The Medium-Term Budget Policy Statement’s outlook for the healthcare system

3 November 2020 – The Medium-Term Budget Policy Statement (MTBPS) delivered by the Minister of Finance Tito Mboweni on 28 October 2020 aims to cement austerity budgeting – cutting government spending to reduce debt – into the budget framework for health and other socio-economic rights for another five years.

SECTION27 and Treatment Action Campaign (TAC) are dismayed that public services, including healthcare services, are being compromised, forcing people who rely on these services to pay the cost of fiscal consolidation. The MTBPS proposes cutting the funding for public health care every year for the next three years. This poses serious risks for the country’s ability to deal not only with the COVID-19 pandemic, but other pressing health needs ranging from high rates of HIV and TB infection, as well as non-communicable disease such as diabetes and heart disease.

In the February budget, Minister Mboweni announced a cut of R3.9 billion to the public health sector over the medium term. The services most affected by budget cuts were central hospital services, provincial hospital services and emergency medical services. SECTION27 and TAC have already seen the impact of these cuts manifest in unfilled vacancies of 40,000 critical posts and support staff, which have led to maternity units and surgical wards being unable to cope with demand. The ever-increasing liabilities from medico-legal claims (which increased to R111.5 billion this year) places additional pressures on the health budget.

Cuts to health funding alongside rising medico-legal claims provides one of the most depressing examples of the illogic of austerity: funding cuts may save a few Rands in the short-term, but these cuts have medium and long term costs on health workers, the quality of services and on lives. As a result, cuts designed to save money lead to increased medico-legal claims due to deteriorating the quality of care. In other words, cuts create so much additional damage down the line so as to render the original reductions in spending utterly self-defeating.

In June 2020, the Supplementary Budget indicated that an additional R2.9 billion had been allocated to the health sector to respond to the COVID-19 pandemic. However, in the MTBPS the health budget was cut by R377 million.

More than 80% of the planned reductions to the human resources budget will come from the health, learning and culture, police and defence sectors. Although R393 million has been allocated to outreach team leaders, community health workers (CHWs) and nurses through the Presidential employment initiative project, a total of R72 billion from the health compensation of employees budget has been cut over the medium term. This will undoubtedly have disastrous consequences for the already overburdened public health workforce.

The new Human Resources for Health Strategy, leaked in August this year, states that 97 000 additional health workers (one third of which are CHWs) will be needed by 2025 to address the chronic human resources shortages and inequities across provinces. Persistent decreases in the human resources budget will make it impossible to address this.

In reference to the National Health Insurance Bill, the MTBPS refers to lessons learnt from public and private sector collaborations during the COVID-19 pandemic. We look forward to the Department of Health sharing these lessons, and the agreements that were signed. Despite calls for transparency and principled contracting with the private sector, very little information was made public and only the Western Cape appears to have in fact signed service level agreements for collaboration with the private sector.  

The MTBPS correctly states that the course of the COVID-19 pandemic remains uncertain. This, combined with the need to address backlogs in other service areas such as TB and HIV treatment, immunisation and primary healthcare, makes it more critical than ever that the health system is adequately strengthened. Instead of ensuring this, below inflation budget increases to health cut health funding in real terms and further decrease access to and quality of services.

TAC and SECTION27 urge the government to change course on austerity, and to commit to a positive long-term vision of a state capable of meeting both its human rights obligations and its obligations to debtors.