The CEOs of the Western Cape’s three academic hospitals have warned that, because of severe funding cuts, they could run out of cash in mid-January, resulting in non-payment of salaries and accounts, among other crisis interventions.
MedicalBrief notes that this comes as Finance Minister Enoch Godongwana last week offered no hope for the health sector in his mini-budget.
The national budget shortfall of at least R570m has forced the three tertiary hospitals to make critical and potentially catastrophic service delivery cuts to avoid a medical Day Zero by 15 January.
To make up for the shortfall, Groote Schuur Hospital, Tygerberg Hospital and the Red Cross War Memorial Children’s Hospital will be de-escalating their services from mid-December to mid-January.
Daily Maverick reports that other savings must be made urgently as well, including saving 50% on consumables, not filling posts and reducing surgical procedures.
The public sector wage increase has had a substantial impact on the funds hospitals receive from the government, the total wage shortfall for all health departments across nine provinces being R8.7bn.
The shortfall for Tygerberg Hospital is R275m, for Groote Schuur R264m, and for the Red Cross War Memorial Children’s Hospital, R31m.
The three CEOs of these hospitals have sent a memorandum to departmental heads stating: “If we continue to function as we have over the past six months, our cash flow will run out by mid-January.
“… this could mean non-payment of salaries and all accounts, non-delivery of consumables, the inability to order essential pharmaceuticals and other items… and we will have to carry these costs over into the new financial year, which is predicted to offer another reduction in our budgets.”
The hospitals’ budgets come from three sources:
• The National Tertiary Services Grant, allocated by the National Treasury via the National Department of Health.
• The Human Resources and Training Grant, allocated by the National Treasury via the National Department of Health.
• The Provincial Equitable Share, allocated by the Western Cape’s Department of Health and Wellness.
Tygerberg’s total budget for 2023/24 is R3.386bn, Groote Schuur has a budget of R3.009bn, and the Red Cross hospital’s budget is R937m. They spend 63%-66% of their budgets on salaries and the remainder is used for operational costs.
At the beginning of the financial year, there were significant cuts to the National Tertiary Services Grant, the Human Resources and Training Grant and the Provincial Equitable Share, adding to the crisis.
The financial situation is unlikely to improve, so further cuts are expected in the coming years.
Departments in the academic hospitals have been asked to reduce consumables by 50%, cut overtime, stop using agencies for nursing shortages and delay filling posts for three months. Staff have been encouraged to take leave.
‘Unprecedented cuts’
De-escalating of services happens annually, but one surgeon in a senior post said: “It is normally two weeks – this year it is four weeks. It is the longest period ever. Most elective surgeries will not happen, and only emergencies will be done.
“There will be a knock-on effect by closing the outpatient clinics for longer during this period as well as not performing elective surgery. Patients do present later with more complex disease.
A specialist said: “We don’t know what will happen after 15 January. There is a very real possibility that there will be even more cuts.”
At Groote Schuur, three anaesthetists have resigned and because of the budget crisis they will not be replaced for at least three months.
The specialist told Daily Maverick: “We treat very complicated cases from all over the country. Even before this (budget issue) we struggled with reduced theatre time.
“Further reduction in our service capacity will severely compromise patients’ access to life- or disability-saving services. Some people have already resigned due to the difficult conditions.”
‘An impossible situation’
One HoD said the biggest concern is the freezing of posts: “If a specialist resigns I can’t fill the post, yet the remaining people still have to deliver the same quality of care … You cannot freeze certain frontline posts … if you do, you have to stop the service .
“This is the end of the current three-year budget cycle… What is next? We don’t know, and inflation is very high.”
Another expert, with years of experience in paediatrics, said: “The impact will be huge. We have a growing childhood population. We are already under-resourced and this will translate to less care and access.”
Tygerberg Hospital and Groote Schuur Hospital see nearly 500 000 patients in their outpatient departments and nearly 65 000 in their emergency centres annually.
