The Eastern Cape Second Adjustment Budget Speech, delivered on 26 November 2020, mirrored the harsh line taken in the Medium Term Budget Policy Statement (MTBPS). The total provincial budget has been reduced by 1,8 billion.
Before we explore what this means for current socio-economic rights and entitlements, particularly regarding health, it is useful to recall how provincial budgets are determined and consider what they need to prioritise.
Provinces have limited revenue raising abilities. The bulk of provincial budgets come from transfers from national government, with the lion’s share of the money coming from the provincial equitable share. In total, about 40% of all revenue raised by government is allocated to the provincial equitable share, and a further 7% of revenue is allocated to provinces through conditional grants.
The provincial equitable share is based on a largely population-based formula. Section 214(2) of the Constitution states that the formula must take into account:
The need to ensure that the provinces are able to provide basic services and perform the functions allocated to them [these include health care, basic education and housing];
Developmental and other needs of the provinces;
Economic disparities within and among the provinces.
The current formula is weighted as follows:
48% of the equitable share is allocated according to each province’s education needs (i.e. how many children are in school); 27% based on each province’s health profile; 16% based on the size of its population; 5% is divided equally to pay for provincial administration; 3% is allocated according to the province’s relative levels of poverty (measured by income); and 1% is based on regional GDP.
The health share is derived from two components. On the one side there is the risk-adjusted portion (75%), the largest of which is determined by using the mid-year population estimates, as well as the percentage of the population that are not covered by medical schemes. The second input is informed by healthcare utilisation in primary health care clinics (5%) and hospitals (20%). These budgets are augmented by several conditional grants, which add an additional 15% to equitable share allocations.
The October 2020 MTBPS reduced the overall pot of money that gets distributed through the equitable share, forcing provincial governments to cut spending. At this crucial moment in the middle of a pandemic, it is thus up to provinces to ensure they provide the resources necessary to fight COVID-19, while also dealing with multiple other health challenges from HIV and tuberculosis (TB) to diabetes, all the while ensuring that schools have sufficient resources to continue to function and provincial social services for the most vulnerable are not undermined. All this must now be done within a shrinking budget envelope.
The MTBPS undoubtedly weakened the ability of the provincial government to perform these crucial functions both now and into the medium-term.
Meeting the health needs of the population
COVID-19 is teaching us that investments in strong community health systems allow for adaptive and timely responses to outbreaks. Our collective failure in addressing the longstanding HIV and TB epidemics has weakened our ability to respond to the ongoing COVID-19 crisis.
In the Eastern Cape, only 60% of people living with HIV are currently receiving treatment, and there is an increasing prevalence of HIV among pregnant women in the province. While not directly correlated, more intentional action to start and keep people living with HIV on treatment has the potential to reduce HIV transmission.
In 2019, the Multi-Drug Resistant TB Policy Framework estimated that 30% of persons with TB are not receiving treatment, despite TB being the leading cause of death in South Africa.
There has also been increased prevalence of both diabetes and hypertension, according to the Health Systems Trust’s District Health Barometer. As we know, people with these conditions are at significantly increased risk should they get sick with COVID-19.
More routine Primary Health Care services like immunisations, access to sexual and reproductive health services are also in decline. Given the large percentage of the population under five years, poor immunisation coverage is particularly concerning as the province continues to struggle to meet the national target of 80%.
Surprisingly, even before the onset of the pandemic, service delivery data suggested that the demand for health services was decreasing, with provincial data indicating a sharp decline in the utilisation of primary health care services. Similarly, the province’s 66 district hospitals continue to balance their important role as first referral hospitals with delivering primary health care services as illustrated by out-patient data, which shows that over 65% of out-patients access services without a referral.
Building back better
During the special adjustment budget tabled earlier this year, an additional R1.7 billion was allocated to the Eastern Cape Department of Health, but this decreased by R688 million in the budget delivered on 26 November 2020. The new adjusted allocation to the health sector in the province is R27 billion, which does not meet the needs of the sector.
Healthcare is people-driven, and each level of care requires a different mix of health care workers. While recognising the significant downward adjustment to the provincial equitable share, the measures proposed by the provincial treasury are likely to reduce the morale of the 40 000 strong health workforce and have dire consequences for patients on the ground. In June this year, there were many preventable maternal deaths due to a lack of staff at Dora Nginza Hospital. Medical and community service officer posts currently remain vacant, and there is a lack of general workers at key facilities.
The human resources proposals from the Eastern Cape Provincial Treasury go not only against public health rationale, but they are also not aligned with the statements made by the Minister of Health on 23 November 2020 following his visit to the Nelson Mandela Bay Metro. The Minister specifically referred to staff shortages as a key factor resulting in poor health outcomes in the province. He identified the overflow of patients waiting in observation wards due to a chronic shortage of porters, cleaners and general workers as a major problem. He stated that urgent interventions are needed to fast-track the filling of posts. Despite this being introduced through regulations during the early days of the epidemic, it is unclear whether these provisions were effectively implemented in the Eastern Cape.
The new proposals by the Eastern Cape Treasury cannot fulfil these urgent needs and impede the appointment process for essential posts. Measures should urgently be introduced not just to respond to the short-term crisis, but to systemically and fundamentally fix the HR system. Organograms should be re-evaluated and health facilities should be effectively capacitated to respond to the public health demand both during and post-COVID-19. This would also ease the escalating psycho-social strain on health workers.
The Minister referred to many well-known challenges facing the province, such as historical underfunding and infrastructural inadequacies. This history and functional inadequacies is precisely the reason the Eastern Cape Department of Health needs further budgetary resources and imaginative interventions if it is to emerge through this crisis.
The challenges are immense and are likely to extend way beyond the COVID-19 crisis. While the importance of the COVID-19 response is without question crucial, there is an urgent need to address the longer term decline in the quality of healthcare services. Instead of blunt cost-cutting measures, the budget should be prioritised around the delivery of comprehensive basic services which the province is constitutionally mandated to deliver.
Government has a role to play in the economy and it can do so through strategic procurement and contracting of services to support optimising the delivery of its core mandate. Government is active in the provincial economy where it procures a wide range of services ranging from large construction projects to security services. If well managed, budgets can also support much needed local economic development, including employment.
However, the measures presented in the budget, particularly the intent to focus on villages, towns and the township economy without a clear framework that links these contracts with improvements in service delivery may be premature. When a similar strategy was employed in the North West, rather than catalysing local economic development, the strategy more often than not resulted in the enrichment of politically connected individuals. Similarly, several measures to support small business have already been promulgated at a national level, so the duplication of these initiatives appears ill-timed. Instead, maximum available resources should be pushed towards ensuring that frontline services are protected.
As the final negotiations in the 2021 budget process unfold, the government of the Eastern Cape and the department of health in particular are being asked to do more with less. It is now more urgent than ever to strengthen public primary health care. The strategic deployment of appropriately trained community health care workers can improve linkages between levels of care. Increasing the province’s intake of community service health professionals can release more experienced nursing assistants to lead ward-based outreach teams. Yet the National Treasury is taking aim at the wage bill in particular for cuts.
Improved linkages to care can reduce the burden on hospital out-patient departments. This will require investment in district management structures to ensure that there is effective management of people and health information, which could significantly improve health system responsiveness and improve health outcomes in the province.
*Deochand is an attorney in SECTION27’s health right programme. Rensburg is the Executive Director of the Rural Health Advocacy Programme.