1

Summary

Health Review: 2005/2006

This Chapter:• Provides an overview of health funding in the

public sector context.• Reviews key policy & sectoral developments.• Examines overall expenditure trends.• Focuses on expenditure & service delivery trends

in key service delivery areas.• Focuses briefly on aspects of personnel in the

sector.

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Key trends

• Real budget growth exceeds 4% per annum • Improving equity• Primary health care, emergency ambulance and HIV

and AIDS programme funding growing strongly• Capital and NPNC expenditure significant real

growth • Under-spending on capital and conditional grants• Professional personnel increased by 2605 after

scarce skills and rural allowance• Weaknesses in sectoral non-financial information

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The Public Sector Context: Total Health Funding in South Africa

Table 1: Funding flows for health services, 2004/05

Financing intermediary  R million Percentage % GDP

Public 47,500 41.5% 3.4%

Private 66,038 57.7% 4.7%

Donors and NGOs 947 0.8% 0.1%

Total 114,485 100.0% 8.2%

Source: National Treasury provincial database and research

There are large differentials between private and public spending.

Nearly 60% of health funding goes towards funding private health care, while only the wealthiest 15% are insured.

Only 40% of health funding goes towards the majority of the population

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Public sector health funding as a % of GDPCountry Public health

expenditure as percentage of

GDP

Total health expenditure as

percentage of GDP

Cuba 6.1% 6.8%

Argentina 5.1% 9.5%

Namibia 4.6% 6.7%

Poland 4.4% 6.1%

Botswana 4.4% 6.6%

Russia 3.7% 5.4%

South Africa 3.6% 8.6%

Columbia 3.6% 5.5%

Turkey 3.6% 5.0%

Brazil 3.2% 7.6%

Chile 3.1% 7.0%

Algeria 3.1% 4.1%

Iran 2.7% 6.3%Mexico 2.7% 6.1%

Venezuela 2.7% 4.7%

South Korea 2.7% 6.0%

Thailand 2.1% 3.7%

Egypt 1.9% 3.9%

Philippines 1.5% 3.3%

Malaysia 1.5% 2.5%

Source: Adapted from WHO Global Health Report

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Public Health Sector Funding in Middle Income Countries

• South Africa’s total health expenditure as a proportion of GDP is relatively high

• Public sector funding at 3.4% of GDP compares favourably

• Influenced by large private health sector, escalating wage costs and the growing burden associated with HIV / Aids

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Health funding flows 2004/05

R million Percentage Provincial departments of Health and Works

40,343 92.8%

Local government health services (including provincial transfers)

2,100 4.8%

National Department of Health 1,047 2.4%

Total public sector 43,490 100.0%

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Provincial health expenditure, 2001/02 to 2007/08

R million 2001/02 2002/03 2003/04 2004/05 2005/06 2006/07 2007/08

Eastern Cape 3,808 4,374 5,090 5,173 6,088 6,618 7,218

Free State 1,927 2,165 2,503 2,797 3,076 3,315 3,522

Gauteng 6,792 7,625 8,129 8,597 9,258 9,900 10,355

KwaZulu-Natal 6,913 7,392 8,042 8,950 10,379 11,467 12,347

Limpopo 2,596 3,062 3,627 4,196 5,046 5,299 5,552

Mpumalanga 1,425 1,652 1,953 2,263 2,481 2,878 3,055

Northern Cape 509 599 817 832 942 1,161 1,241

North West 1,675 1,973 2,207 2,595 2,894 3,198 3,433

Western Cape 3,703 3,951 4,547 5,172 5,743 6,134 6,488

Total 29,347 32,794 36,916 40,575 45,905 49,969 53,211

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Provincial health expenditure, 2001/02 to 2007/08

• Between 2001/02 –2004/05 growth exceeded 15% annually in Northern Cape, Mpumalanga, North West & Limpopo, implying that basic health services were significantly strengthened.

• The medium term sees growth in all provinces, with growth above 11% in KZN, Eastern Cape & Northern Cape.

• KZN now has the largest provincial health budget.• The 20.3% per capita increase in Limpopo’s budgets

in 2005/06 helps to close the spending gap.

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Under-spending on Conditional Grants

• Under-spending on conditional grants 4.8%, compared to overall 1.3%

• Most prevalent in Hospital Revitalisation Grant (24.9%) and Integrated Nutrition Programme Grant (22.6%).

