Friday, 19 April, 2024
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Health budget brings NHI a step closer

In his budget speech last week, Finance Minister Enoch Godongwana said R848bn has been set aside for the public health system over the medium term expenditure, including almost R1.4bn for the National Health Insurance (NHI) grant over the next three years.

In its manifesto, the ANC had said NHI would be implemented over five years.

The health allocation also includes R11.6bn to address the 2023 public health sector wage agreement and R27.3bn for infrastructure for the period. Godongwana called the allocation for NHI “a demonstration of the government’s commitment to this policy”, reports Mail & Guardian.

At total cost, the NHI envisages a budget of R600bn a year, pooling the public and private health expenditures.

In his speech, Godongwana said various system-strengthening activities – key enablers of an improved public healthcare system – needed to be undertaken first, including building a national information system and digital patient records; upgrading facilities and improving quality of care to ensure they meet the minimum criteria to be certified and accredited for contracting under NHI.

Facility and district management would also need to be strengthened in preparation for contracting, and central hospitals, and “potentially other hospitals” would have to be granted “semi-autonomous” status under the system.

Activities also included developing reference prices and provider payment methods for hospitals.

“Many of these activities are already under way but require further development before the NHI can be rolled out at scale,” Godongwana said.

According to the Division of Revenue Bill, which Godongwana tabled on Wednesday, the government proposes that the NHI Grant Fund, to which the R1.4bn will be transferred, remains in place until the NHI Fund is created through legislation. A total of R456m will be paid to the fund in 2024-25, R462m in 2025-26, and R471m in 2026-27.

The Bill also makes provision for the further funding of the system via the NHI Indirect Grant that will get R2.2bn in 2024-25; R2.4bn in 2025-26, and R2.3bn in 2026-27, to be allocated to health facility revitalisation and health systems.

Funds allocated to health facility revitalisation will be used “to create an alternative track to improve spending, performance, as well as monitoring and evaluation on infrastructure, in preparation for NHI … to enhance capacity and capability to deliver infrastructure … to accelerate the fulfilment of the requirements of occupational health and safety”.

Spending on health systems will be to “improve access to, and quality of, healthcare through expansion of the alternative dispensing and distribution model for chronic medication” and “improved quality health services in all primary healthcare facilities”.

Additional promises in the ANC’s manifesto included that the government would “promote healthy lifestyles and preventive healthcare campaigns; strengthen infrastructure and the training of personnel, and create a single electronic health record; expand the Ideal Clinic programme to improve quality of care; strengthen financial management and supply chain management; collaborate with other countries on research and development of traditional medicine, and the leverage of new technologies like telemedicine and artificial intelligence in healthcare”.

Some of the health budget allocation will go towards the building and implementation of the enterprise architecture design for the NHI digital information systems, while systems for medicine stock management and procurement would also be developed and implemented, and all public health facilities will be certified by the Office of Health Standards Compliance.

Treasury deputy director-general of public finance Mpho Modise said the amount allocated in the 2024-25 budget would be directed to the pilot programme in line with the government’s 2019 study, showing that R30bn was needed to start the system.

She said additional funds would be allocated after year three and four but did not indicate when the NHI would be implemented.

“In the starting years, they will be using the money already allocated and then, in year three and four, we will have to start allocating additional funding and that funding is not going to start, for example, at R30bn – it will start at R10bn, R9bn, increasing over time … so we will have to work with health just to understand as and when the scheme is implemented,” Modise said.


Mail & Guardian article – NHI plans to revitalise hospitals (Restricted access)


ANC election manifesto (Open access)


See more from MedicalBrief archives:


No new funding for NHI in yesterday's Budget


No new funding for NHI in medium term budget statement


Crisp says Health budget has to be bigger if NHI goals are to become a reality


Fix current system before NHI implementation





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