Public health care has been chronically underfunded for the past five years and gross provincial disparities in spending persist, a government report now confirms. As a result, the Treasury’s claims that health budgets have increased significantly in the same period are under renewed fire.
The Department of Health commissioned the report, Essential Health Care for All South Africans, which was completed in September last year. The report says underfunding leads to an excessive workload for staff, causing demoralisation and migration to the private sector or abroad.
Health-care workers have long insisted that budgets are being cut and that workloads are excessive.
But “what is new about the report is that it was commissioned by [the] government and therefore it is an input which they now sitting with and have to manage,” said Andy Gray, senior lecturer in pharmacology at the University of KwaZulu-Natal.
It is also the first time the department has calculated the combined national and provincial health budgets over a period. Speculation in the sector is that the health department commissioned the report to put pressure on the Treasury and especially to address provincial inequities.
The report finds that health expenditure — adjusted for inflation — per person accessing the public health system without a medical aid was less in 2002/03 than in 1997/98.
The report says more poor people are accessing health than were doing so five years ago. The burden of HIV/Aids and tuberculosis (TB) has increased, but real per capita expenditure has declined.
Health experts say this reinforces their fears that the expected increase in health over the next few years will not be used to alleviate this overall underfunding but will be used only for anti-retroviral treatment.
“Instead of looking at [health] expenditure in normal ‘cash’ terms as it is expressed in government budgets, we asked the question: what has been the actual purchasing power of this money over the years, given inflation?” said Dr Malcolm Segall, co-author of the report and a European Union-funded special adviser in the office of the director general of health.
“So we adjusted the expenditure trends for inflation and expressed the spending in all the years in terms of 2002 prices. This gave us what is called ‘real’ expenditure — real in the sense of the real physical resources the money can buy.”
The researchers then asked how many people had to receive health care services from this money.
“So we took into account population growth over the years and expressed the spending as expenditure per person without private medical insurance,” Segall said.
“We did this because these are the people who are reliant on the public health services and who are the main users of them.”
He said: “We consolidated the expenditure of the nine provinces and the national department. This gives us the total effort the government is making for public health. We then found that the public health expenditure in 2002/03 was R928 per uninsured person, less than the R989 — in 2002 prices — five years earlier in 1997/98.
“Treasury points to the growth since the lowest point in 2000/01, but the fact remains that the spending has still not recovered to 1997/98 levels. In a word, the public health service is having to do much more with fewer resources per person to be served — and that’s why health workers are continually complaining about cuts. Now for the first time we have quantified them.”
The report indirectly criticises the federal fiscal system, which was introduced in the 1996 Constitution: one national health budget was broken down into 10 budgets (nine provinces and one national). “Until 1997/98, South Africa had a national health budget driven by national health policy,” said Segall.
The budget was then allocated to the provinces on equity criteria. This report shows that these 10 budgets each negotiate independently and without knowledge of the total national picture. This has resulted in “inadvertent” underfunding. Segall said: “In the general context of budgetary austerity, we suggest that this is an unwitting, inadvertent and, until now, largely invisible consequence of the devolution in 1997/98 of health financing to provincial governments.”
The report finds interprovincial inequality in the health spending has been decreasing, but this reduction has been “uneven” and “unsystematic”. It said the provincial distribution of medical specialists has become more unequal, with primary health care spending far too low in many districts.
The report, which is on the health department’s website, calls for “greater financial commitment by the government to the national health system to enhance the ability of the public service to respond to the major health challenges, namely: to increase access to, and improve the quality of healthcare for the disadvantaged people of the country, and to combat HIV/Aids and tuberculosis epidemics.”
It also recommends that the health budget should return to a “central allocation system”, in which the national department makes allocations to the provinces. “This would be the best means to reduce interprovincial health financial inequalities,” says the report.
The report is evidence that the health department is undertaking “serious analysis of the equity of health care financing, which we welcome”, said Alison Hickey, manager of the Aids budget unit at the Institute for Democracy in South Africa. “The study displays an understanding that inequities primarily result from our budgeting systems and funding flows.”
The Treasury has “taken note of the report”, said Thoraya Pandy, the Treasury’s director of communications. “However, we will only be able to comment extensively after the Budget speech on Wednesday February 18.”