Finance Minister Enoch Godongwana has allocated R848 billion to the public health system over the medium term expenditure, including almost R1.4 billion for the National Health Insurance (NHI) grant over the next three years.
The health allocation also includes R11.6 billion to address the 2023 public health sector wage agreement and R27.3 billion for infrastructure for the period, Godongwana said in his budget speech on Wednesday.
“The allocation for the NHI is a demonstration of the government’s commitment to this policy. There remain a range of system-strengthening activities that are key enablers of an improved public healthcare system that must be undertaken,” he said.
He said these activities include building a national health information system and digital patient records; upgrading health facilities and improving quality of care to ensure that they meet the minimum criteria to be certified and accredited for contracting under NHI.
Facility and district management would also need to be strengthened in preparation for contracting, and central hospitals and “potentially other hospitals” would have to be granted “semi-autonomous” status under the system.
Activities also included developing reference prices and provider payment methods for hospitals.
“Many of these activities are already underway but require further development before the NHI can be rolled out at scale,” Godongwana said.
According to the Division of Revenue Bill which Godongwana tabled on Wednesday, the government proposes that the NHI Grant Fund, to which the R1.4 billion will be transferred, remains in place until the NHI Fund is created through legislation. A total of R456 million will be paid to the fund in 2024-25, R462 million in 2025-26 and R471 million in 2026-27.
The bill also makes provision for the further funding of the system via the NHI Indirect Grant that will get R2.2 billion in 2024-25; R2.4 billion in 2025-26 and: R2.3 billion in 2026-27, to be allocated to health facility revitalisation and health systems.
Funds allocated to health facility revitalisation will be used “to create an alternative track to improve spending, performance, as well as monitoring and evaluation on infrastructure, in preparation for National Health Insurance … to enhance capacity and capability to deliver infrastructure for NHI … to accelerate the fulfilment of the requirements of occupational health and safety.”
Spending on health systems will be to “improve access to, and quality of, healthcare through expansion of the alternative dispensing and distribution model for chronic medication” and “improved quality health services in all primary healthcare facilities”.
The enterprise architecture design for NHI digital information systems will be built and implemented and systems for medicine stock management and procurement will be developed and implemented, while all public health facilities will be certified by the Office of Health Standards Compliance.
Treasury deputy director general of public finance, Mpho Modise, said the amount allocated in the 2024-25 budget would be directed to the pilot programme in line with the government’s 2019 study which showed that R30 billion was needed to start the system.
She said additional funds would be allocated after year three and four but did not indicate when the NHI would be implemented.
“In the starting years, they will be using the money already allocated and then, in year three and four, we will have to start allocating additional funding and that funding is not going to start, for example, at R30 billion — it will start at R10 billion, R9 billion, increasing over time … so we will have to work with health just to understand as and when the scheme is implemented,” Modise said.
A total of R279.1 billion will be allocated to public health in 2024-25 with R120 billion going to district health services; R52,8 billion to central hospital services; R47.5 billion to provincial hospital services; R40.2 billion to other health services; and R11.3 billion to facilities management and maintenance.
