1. HEALTH AND HIV FUNDING Budget Monitoring Forum Presenter: Mark Blecher | National Treasury | November 2011

2. Mortality beginning to drop 2

3. Numbers on AIDS treatment 3

4. Health personnel 4

5. Primary care visits 5

6. National service delivery agreement 6

7. Middle income health financing 7

8. Health spending 8

9. Public and private health spending (real) 9

10. 10

11. Hospital workloads 11

12. Health infrastructure Total R10b pa Improve delivery capacity R134m for NDOH 11/12 Partnerships with DBSA, CSIR Managing engineers Project monitoring tools Project intervention teams 5 large PPPs New Health Infrastructure grant (R1.7b rising to R1.9b) 12

13. Budget 2012 Difficult fiscal position Holding budget – no increase in deficit Only contingency reserve available for allocation Function committee approach Reprioritisation Non-discretionary areas Policy priorities (minimal fiscal space) Savings (partly to fund economic stimulus package, enterprise support, EPWP type jobs, NHI pilots) 13

14. Budget 2012 Difficult fiscal position Holding budget – no increase in deficit Only contingency reserve available for allocation Function committee approach Reprioritisation Non-discretionary areas Policy priorities (minimal fiscal space) Savings (partly to fund economic stimulus package, enterprise support, EPWP type jobs, NHI pilots) 14

15. Fiscal position 15

16. Government borrowing 16

17. Health and social protection diagram 17

18. Health Baseline 18

19. Reprioritisation Very difficult fiscal climate requires reprioritisation Focus on efficiency, improving value for money Wider call to restructure expenditure Huge variability in unit costs across hospitals of similar type, districts, economic classification Was supposed to be first step of budget process Not much progress made in Function group in this area Only significant proposal was to top-slice R200m from HIG and HRG for nursing college upgrading Some potential within goods and services area (procurement, arv prices, fraud, collusion leading to higher prices, improved controls, protocols); inefficiencies in capital projects More reprioritisation is required given fiscal position, personnel pressures, cuts exercise and improving efficiency Each province will need to look at this in finalising budget for 2012/13 19

20. 1 Budget bids – NHI Pilots Various aspects of NHI need to be tested and piloted PHC reforms: 1.Family health teams: ward based teams set up to improve primary health care delivery 2.District specialist support teams: Aims to strengthen district health services 3.School health services: Package of health services (e.g. testing, prevention, deworming) offered at schools Contracting with private providers: review legal aspects of contracting with private GPs, determine how these contracts can be designed, measured and monitored, and experimentation with reimbursement mechanisms (e.g. capitation) Costing still in progress: Initial rec xxx

21. Non-discretionary areas Certain pressures are effectively non-discretionary –ICS (6.8% vs 5.5% carry-through) –ARV uptake increases (approximately 400 000 pa) –Possibly rising PHC visits (4-5m pa average over past decade) 21

22. HIV and AIDS ART Programme: new cd4 350 threshold generalised –Need to make provision for at least 400 000 growth pa –Unit cost R4300-R4900 per capita –Analysis suggests baselines largely sufficient (R1.8b growth pa) except outer year –Recommendation xxx New NSP development – implications for other sectors 22

23. Primary health care and volume adjustment: Rising PHC visits PHC visits rising by 4 mil pa Possible volume adjustment for outer year as non-discretionary baseline adjustment Transfer as part of new NHI conditional grant Links to PHC policies of family health teams, ward based community teams, district support teams and school health services 23

24. Policy priorities NHI pilots Nursing college upgrading Office of Standards compliance Planning large PPPs and infrastructure support HR strategy 24

25. NHI Key theme for Budget 2012/13 Release of Green paper, public announcements by Ministers, wide media coverage and public interest Need to chart practical way forward DG Health requested NHI pilots as key priority for Budget 2012/13 Need to accept that NHI will entail greater national control over sectoral funding Need to establish functioning interim mechanism prior to NHI Fund Probable establishment of new transitional NHI grant – need to finalise funding mechanism Two other cgs (NTSG, HIV) potential slight renaming to indicate longer term shift into NHI 25

26. Infrastructure Ministers driving new approach to health infrastructure with larger direct role for National Department and DBSA Nursing colleges upgrading and recapitalisation is immediate focus – Large PPPs in planning (but feasibility studies not yet complete) New Schedule 7 (in-kind) grant is proposed as option / test case on nursing colleges upgrading Preconditions: i) Provincial sign-off ii) Signed agreements Reprioritisation: Nursing college upgrading to be funded initially through top-slicing of HIG/HRP DBSA and CSIR IUSS support interventions Efficiency of infrastructure delivery: AG Report and Scopa hearing 26

27. HR Strategy and ICS for health Development and implementation of the new HR strategy for health 100 page document, draft policy and models released Large focus on filling posts and increasing supply Partly via NHI pilots ICS increase 1.3% estimated to cost R800m pa Over-spending on health personnel >R1bil pa for several years Over-spending projection on personnel going forward 27

28. Provincial Health budget baselines 28

29. HIV conditional grant health baseline Rmil 29

30. HIV/AIDS subprogramme Health (Health) 30

31. Provincial IYM Sept 11 (6 months of 11/12) 31

32. Estimate of national HIV spend 32

33. NASA draft: Total Funding & Sources for HIV/AIDS/TB in SA (2007/08-2009/10) (incl % of the Child Support Grant) 33

34. Conclusion Budget 2012/13 is being formulated in very tough fiscal climate Budgets going forward will not be as strong as growth over past three years Very small number of additional allocations from contingency reserve NHI pilots will be important going forward and plans will need to become very practical in year ahead Need to finalise whether will or will not have two new conditional grants –NHI –S7 nursing colleges grant Provinces will need to focus substantially on reprioritisation Control of personnel spending will be nb noting projected shortfall Increasing efficiency and delivery on capital expenditure 34

35. NASA draft: Total SA HIV/AIDS Spending Activities (2007/08-2009/10). 35