The 2013 budget speech has allocated R133-billion over the medium term to health which accounts for 4.5% of the budget. Health financing and national health insurance will account for 44% of health spending over this period. Despite the tight fiscal climate, it does seem encouraging that the health sector is receiving extra funding. However South Africa already spends 8,5% of its gross domestic product on health and is still on the lower end of the health outcomes spectrum when compared with similar middle-income countries. Therefore is this increase to the health budget really necessary, or should Gordhan have paid more attention to spending money allocated to healthcare more efficiently?
Gordhan stated that alongside social assistance, access to health care is a vital element in the social wage. This is an encouraging statement given the manner in which social determinants play such a fundamental role in defining the status of a nation’s health. He also pointed out examples of progress in the healthcare sector, acknowledged the progress made in reducing mortality and improving the HIV and TB programmes and placed a renewed focus on the NHI initiative.
However Gordhan is too vague in supplying us with details regarding the National Health Insurance. It is all very well alluding to the fact that a tax increase ‘might’ be needed to fund the implementation of NHI without giving any concrete details about when, where and how this anticipated tax increase will manifest itself in the future.
New policy initiatives such as the NHI are only possible if South Africa succeeds in driving economic growth towards 5% year. According to Stats SA, our current GDP at market prices has only increased by 2,1% during the fourth quarter of 2012. This also means that government revenue needs to double within the next 20 years in order for NHI to become a reality. Therefore the affordability of the NHI is inextricably linked with the growth of the economy. Bearing this in mind and taking into consideration South Africa’s current economic growth trajectory at only 2,1%, implementation of the NHI is practically impossible to conceive unless government takes measures to reduce spending in certain areas and increase taxes in others. Gordhan however states that the initial phase of NHI will not place new revenue demands on the fiscus.
In my opinion this is rather short-sighted. South Africa unfortunately suffers from a quadruple burden of disease and the Gini Co-efficient for South Africa is one of the largest in the world. The gap between the rich and the poor is exponential and growing everyday. A NHI policy is going to need a large sum of capital to launch and implement never mind run effectively, to do this; taxes will have to be raised in order to procure this much needed capital. However Gordhan’s budget speech fails to address these glaring issues about how the NHI will be funded.
According to the Mail & Guardian, reductions have actually been made to the NHI grant due to slow spending. This seems completely counter-intuitive to me especially in terms of South Africa’s lack of sufficient economic growth and the fact that NHI will never come to fruition unless our GDP makes a distinct improvement in the global economy.
In addition, I also think that there should have been more clarity on how much money allocated to the health budget would be spent on combating corruption in the health sector. Not only is this a huge problem which directly affects South Africans at the moment but corruption in the health sector will undoubtedly also hinder the effective implementation of NHI.
(See http://www.news24.com/SouthAfrica/News/Corruption-costs-E-Cape-health-R45m-20110307
http://www.news24.com/SouthAfrica/Politics/Devastating-corruption-in-E-Cape-health-dept-20130203
http://www.aljazeera.com/indepth/opinion/2012/06/201265112355558115.html )
Gordhan should have been more lucid about how much money in the healthcare budget would be used to combat corruption, improve governance structures in health districts and hold public health officials accountable for their actions.
However despite these criticisms, the budget speech does show that health infrastructure, contracting with general practitioners and financial management reforms as well as medical and nurse training capacity must first be improved if NHI is to be effective and build public confidence in the reform.
Interesting take on NHI...it seems like most of the critical points you raised is exactly what SA is trying to put in place before the full launch of NHI. Current programs are being implemented to make SA "NHI ready", lets hope something meaningful will come out all the hard work
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