Equity impact of minimum unit pricing of alcohol on household health and finances among rich and poor drinkers in South Africa

Abstract

Introduction: South Africa experiences significant levels of alcohol-related harm. Recent research suggests minimum unit pricing (MUP) for alcohol would be an effective policy, but high levels of income inequality raise concerns about equity impacts. This paper quantifies the equity impact of MUP on household health and finances in rich and poor drinkers in South Africa.

Methods: We draw from extended cost-effectiveness analysis (ECEA) methods and an epidemiological policy appraisal model of MUP for South Africa to simulate the equity impact of a ZAR 10 MUP over a 20-year time horizon. We estimate the impact across wealth quintiles on: (i) alcohol consumption and expenditures; (ii) mortality; (iii) government healthcare cost savings; (iv) reductions in cases of catastrophic health expenditures (CHE) and household savings linked to reduced health-related workplace absence.

Results: We estimate MUP would reduce consumption more among the poorest than the richest drinkers. Expenditure would increase by ZAR 353 000 million (1 US$=13.2 ZAR), the poorest contributing 13% and the richest 28% of the increase, although this remains regressive compared with mean income. Of the 22 600 deaths averted, 56% accrue to the bottom two quintiles; government healthcare cost savings would be substantial (ZAR 3.9 billion). Cases of CHE averted would be 564 700, 46% among the poorest two quintiles. Indirect cost savings amount to ZAR 51.1 billion.

Conclusions: A MUP policy in South Africa has the potential to reduce harm and health inequality. Fiscal policies for population health require structured policy appraisal, accounting for the totality of effects using mathematical models in association with ECEA methodology.

Keywords: epidemiology; health economics; health policy; mathematical modelling; public health.

Figure 1

Description of the Minimum Unit Pricing model contextualised to South Africa and expanded via the extended cost-effectiveness analysis framework. Adapted from: Gibbs et al. Licensed under Creative Commons Attribution (CC BY 4.0) available at: https://creativecommons.org/licenses/by/4.0/

Figure 2

Estimated distributions, across wealth quintiles, of the health and financial outcomes following implementation of Minimum Unit Pricing (MUP) in South Africa. (A), drinking prevalence; panels (B–F) demonstrate the distributional (equity) impact of the policy, all estimates are for a 20-year time horizon; (B), deaths averted; (C), net change in alcohol expenditures; (D), healthcare cost savings (government vs OOP cost savings); (E), cases of catastrophic health expenditures (CHE) averted; (F), indirect costs savings.

Figure 3

Distributional (equity) impact of the sensitivity analyses. All estimates are for a 20-year time horizon. A, change in alcohol expenditures comparing three different price elasticity sets; B, cases of catastrophic health expenditures (CHE) using alternative thresholds; C, indirect costs savings.