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National Health Act, 2003 (Act No. 61 of 2003)


National Health Insurance Policy towards Universal Health Coverage

Chapter 8 : Purchasing of Health Services

8.4 Provider Payment Mechanisms

8.4.3 Provider payment at hospital level


297. Payment related to services delivered would be determined through a system of case-mix activity adjusted payments (such as Diagnosis-Related Groups or DRGs).


298. As with PHC providers, moving towards this payment system should be phased in over time, with a gradual transition to global budgeting based on crude activity estimates (as opposed to line-item budgeting) for hospitals. The gradual transition will allow hospitals to adjust their service organisations and provision arrangements in preparation for moving to the next phase. The development of a base DRG started in 2014 and the full DRG will be implemented in the central hospitals and extended to other tertiary, regional and district hospitals.