The good news is that National Treasury has made good on Health Minister Joe Phaahla’s promise that the government would find the money to hire more doctors, but not all unemployed doctors will be hired as provinces will have to prioritise posts, notes MedicalBrief.
BusinessLIVE reports that but the health sector will remain under pressure as the health budget shrinks in real terms over the next three years. Under growing pressure to reverse the deep cuts announced in the Medium-Term Budget Policy Statement in November, the Treasury has allocated an extra R11.6bn to help cover last year’s higher-than-anticipated wage settlement, Finance Minister Enoch Godongwana announced in his Budget presentation yesterday.
The Western Cape has been vocal about the impact of the centrally agreed wage deal that wasn’t fully funded by the Treasury and left provincial Health Departments unable to fill essential posts.
Treasury’s chief director for health and social development, Mark Blecher, said the extra money would not be sufficient to hire all the recently qualified doctors who have been unable to secure jobs with the state, and provincial Health Departments would need to determine which posts should be prioritised.
“There will be less downsizing, and more posts will be filled, but it is unlikely they all will be,” he said. Trade union Samatu estimates 800 recently qualified doctors who expected to work for the state have been unable to find jobs.
Provincial health departments will remain under financial pressure as consolidated health expenditure grows by a nominal 3.4 % over the medium term, said Blecher. Treasury estimates inflation will average 4.7% over the next three years which means the budget shrinks in real terms.
Treasury has set aside a revised estimate of R267.3bn for consolidated health expenditure this year, rising to R271.9bn in 2024/25. The consolidated health budget then increases to R281.1bn in 2025/26 and R295.2bn in the outer year. This represents baseline reductions of R23.7bn over the medium term, Treasury said in the Budget Review.
The HIV/Aids component of the district health service grant has been cut by R1.3bn a year over the medium term, due to the number of people on treatment running “significantly below target” and cheaper than anticipated medicines, Treasury said in its Estimates of National Expenditure. Only 5.5m of the estimated 7.8m people living with HIV in 2022/23 were on treatment.
The Health Facility Infrastructure Grant has been reduced by R3.6bn over the next three years due to historic underspending while an extra R1.1bn has been added to the national tertiary services grant to accommodate the restructuring of oncology services.
Meanwhile, a jobs freeze in the Western Cape Health Department has brought the budget back under control, head of department Dr Keith Cloete said last week, but it's not all smooth sailing yet.
Cloete told health workers that the “severe and drastic measures” taken to “constrain the filling of posts” in the past three months has brought the department back within budget, writes Daniel Steyn for GroundUp.
The “near-complete” freezing of vacant posts was in response to curb budget cuts imposed by National Treasury.
Initial cuts to provincial budgets and conditional grants that fund hospitals were made at the start of 2023/24 and were further exacerbated by in-year cuts.
Provincial governments also had to absorb – within their existing budgets – the mandatory public sector wage increase, and in November, the Treasury had recommended departments put a freeze on hiring.
Since November, posts could only be filled on approval by head office, but Cloete said those decisions would now be “decentralised” again.
Line managers may again fill vacant posts on condition they “apply their minds” and work within “a tight framework”, he said.
This news was welcomed by theatre surgeons, one of whom said the situation had been so dire that a statistician had to come in and sift through patient lists to “scientifically decide who will die”, said one.
“If you are not dying or have a serious complication, there is no way you will get an operation.”
Earlier this month, more than 1 200 doctors wrote an open letter to Western Cape Premier Alan Winde, Western Cape Finance Minister Mireille Wenger and national Finance Minister Enoch Godongwana, calling for an end to the “catastrophic budget cuts”.
Battle to maintain
Professor Lydia Cairncross, head of surgery at Groote Schuur Hospital, authored the open letter after seeing how her colleagues in the sector were struggling – not to improve their service, she said, but to maintain it.
“The people who are mainly affected are largely voiceless, and they are only going to really feel it in a few weeks or a month’s time,” she told News24.
This was not the type of situation that could be fixed by being more efficient and trying to work smarter, she added.
“You can hold on and manage if you’ve got an end in sight. But we have been told there is no end in sight, because the upcoming budget looks even worse. We’re looking at this for the next three years.”
The provincial government said it was doing what it could to try to lessen the impact, despite the quantum of the budget cuts being so large it would be almost impossible to fully mitigate.
In numbers
• R6.7bn – the reduction from the Provincial Equitable Share over the current Medium-Term Expenditure Framework (MTEF) over the next three financial years.
• 37% – the Department of Health & Wellness’ share of the total provincial budget.
• R1.1bn – funding shortfall of 2023 public sector wage agreement for which provincial government has not been fully compensated.
Wenger said the province relied almost completely on funding from the nationally collected tax revenue, which was allocated to each of the nine provinces by the National Treasury through the Provincial Equitable Share.
This accounts for about 75% of the budget, with conditional grants adding about 18% of the total budget, meaning 93% of the provincial budget is determined by the national government.
Despite the Western Cape being the third-largest province in South Africa by population, it receives the fifth largest budget allocation as the latest census data has not been incorporated.
Winde, in a responding letter to Cairncross and the signatories, said that three months ago his administration had declared an intergovernmental dispute with the national government for its “fair share of funding”.
All affected by cuts
Cairncross warned that a disruption to the public health sector affected the whole of society.
“You may think that because you’ve got a private medical scheme (this) doesn’t really matter. But it does, because the private health sector cannot survive without a functional public health system, which provides the training, the cutting edge innovation, the academic rigour and the foundation upon which the rest of the health system is founded,” she said.
“When that collapses, it begins to ripple down the entire system, whether it’s public or private.”
Countries with broken health systems force their citizens – who are able to afford it – to travel elsewhere for treatment, she said.
“We don’t want that in South Africa. We’ve got the infrastructure. We need to make the kinds of decisions that protect that, as we try to improve the fiscal situation. Good health (systems) contribute to social stability. And saves lives.”
BusinessLIVE – Extra money for health workers, but sector’s budget shrinks in real terms
See more from MedicalBrief archives:
Western Cape experts appeal for end to health budget cuts
Western Cape mulls freezing health posts as wage deal threatens jobs
Proposed budget cuts disastrous for health sector, activists warn