There has been a noticeable reduction in the contingent liabilities facing provincial Health Departments, thanks to better application of its accounting guidelines for medical negligence claims, according to the Treasury.
This signals a decrease in one of the key financial risks to provincial governments, it added.
Date show liabilities facing the provinces declined from a peak of R110.4bn in 2019/2020 to R62.4bn in 2023/2024 – the greatest year-on-year decline being recorded in KwaZulu-Natal, where contingent liabilities dropped by more than half, from R7.3bn in 2022/2023 to R3.3bn in 2023/2024. In 2021/22, these had peaked at more than R26bn.
A marked decline was also reported by Gauteng, where contingent liabilities dropped by a third year on year, from R18.4bn in 2022/2023 to R12.3bn in 2023/2024. They had peaked in 2017/2018 at R21.7bn and hovered around this level until 2022/2023, reports Business Day.
Provincial departments had initially accounted for all medical negligence claims as though they would be paid out in full, said the Treasury’s acting head of intergovernmental relations, Ogaletseng Gaarekwe.
The Treasury’s Office of the Accountant-General had then issued guidelines on how to account for these claims, which takes account of whether or not the provincial department admits liability and whether the matter is before the courts or a mediator.
If the department had not yet reviewed or assessed a claim, no disclosure was required.
The Treasury did not have verified data yet on the amounts paid out by provincial departments in 2023/2024, said Gaarekwe. However, Health Minister Aaron Motsoaledi told Parliament in October they had paid R1.51bn to successful claimants in 2023/2024, almost half of which was paid by Gauteng.
The improvement in provincial departments’ accounting practices has taken place in parallel with efforts by SA’s law enforcement authorities to tackle fraudulent claims.
In the Medium-Term Budget Policy Statement (MTBPS) last month, the Treasury said the Health Department was improving its capacity to defend claims by instituting better record keeping and capturing documentation electronically.
Cases are unable to be defended if provincial departments do not have the patients’ records on hand.
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