The fact that the Road Accident Fund (RAF) is running away is unacceptable. Incompetence – from the admin to the medical procedures – is to blame. The taxpayers are fed up.
During the 2023/2024 Budget speech, Minister of Finance Enoch Godongwana said: “Healthy public finances can help us build a prosperous future, yet today, South Africa spends more to service its debt than it does on health, social development or security.”
The Budget allocation for the National Department of Health showed a decline of R4.4bn from 2022/23, to R60.1bn. Even though the decline can be attributed to the discontinuation of conditional grants that were allocated for the fight against Covid-19 including vaccinations, the fact of the matter is that no adjustment for inflation was made, in addition to the reduction in the allocations to existing programmes.
At R4.6 trillion, the size of the economy in 2022 was bigger than the pre-pandemic levels in real terms, and the government said its debt would stabilise at a higher level of 73.6% of gross domestic product in 2025/26. This is three years later than anticipated in the 2022 Medium Term Budget Policy Statement. In general, government debt is high. Gross government debt is projected to increase from R4.73 trillion in 2022/23 to R5.84 trillion in 2025/26. Debt-service costs are projected to average R366.8bn annually over the medium term, reaching R397.1bn in 2025/26.
1. The National Treasury has acknowledged that the health sector is underfunded to a minimum of R11bn, but industry experts believe that cumulatively, it is much higher, at 89.2% of our national Budget, which is transferred to provinces. Current Budget transfers and subsidies to provinces is about R56.2bn out of R60.1bn. However, most provincial health departments have become so politicised and dysfunctional that they generally repel rather than attract the best managers. To be clear, we are speaking specifically about managers and administrative staff rather than general health-care workers.
2. Missing from the numbers are the huge medico-legal bills payable by the health sector. The government, if it is serious about transparency and accountability in this area, needs to publish annual medico-legal claims reports that pull together all the relevant data, broken down by province, which can then be used to provide a detailed analysis of trends over time, to manage finances and quality of care. Parliament’s select committee on appropriations recently called a briefing from the Office of the Auditor-General of South Africa (AGSA) and the National Department of Health to discuss medical-legal claims and its impact on provincial health-care budgets. The AGSA said medico-legal claims were costing the health sector an accumulative R77bn a year, and the amount had risen significantly over the years. The AGSA said that by March 31, 2022, 15 148 medico-legal claims, amounting to R125bn, were lodged against the Department of Health.
3. The committee also heard that provincial health facilities lacked reliable and accurate record-keeping and, in most cases, this was caused by a shortage of administrative staff. The sad reality is that despite the billions allocated to the public health sector, weak management and system controls are hampering effective service delivery. In addition, many of the medico-legal claims cannot successfully be defended due to sloppy or non-existent data files. The committee recommended that the focus shifts toward improving patient services at health-care facilities rather than funding for possible litigation. The committee also called for significant improvements in archiving and record-keeping, and the establishment of an electronic card management system. These are all worthy statements but they need to be implemented and not discussed once a year.
3. The committee did welcome reports from various provincial health MECs who shared their plans to mitigate rising medico-legal claims and strengthen record-keeping. The committee noted the calls from the National Archives and Records Service of South Africa for the appointment of senior staff to ensure the implementation of sound records management. Committee chairperson Dikeledi Mahlangu emphasised the societal importance of health care and the need for everybody to be on board to ensure service delivery. Of the many examples of dysfunctions in the health-care system is that in the Northern Cape, for four years (since 2015), the health department overpaid for radiology services due “to a mathematical error”. The department also recorded payments for mammograms, but the relevant hospital did not even have the equipment to offer the service.
4. The committee also welcomed the news that the AGSA was conducting a forensic investigation into law firms involved in litigation against provinces on medico-legal claim matters. The new proposed legislative changes to the RAF Act will also clamp down on the legal fraternity’s feasting on medico-legal matters against the RAF and the Department of Health, and divert their attention and knowledge to focus more on the provision of health services.
5. The latest development on the National Health Insurance Bill will, no doubt, change the medical landscape in South Africa forever, but the cash flow the government anticipates from this source may be over-optimistic. Many other opportunity costs do not seem to be accounted for either. The latest Budget Review stated that over the past 10 years, there had been a significant increase in the training of doctors by local medical schools and in facilities in Cuba. As a result, the number of medical interns increased from 500 in 2015 to 2 625 in 2022. Medical conserves increased from 1 322 to 2 369 over the same period. The problem is that provinces have not been able to absorb all the medical trainees due to budget restraints. It is well known that employment equity rules have excluded certain demographics of the population to study medicine or be employed by the state, despite some of them having academic excellence. The DA has taken the ruling ANC to court to address some of the issues, especially around cadre deployment. It will be interesting to see what influence the policies have had in the health sector. In 2021, the department admitted to Parliament that more than a third (3 301) of the 9 477 senior managers in the public service registered on Persal did not have the required qualifications for the job. In provinces, most of them were in health departments.
The government cannot afford to lose more money because of poor decision-making, neglect or inefficiencies. This aspect alone calls for change. But if history taught us anything, we can’t afford to have the government take a bigger stake in the health-care industry either.
* Kruger is and independent analyst
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