The National Treasury has issued a scathing assessment of the government’s slow progress in implementing National Health Insurance (NHI), saying the ANC’s flagship plan for achieving universal health coverage is unlikely to require significant funding anytime soon.
More than 10 years after the plan was signed off by the ANC at a policy conference in Polokwane, it has yet to be implemented, reports Business Day.
Key legislation paving the way for the establishment of a fund that will pay for health services was submitted to Parliament more than two years ago, but the NHI Bill is still being considered by the Portfolio Committee on Health, and the government has yet to publish up-to-date costing estimates for the programme.
“At present … there is insufficient capacity in the health sector to work substantively on NHI. The NHI indirect grant has been underspent, the NHI fund has not yet been established, and the NHI Bill still needs to be passed by Parliament. It is therefore unlikely that NHI will be a significant cost pressure in the medium term,” the Treasury said in the Medium Term Budget Policy Statement (MTBPS).
A previous costing of the NHI policy estimated it would require R40bn a year in additional funding over the first five years, and perhaps more over time, the Treasury said. “The existing provisions for NHI, including the conditional grant, have not been spent,” said Treasury's acting head of the budget office, Edgar Sishi,
“It is unlikely that will change because (it requires) some fairly significant institutional arrangements to occur in the health sector, and that is nowhere near happening at this point,” he said. “Money can’t just move.”
In the 2020 budget, for example, the Treasury shifted R1.4bn out of the NHI indirect grant, which funds the majority of NHI projects. At the time, the Treasury said the cut was due to slow spending on contracting with general practitioners, mental health services and oncology services.
Similar cuts were imposed in 2019 when the Treasury moved R2.8bn in unspent NHI funds to the provinces so that they could fill critical posts.
The medium-term budget policy statement now sees the Treasury cutting R308.4m from the NHI indirect grant, trimming its allocation for the 2021/2022 financial year from R1.34bn to R1.03bn.
The February budget allocated R7.5bn to the NHI indirect grant over the medium-term expenditure framework. This included R986.3m to fund the contracting of healthcare services, R2bn to strengthen the health system in preparation for NHI, and R4.4bn for infrastructure projects.
Writing in The Conversation, Russell Rensburg, Programme Manager Health Systems and Policy, University of the Witwatersrand, writes that the budget framework proposed further cuts to an “already collapsing public health system”. He identifies a number of examples of the deleterious effect of the cuts:
- A NHI indirect grant was introduced to strengthen health management information systems to improve decision making and prioritisation. Cuts to this grant set back this crucial investment in strengthening health system responsiveness. The NHI grant has a history of poor spending. But the grant has been redesigned to support the development of the required infrastructure for the establishment of the NHI Fund.
- A recent report by the Medical Research Council looked at the readiness of public hospitals to use diagnostic related groups – a patient classification system that helps standardise the cost of care. The report highlighted the woeful state of hospital administrative systems. About 40% of hospitals assessed were unable to produce discharge records – among other challenges. Cuts to this NHI indirect grant will compromise efforts to address this.
- Then there’s the health revitalisation grant which is meant to support the building of new facilities and refurbishment of existing ones. Its share of the budget remains static over the next three years. Considering the significant overruns in the management of these projects, this may have been an opportunity to reduce expenditure while prioritising the strengthening of organisational systems which the grant also accommodates. Infrastructure investments are essential to improving the health system. But closer consideration should be given to how projects are identified, evaluated and approved. With limited fiscal space, greater priority should be given to revitalising existing infrastructure.
- Allocations to the HIV and TB and community outreach grant remain static. But given the need to respond to COVID-related disruptions it is essentially a cut. Furthermore, some consideration should have been given to effectiveness of the current grant. To end HIV as a public health threat the UN had set targets that by 2020: 90% of people living with HIV must know their status; 90% of people with HIV who know their status must be initiated into treatment and lastly 90% of those initiated into treatment must be virally suppressed. Currently, South Africa scores poorly across the cascade. It needs closer interrogation of what is constraining the response. Continuing to do more of the same is clearly not the way.
Business Day article – Treasury gives scathing review of stagnant NHI (Restricted access)
See more from MedicalBrief archives:
IRR submission on NHI Bill: ‘Blatant elite enrichment’
HPCSA: All medical scheme assets should go to NHI
Foundation calls for withdrawal of 'grossly inadequate' NHI Bill