OPINION: 2022’s health budget decisions in review

OPINION:  2022’s health budget decisions in reviewLivingstone Hospital in the Eastern Cape. PHOTO: Black Star/Spotlight
Comment & Analysis

Health budgets have the power to advance access to healthcare for millions of people in South Africa. This year, however, as the health sector and the economy recovered from the COVID-19 pandemic and a volatile global environment, the South African government missed opportunities to provide the financial resources to protect access to healthcare for the most vulnerable.

In 2022, the aggressive fiscal consolidation path characterised by below-inflation increases in healthcare funding to reduce public debt continued the pre-COVID-19 trend of cutting social spending, including that on healthcare.

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Missed opportunities

This year corruption, underspending, irregular spending and fruitless and wasteful spending continued to chip away at investment in healthcare in the country, while healthcare users still withstand the worst of the under-resourcing of public health facilities.

Following the February 2022 main budget, there was an average real reduction in healthcare funding of -4.3% for the 2022/23 financial year, which limited the health sector’s ability to tackle the backlogs in access to healthcare created by the COVID-19 pandemic. SECTION27, where I work, called for increased funding to bolster the quality of care available to the 76% of the population that uses public health facilities by redressing the pre-existing structural issues that plague the sector.

However, with the Consumer Price Index (CPI) inflation projections for 2022/23 increased to 6.8%, this real cut has only become more pronounced, resulting in a cut to health funding of -8.2% this financial year.

The Medium-term Budget Policy Statement (MTBPS) also did not respond to this with the much-needed upward adjustments to health budgets for this or future years. Instead, the MTBPS pencilled in an overall real cut to spending per public healthcare user of -R610 from R5 036 in February this year to R4 426 this financial year.

Enoch Godongwana, finance ministwr
Finance Minister Enoch Godongwana. PHOTO: GCIS

What does all this mean for public healthcare users?

i)               Healthcare Infrastructure

In 2022, we raised concerns that the budget allocations to the Health Infrastructure Revitalisation Grant would constrain government’s ability to address backlogs in infrastructure and maintenance. There have been no upward adjustments to this grant to remedy the delays to health infrastructure maintenance and rehabilitation caused by the lockdowns and pandemic – this is in spite of rising inflation rates this year.

Moreover, this lack of upward adjustment to ensure that health budgets keep up with CPI inflation occurs as the country shoulders extreme weather events, which National Treasury notes in the Budget Review and MTBPS. The country, therefore, needs to improve its resilience to these events. While the Department for Basic Education received an increased allocation for repairs to schools, the MTBPS 2022 did not explicitly recognise damage to healthcare facilities caused by extreme weather events such as the floods in KwaZulu-Natal (KZN), with the Health Facility Revitalisation Grant receiving no adjustment to its funding.

In April this year, 85 health facilities were damaged during floods in KZN but the province’s health department received no additional funds from Treasury and claimed they had to re-prioritise an estimated R200 million of its funds intended for other health priorities within the province. The Eastern Cape also had 12 health facilities destroyed by the floods, but no explicit additional allocations were provided to support the repair and rehabilitation of these facilities.

In the National Budget tabled in February this year, the Health Facility Revitalisation Grant increased by 5.2% (R349 million) but with the 2022/23 CPI inflation rate – now revised to 6.8% according to the MTBPS – this resulted in an increase of only R8 million in real terms. With no adjustments to this grant planned in 2023/24, the government will be less equipped over the medium term to spend on health infrastructure – jeopardising the country’s ability to adapt to the effect of the climate crisis.

Any relief granted to ensure that health facilities affected by floods can be repaired should either be ring-fenced, or the Health Facility Revitalisation grant should be adjusted upwards to account for the impact of extreme weather events in KZN and the Eastern Cape.

ii)              District Health Programme Grant: HIV and TB

The 2022/23 fiscal year saw the consolidation of the HIV, TB, malaria, and community outreach conditional grant into the District Health Programme Grant (DHPG). Considering our assessment in February that the 2022 Budget ignored underperformance of important HIV indicators, we welcome the MTBPS’ refocus on core health services and addressing accumulated backlogs occasioned by the response to the COVID-19 pandemic. We note, however, that such a refocus is not evident in the adjusted figures provided in the MTBPS for the current fiscal year.