The Red Cross War Memorial Children’s Hospital sees nearly 80 000 patients in its outpatient department and some 36 000 patients in its emergency centres annually.
What the government says
The provincial and national Health departments were asked how they planned to help the hospitals.
Foster Mohale, spokesperson for the National Department of Health, said: “The calculated wage bill shortfall was estimated to be about R8.7bn for the health sector.
“The National Treasury has estimated the shortfall to be equivalent to 18 000 posts …. The department is awaiting the budget adjustment speech by the Minister of the National Treasury to identify if the wage increase will be funded.
“The department and National Treasury had meetings which involved the nine provincial Health Departments, provincial Treasuries and National Treasury. The shortfall of R8.7bn was discussed, with no funding proposals identified.
“There is no doubt cuts will impact healthcare, however, the department is working with the provinces to ensure that essential services, including recruitment of health specialists, procurement of medical supplies and equipment, are prioritised.”
In the Medium-Term Budget Policy Statement last Wednesday, Finance Minister Enoch Godongwana said an additional R24bn had been allocated this year and R74bn over the medium term to fund wage increases in the health, education and police sectors. How these funds will be distributed remains unclear.
The looming budget cuts on the healthcare sectors have raised concerns on how the health ministry is going to address some of the challenges it already faces such as shortages of healthcare workers, and ambulances, dilapidated public health buildings and the non-communicable diseases.
Health-e News reports that Matshidiso Lencoasa, a budget researcher at the advocacy organisation SECTION27, says the budget cuts in the health sector will end up punishing the 71% of people who rely on public health services.
“The billion rand cut to the HIV sector is huge. We are still far from achieving the targets of the National Strategic Plan for HIV and TB. There is a concern on how we will be able to achieve our set goals with restricted budgets,” says Lencoasa, in reaction to Godongwana's statement last week.
She said that South Africa has made major progress in terms of treating HIV. But the country is yet to reach the United Nations targets needed to end AIDS as a public health threat by 2030. And the budget cuts could be a setback to the gains made.
Lencoasa says the imposed budget cuts mean that most of the existing challenges faced by the health ministry will remain unaddressed in the coming years.
Fouché Venter, head of public economics and modelling at DNA Economics, said that though the health sector received the highest share of the mini budget, most of the funds will be spent on paying salaries instead of improving health services.
“The allocated budget will also not be enough to increase the number of healthcare workers in the public health sector. And as a result, there will be minimal improvement in terms of service delivery.
“At the moment the wage bill is the only thing which the healthcare sector is trying to keep up with rather than increasing the number of people being employed,” says Venter.
Venter says that it is important for the public to note that the healthcare budget over the next three years will grow at a rate of 3.1% per year which will be meaningfully lower than the inflation rate.
“In real terms the budget is actually decreasing, so I do not see any meaningful measures which this budget will have on addressing challenges in the health sector,” he says.
Professor Frikkie Booysen, the PPS Chair in Health Economics at the University of Witwatersrand, said the cutting of funds reserved for building and maintaining public health infrastructure was a huge concern.
Almost half of a billion rand will be cut from the hospital systems programme which focuses on infrastructure.
“That is worrying as we are spending more money to protect the public sector wage agreements, but we are cutting infrastructure. So we are robbing the future generation of good healthcare by paying healthcare workers more now,” said Booysen.
According to Booysen, cutting infrastructure budgets also means that healthcare workers will work in poorly resourced hospitals. This, in turn, will mean poor health services to the public.
Booysen says that it also remains to be seen how the R1bn which will be cut from HIV programmes will affect the front line services.
“Everyone, not just the health sector, will just need to use money better, use it more efficiently and not waste a lot of money. There is a lot of wastage that can be avoided.
“We need to be efficient in how we spend the money, then things can improve. We also need to think of budget cuts as presenting an opportunity to find cost savings methods and to be more efficient,” says Booysen.-Health-e News.
Health-e News – PUBLIC HEALTH SERVICES FACE CUTS AS GOVERNMENT STRUGGLES TO CURB SOUTH AFRICA’S DEBT
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