Tuesday, 21 May, 2024
HomeA FocusNo funding model yet, but NHI gets big chunk of health budget

No funding model yet, but NHI gets big chunk of health budget

There is still no sign of a cost model for the National Health Insurance (NHI), but a large proportion of this year's much-reduced health budget has been allocated to the scheme, notes MedicalBrief.

The 2023/24 budget allocation for the National Department of Health has declined by R4.4bn, from R64.5bn in 22/23 to R60.1bn in 2023/24, Health Minister Joe Phaahla said, attributing this to the discontinuation of grants allocated for fighting Covid, but adding that money had been set aside to train specialists and to refurbish and upgrade facilities.

An amount of R8.8bn over the next three years will go towards implementing the NHI, reports News24.

The Portfolio Committee on Health’s report on the department's budget and annual performance plan, “noted with concern” that the costing model for the NHI was still outstanding. Funds had been allocated to the department for NHI, but the National Treasury had not engaged the committee about the costing model, it said.

Delivering the budget vote in the National Assembly on Tuesday, Phaahla said both the pandemic and load shedding had damaged the economy, reports Health-e News.

“The fact of the matter is there is not even an inflation adjustment and there are also reductions in allocations to existing programmes,” he said, admitting that the Treasury acknowledged the health sector was underfunded by at least R11bn.

“We believe commutatively it is much higher: 89.2% of our budget is transferred to provinces and in the current budget the transfers and subsidies to provinces are at R56.2bn of the R60.1bn.”

He added that the recent wage settlement with public servants would make it harder to fill vacant posts, costing the government an extra R23bn above the allocation set aside for compensation, meaning provincial Health Departments would have to find the extra money promised to their employees by shifting funds from other programmes.

When the agreement was signed at the end of March, the Treasury warned it would entail trade-offs such as delaying projects and restricting recruitment, reports BusinessLIVE.

Covid out of the way

With Covid-19 no longer a public health emergency, the department would now focus on improving services across the board, from Primary Health Care to specialised care, and hastening the NHI implementation.

Over the medium-term expenditure framework (MTEF), it will continue to focus on preventing and treating communicable and non-communicable diseases, and also oversee the provision of primary health care services, the phased implementation of the NHI, support tertiary health care services, investing in public health infrastructure and developing the health workforce, according to the Portfolio Committee on Health’s report on the budget and annual performance plan.

An amount of R10m per annum would go to the no-fault scheme (a fund pharmaceutical companies required the government to establish to cover possible injuries from Covid-19 vaccines – without establishing such a fund, Pfizer and J&J weren’t willing to sell jabs to any government).

Bhekisisa reports that additionally, over the medium term expenditure framework a total of R8.7bn within the human resources grant has been allocated to train specialists over the next three years.

Also over the medium term expenditure framework, R7.8b would pay the salaries of medical interns and community service doctors, while R7.2m has been allocated for direct transfers to provinces with approved plans for the maintenance, refurbishment, upgrades and replacements of primary healthcare facilities.

Under NHI scheme grants, R1.4bn will be available to provinces to upgrade or build new clinics and hospitals. The Limpopo Academic Hospital, Zithulele and Bambisana Hospitals in the Eastern Cape and Dihlabeng Hospital in the Free State are part of this project.

The first year of the government health sector’s electronics health records system (EVDS) will also be introduced this year, focusing on electronically recording the data of HIV and TB patients.

However, because there are public sector clinics that have no internet, Phaahla said all clinics will have connectivity by the end of the financial year.

NHI Bill no magic bullet

He appealed to MPs to support the NHI Bill, calling it “an instrument for the realisation of the goal of equity”.

Responding to his speech, the DA’s Michele Clark said NHI would not be a quick fix to the problems confronting public healthcare, and urgent action was needed to provide quality services to patients. Little progress had been made towards the goals set out in the presidential health compact signed in 2019, she said.

“It is a clear indicator of what will happen with NHI,” she added.