• From 2006/07, the integrated nutrition grant will be phased into the provincial equitable share

• Various interventions being put into place to strengthen Hospital Revitalisation programme

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Primary health care per capita spending trends

2003/04 2004/05 2005/06

Projected Budget Increase

Eastern Cape 171 197 217 10.4%Free State 196 218 230 5.7%Gauteng 166 170 182 7.0%Kw aZulu-Natal 150 183 201 9.8%Limpopo 136 170 187 10.1%Mpumalanga 115 118 152 28.8%Northern Cape 200 231 298 28.9%North West 192 196 238 21.5%Western Cape 215 225 274 21.5%

Total 165 184 207 12.8%Source: National Treasury provincial database and demographic projections

Substantive increase in PHC from 2001/02 (R121) to 2005/06 (R207) reflects national policy of improving access and support lower levels of care.

Significant expenditure growth, though large disparities still exist.

Department of Health has set PHC utilisation target at 3.85 visits per year for uninsured persons.

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PHC visits per capita

PHC visits per capita 2001/02 2002/03 2003/04

Eastern Cape 2.5 2.3 2.4

Free State 2.4 2.5 2.6

Gauteng 1.7 1.8 1.7

KwaZulu-Natal 2.0 2.1 2.2

Limpopo 2.4 2.7 2.9

Mpumalanga 1.9 1.9 2.1

Northern Cape 3.0 3.1 3.6

North West 2.8 2.7 2.6

Western Cape 3.6 3.8 3.6

Total 2.3 2.4 2.4

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Provincial emergency medical services expenditure, 2001/02 to 2007/08

2001/02 2002/03 2003/04 2004/05 2005/06 2006/07 2007/08 Average

Outcome Medium-term estimates annual

R thousand growth 2001/02 - Emergency

transport772,693 898,666 1,186,660 1,194,312 1,491,732 1,556,013 1,639,318 13.4%

Planned patient transport

19,934 8,465 98,808 145,218 187,584 227,715 248,665 52.3%

Total 792,627 907,131 1,285,468 1,339,530 1,679,316 1,783,728 1,887,983 15.6%

1. Ambulances and non-emergency patient transport.

Source: National Treasury provincial database

Preliminary outcome

Funding for EMS grows strongly to R1.7billion in 2005/06.

Unit costs vary significantly among provinces due to problems in information systems, population density, distances and variations in staffing models.

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Provincial HIV and Aids expenditure, 2001/02 to 2007/08

2001/02 2002/03 2003/04 2004/05 2005/06 2006/07 2007/08 Average

Outcome Medium-term estimates annual

R million growth 2000/01 - Conditional grant 37 288 402 770 1,135 1,567 1,646 88.1%

Other 43 -5 216 411 609 650 825 63.8%

Total 80 283 618 1,181 1,744 2,218 2,471 77.2%

Source: National Treasury provincial database

Preliminary outcome

Provinces have budgeted R1.7 billion in 2005/06 for specific interventions.

AIDS treatment programmes have been initiated in all 53 health districts, 42 367 people on treatment by December 2004

Widespread rollout of voluntary counseling and testing (427 sites in 2002 to 3369 in 2004) and Mother-child prevention programmes. Male condoms distributed increased from 150 million in 1998 to 360 million in 2004

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Revitalisation hospitals close to completion

2004/05 2005/06 2006/07

Eastern Cape Mary Theresa

Limpopo Lebow akgomo Jane Furse Dilokong

Mpumalanga Piet Retief

Northern Cape Colesberg Calvinia

North West Sw artruggens

Western Cape George Vredenberg

Worcester (Eben Donges)

Source: National Department of Health

Need higher quality project business & implementation plans.

Strengthening national programme unit & provincial departments through the infrastructure development improvement programme.

