South Africa’s medium-term fiscal policy statement for 2021 was more of the same old story. This was not talking about the high expectations that the impact of poverty and inequality would be strongly present.
Instead, the South Africans got:
let’s be patient, let’s stick to the dream of a primary account surplus, then maybe we can then make the necessary investments to put in place extended social security, invest in strengthening the health system, etc. In the meantime, let’s do more with less.
Budgets alone do not solve structural problems such as state efficiency. Reducing the wage bill does not solve mismanagement or poor execution of the budget. On the contrary, it increases the risk of execution. But they provide insight into the government’s plans to meet its broader development priorities.
In the case of South Africa, tackling the impact of poverty and inequality on broader development is and should be our priority. For example, the youth unemployment rate is 60%. This is structural because many discouraged job seekers have neither the skills nor the retraining necessary to access opportunities. The government’s plans will not fix it. If very strong growth occurs, it will not benefit these groups, especially those in rural areas where work opportunities are scarce.
Given the record that COVID has had on the socio-economic life of the country, including health, there were high expectations that Enoch Godongwana, the Minister of Finance, would indicate in the medium-term fiscal policy statement how the government planned to mitigate the impact of COVID on the healthcare system.
Indeed, the government has invested heavily in mitigating the risks associated with COVID. Examples include the introduction of a social distress subsidy, reduced interest rates, and tax incentives for businesses most affected by the foreclosure. Investments in vaccine supply have also been significant.
The government has also implemented a number of other public policy measures. These included several regulations to limit the spread of the virus, imposed alcohol bans to reduce the impact of trauma-related injuries on the healthcare system, and allocated large sums for vaccines.
But all this was not enough, as 265,000 more people died between March 2020 and November 2021 compared to deaths from natural causes in previous years. This is almost three times more than the official number of reported COVID deaths. It will take some time to fully unwrap this anecdotal evidence from district health officials who have investigated unexplained deaths at facilities. But these numbers demonstrated the disruption in services and the need for strategies to address it in the future.
COVID-related restrictions have had unintended consequences. These included restrictions on access to routine health services. A survey carried out in the first 150 days of South Africa’s lockdown in 2020 showed a sharp decline in access to health services. In particular, access to HIV and tuberculosis testing has declined by up to 50%.
Additionally, COVID has exposed the ineffectiveness of South Africa’s shadow health system. More than 50% of COVID tests have been carried out in the private sector, while only 15% of the population has private medical coverage. More than 40% of hospital admissions related to COVID were private admissions. Official deaths from COVID were also higher in public facilities – often due to a delay in seeking care.
Read more: Healthcare in South Africa: How inequalities contribute to inefficiency
In light of all this, the government was expected to seize the opportunity and make the necessary investments to improve access and responsiveness of the health system. Instead, the fiscal framework proposed further cuts to an already collapsing public health system.
The National Health Act defines the governance of South Africa’s health system, assigning it to the three spheres of government – national, provincial and municipal.
The national ministry of health provides a framework for a structured and uniform health system. Provincial ministries are responsible for the delivery of health services. They employ most of the health workers and depend on the provincial equitable share of national revenues for health care funding. The provincial fair share cuts will put additional pressure on struggling rural provinces like the Eastern Cape, Limpopo, the North West and the Free State to make the necessary investments to address gender inequalities. health.
Impact of budget cuts on state-funded health care
Effective governance of health systems depends on good quality data on a number of indicators. These include the burden of disease, health service delivery, outcomes of interventions, and advances in equity, especially limiting out-of-pocket spending.
An indirect grant from the National Health Insurance (NHI) was introduced to strengthen health management information systems to improve decision making and prioritization. The cuts to this grant have delayed this crucial investment in strengthening the responsiveness of the health system. The NHI grant has a history of poor spending. But the grant was redesigned to support the development of the infrastructure required for the creation of the NHI Fund.
A recent report by the Medical Research Council examined the willingness of public hospitals to use diagnostic groups – a system for classifying patients that helps standardize the cost of care. The report highlighted the deplorable state of hospital administrative systems. About 40% of the hospitals assessed were unable to produce discharge records – among other challenges. Cuts to this indirect INSA grant will undermine efforts to address this issue.
Read more: Water, blackouts and neglect wreak havoc on South Africa’s best hospitals
Then there is the Health Revitalization Grant which aims to support the construction of new facilities and the renovation of existing facilities. Its share of the budget remains stable over the next three years. Given the significant overruns in the management of these projects, this may have been an opportunity to reduce expenses while focusing on strengthening organizational systems that the grant also makes it possible to accommodate. Investments in infrastructure are essential to improve the health system. But more attention should be paid to how projects are identified, evaluated and approved. With limited fiscal space, higher priority should be given to revitalizing existing infrastructure.
Allocations for the HIV and TB grant and community outreach remain static. But given the need to respond to COVID-related disruptions, this is essentially a reduction. In addition, some consideration should have been given to the effectiveness of the current subsidy. To end HIV as a threat to public health, the UN has set targets by 2020: 90% of people living with HIV need to know their status; 90% of HIV-positive people who know their status must be initiated to treatment and finally 90% of those initiated to treatment must undergo viral suppression. Currently, South Africa is performing poorly in the stunt. It is necessary to question more closely what constrains the answer. Continuing to do more of the same is clearly not the way.
Read more: HIV, AIDS and 90-90-90: what is it and why is it important?
Abdication of constitutional obligations
Article 27 of the Constitution guarantees everyone the right to health services and commits the government to the progressive realization of this right.
And the budget – the vehicle for making this constitutional guarantee a reality – should prioritize the interests of the most vulnerable. Instead, it puts the interests of the elites before the needs of the majority.
The elites do not depend on the public provision of basic services like education and health care. Private health expenditure corresponds to government health expenditure although it covers only 15% of the population. Likewise, the expansion of low-cost private schools will erode the capacity of publicly funded education. And the cuts in the number of teachers will not be felt by the elites.