Research

The training of healthcare professionals: An expense or an investment?

R G MacGregor, G Zihindula, L Chola, A J Ross

Abstract


Background. There is little information on the financial return of investment when funding the tertiary education of healthcare professionals (HCPs) in South Africa (SA).

Objectives. To assess the cost-benefit of the Umthombo Youth Development Foundation (UYDF) scholarship scheme, which has supported the training of HCPs from rural areas in KwaZulu-Natal Province, SA, for the past 19 years, and to establish whether it is a worthwhile investment.

Methods. This was an economic analysis to estimate the costs and economic value of UYDF’s investment in the training of HCPs, using a deterministic model developed in Excel 2010 (Microsoft, USA) to analyse the UYDF’s historical, numerical and economic data. Costs were measured in monetary terms, and a rate of return on investment was calculated over the working life of HCPs who had been supported by the UYDF.

Results. With a >90% pass rate, the total cost of training the 254 graduates supported by the UYDF from 2009 to 2015 was estimated to be ZAR186 million. Graduates are expected to generate an estimated ZAR15 billion in lifetime earnings, which is equal to ZAR4 billion at 2015 prices, and represents an internal rate of return of 63%. Income tax paid on future earnings will be ~ZAR4 billion, assuming a 20 - 30% tax rate.

Conclusions. The analysis has shown that the cost of HCPs’ education, where the annual pass rate is >90%, and >98% of graduates are employed, is an excellent investment. Consideration should be given to finding ways of improving the pass rate at institutions of higher learning and ensuring that graduates obtain meaningful employment if such returns on investment are to be seen on a national level.


Authors' affiliations

R G MacGregor, Umthombo Youth Development Foundation, Durban, South Africa

G Zihindula, Healthy Rural Society, Mtubatuba, South Africa

L Chola, School of Public Health, Faculty of Health Sciences, University of the Witwatersrand, Johannesburg, South Africa

A J Ross, Department of Family Medicine, School of Nursing and Public Health, College of Health Sciences, University of KwaZulu-Natal, Durban, South Africa

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Keywords

Rural health workforce; Cost and benefits; Umthombo Youth Development Foundation; South Africa; Rural areas and hospital staffing; Health profession education

Cite this article

South African Medical Journal 2020;110(5):369-373. DOI:10.7196/SAMJ.2020.v110i5.14221

Article History

Date submitted: 2020-04-29
Date published: 2020-04-29

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