Abstract

A purposive sample of South African specialist doctors provided data for an empirical analysis of revenues, costs and earnings associated with specialist surgical medicine. The empirical analysis includes both parametric and nonparametric regression. Parametric estimates of revenues per new patient range between R689 to R818, while cost per new patient estimates range between R694 and R749; average surgeon income per new patient falls within a similar range. Furthermore, costs per surgery follow a cubic specification, implying increasing marginal costs at the practice level. Returns to experience are estimated to be quadratic, although imprecisely so, given limited observations. Due to the low response rate in the survey, there is a need to conduct further research into this topic, to provide better information to both specialists and the South African Department of Health, which sets pay packages for public sector health workers.