Decline in public health spending despite looming NHI

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Finance Minister Tito Mboweni’s latest budget reveals that per capita spending on public health will decline for the second year in a row – and health infrastructure spending will bear the brunt of the cuts, writes Daniel McLaren, a budget analyst with Section27, in a Bhekisisa report.

McLaren writes: “Total health expenditure in 2019/20 is proposed to be R222.6bn, this is R700m less than what was projected in the Medium Term Budget Policy Statement released last year.

“On paper, the health budget grew by 6.6%. But in reality, it shrunk. But in real terms, a 6.6% increase represents a decline in health funding per person once standard inflation of 5.2% is factored in as well as a 1.6% growth in population. It’s worth noting that medical inflation or the inflation rate for healthcare products and treatment is usually higher than this general inflation rate of 5.2%

“This decline is despite the government’s own White Paper recognising that spending on health will have to double if quality healthcare is to be provided to all through the National Health Insurance (NHI).

“After a decade of stalling NHI funding and the continued failure to regulate the private health market, people will be forgiven for wondering if NHI delayed means NHI denied. That is certainly the effect of the 2019 budget proposals.

“As most commentators focused on the latest Eskom bailout plan, another illuminating story could be found in health. The lines of numbers presented in budgets always reveal what the state really wants to do — no amount of rhetoric can disguise them.

“Here are two figures to be concerned about: Medico-legal claims have grown from R28.6bn in March 2015 to R80.4bn in March 2018. In many provinces, these claims (and their associated legal costs) now equate to more than half the annual provincial health budget; and accruals by provincial health departments (goods and services received but not yet paid for) amounted to R18bn in 2017/18.

“These figures make one wonder what effect further cuts to health spending will have. In the absence of a health quality improvement plan, will the quality of services deteriorate further, leading to even more medico-legal claims? Sadly, a large portion of claims relates to deaths and injuries to mothers and babies during botched births.

“Are tightening provincial health goods and services budgets likely to end the kind of medical equipment shortages in areas such as oncology that lead to growing waiting lists? And will the nurses and doctors who have left the public health system due to deteriorating conditions be encouraged to return by conflcting proposals on ‘reducing public sector head counts’ and ‘filling critical health posts’? No time-frame was provided for when the ‘critical’ posts will be filled, in Mboweni’s latest budget.

“The 2019 budget does propose improvements in the state’s strategy to deal with this crisis in medico-legal claims by, for instance, improving care in areas like gynaecology and obstetrics that account for large portions of claims and amending legislation to do away with hefty lump sum pay-outs and instead move to periodic payments. It has also proposed referring fraudulent cases to the Special Investigations Unit. But Treasury officials admit behind the scenes that they are considering how to hide the escalating contingent liabilities from the state’s balance sheet.

“These avoidance and distraction methods typify the worst aspects of the 2019 budget. In the absence of a strategy from the minister of health for widespread quality improvement, the National Treasury will continue to seek ways to plaster over the cracks of ailing public health services, while denying the funding necessary to build a new, integrated national health system.

“We at Section27 are also concerned that budget proposals contain no information on the funds needed to complete the work of the Competition Commissions Health Market Inquiry, which aims to, for instance, uncover what is driving the high cost of private health care in the country. The inquiry ran out of funds last year and has been suspended pending an additional allocation.

“We also note a 3% cut in transfers to non-profits that are delivering health services on behalf of the state, with no explanation provided. What will the impact of these cuts be?
We celebrate the R1bn provided to pay our community health workers a minimum wage but are sad that this will only be so from 2021/22.

“These workers continue to be a pillar of primary health care and deserve to be rewarded as such.”

This article was originally published by the Bhekisisa Centre for Health Journalism, bhekisisa.org

 

Before 2012, South African public health expenditure grew by as much as 7% year on year – driven by the costs of the country’s successful HIV treatment programme. But, writes Russell Rensburg, executive director of the Rural Health Advocacy Project (RHAP) in a Bhekisisa report: “Our reading of the 2016/17- 2018/19 Medium Term Expenditure Framework finds that although the health budget is increasing beyond inflation it isn’t enough to keep up with the higher inflation rate for healthcare products and treatment, often called medical inflation and salary increases, a 2017 Rural Health Advocacy Project working paper argues.

“National pressures are filtering down to provinces that rely on national treasury allocations for up to 35% of their health budgets, according to the Financial and Fiscal Commission’s 2019-2020 report. The commission – an independent, statutory body – advises the government on financial matters.

“Based on RHAP’s budget research and our work in provinces, we know funding constraints are behind a lack of posts for healthcare workers, including new medical graduates. But the way these hiring freezes are managed gives little consideration to how they impact service delivery.

“Healthcare is about people and systems can’t function without not only doctors and nurses but also people such as physiotherapists, procurement officers, financial managers, cleaners and porters.

