South Africa’s per capita health spending flatlining since 2012: Report

While the health budget has risen at an average rate of 2.5 per cent per year, it has not translated into equitable access

By Kiran Pandey, Madhumita Paul
Last Updated: Tuesday 30 April 2019
Healthcare spending in South Africa
Photo: Getty Images Photo: Getty Images

South Africa’s investment on the health of each citizen has plateaued for more than half a decade now despite opportunities to boost funding, according to a recent report.

The country is the second-largest economy in Africa, with a gross domestic product (GDP) of $349.3 billion, after Nigeria. South Africa, however, far outperforms its most populous African counterpart in terms of per capita GDP.

South Africa’s healthcare budget has increased at an average 2.5 per cent per year, according to a report titled Protecting Healthcare in Times of Economic Crisis Report. Public sector spending per capita on healthcare also jumped to about R3,800 from R2,000 since 1995-96.

It has, however, stagnated at that level since 2012-13 and, in fact, dipped a little from 2015-16 levels, according to the report by Rural Health Advocacy Project (RHAP). 

There are opportunities to increase the available funding for healthcare delivery like the National Health Insurance (NHI), which is yet to be implemented. South Africa can use the six World Health Organization (WHO) building blocks for health, and use NHI for public health equity, added RHAP.

RHAP works to promote health equity for rural communities.

NHI is a financing system to ensure all citizens and legal long-term residents of South Africa are provided with essential healthcare regardless of their employment status and ability to make a direct monetary contribution to the NHI Fund.

Regardless of its implementation, there is always a need for more money to spend on healthcare each year. “Solutions can be found to maximise the return on diminished health spending in rural areas if there is a strong and sustained political will and consistent policies,” said Russell Rensburg, director of RHAP.

The RHAP report draws on empirical research to establish how countries, like Brazil, Colombia and Rwanda, with a similar socio-demographic profile as South Africa have turned harsh austerity into a positive force.

“Rural areas bear the brunt of healthcare worker shortages and this inequality needs to be resolved for NHI’s success,” said Rensburg, while launching the report in Johannesburg.

Compulsory community service is a strategy to increase number of healthcare workers in rural areas but every year, without fail, a significant number of medical graduates reject rural posts. A well-functioning health system is essential for equitable access to essential medical products and vaccines.

Two decades of health care

According to the RHAP analysis, the percentage of health spending in the country in relation to the overall budget spending has dropped in recent years.

In 2001, 26 African nations, including South Africa, signed the Abuja Declaration, committed to allocate a minimum of 15 per cent of government spending to health. At the time, South Africa was already spending approximately 13.5 per cent of government revenue on health and by 2011 this had increased to 14.5 per cent.

The persistent slow economic growth got the proportion of government spending allocated to health to 13.5 per cent between 2013-14 and 2017-18. So while South Africa had come close to meeting this commitment it has moved backwards over the last few years.

Health service delivery costs outstripped inflation   

While the economy suffered due to several structural and political issues, the government increased its borrowings to sustain investment in key areas. Increases in non-interest spending slowed significantly as the budget deficit grew.

Healthcare spending has been insufficient to meet service delivery costs that continue to outstrip inflation, says the report. The country was also under pressure to increase its investment in the HIV / AIDs programme.

The government was forced to cut costs on public health system. Since human resources are, by some margin, the most significant and fastest growing component of the health budget, this area of spending has been subject to numerous cost-saving exercises. Moreover, over the last few years hiring on certain posts in the public healthcare system have been frozen or the posts have been cut at facility level.

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