HEALTH AND HIV FUNDING

Budget Monitoring Forum

Presenter: Mark Blecher | National Treasury | November 2011

Mortality beginning to drop

2

Numbers on AIDS treatment

3

Health personnel

4

Primary care visits

5

National service delivery agreement

6

Table 1: Summary of outcomes and targets of the NSDA

Outcome Target for 2014, with baseline values

from 2009

1 Increase life-expectancy Increase life-expectancy from 53.9 to 58 years

for males and 57.2 to 60 years for females

2 Decrease maternal and child mortality Decrease maternal mortality rate from 625 to

≤ 100 per 100 000

Decrease under-five mortality rate from 104 to

≤ 20 per 1000

Decrease infant mortality rate from 53 to ≤ 18

per 1000

3 Combat HIV and AIDS and decrease the burden of

disease from TB

Reduce new HIV infections by 50%

Of all those eligible for highly active

antiretroviral therapy (HAART), 80% must have

access to it

Increase TB cure rate from 64% to 85%

4 Strengthen health system effectiveness Re-engineering of PHC

Implement NHI system

Source: National Department of Health (NDoH), 2010. 2

Middle income health financing

7

Health spending

8

Public and private health spending (real)

9

10

Provincial DOH spending (real) Real spending growth per annum

Per capita health spending (real 10/11) Health spending as % of GDP

0

20,000

40,000

60,000

80,000

100,000

120,000

Provincial health funding trends R million real 10/11prices

R million

2.00%

3.00%

4.00%

5.00%

6.00%

7.00%

8.00%

9.00%

10.00%

Health spending as % of GDP

Public h ealth

Private

Total

Hospital workloads

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Health infrastructure

• Total R10b pa• Improve delivery capacity• R134m for NDOH 11/12• Partnerships with DBSA, CSIR• Managing engineers• Project monitoring tools• Project intervention teams• 5 large PPPs • New Health Infrastructure grant

(R1.7b rising to R1.9b)

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Budget 2012

• Difficult fiscal position• Holding budget – no increase in deficit• Only contingency reserve available for allocation• Function committee approach• Reprioritisation • Non-discretionary areas• Policy priorities (minimal fiscal space)• Savings (partly to fund economic stimulus package, enterprise support,

EPWP type jobs, NHI pilots)

13

Budget 2012

• Difficult fiscal position• Holding budget – no increase in deficit• Only contingency reserve available for allocation• Function committee approach• Reprioritisation • Non-discretionary areas• Policy priorities (minimal fiscal space)• Savings (partly to fund economic stimulus package, enterprise support,

EPWP type jobs, NHI pilots)

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Fiscal position

15

Government borrowing

16

Health and social protection diagram

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Social Development & welfare services

R13 billion

Health & Social ProtectionR266 billion

HealthR118 billion

Social SecurityR31 billion

Social AssistanceR104 billion

National Development Agency

R175 million

Women, Children and People with Disabilities

R63 million

National Social Development: Programme 1,4 &5

R767 million

Soc Dev provincial dept.R12 billion

The Commission on Gender Equality

R55 million

CCODR110 million

Road Accident FundR17 billion

SASSAR6 billion

National Social Development, programme 2

R98 billion

Defence and Military VeteransR3 billion

National health Laboratory ServicesR4 billion

Council for Medical SchemesR94 million

National Youth Development Agency

R398 million

Health & Social Protection Function MTEF 2011/12

Public Entities & Agencies:-SASSA

RAF-NHLS-CCOD

-Council for Medical Schemes-Compensation Fund and Reserve

-Unemployment Insurance fund-National Development Agency

-National Youth Development Agency-The Commission on Gender equality

National Departments:-Health-Labour

-Presidency- Social Development

-Defence and Military Veterans-Women , Children and People with

Disabilities

ProvincialSocial development PDs

Health PDsHealth CGs

Compensation Fund and Reserve Fund

R5 billion

UIFR10 billion

National Social Development: Programme 3,excl.SASSA

R101 million

NDoHR1.4 billion

Health PDs and CGsR110 billion

Health Baseline

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Adjusted Appropriation

Average growth for

history period

Average growth for

MTEF period

R thousand2008/09 2009/10 2010/11 2011/12 2012/13 2013/14 2014/15 08/09 to

11/1211/12 to 14/15

National 6,039,037 7,084,336 7,813,365 8,171,153 8,447,444 8,929,752 9,450,766 10.6% 5.0%