“Since 2016, we have repeatedly called for critical health posts to be protected and for the national Health Department to create guidelines to help provinces to do this. It’s important to remember that what makes a post “critical” depends on the context — a cleaner can be as important as a doctor in ensuring that a clinic or hospital can provide quality care. It should be up to local districts in consultation facilities to define what they need most and when.

“Initially, the government responded by denying that posts were being frozen at all. But in February 2017, national Health Department director general Malebona Precious Matsoso confirmed to Parliament that there were more than 40,000 vacancies nationally.

“Government has not been altogether unresponsive. The national Health Department has partnered with the South African Institute of Chartered Accountants to improve financial management skills but continued wasteful and irregular expenditure suggests that this initiative is yet to bear fruit.

“In response to RHAP’s recommendations, the national treasury has also issued directives to protect frontline health workers. But without accompanying guidance to support health managers to adhere to these instructions, the treasury’s efforts haven’t halted the freezing of critical posts. We’ve tried to fill that gap.

“In 2015, we published what we called a toolkit for healthcare managers to ‘rural-proof’ their services. It was a framework designed to help people think about solutions for the challenges of providing care in rural areas – far-flung, historically under-resourced regions where the distances between communities and clinics, and between facilities, are far.

“The concept takes the six components that the World Health Organisation says are critical to health systems – things such as human resources, information systems and access to essential medicines – and helps healthcare managers to think through these from a rural perspective.

“To test whether our tool could help rural districts to navigate austerity measures, we took it to the North West’s Maquassi Hills Local Municipality in the province’s Dr Kenneth Kaunda district near Wolmaransstad in 2018.

“The provincial health department is under administration after an almost complete shutdown last year precipitated by violent protests. But by the time we arrived in 2018, the health department had already been co-managed by the provincial treasury for two years and efforts to contain costs had resulted in painful cuts. The province lost more than 30 ward-based community health teams and had cut dozens of hospital health posts.

“Together with health-workers, we asked some simple questions such as: Does every health facility offer all the health services it should? Does each clinic or hospital have the right mix of workers to provide services? Are there areas of waste and inefficiency?
We took the answers to these questions and developed solutions.

“For instance, after taking stock of gaps in access, health-workers said moving a local clinic to another location in an existing government building would help to lighten the load of a local hospital by putting care in better reach of rural pregnant women. Changing management structures and combining some offices could help to make services more efficient, they argued. Recommendations were broken down into what could be accomplished now and what might be longer-term goals.

“The rural-proofing tool couldn’t solve the province’s financial woes – it didn’t magically put more money into their health budget but it did provide local health managers with a plan with concrete steps that they could use to navigate shrinking health budgets. RHAP has now offered to return to the district to monitor how well suggestions have been taken up.

“What we call ‘rural-proofing’ isn’t too different from global thinking about what makes health systems resilient. Researchers from the London School of Hygiene & Tropical Medicine looked at three international events that shocked health systems – Europe’s 2008 financial crisis, mass migration and climate change, as well as West Africa’s 2013- 2016 Ebola outbreak – and asked what made health systems better able to cope with these changes. They found that countries with strong information systems were better able to make decisions during crises. This combined with the right financing mechanisms to fund what needs to be done – and planning around the people to do it – enabled health-workers to better weather unexpected storms, a 2018 article found. ‘Well-integrated and locally grounded systems may be more resilient to shocks,’ researchers explain.

“Fundamental to success were two cross-cutting components: good governance and the values that shaped responses. In South Africa, governance may need a rethink. Although, in theory, provincial and national legislatures are important accountability bodies, they seldom have sufficient capacity to fulfil this role. The National Health Act envisions citizen oversight in the form of hospital boards and health committees that remain dysfunctional. Meanwhile, the ring-fenced conditional grants that fund some programmes, such as HIV, and national treasury’s formulas for dividing funds between provinces and departments are outdated.

“There are, sadly, no quick fixes for the country’s latest crop of unemployed healthcare workers but we can start to find solutions. We can begin by figuring out where our health workers are and the national health department should release this data, including breakdowns between rural and urban areas as well as clinics and hospitals. More broadly, we should use this crisis to address the gaps that will make the public sector an employer of choice, one that creates dignified workspaces that, in turn, prioritise dignified, respectful care.

“An important step in this transformation is the prioritisation of rural populations, particularly those in former Bantustans that are yet to fully enjoy the fruits of freedom. It is time to take government’s Batho Pele principles – including those of access, openness and consultation – that are posted on our clinic walls and put them into practice.”

This article was originally published by the Bhekisisa Centre for Health Journalism, bhekisisa.org

 

 

Bhekisisa report
Bhekisisa report
Health and Policy Planning article


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