More for health as NHI pilots roll out


    27 February 2013

    With the National Health Insurance (NHI) pilot programmes already being rolled out in some of South Africa’s major cities, the government says the country’s health infrastructure remains a priority.

    The country’s health sector received R133.6-billion from the 2013 National Budget tabled by Finance Minister Pravin Gordhan in Parliament in Cape Town on Wednesday.

    Gordhan said some of the money would go towards ensuring the completion of some 1 967 health facilities and 49 nursing colleges which he said were in various stages of planning, construction and refurbishment.

    Extra R100-million to cover Pepfar shortfall

    More than R800-million was to have been allocated for the scale-up of the provision of antiretroviral treatment. However, the Treasury says an additional budget allocation of R100-million in 2014/15 and R384-million in 2015 will be necessary to partly address the announced decrease in funding over the medium term from the US President’s Emergency Plan for Aids Relief (Pepfar).

    This programme has contributed roughly R4-billion a year towards the South African national HIV/Aids and tuberculosis response, but the amount is likely to decrease by 50 percent over the next five years.

    However, Gordhan said there had been progress in the reducing mortality and improving the country’s HIV and TB programmes, with medical and nurse training capacity proving a success.

    NHI ‘will require fundamental reform’

    As announced in 2011, the spending focus over the medium term will also be on the preparing for the implementation of the NHI scheme. The bulk of health spending will go to hospitals and human resource development programmes.

    The government has conceded that achieving its health sector objectives will require a fundamental reform in the country’s health system. The National Development Plan (NDP), a growth document recently approved by the Cabinet, also endorses a health system which raises life expectancy and reduces infant mortality and HIV/Aids.

    The NDP further highlights several areas of the South African health system for attention, including demographics, health systems and the social and environmental causes of poor health.

    A closer look at the Treasury’s annual estimates of expenditure reveals that as a result of the anticipated phasing in of the NHI, spending on health infrastructure increased from R3.3-billion in 2009/10 to R5.4-billion in 2012/13, and is expected to grow to R6.5-billion over the next three years.

    Tax hikes likely over longer term

    The spending focus over the next few years will be on overseeing the 10 NHI pilot projects and conducting health economics research focusing on the roll-out of the plan and alternative health care financing mechanisms.

    The Treasury said that due to slow spending on the NHI conditional grant, the Cabinet had approved reductions of R10.5-million, R10-million and R5.2-million to the grant over the medium term. Subsequently, the allocation to the provinces for the existing NHI grant is R48-million, R70-million and R74-million over the next three years.

    Gordhan pointed out that the initial phase of the NHI would not place substantial new revenue demands on the fiscus during that period, because investments in improved health facilities were accommodated within annual health budgets.

    However, over the long term, more significant funding would be required, and it is anticipated that a tax increase will be needed to fund implementation.

    “The National Treasury is working with the Department of Health to examine the funding arrangements and system reforms required for NHI,” Gordhan said, adding that a discussion paper inviting public comment on various options would be published this year.