/ 15 March 2013

Promoting good health makes cents

Bottoms up: An extra 1% tax on alcohol sales could fund a preventive health foundation.
Bottoms up: An extra 1% tax on alcohol sales could fund a preventive health foundation.


"Prevention is better than cure" is the well-known adage. It is also more cost-effective, not least in relation to families and the social costs of illness. If this adage was applied in South Africa, through an effective health promotion and development foundation, it could play a critical role in preventing disease and have a tremendous social and economic impact.

Deaths in South Africa are caused by a complex mix of chronic ailments such as heart disease and diabetes, infectious chronic diseases such as tuberculosis and HIV, as well as maternal and child mortality, child diarrhoea and malnutrition, and high levels of interpersonal violence and accidents. 

All of these contribute to a growing public health burden, the bulk of which can be alleviated through a change in personal behaviour and the creation of enabling environments to support healthy behaviour.

The rise of non-communicable diseases – cancer, heart disease, diabetes and chronic lung disease – are a particular threat to social and economic development. Chronic diseases lead to a reduced labour force, decreased production output, less savings and, thus, slower economic growth. Yet, with appropriate measures to support health by a range of stakeholders including government departments, research institutions, food producers, media and advertisers, to name just a few, these diseases can be reduced and even prevented. 

Alcohol – killer of youth
Dr Sebastian van As, head of the trauma unit at the Red Cross Children's Hospital in Cape Town, says alcohol-related accidents are one of the main killers of young people, and almost 70% of interpersonal and domestic violence is alcohol induced.

The Medical Research Council cites the cost of alcohol use and misuse to the fiscus at R38-billion a year, or 1.6% of gross domestic product. Globally, the rising cost of non-communicable diseases is expected to reach trillions of dollars. Yet broad-based interventions cost very little. 

The World Health Organisation (WHO) estimates that a combination of population-based measures aimed at reducing the risk of non-communicable diseases in middle-income countries such as South Africa would cost approximately R150-million a year. This is one tenth of the cost of individually targeted interventions. 

Such measures would include increasing the tax on alcohol and tobacco, reducing the salt content in food, and raising public awareness through campaigns in the media.

In September 2011, at the United Nations session on non-communicable diseases, South Africa made a pioneering declaration to reduce the threat of these diseases by 2020 by, among other things, lowering alcohol and tobacco use, reducing the intake of salt, and promoting physical exercise.

Health promotion and development foundation
A health promotion and development foundation could oversee preventive and promotion research advocacy and implementation, among other tasks. 

The Health Promotion and Development Foundation Network is made up of civil society organisations including Soul City, the Medical Research Council, the National Council against Smoking and several universities and research institutions, which are lobbying for the establishment of such a foundation.

They argue that without a concrete independent body in place to work on prevention, the sheer scale of demand for treatment will inevitably lead to prevention being neglected.

Australia, Thailand, Austria, Switzerland and Singapore have successfully implemented such foundations. Thailand's foundation was set up at the same time as its National Health Insurance (NHI) was launched, with the aim of reducing the burden of disease and containing the cost to the NHI.

In his recent budget speech, Finance Minister Pravin Gordhan announced that pilot NHI projects have been initiated in 10 districts this year. Although the initial phase of NHI development will not place new revenue demands on the fiscus, it is anticipated that, over the longer term, a tax increase will be needed. The treasury is working with the health department to examine the funding arrangements and system reforms required for NHI. 

The cost for the 10-year roll-out is estimated to be more than R250-billion. In Thailand, the introduction of the foundation dramatically reduced the costs to the NHI. Without a co-preventive and promotion strategy, South Africa's NHI scheme could become unmanageably expensive.

A health promotion foundation would further augment the government's commitment to improving the length and quality of life, and delivering on the millennium development goals by 2015 and on the other UN commitments for non-communicable diseases.

David Tseng, an economist at the University of Cape Town's Research Development Policy Unit, says: "The linkage between the implementation of the NHI and a health promotion and development foundation can occur in a multidimensional, complementary way with potentially great outcomes. Among other things, health promotion and disease prevention together could be extremely cost-effective against an individual's exorbitant treatment costs, and efficient through information spread and other network externalities."

It would, therefore, benefit South Africa greatly to move forward with a structure that would ensure adequate and sustainable financing, increase awareness about health gains, create demand for health promotion, and ensure broad participation and commitment.

"Where would the funding come from?"
The key question is: Where would the funding come from? "Ideally," according to Professor Davison Munodawafa, from the Health Promotion Cluster at the WHO, "the national health budget allocation should provide adequate financial resources to support health promotion. However, due to the numerous public health needs competing against limited financial resources, most of the national health budget goes for curative services and not health promotion."

Considering that the societal cost of harmful alcohol use is R37-billion, and the primary objective of taxes is to raise revenue for the fiscus to fund the government's expenditure priorities, "sin taxes" from alcohol and tobacco companies could fund the public provision of health promotion services, as is done in Australia, Thailand, Fiji, Singapore and Tonga.

A surcharge tax of just 1% of alcohol consumption in South Africa could sufficiently meet the needs of the foundation, and provide a sustainable source of funding while reducing consumption.

The Southeast Asia Tobacco Control Alliance succinctly captures the core issue: "Either we retain the existing financial procedure – which neglects health promotion – and face the consequences of a growing healthcare burden, or we impose a surcharge tax on the alcohol and tobacco industries, with the opportunity to gain additional government revenue to fund health promotion. The tax can be used to support short- and long-term health promotion and alcohol and tobacco control programmes, resulting in the health and wellbeing of the public improving over time, while the concurrent healthcare expenditures decline."

Munodawafa said South Africa stands on the verge of taking a lead in demonstrating that innovative financing of health promotion is feasible, even under difficult economic conditions. It is time for government, civil society and the health sector to act collectively to make prevention and health promotion a priority.

Savera Kalideen is an advocacy manager at the Soul City Institute for Health and Development Communication