Bigger health budget to roll out NHI

Wednesday, February 27, 2013

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

The health sector received R133.6 billion from the National Budget tabled by Finance Minister Pravin Gordhan in Parliament on Wednesday. Gordhan said some of the money will go towards ensuring the completion of some 1 967 health facilities and 49 nursing colleges which he said were in different stages of planning, construction and refurbishment.

More than R800 million would have been allocated for the scale up of the provision of antiretroviral treatment. 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.

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

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 spending will go to hospitals and human resource development programmes.

Government concedes that achieving the health sector objectives will require a fundamental reform in the country’s health system. The National Development Plan, a growth document approved by Cabinet recently, also endorses a health system which raises life expectancy, reduces infant mortality and HIV and Aids. The plan further highlights several areas of the South African health system for attention and these include demographics, and disease burden, health systems and 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 infrastructure increased from R3.3 billion in 2009/10 to R5.4 billion in 2012/13 financial year and this is expected to grow to R6.5 billion over three years.

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, Cabinet approved reductions of R10.5 million, R10 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 three years.

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

But over long term, more significant funding will 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 will be published this year –