SAHR 2007 - Health Systems Trust

Health Care Financing and Expenditure 3
Figure 3:
Government expenditure shares, 2000/01 and 2007/08 (functional classification)
2000/01 2007/08
19.1%
6.4%
16.7%
15.1%
9.5%
6.3%
15.7%
9.7%
3.8%
21.1%
7.6%
18.8%
11.8%
11.5%
16.1%
10.9%
Central government
Protection services
Education
Social security and welfare Other social services Economic services
Health
Debt servicing
Source: McIntyre, 2007; 1 National Treasury. 4,9 istration, facility maintenance, health professional training,
in 2007/08. Over this period, government’s debt servicing
commitments have declined from consuming 19.1% of total
government resources in 2000/01 to 9.5% in 2007/08. The
resources released from this declining debt burden have
largely been allocated to social security and welfare (whose
share of total government expenditure has increased from
11.8% in 2000/01 to 16.1% in 2007/08), other social services
(increased from 3.8% to 7.6%) and economic services
(including National Treasury and the Department of Trade
and Industry, increased from 9.7% to 15.1%).
While the dramatic increase in spending on social grants
is likely to contribute to improved health status, the public
health sector is in desperate need of additional resources.
There is the potential for funding of the public health sector to
increase in the next few years; as the debt servicing requirements
decline even further, resources will be released which
could partially be devoted to the health sector, if sufficient
pressure is placed on key policy makers.
At the time of the first democratic elections in 1994, the key
challenges facing the public health sector included allocative
inefficiencies and geographic inequities. In particular,
there was inefficient distribution of resources between levels
of care with hospitals accounting for nearly 89% of expenditure
on the major categories of health services and nonhospital
primary care accounting for only 11% in the early
1990s. 12 This relative distribution has shifted with hospitals
accounting for 77.5% and primary care for 22.5% respectively
in 2005. 2,4
Figure 4 shows the distribution of total government health
care expenditure, including ‘other’ spending such as admin-
ambulance and other patient transport. It is encouraging
that over one-third of all expenditure is devoted to district
level (i.e. primary care and district hospitals), followed by
the next level of provincial hospitals at almost a fifth of total
expenditure and finally by the highest level of tertiary and
central hospitals.
Figure 4:
Primary
health care
17%
Distribution of total government health care
expenditure, 2005
Other
26%
Chronic
hospitals 5%
Source: National Treasury. 2,4
Central & Tertiary
hospitals 16%
District
hospitals 17%
Provincial
hospitals 19%
There was also an inequitable distribution of public sector
health care resources between provinces at the time of
the first democratic elections. In 1992/93, the most well
resourced province (the Western Cape) was spending
approximately 3.5 times more per person residing in the
province than the least resourced province (Mpumalanga). 12
If those who use the private health sector are removed from
the provincial populations (estimated as those who are
members of medical schemes in each province), there was
a more than fivefold difference in public sector spending
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