Health 1,120,557 1,309,312 1,403,699 1,423,095 1,487,704 1,564,072 1,658,174 8.3% 5.2%Administration 241,021 269,925 124,502 326,071 325,324 344,389 195,922 10.6% -15.6%Health Planning and Systems Enablement 119,673 111,617 223,223 160,387 177,559 189,347 314,734 10.3% 25.2%HIV and AIDS, TB and Maternal, Child and 509,017 547,354 616,871 533,566 552,461 581,562 616,456 1.6% 4.9%Primary Health Care Services 108,660 273,295 142,930 139,632 143,032 150,126 159,134 8.7% 4.5%Hospitals, Tertiary Services and Workforce Development41,587 2,291 72,950 98,381 93,912 95,127 95,535 33.2% -1.0%Health Regulation and Compliance Management 100,599 104,830 223,223 165,058 195,416 203,521 314,734 17.9% 24.0%

Health Public Entities 2,741,540 3,166,896 3,360,097 3,703,919 3,631,704 3,846,005 4,061,737 10.5% 3.1%CMS- Council for Medical Schemes 58,261 64,358 82,219 94,040 100,387 105,908 111,204 17.3% 5.7%NHLS -National Health Laboratory services 2,683,279 3,102,538 3,277,878 3,609,879 3,531,317 3,740,097 3,950,533 10.4% 3.1%

Defence and Military veterans 2,176,940 2,608,128 3,049,569 3,044,139 3,328,036 3,519,675 3,730,856 11.8% 7.0%Military Health Support 2,176,940 2,608,128 3,049,569 3,044,139 3,328,036 3,519,675 3,730,856 11.8% 7.0%

Provincial 72,372,855 85,516,205 94,819,079 106,420,663 114,873,406 123,031,464 130,427,322 13.6% 6.9%Health (Including conditional grants) 75,056,134 88,618,743 98,096,957 110,030,542 118,404,723 126,771,561 134,377,855 13.6% 6.9%Administration 2,638,397 3,421,922 2,710,686 3,204,944 3,543,087 3,697,476 3,919,325 6.7% 6.9%District Health Services 31,477,904 37,190,822 42,722,717 47,438,204 51,747,358 56,429,202 59,814,955 14.7% 8.0%Emergency Medical Services 2,899,384 3,479,045 3,882,460 4,538,309 4,859,355 5,088,589 5,393,904 16.1% 5.9%Provincial Hospital Services 17,475,754 20,335,823 22,753,304 23,407,630 25,021,228 26,746,175 28,350,945 10.2% 6.6%Central Hospital Services 10,999,632 13,201,687 14,670,227 16,627,725 17,862,545 18,902,700 20,036,862 14.8% 6.4%Health Sciences and Training 2,586,164 2,954,222 3,358,981 3,692,936 3,845,042 4,043,683 4,286,304 12.6% 5.1%Health Care Support Services 1,214,454 1,330,614 1,418,032 1,759,139 1,851,370 1,915,386 2,030,309 13.1% 4.9%Health Facilities Management 5,764,445 6,704,608 6,580,550 9,361,654 9,674,739 9,948,349 10,545,250 17.5% 4.0%Minus the NHLS double count 2,683,279 3,102,538 3,277,878 3,609,879 3,531,317 3,740,097 3,950,533 10.4% 3.1%

Total 78,411,892 92,600,541 102,632,444 114,591,816 123,320,850 131,961,216 139,878,088 13.5% 6.9%

Expenditure Outcomes

Medium -term expenditure estimates

Reprioritisation

• Very difficult fiscal climate requires reprioritisation

• Focus on efficiency, improving value for money

• Wider call to restructure expenditure

• Huge variability in unit costs across hospitals of similar type, districts, economic classification

• Was supposed to be first step of budget process

• Not much progress made in Function group in this area

• Only significant proposal was to top-slice R200m from HIG and HRG for nursing college upgrading

• Some potential within goods and services area (procurement, arv prices, fraud, collusion leading to higher prices, improved controls, protocols); inefficiencies in capital projects

• More reprioritisation is required given fiscal position, personnel pressures, cuts exercise and improving efficiency

• Each province will need to look at this in finalising budget for 2012/13

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1

Budget bids – NHI Pilots

• Various aspects of NHI need to be tested and piloted• PHC reforms:

