sahr2001 - Health Systems Trust

governments can order drugs from the provincial depot. This funding
mechanism makes explicit the hidden value of the subsidy local governments
are getting from the provincial governments through free drug supplies and
has been introduced to promote better management of drug utilisation by
local governments. A local government manager viewed this as a positive
move offering the following explanation:
“Before, the laboratory costs, reproductive health services, family planning stuff
and medicines, including TB medicines and obviously vaccines had all been
free to local government, and we would just draw from the central store. Province
had to pay … and that means it was a bit like Father Christmas … There was no
motivation for us to manage what was going on … We didn’t know what was
going on. So nobody had any idea what medicines were being used and what
was happening, so it was a recipe for disaster.”
Strengths of the system of provincial allocations to local government health
services
The majority of provincial officials interviewed indicated that the key benefit
of the present financing mechanism is that it gives provinces some control
over local government health care services. They see the need for such control
in order to ensure that national policy is implemented within the local sphere
of government. These views indicate some uncertainty about local government
health departments’ willingness or ability to provide health services in line
with the national policy framework. This uncertainty is exacerbated by the
1977 Health Act which makes provision for the national health department
to issue directives to local governments in relation to health service provision,
reflecting a view of municipalities as a ‘lower level’ of government. The Health
Act (No. 63 of 1977) has yet to be revised to reflect the new constitutional
reality in which local government is an independent sphere of government,
alongside the national and provincial spheres. Municipalities as a distinct
sphere of government, should have relative autonomy in deciding on service
provision within the parameters of national policy guidelines.
A strength of the current financing mechanism is that it facilitates appropriate
interaction and referral patterns between the different levels of health services
allowing for co-ordination of the provision of all health care services in an
integrated manner.
As one provincial health official noted:
“I think that the funding needs to be channelled via the provincial health
department simply in order to try and ensure that the entire health system still
hangs together. You can’t have a primary care service which is running
completely independently of the hospital services.”
Some interviewees also suggested that the current financing mechanism
enhances financial sustainability in the sense that local governments have an
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