Her DA colleague, Lindy Wilson, said the government had presided over the collapse of the public health system. “You are, by your own admission, falling behind,” she said, cataloguing the years-long waiting lists confronting patients in need of surgery.

Orthopaedic surgery backlogs were as long as seven years in parts of the country, while cancer patients could wait up to three years for the removal of tumours, she said.

Phaahla responded to their critique by saying the public health system provided care to millions of people every day, throughout SA. The Health Department acknowledged the challenges created by a growing burden of disease, under-funding, and corruption, but it was taking action to deal with these issues, he said.

Medico-legal problems

“We have established a working relationship with the Eastern Cape Department of Health that will see us roll out a bespoke Patient Information System (HMS2) at all district hospitals to improve patient care, revenue generation and mitigation against the increasing medico-legal exposure.

“This project will be implemented at at 12 hospitals during the 2023/24 financial year, part of aggressive attempts to modernise public health through digitalisation, which will include the back scanning of all paper-based patient files.”


Yet the Treasury has still to provide details on how the NHI will be financed. Several clauses in the NHI Bill made provision for a staggered approach of implementation, stating that the NHI must be gradually phased in using a “progressive and programmatic approach” based on financial resource availability.

A “single-payer” system is proposed in the Bill, where the government paid for all essential healthcare of its citizens, including doctor visits, hospitals and prescription medicine. Under the proposal, medical schemes would only be allowed to cover services and products not covered by the government.

The Bill stated broadly that the system would be funded by taxes, like personal income tax and VAT.

Previously, several civil society organisations raised concerns with the implementation of the NHI, with the SA Medical Association (Sama) saying it could not support the NHI as proposed.

"Many of the proposed changes have yet to be fully researched for their effectiveness and potential to actually improve service delivery by ensuring there are sufficient funds and the desired framework to achieve this.”

Expedite NHS: FFC

However, the Financial and Fiscal Commission (FFC), in its report on the budget and annual performance plan, said an acceleration and speedy implementation of health reforms like the NHI was imperative.

It highlighted the high burden of communicable and non-communicable diseases, and noted that the HIV prevalence rate was about 13.7% of the population – or 8.2m.

Worsening the crises were the shortage of doctors and specialists in comparison with other countries: SA has the lowest number of doctors per 1 000 patients and the highest number of patients per doctor: it had 0.79 doctors per patient in 2019.

“While the budget is down for 2022/23 adjusted appropriation, total expenditure is projected to increase at an annual average rate of 0.4%. The Compensation Commissioner for Occupational Diseases' expenditure is also expected to total R1.5bn over the medium-term expenditure framework, increasing at an annual average rate of 6.5%,” the report read.

The FFC report said the Council for Medical Scheme’s total expenditure was expected to rise at an average annual rate of 4.7%, from R193.4m in 2022/23, to R221.9m in 2025/26.

“The council is further expected to generate 95.2% (R616.4m) of its revenue over the medium term through the collection of levies from medical schemes and 3.2% through transfers from the department,” it said.

Regarding the SA Health Products Regulatory Authority (Sahpra), the FFC reported that the total revenue expenditure was expected to increase at an annual average rate of 7% to a total of R1.2bn over the MTEF and a deficit of R13.9m was projected for 2023/24, after which the budget would remain balanced.


Health-e News article – Health budget allocation down R4.4bn (Open acccesss)


BusinessLIVE article – Wage deal will reduce staffing levels, warns health minister (Restricted access)


Bhekisisa article – #HealthBudgetVote: Here’s what the health department’s kitty looks like this year (Creative Commons Licence)


News24 article – SA health crisis: Resource-rich private sector services 15% of SA, public sector limps along (Open access)


News24 article National Health Insurance will get R8.8 billion in the next three years, without a costing model


See more from MedicalBrief archives:


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


Treasury says NHI implementation so slow that no budget is needed anytime soon


Budget ‘protects’ NHI from cuts but Treasury hints at implementation delay







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