Assessment of Inter-Provincial Inequity with respect to Public

Healthcare Expenditure

Presentation by the NDoH

to the Portfolio Committee

Purpose

• Brief the Portfolio Committee on the current situation of inter-provincial inequity with respect to public health care spending.

Outline of Presentation

• Present trends in Public Health care expenditure over a 10-year period

• Present trends in per capita expenditure over a 10-year period (both nominal and real)

• Present trends including and excluding conditional grants

• Map a possible way forward– Involvement of the Portfolio Committee

Trends in Public Health Care Spending

South Africa - Health Expenditure by National & Provincial Government as % of GDP, 1992/93 to 2004/05 (MTEF estimate)

2.85%

2.90%

2.95%

3.00%

3.05%

3.10%

3.15%

3.20%

3.25%

3.30%

3.35%

3.40%

92/93 96/97 97/98 98/99 99/00 00/01 01/02 02/03 03/04 04/05

Trends in Public Health Care Spending (nominal values)

-

1,000,000

2,000,000

3,000,000

4,000,000

5,000,000

6,000,000

7,000,000

8,000,000

9,000,000

10,000,000

Eastern Cape Free State Gauteng KwaZulu Natal Limpopo Mpumalanga North West Northern Cape Western Cape

1995/96

1996/97

1997/98

1998/99

1999/00

2000/01

2001/02

2002/03

2003/04

2004/05

2005/06

Trends in Public Health Care Spending (real values)

-

500,000

1,000,000

1,500,000

2,000,000

2,500,000

3,000,000

3,500,000

4,000,000

4,500,000

5,000,000

Eastern Cape Free State Gauteng KwaZulu Natal Limpopo Mpumalanga North West Northern Cape Western Cape

1995/96

1996/97

1997/98

1998/99

1999/00

2000/01

2001/02

2002/03

2003/04

2004/05

2005/06

Trends in Per Capita Spending (nominal value)

0

100

200

300

400

500

600

700

800

900

Easte

rn C

ape

Free

State

Gau

teng

KwaZul

u Nat

al

Lim

popo

Mpu

mal

anga

North

Wes

t

North

ern

Cape

Wes

tern

Cap

eTo

tal

1995/96

1996/97

1997/98

1998/99

1999/00

2000/01

2001/02

2002/03

Trends in Per Capita Spending (real value)

-

100

200

300

400

500

600

EasternCape

Free State Gauteng KwaZuluNatal

Limpopo Mpumalanga North West NorthernCape

WesternCape

Total

1999/00

2000/01

2001/02

2002/03

2003/04

2004/05

2005/06

Distance from Equity (including Conditional Grants)

-60.0

-40.0

-20.0

0.0

20.0

40.0

60.0

80.0

Eastern Cape Free State Gauteng KwaZulu Natal Limpopo Mpumalanga North West Northern Cape Western Cape

1995/96

1996/97

1997/98

1998/99

1999/00

2000/01

2001/02

2002/03

2003/04

2004/05

2005/06

Distance from Equity (excluding Conditional Grants)

-40.00%

-30.00%

-20.00%

-10.00%

0.00%

10.00%

20.00%

30.00%

40.00%

50.00%

60.00%

Eastern Cape Free State Gauteng KwaZulu Natal Limpopo Mpumalanga North West Northern Cape Western Cape

1999/00

2000/01

2001/02

2002/03

2003/04

2004/05

2005/06

Assessment of Equity

• Massive inequities exist in the public health system• Even if conditional grants are removed, the

inequities are not significantly reduced• Some provinces have made remarkable progress,

however, concern of the pace of change.– Western Cape– The intentions of the Northern Cape need to be

acknowledged.

• Overall the impact on reducing inequities has been small.

Intra-Provincial Inequity

• No comprehensive assessment done yet• Limited studies show similar trends

– Rural and less advantaged areas have less access to resources

• District Health Expenditure Reviews– Help assess the level of inequity and make informed

decisions

– Guidelines developed

– Provinces are rolling them out

Obstacles to achieving Equity

• Fiscal federalism– Global budgets are allocated to provinces and

not to sectors specifically– Equity needs to be properly assessed in the

light of other social spending

Next Steps

• Development of norms and standards

• Definition of a basic package of health care – broader than merely primary health care.

Way Forward

• It is recommended that as a way forward the following steps are operationalised:

• Review of the budgeting system and the use of fiscal federalism to improve inter-provincial equity. Essential steps here include:– Conducting an incidence analysis of the financing and

benefits health care in South Africa– Review of the incorporation funding mechanisms to

account for health sector specific problems, e.g. weighting for HIV/AIDS, TB, Malaria

– Improve the focus on equity of the approach

Way Forward

– Development of a definition of basic health care services

– Development of both quantitative and qualitative norms and standards

– Development of minimum funding requirements for health care provision.

Involvement of Portfolio Committee

• There are a number of areas where the Portfolio Committee on Health can influence the promotion greater equity in health care spending. These include areas where the National Department has little influence over:• Working with the portfolio Committee on

Finance to understand why greater emphasis is not placed on inter-provincial equity

Involvement of the Portfolio Committee

• Together with the Portfolio Committee on Finance and the Select Committees of the NCOP to interrogate Provincial Legislatures and Treasuries in their allocation of revenue to Health departments

• As the NDoH defines basic Packages of Care and associated norms and standards, it is crucial that the Portfolio Committee on Health assist in obtaining buy-in of this process, to the end that there is commitment to deliver these packages and to fund their appropriate delivery.

– Assessment of funds earmarked for the implementation of Health Policies are implemented, e.g. HIV/AIDS, Personnel, Capital spending