This chapter investigates how effective recent changes in the South African public health care system have been in transforming the inequitable system inherited from the apartheid-era government. How has post-apartheid budget reallocations, decentralisation, the elimination of primary health care user fees and expansion of the network of clinics changed the incidence of spending and the quality of services provided? Have these changes benefited the poor? The results from research conducted indicate that the distribution of health spending on hospitals and clinics is driven by utilisation patterns. The decision by the affluent to opt-out of the public health system means that the most affluent receive a dramatically smaller proportion of the budget than the rest. There is, however, not much evidence of pro-poor targeting for the rest of the income distribution. However, in terms of spending equity, South Africa compares well with other developing countries. It is clear that health services have become more accessible and more affordable for the poor. Yet, the government is still far from achieving universal access and the desired degree of equity. In addition, there are concerns regarding the quality of services provided by public sector clinics and hospitals. Dissatisfaction among users of public sector services has increased and complaints include long waiting times, staff rudeness and problems with the availability of drugs.