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Our weak economy threatens to undermine the significant progress made in the public health sector over the past decade, including a 10-year increase in life expectancy.
The SA Health Review 2017, released on 23 August, paints a sober picture of a sector battling to deliver services and contain costs in the face of low economic growth.
Additional revenue streams
Health expenditure will increase in this financial year by a mere 1.1%. By next year, this increase will be a tiny 0.8% and in 2018/19, there will be a cut in spending of R142-million (0.1%).
“The slowdown in growth may last for a long time, impacting on health budgets negatively, but the National Health Insurance (NHI) has the potential to reverse this trend through additional revenue streams to fund health services,” argue Treasury official Mark Bletcher and colleagues in the SAHR.
Proposed financing for the NHI is from a reduction in tax breaks for medical scheme members, a VAT increase, payroll tax and personal income tax surcharge.
The 38% depreciation of the Rand against the US Dollar between 2012 and 2016 has posed a huge challenge to the price of medicines, observe Bletcher and colleagues.
At the same time, an extra 400 000 patients per year are joining the HIV treatment programme and a number of new children’s vaccines have been introduced.
Staff the biggest expense
“Control of medicine price increases has generally been one of the Department of Health’s greatest successes,” note Bletcher and colleagues. This has been done largely through the central procurement of medicines.
“Prices of ARVS are generally considered the lowest in the world and overall public sector medicine prices have been said to be 87% lower than average OECD prices,” they note.
Staff costs are the biggest expense, with national salary increases for certain categories of health professionals resulting in increases of 38% between 2005 and 2012.
“Most provinces have imposed some form of restriction in terms of filling vacant posts,” says Bletcher, with posts declining by around half a percent a year since 2012. This has translated into a loss of 5 500 positions over the past four years.
Spending on infrastructure has been cut, while more patients are being channelled to clinics rather than hospitals to cut costs.
At the same time, clinic visits have been cut by three million over the past two years, in part due to the introduction of a new medicine dispensing programme that enables stable chronic patients to get their medicines from designated pick-up points such as private pharmacies and schools, rather than clinics. The programme is implemented in 700 facilities and covers over half-a-million patients at present. – Health-e News.
Image credit: iStock