1. Family health teams: ward based teams set up to improve primary health care delivery

2. District specialist support teams: Aims to strengthen district health services

3. School health services: Package of health services (e.g. testing, prevention, deworming) offered at schools

• Contracting with private providers: review legal aspects of contracting with private GPs, determine how these contracts can be designed, measured and monitored, and experimentation with reimbursement mechanisms (e.g. capitation)

• Costing still in progress: Initial rec xxx

Non-discretionary areas

Certain pressures are effectively non-discretionary– ICS (6.8% vs 5.5% carry-through)– ARV uptake increases (approximately 400 000 pa)– Possibly rising PHC visits (4-5m pa average over past decade)

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HIV and AIDS

• ART Programme: new cd4 350 threshold generalised– Need to make provision for at least 400 000 growth pa– Unit cost R4300-R4900 per capita – Analysis suggests baselines largely sufficient (R1.8b growth pa)

except outer year– Recommendation xxx

• New NSP development – implications for other sectors

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Primary health care and volume adjustment: Rising PHC visits

00/01 01/02 02/03 03/04 04/05 05/06 06/07 07/08 08/09 09/10Eastern Cape 14,339,786 14,383,889 13,746,488 14,503,175 15,312,880 14,618,214 16,589,065 16,606,276 17,796,107 18,647,433Free State 5,069,882 5,446,065 5,725,472 5,972,199 6,031,495 5,912,089 5,932,312 5,903,854 6,460,991 6,536,325Gauteng 10,649,014 11,094,574 12,012,319 12,396,325 13,059,604 14,162,418 14,961,820 16,261,089 19,372,439 19,636,757KwaZulu-Natal 15,315,661 16,908,055 18,000,507 18,948,993 19,428,937 19,789,376 18,703,020 22,309,763 24,498,906 26,088,177Limpopo 10,984,360 11,748,869 13,680,318 14,381,591 15,253,259 14,862,213 14,063,129 13,684,125 14,784,386 15,145,254Mpumalanga 3,953,523 5,100,122 5,399,366 6,063,243 6,193,706 6,792,927 6,923,114 7,388,645 7,923,291 7,959,887Northern Cape 1,931,154 2,010,410 2,124,661 2,420,212 2,332,201 2,175,354 2,267,522 2,828,567 3,511,999 3,434,203North West 8,237,237 9,039,665 8,892,998 8,768,182 9,668,768 9,822,014 8,029,057 7,804,490 8,574,971 8,321,827Western Cape 11,426,477 11,839,414 12,856,051 12,877,078 13,593,636 13,623,772 13,126,182 13,291,336 14,979,546 15,792,199Grand Total 81,907,093 87,571,063 92,438,180 96,330,998 100,874,486 101,758,377 100,595,221 106,078,145 117,902,636 121,562,061

• PHC visits rising by 4 mil pa

• Possible volume adjustment for outer year as non-discretionary baseline adjustment

• Transfer as part of new NHI conditional grant

• Links to PHC policies of family health teams, ward based community teams, district support teams and school health services

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Policy priorities

• NHI pilots• Nursing college upgrading• Office of Standards compliance• Planning large PPPs and infrastructure support• HR strategy

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NHI

• Key theme for Budget 2012/13• Release of Green paper, public announcements by Ministers, wide

media coverage and public interest• Need to chart practical way forward • DG Health requested NHI pilots as key priority for Budget 2012/13• Need to accept that NHI will entail greater national control over sectoral

funding • Need to establish functioning interim mechanism prior to NHI Fund• Probable establishment of new transitional NHI grant – need to finalise

funding mechanism• Two other cgs (NTSG, HIV) potential slight renaming to indicate longer

term shift into NHI

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Infrastructure

• Ministers driving new approach to health infrastructure with larger direct role for National Department and DBSA

• Nursing colleges upgrading and recapitalisation is immediate focus – • Large PPPs in planning (but feasibility studies not yet complete)• New Schedule 7 (in-kind) grant is proposed as option / test case on

nursing colleges upgrading• Preconditions: i) Provincial sign-off ii) Signed agreements • Reprioritisation: Nursing college upgrading to be funded initially through

top-slicing of HIG/HRP• DBSA and CSIR IUSS support interventions• Efficiency of infrastructure delivery: AG Report and Scopa hearing

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HR Strategy and ICS for health

• Development and implementation of the new HR strategy for health• 100 page document, draft policy and models released• Large focus on filling posts and increasing supply• Partly via NHI pilots• ICS increase 1.3% estimated to cost R800m pa• Over-spending on health personnel >R1bil pa for several years• Over-spending projection on personnel going forward

