Health Budget Brief South Africa 2020 Preface This budget brief is one of six that explore the extent to which the 2020 national and provincial budgets address the needs of children under 18 years in South Africa. The briefs analyse the impact of the coronavirus (COVID-19) pandemic on allocations for children by comparing the baseline budget introduced in February 2020 with the special adjusted budget presented to Parliament in June 2020. Each brief considers the evidence and draws conclusions about how the government’s emergency public finance response affects services and programmes that benefit children. 2 Key messages and recommendations The South African Government has reprioritised its 2020 fiscal year (FY) budget allocations to make room for spending on COVID-19 impact mitigation. Ministries and programmes have postponed or suspended spending to free resources from the current budget to contribute to COVID-19 financing. This flexibility is seen in the health sector, with R21.5 billion reprioritised in national and provincial health budgets to fund COVID-19 services. The national health budget has grown by 5 per cent (R2.9 billion) from its FY2020 baseline allocation to fund COVID-19. The pandemic arrested a real reduction in funding for the health sector, which was subject to the same fiscal austerity measures as other social sector programmes. Within the national health budget, the communicable and non-communicable diseases and primary health care (PHC) programmes received the largest increases of 12 per cent and 21 per cent respectively, as they are at the centre of the health response to COVID-19. This is good news for the protection of child health resources to fund programmes like immunisation which is covered under the maternal, child and women’s health programme within district health services at the provincial level. COVID-19 has attracted additional funding, which would not have been allocated otherwise, for the health sector from the national and provincial treasuries. A total of R21.5 billion (equitable share and conditional grant funding) has been reprioritised to the provincial health departments to respond to the pandemic. Further funding has been reprioritised from various conditional grants and within the health departmental budgets to allow more resources for COVID-19, including suspension or delay of some programme spending until FY2021. None of the reprioritised funds have come from PHC programmes, ensuring that adequate funding for child health is secured. 3 The Medium-Term Budget Policy Statement crowd out other health programmes, resulting 2020 will provide additional opportunities for in high maternal and child morbidity and the government to revise its Medium-Term mortality due to other illnesses. Expenditure Framework (MTEF) estimates, 3. Some child health elements are included in because they have not been adjusted to most health conditional grants, to ensure that reflect the impact of increased health children benefit from all nationally designed funding. conditional grant programmes implemented at provincial level. The health sector is prioritised in the 2019– 2024 Medium Term Strategic Framework Because of the macroeconomic and fiscal (MTSF) and will tackle the worrying levels outlook, the estimates to roll out NHI that of child stunting, South Africa’s dual (public were published in the National Health and private) health care system, and the Insurance Green Paper in 2011 and White compromised quality of health care in the Paper in 2017 are no longer affordable. The public sector. In the context of the pandemic revised model estimates that rolling out NHI and the role of non-communicable diseases, it is would require an additional R33 billion annually encouraging to note interventions aimed at curbing from FY2025. The National Treasury noted that non-communicable diseases, the focus on the these are not explicit budget commitments but social determinants of health problems, and the indicative cost estimates. The Minister of Finance determination to see through the implementation outlined that initial NHI costs were projected to of National Health Insurance (NHI). increase public health spending from about 4 per cent to 6 per cent of gross domestic product over As a result of the need to respond to the 15 years. immediate effects of the pandemic, more time and research are required to understand The NHI evaluation project concluded that future the disease and its impact on the health NHI funding should be needs-based and make needs of women and children. While the provision for a well-financed human resources country continues to see a significant reduction plan, and that additional resources should be set in infant and maternal mortality rates, the aside to support monitoring and communication government is encouraged to ensure that: of the progress of implementation. Maternal and 1. Hard-won gains are preserved and extended child health should also be prioritised in resource during and after the pandemic. allocation, to ensure that the gains made in 2. It continues to monitor the financing of reducing maternal and child mortality are not COVID-19 activities to ensure that it does not reversed. 4 1. Introduction Governance and national policy • The National Health Insurance Bill, which aims to provide mandatory pre-payment health services in terms of Section 27 of the In South Africa, the National Department of Constitution and establish a NHI fund, and Health is responsible for policymaking, and ensures the creation of mechanisms for the coordination and oversight of health services equitable, effective and efficient utilisation of in the country, while the nine provincial the resources of the fund; departments bear the main responsibility • The Mental Health Care Act (No. 17 of 2002), for service delivery. The Department of which provides for the care, treatment and Health derives its mandate from the South rehabilitation of people who are mentally ill; African Constitution of 1996 which provides • The Medical Schemes Act (No. 131 of 1998), for progressive realisation of socioeconomic which provides for the registration and control rights, including access to affordable and quality of activities of medical schemes, protects the health care. This is further elaborated through interests of members of medical aid schemes the National Health Act (2003), which requires and establishes the Council for Medical that the department provides a framework for a Schemes; structured and uniform health system for South • The Traditional Health Practitioners Act (No. Africa. The Act sets out the responsibilities of the 35 of 2004), which establishes a framework national, provincial and local government spheres to ensure the efficacy, safety and quality of in the provision of health services. In addition traditional health care services, and to provide to the National Health Act, other legislation and management and control over the registration, emerging policies that guide the work of the conduct and training of practitioners and health sector include: students; 5 • The South African Medical Research Council The 2019–2024 MTSF acknowledges that the Act (No. 58 of 1999), which provides for the provision of public health services has not continued existence of the South African kept up with the South African population’s Medical Research Council and its management needs, although health outcomes have by an appointed board; improved over the previous MTSF period • The Nursing Act (No. 33 of 2005), which (2014–2019). Such improvements include total promotes the provision of nursing services to life expectancy at birth, life expectancy for men inhabitants and ensures that professional and and women, maternal mortality, and infant and ethical standards are maintained and upheld in child mortality, recognising concerted joint efforts all matters pertaining to nursing; of the government and its partners.1 • The Medicines and Related Substances Act (Act No. 101 of 1965), which provides for the The 2019–2024 MTSF is aimed at addressing registration of medicines and other medicinal existing gaps in health care delivery, which products to ensure their safety, quality and include the following: efficacy, and provides for transparency in the • Increasing levels of stunting (low height for pricing of medicines; age) among children, which reached 27 per • Free health care for pregnant women and cent by 2016. children under the age of 6 years. • The increasing burden of non-communicable Health in the 2019–2024 Medium Term diseases, such as diabetes, hypertension and Strategic Framework cancer. • The challenging ‘dual and unsustainable health The South African Government has system’ split between the private sector aligned its National Development Plan (covering 16 per cent of the population) and (‘Vision 2030’) health chapter with the the public sector (covering 84 per cent of United Nations’ Sustainable Development the population) with almost similar financial Goals (SDGs) to ensure key health goals resources. This means that the larger portion are addressed through policymaking, of public health sector clients must share programming and financing. The relevant SDG the scarce budget envelope, resulting in goal is Goal 3: Ensure healthy lives and promote compromised or limited service provision, well-being for all at all ages. access and utilisation. 6 • Such compromised quality of health care in the obligations as stipulated in the National public sector has resulted in concerningly high Health Act (2003) and