Intergovernmental Fiscal Review 2003

Introduction - Chapter 5: Health South Africa’s public and private health care system contributes approximately 8 per cent of South Africa’s GDP. Two of the largest components are medical aid scheme contributions of about R41 billion, and expenditure by provincial health departments of around R33,2 billion in 002/03. Close to 7 million South Africans are covered by medical aid schemes. The majority are predominantly covered by public health services, which comprise 13,3 per cent of consolidated national and provincial non-interest expenditure. Private medical aid scheme contributions were approximately R5 900 per beneficiary in 2002 (R490 per month), approximately six times provincial health expenditure of R911 per uninsured person. Each of the three spheres of Government plays a role in the delivery of health services. The national Department of Health focuses mainly on policy, legislation, national programmes and international liaison. The major delivery responsibility rests with provinces with combined budgeted health expenditure amounting to R36,9 billion in 2003/04, including conditional grants. Of this, about R6,0 billion is budgeted for out-of-hospital primary health care. Local Government also plays a role in relation to environmental health and clinic based primary health care services. Combined budgeted spending of the six largest municipalities, or metros, amounts to R1,1 billion in 2002-03 1. Provincial health budgets rise significantly in 2003/04, in keeping with the expansionary fiscal stance of the 2003 Budget. This is also in order to strengthen the health sector in particular and to intensify a range of specific programmes. Key features of the provincial health budgets are: -Substantial funding increases especially for health services in previously disadvantaged provinces -Large increases in the Hospital Revitalisation Programme -Increases for the Integrated Nutrition Programme -Further strengthening of the Enhanced Response to HIV/Aids Strategy -R500 million rising to R1 billion additional funding annually for a new system of rural incentives and a scarce-skills strategy for the health sector. Significant reforms introduced in this year’s budgets include a new standardised budget programme structure for health and, improved uniform formats for the nine provincial strategic plans. The new framework for tertiary health services funding is now operational and is being strengthened by the Modernisation of Tertiary Services project.

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