NHI discussion document nearly ready

Lungisa Fuzile. Image: National Treasury

The government hopes to overcome the current inequalities that people have to health care by introducing NHI‚ but exactly what form it will take in order to achieve this goal and how it will be paid for are questions Treasury has yet to answer.

Consumers and health economists are particularly keen to see the financing proposals‚ as it is likely that better-off individuals will pay higher taxes of some kind to supplement what the government allocates from the national fiscus.

When Finance Minister Pravin Gordhan delivered his budget speech last year‚ he said a discussion document on financing mechanisms for NHI would be published by April 2012‚ but the deadline has been extended repeatedly since then.

"Part of the delay has been because we were hoping we would get perfect alignment between the broader policy paper that health (the national Department of Health) has responsibility for and the one that deals with options for financing NHI‚" Fuzile said during a press briefing shortly before Gordhan presented his medium-term budget policy statement to Parliament.

"We have reached a point where there would be no harm in us going ahead and publishing the financing options before because now we know there is almost perfect alignment between the Department of Health and the Treasury but it would be nice to have them both out at the same time‚" he said.

Cabinet to examine funding proposals

The minister said the Treasury's views on financing NHI were linked to its long-term fiscal plan‚ which should go through the Cabinet process once we are over this busy period.

Pravin Gordhan. Image: GCIS

He has previously made the point that the affordability of NHI would hinge on the growth of the economy: when he delivered his budget in February‚ he said major new policy initiatives such as NHI would be affordable with limited adjustments to tax policy only if growth rose towards 5% a year and government revenue doubled in the next 20 years.

"But if growth continued along its current trajectory‚ substantial spending commitments such as NHI would need significant adjustments in revenue‚ and reductions in other areas of spending," Fuzile said.

"Important lessons were being learned through the NHI pilot sites‚ which would give Treasury a better sense of the costs involved‚" he said.

"Given the tight fiscal environment the overall health budget remains largely unchanged‚ but there had been quite a bit of effort to reprioritise funds‚" said Mark Blecher, Treasury's chief director for health and social development.

Additional funds needed

The statement says extra funds are to be allocated to the provinces over the next three years to enable the roll-out of a new human papilloma virus vaccine‚ which protects women against cervical cancer.

Additions to the provincial equitable share of R2.5bn in 2014/15‚ R4.3bn in 2015/16 and R5.1bn in 2016/17 were to be used to fund shelters for victims of abuse and the roll-out of the new vaccine.

The Department of Health has reduced the national health grant‚ which includes funds for the NHI pilot projects and health facility revitalisation‚ in response to slow spending.

The statement also says the government aims to maintain staffing levels over the next three years‚ but Blecher said this did not mean there would be a hiring freeze for health.

"Health is one of those areas where there tends to need some flexibility‚" he said. "There is a 7% or 8% growth in staff numbers next year‚ which is above the projected inflation rate‚" he said.

The statement shows the number of health employees increased by 41% between 2005 and 2013‚ rising from 225‚900 to 318‚756 during this period.