In the 2022/23 budget, the HIV, TB and STI component of the District Health Services expenditure shows an average annual decline of -3.4% over the next three years (before accounting for inflation), and no adjustment has been made to improve this. There has also been no adjustment to the TB management sub-programme’s allocation, which is responsible for the formulation of policy, guidelines and norms and standards on TB. Instead, again, the commitment to allocate additional funds was deferred to the 2023 budget to address services backlogs, including antiretroviral treatment and TB screening and treatment.

TAC member holding up TB poster calling for TB to be declared a national emergency.

Treasury’s failure to provide an increase to HIV, TB and STI funding occurs despite the clear indication that government is not on track to meet its goal set in the February 2022 main budget of retaining 5,7m patients on antiretroviral therapy (ART) by the end of this fiscal year. Having only retained 5,3m patients in the first half of the fiscal year – instead of adjusting the allocation to pursue the initial goal – the MTBPS shifts the goalposts by adjusting this figure down to 5,5m.

What is more concerning about the failure to make adjustments as far as HIV is concerned is that the reality on the ground is inconsistent with government’s policy choice. The Thembisa model (version 4.5), a mathematical model of South Africa’s HIV pandemic, shows that there is mixed progress towards the country’s achievement of its 95-95-95 targets set by UNAIDS. Regarding the first target to get 95% of persons living with HIV (PLHIV) diagnosed, progress has been good with many provinces achieving around 93%. Satisfactory progress has also been made toward the third target of getting 95% of persons on ART virally suppressed.

Disappointingly, on the second target to have 95% of people diagnosed with HIV receiving ART, progress has been poor across provinces with ART take-up varying between 59% in the Western Cape and 79% in KwaZulu-Natal. In addition to this, from as early as 2019, the Medium-Term Review of the National Strategic Plan on HIV, TB, and STIs (2017-2022), had already shown that the country was not on track to meet its ART uptake goals. According to the 2022 Estimates of National Expenditure, by March 2021 the number of PLHIV accessing ART stood at 5,1m, and the objective was to increase this number to 6,7m by March 2025.

This current state of affairs shows that an adjustment was desperately needed and if government seriously intends to address the HIV pandemic, it must renew efforts to increase ART uptake and these efforts must be allocated resources accordingly.

iii)            District Health Programme Grant: Oncology

Deferring an adjustment to oncology funding until next year also signals that, despite growing waiting lists for radiation oncology services, oncology is not a pressing priority for government. The backlog in oncology services includes approximately 3 000 patients who are awaiting radiation oncology services in Gauteng alone, and many have been waiting for the past three years. Radiation oncology is a time-sensitive treatment that must be performed within a short window following surgery and/or chemotherapy. For example, in breast cancer, the international best practice and domestically recognised guidelines provide that patients must get radiation oncology treatment within three months of surgery, failing which, there is a significant risk of recurrence. So, deferring an increase in the oncology budget to 2023 will be too late for many of these patients.

In the 2022 main budget, it was announced that mental health and oncology funding would be shifted to the district health programme grant. The MTBPS provided no increase to the district health services grant in the medium term, nor any increase to the National Health Insurance Fund grant – which both hold funding used for oncology. Instead, the budget for non-communicable diseases shrunk by R1,1 million. This is despite the National Strategic Plan for the Prevention and Control of Non-Communicable Diseases (2022-2027) that was published this year with government stressing its commitment toward the prevention and control of NCDs.

While the non-communicable diseases sub-programme funds services for a number of diseases, it also includes funding for oncology. Therefore, the best-case scenario is that there are no adjustments made to the funding for oncology, and the worst-case scenario is that the funding toward oncology has been adjusted down by up to R1 million. In these circumstances, the recognition by the Treasury that additional funding is required to deal with oncology backlogs is futile in the face of no increased allocations in the medium term.

Transparency needed

We have consistently rejected the retrogressive austerity budgeting of 2022 and have called on Parliament to amend the budget to meet the needs of public healthcare users.

In the years ahead any government decision to cut funding for healthcare services must be based on transparent and participatory human rights impact assessments. These must demonstrate that the funding reductions will not increase inequity in access to healthcare and undermine the rights of the most vulnerable members of our society to access quality, dignified and timely healthcare services, as well as other fundamental socio-economic rights.

*Lencoasa is a budget researcher at SECTION27.

NOTE: This is an article written by an employee of SECTION27. Spotlight is published by SECTION27 and the Treatment Action Campaign but is editorially independent, an independence that the editors guard jealously. The views expressed in this article are not necessarily those of Spotlight.