Debt and patronage lay waste Gauteng’s health budget

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Gauteng Health’s R40bn health budget is insufficient and the department cannot carry out the tasks it is required to do because of its sizeable debt and questionable contracts.

Health MEC Gwen Ramokgopa says that the budget of the province’s health department grew from R37.6bn in 2016 to R40.2bn in 2017. It is the department with the second-largest allocation in the province’s total budget, reports  Business Day.

The budget of the province’s health department grew from R37.6bn in 2016 to R40.2bn in 2017. It is the department with the second-largest allocation in the province’s total budget.

At the province’s Health Consultative Forum, Ramokgopa is quoted as saying the challenges that plagued the public health system included high equipment prices, poor-quality services and inadequate human resources. Of the total budget, R23.8bn was earmarked for compensation of employees and R16.3bn for goods and services, while an estimated R6bn was allocated to accruals, she said.

“This budget is effectively not available,” she is quoted in the report as saying, “which means we have not been able to afford services in the past years and the service providers carried the public health system at a huge cost.” Small businesses were badly affected and the department had almost put them out of business, she said. However, the department had paid off most of the debt to small businesses and was now working on paying off what it owed to large companies, Ramokgopa said. About 20 small businesses with administrative issues such as tax clearance were the only ones that had not been paid.

The report says the Health Department owed more than R1.2bn in late payments to 808 service providers at the end of January due to insufficient budget allocations and an increase of patients from other provinces.

Ramokgopa said sometimes service providers were able to secure contracts through patronage and nefarious networks and then provided hospitals with products and services the sector did not need. “We sometimes buy goods and services for three times the cost and this is crippling the public health system,” she said. The government was keen to contract with small businesses but on an ethical basis.

Meanwhile, the report says, in 2016 the Health Department’s legal fees amounted to R569m and medico-legal claims had been piling up since 2009. The department conceded that escalating medical litigation affected the recruitment of specialists and the management of departmental resources.

The department was working on its revenue collection services and retrieving money from patients with medical aids who utilised public healthcare services, she said. “Regrettably, we even write off debts of medical aids because our systems don’t have integrity, consistence and reliability,” Ramokgopa said.

Business Day report

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