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Provincial Health budget baselines

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HIV conditional grant health baseline Rmil

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04/05 05/06 06/07 07/08 08/09 09/10 10/11 11/12 12/13 13/14ec 99 161 218 233 301 426 691 864 1,014 1,222fs 70 96 142 154 190 298 434 530 622 751gt 134 207 253 400 577 890 1,278 1,621 1,934 2,294kz 186 240 344 467 757 1,036 1,499 1,889 2,246 2,675lm 77 94 176 201 233 402 515 625 734 884mp 54 90 107 121 187 236 384 490 578 694nc 32 58 69 74 91 110 182 213 247 302nw 71 105 142 156 246 370 476 599 706 849wc 58 93 116 201 266 376 554 661 743 935tot 782 1,144 1,567 2,006 2,849 4,143 6,012 7,493 8,825 10,607

HIV/AIDS subprogramme Health (Health)

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R million 05/06 06/07 07/08 08/09 09/10 10/11 11/12 12/13 13/14Eastern Cape 182 310 357 396 479 789 884 1,112 1,314Free State 109 152 170 214 326 484 581 682 813Gauteng 368 429 580 707 1,037 1,517 1,912 2,418 2,910KwaZulu Natal 528 704 1,059 1,239 1,535 1,611 1,925 2,330 2,774Limpopo 103 207 205 257 414 526 625 734 884Mpumalanga 106 134 195 225 347 409 505 626 745Northern Cape 53 74 81 113 149 221 247 283 340North West 120 197 244 332 479 602 696 807 852Western Cape 172 249 240 269 384 555 661 743 935Total 1,741 2,456 3,130 3,753 5,149 6,714 8,035 9,735 11,568

Provincial IYM Sept 11 (6 months of 11/12)

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ProvinceAvailable budget

Projection Spending by

September

% spend Deficit

EC 14,237,249 14,485,025 7,484,979 52.6% -247,776FS 6,820,708 6,944,216 3,219,779 47.2% -123,508GT 22,837,577 24,156,622 11,310,740 49.5% -1,319,045KZN 24,507,254 24,685,811 11,728,040 47.9% -178,557LIM 11,587,901 12,014,843 5,894,931 50.9% -426,942MPU 7,365,135 7,213,896 3,291,162 44.7% 151,239NC 2,946,839 3,072,265 1,411,654 47.9% -125,426NW 6,322,945 6,650,467 3,005,416 47.5% -327,522WC 13,395,060 13,393,628 6,268,554 46.8% 1,432Tot 110,020,668 112,616,773 53,615,255 48.7% -2,596,105

Estimate of national HIV spend

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Rand million 04/05 05/06 06/07 07/08 08/09 09/10 10/11 11/12 12/13 13/14National DOH Total 1,107 1,512 2,026 2,474 3,078 4,868 6,621 7,975 9,344 11,154 DOH core 372 362 410 467 493 492 569 482 520 547 DOH conditional grants 735 1,150 1,616 2,006 2,585 4,376 6,052 7,493 8,825 10,607Provincial own dedicated 412 542 762 911 1,124 772 663 542 911 961Education grant 134 136 144 158 168 177 188 199 209 221Social services 128 223 339 452 607 678 795 843 894 938Sub-total 1,781 2,413 3,271 3,995 4,977 6,496 8,267 9,559 11,358 13,274Treatment of opportunistic infections 4,477 4,701 4,936 5,183 5,442 5,714 6,000 6,300 6,615 6,946Donor 3,731 3,918 4,114 4,319 4,535 4,762 5,000 5,250 5,513 5,788Total 9,990 11,032 12,320 13,497 14,954 16,972 19,267 21,109 23,485 26,008

NASA draft: Total Funding & Sources for HIV/AIDS/TB in SA (2007/08-2009/10) (incl % of the Child Support Grant)

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Conclusion

• Budget 2012/13 is being formulated in very tough fiscal climate• Budgets going forward will not be as strong as growth over past three

years• Very small number of additional allocations from contingency reserve• NHI pilots will be important going forward and plans will need to become

very practical in year ahead• Need to finalise whether will or will not have two new conditional grants

– NHI– S7 nursing colleges grant

• Provinces will need to focus substantially on reprioritisation • Control of personnel spending will be nb noting projected shortfall• Increasing efficiency and delivery on capital expenditure

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NASA draft: Total SA HIV/AIDS Spending Activities (2007/08-2009/10)

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