1. Spending on ART by Provinces in South Africa: trends, cost drivers, (in)efficiencies and sustainability Simelela, N., Sipho, S., Sozi, C., Damisoni, H., Guthrie, T. XIX International AIDS Conference 22 – 27 July 2012, Washington D.C., USA

2. Presentation Outline Background to NASA in SA Methodology Limitations Findings: o Total Provincial Per Capita Spending on HIV/AIDS and TB (all sources) o Total Provincial Total Treatment Spending (not only ART) o Provincial DOH Health, HIV/AIDS & TB Public Spending o PDOH ART Spending and Components o PDOH Absorption of Funds by Funding Channel Conclusions Recommendations

3. Objectives of NASA in South Africa For the years 2007/08, 2008/09 & 2009/10, identified: All the sources (public, external and business) of financing for HIV/AIDS and TB in SA, by provincial & national levels (excluding out-of-pocket expenditure) The providers of the HIV/AIDS and TB services in SA The activities services delivered in SA The beneficiaries of the services In order to make recommendations for the improved targeting of funds and efficiency of spending, according to the national and provincial priorities – informing the new NSP and PSPs. Allowed for detailed analysis of the public ART spending. 3

4. Analyzing the Public ART Spending An indepth analysis of the public sector spending on ART being delivered by the provincial Departments of Health Funding channelled through: o An ear-marked condition grant from the national treasury, and; o Equitable share (discretionary voted) spending of the provincial DOHs which comes from their health budget. Through analysis of the public expenditure records labelled as ART-related, the budget line-items were identified Total annual provincial DOH ART spending was divided by the total number of active patients in the same year. 4

5. Limitations of the Analysis Public expenditure that was not specifically labelled as ART-related was omitted. For example, the proportion of the facility management and operating costs that could be allocated to the ART programme were not included. Therefore the figures presented here are an under- estimation. The budgetary line-item classification may have had errors that could not be identified or corrected. Some direct donations made by development partners to public ART programmes through personnel or ARVs could not be identified (eg. In Gauteng) and therefore may have resulted in an inaccurately lower unit cost.

6. 6 South African Provincial HIV per capita (total population) spending (2009/10, ZAR) & HIV Prevalence (2009, %)

7. 7 South African Provincial HIV per capita (PLWHA) spending (2009, ZAR) & HIV Incidence (2009, %)

8. 8

9. 9 Total R8.2b

10. Provincial Treatment Activities (Rm, 2009/10) 10

11. DOH Spending on HIV/AIDS & TB in SA 11

12. Provincial DOH Health and HIV/AIDS & TB Spending (Rm, 2009/10) DRAFT - DO NOT DISSEMIATE. 12

13. Provincial DOH HIV/TB Spending Trends as Share of Total Health Spending 13

14. Provincial DOH ART Spending & Nos of Patients (Rm, Pts ‘000s, 2009/10) 14 NB. GP also spent PEPFAR funds on public ART, not included above

15. Provincial Proportional ART Costs (%, 2009/10) 15 NB. GP also spent PEPFAR funds on public personnel ART, not included above

16. Provincial DOH ART per patient per annum spending & HIV prevalence (ZAR, 2009/10 ) 16 NB. GP also spent PEPFAR funds on public ART, not included above

17. SA Public Funding Channels Conditional (Ring-fenced) Grants Voted (Discretionary) spending from the equitable share allocations for health

18. DOH CG vs Voted Proportional Spending on HIV/AIDS & TB (%, 2009/10) 18

19. DOH CG for HIV Budget vs Spending (Rmill, 2009/10)

20. DOH Voted for HIV & TB Budget vs Spending (R mill, 2009/10)

21. Conclusions Provincial spending on treatment has been increasing, of which ART is almost half and growing proportionally. This may be challenging for sustainability given the anticipated increase in numbers of patients at the lower CD4 criteria. The provinces showed a relatively similar and low unit cost for public ART patients, although some costs were omitted because they were not labelled as ART-related. This would therefore be an underestimation of the government’s contribution through ‘hidden’ and higher- level management costs – these should be costed more carefully. The CG is an important mechanisms for ensuring a certain degree of service delivery, and half the provinces absorbed it completely. The voted funds are important for provinces to commit additional funds, when required, with similar absorption rates to the CG (but of much lower amounts).

22. Recommendations Within the unit cost, some provinces had savings on their lab costs which could be replicated in other provinces. The recent country-wide tender achieved much lower ARV prices and therefore should reduce spending significantly, and equalise these costs between provinces. The CG should remain as an important funding channel to ensure the minimum level of services are delivered. The proposed NHI may mobilise addition funds for key health services, but roll-out may be affected by the varying provincial capacities. Provinces and districts will require improved financial management and information systems, to carefully track provincial & district spending on ART and other key health interventions, so as to pick up any inefficiencies & bottlenecks early.

23. Thanks to: SANAC for leading the NASA process UNAIDS for funding the NASA National Treasury and all the provinces for sharing their data Centre for Economic Governance for conducting the NASA and the ART analysis. Dr Nono Simelela President’s Office South Africa