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There are two key issues which help to explain this poor relationship between health care expenditure and health status. Firstly, there are a number of factors (other than health care) that influence health status, such as income, education and access to water and sanitation. So, high levels of spending on health services will not by itself result in good health. Secondly, we may not be using the health care resources we currently have most effectively. Within South Africa, it is particularly important to consider resource differences between the public and private sectors relative to the populations that they serve. The private sector accounts for over 60% of health care expenditure, yet it serves a minority of the population.
There are certain concerns about private sector health care financing, particularly in relation to medical schemes, which account for the largest share of private sector spending. Medical scheme contributions continue to increase faster than inflation and are increasingly unaffordable for many South Africans, especially low-income workers. At the same time, schemes are limiting the health care benefits that they provide and the elderly, chronically ill and others are dumped' on public hospitals when medical scheme benefits run out. The new Medical Schemes Act , which was implemented early in 2000, is attempting to address some of these problems, but it is unclear whether the Act is achieving its objectives.
Most of the funding for public sector health services comes from general tax revenue. A very small amount of money comes from user fees at public hospitals. The government's economic policy (called GEAR ) makes a commitment to pay off government debt in a relatively short time. This means that overall government expenditure has declined since the first democratic elections in 1994, as a big share of tax revenue is being used for debt repayments. However, the government has been careful to protect social service budgets. While there has been considerable variation in different province's success in securing a reasonable share of provincial budgets for health care, overall allocations to the health sector have increased as a percentage of the total budget.
Some may argue that an even higher percentage of the government budget should be directed towards health care. There was a substantial reallocation of budgets from protection services (including defence , police and prisons ) shortly after the 1994 elections. Given the need to address crime and for additional resources for prisons, there is limited potential for reallocating more resources from protection services to social services (with the notable exception of the recent arms deal' budget). Thus, additional resources for health services would probably be secured at the expense of other social services (such as education and social welfare payments). Given that improved education (particularly for women), access to potable water and sanitation and other socio-economic conditions contribute substantially to health improvements, it would be unwise to jeopardise these services by over-emphasising health service resource requirements.
Thus, it is unlikely that additional tax revenue will be available in the near future for public sector health services. Before seeking alternative sources of funding for these services, it is important to improve equity and efficiency in the use of existing resources. In particular, there is a need to gradually shift budgets towards currently under-resourced areas and in favour of primary care services. This means that hospital budgets, particularly for the large urban-based tertiary hospitals, would decrease gradually. In order that referral hospital services are not jeopardised, dramatic improvements in hospital efficiency are required (i.e. efforts must be made to offer a similar quality and quantity of hospital services with fewer resources). In particular, losses of drugs and other consumables (either through theft or expiry of drugs through poor stock management) and inappropriate staff numbers and skills' mix should be addressed. This redistribution of financial resources needs to be accompanied by pro-active efforts to develop adequate management capacity (e.g. appropriately skilled managers and functioning health information systems) in these areas and facilities, to ensure that budgets are translated into service delivery improvements. As staff account for the greatest share of health care spending, it is also important to develop adequate staff relocation mechanisms, including incentives for staff to work in rural and peri-urban areas and in primary care facilities.
The key mechanism available to draw additional funds into public sector health services is through user fees at hospitals. On the one hand, it is not advisable to increase fee levels for those who do not have any form of health insurance, as this would adversely affect access to hospital services given that few public hospital users can pay substantial amounts of money at the time of illness. However, some public hospital patients are covered either by medical schemes or other forms of insurance such as workmen's compensation. At present, substantial fee revenue is lost due to poor billing systems. Sometimes, accounts are issued so late that medical schemes refuse to pay them. Improved issuing of accounts and collection of fee revenue could increase the resources available for public health services, if provincial treasuries agree to these funds being kept within the health sector (rather than being placed in general provincial funds).
Another possible funding source currently under discussion is that of introducing a social health insurance (SHI), which would extend health insurance coverage to a larger number of South Africans. While an SHI may address a number of health care financing problems, it requires careful consideration before it can be taken forward. |
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