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Trends in scarce health professionals

December 2001

February 2003

April 2004 February 2005

 Change February 2003 to

February 2005

Percentage change

Doctors 11,170 11,265 11,595 11,135 -130 -1.2%

Medical practitioners 7,363 7,694 8,146 8,008 314 4.1%

Medical specialists and registrars

3,807 3,571 3,449 3,127 -444 -12.4%

Professional nurse 41,063 40,846 42,263 43,060 2,214 5.4%

Radiographer 2,058 2,078 2,043 2,076 -2 -0.1%

Pharmacists 1,239 1,256 1,336 1,607 351 27.9%

Dental practitioners 625 568 626 585 17 3.0%

Physiotherapists 455 667 725 728 61 9.1%

Occupational therapist 399 574 611 606 32 5.6%

Dieticians 250 378 404 435 57 15.1%

Speech therapist 118 215 240 255 40 18.6%

Dental specialists 44 63 33 28 -35 -55.6%

Total 57,421 57,910 59,876 60,515 2,605 4.5%

Source: Vulindlela

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Personnel per 100 000 population

EC FS GT KZN LIM MPU NC NW WC

Medical officer 14.6 19.0 24.7 21.8 13.0 18.3 35.7 12.1 31.6

Medical specialist and registrar

2.0 13.5 17.3 5.3 1.4 0.6 2.2 0.9 23.1

Doctor total 16.6 32.5 42.0 27.1 14.4 18.9 37.9 13.0 54.7

Professional nurse 107.5 148.3 105.4 106.6 110.8 93.2 141.3 89.9 105.9

Radiographer 4.1 7.8 7.8 4.4 2.2 2.8 6.5 2.6 10.1

Pharmacist 3.4 4.4 3.7 4.2 2.8 3.9 5.4 3.1 7.3

Dental practitioner 0.9 2.0 2.3 0.6 1.1 1.7 2.2 1.4 2.7

Physiotherapist 0.8 2.4 2.0 2.2 1.3 1.9 2.2 1.3 2.9

Occupational therapist

0.5 2.6 1.8 1.1 1.7 2.2 2.2 1.0 2.4

Dietician 0.6 1.7 1.4 0.6 1.0 1.5 1.9 1.2 1.3

Total 151.3 234.7 209.3 174.6 150.5 146.0 239.2 127.0 242.8

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Trends in scarce health professionals

• Professional personnel numbers rose (2605 employees), suggesting improving stability

• Increases noted in pharmacists (27.9%), dieticians (15.1%), speech therapists (18.6%) & physiotherapists (9.1%).

• While number of doctors did not increase, redistribution noted among provinces, following rural allowance strategy.

• While progress is noted, the lack of skilled personnel in rural areas remains a problem.

• Access to personnel varies considerably across provinces.

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Table 3.23 Provincial health expenditure by economic classification, 2001/02 to 2007/082001/02 2002/03 2003/04 2004/05 2005/06 2006/07 2007/08 Average

Outcome Preliminary Medium-term estimates annual

outcome growth

R million 2001/02– 2007/08

Current payments 25 341 28 422 31 593 35 459 39 500 42 920 45 854 10,4%

Of which:

Compensation of employees

17 762 19 022 20 854 23 311 25 826 27 809 29 442 8,8%

Goods and services 7 575 9 397 10 737 12 115 13 674 15 112 16 412 13,8%

Transfers and subsidies 2 136 2 539 2 821 2 491 2 904 2 914 3 080 6,3%

Municipalities 754 829 835 1 012 1 100 1 015 1 066 5,9%

Payments for capital

assets

1 870 1 834 2 502 2 625 3 501 4 135 4 277 14,8%

Of which:

Buildings and other fixed structures

1 230 1 025 1 428 1 430 2 111 2 546 2 641 13,6%

Machinery and equipment

637 808 1 073 1 186 1 378 1 586 1 632 17,0%

Total 29 347 32 794 36 916 40 575 45 905 49 969 53 211 10,4%

Source: National Treasury provincial database

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Conclusion

2005 / 2006 budget showed 8.6% real growth. Key emphasis on strengthening primary health care

and implementing the district health system, expanding programmes to counter HIV / AIDS, and revitalising health infrastructure. Ambulance budget & goods and services (NPNC) continue to improve.

Greater attention to hospital budgets, Modernisation of Tertiary services and improving staffing levels required in future budgets

Publishing and disseminating health information needs to be improved.

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Questions

• Do we have sectoral information we need for planning and evaluation

• How do we increase health professional personnel

• How to speed up capital spending and revitalisation

• Are we getting value for money

• Are we improving quality of care

• Are we focusing enough on prevention and outcomes