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Input Indicators
Health Systems Trust
2010-02-16

In 2008/09 the District Health Services Programme (Programme 2) spent R31.4 billion¹ on health care according to Treasury's Provincial Budgets and Expenditure Review². This is up from R18.4 billion in 2005/06 and is estimated to reach R41 billion in 2011/12 the significant growth attributable to the increased spending on primary health care and HIV/AIDS. In the sections of this chapter that follow, pertinent finance indicators are highlighted and the R31.5¹ billion expenditure is broken down, per district, within South Africa.

Table 1: Budget programme structure for provincial health expenditure

1.1 Total PHC Expenditure per Capita

The total Primary Health Care (PHC) per capita expenditure (total PCE) measures the total amount of money, including expenditure on district hospitals⁴, which each district spends annually per person not covered by medical insurance⁵. In 2008/09 the provincial health departments spent R31.5 billion and Local Government spent R1.4 billion, giving an overall district expenditure of nearly R33 billion.

This money was used to provide services for 41.5 million people⁴ not covered by medical insurance, giving an average expenditure of R794 per person for the year. The comparable figures, after taking inflation into account ('real expenditure in 2008/09 Rand terms') were R610 in 2005/06, R654 in R2006/07 and R744 in R2007/08. These increases show that over the last four years considerably more money has gone into overall district expenditure with a 30% increase during this time.

The provincial total PCE averages were fairly tightly clustered around the national average (see data in accompanying DHBdata file). The difference between KwaZulu-Natal with the highest total spend per capita of R966 and Gauteng with the lowest total spend per capita of R577 is 67% and has increased steadily from the 59% difference in 2005/06. The difference is probably partly due to the relatively small number of district hospitals and district hospital beds in Gauteng and the disproportionately high number of provincial and tertiary hospital beds which offer more sophisticated care which result in an overall skewed allocation of resources in this province.

Figure 1 and Map1,Total PHC per capita expenditure by district, 2008/09, illustrate the wide range of spending amongst the districts with a close to four-fold difference between Sisonke (KZN), the district with the highest total PCE of R1507, and Ekurhuleni (GP), the district with the lowest expenditure of R384. Cross-border boundary changes, as per the Demarcation Board in 2006/07, have resulted in the transfer of part of Alfred Nzo (EC) into Sisonke district and expenditure for the additional facilities now reflects under the district. The Sisonke 08/09 DHIS population estimates, from which the denominator is derived, have not yet been adjusted upwards from the 2007/08 estimates to reflect the increase in health district population due to the boundary change. If one uses, for instance, the population estimates from the 2007 Community Survey the total PCE in Sisonke for 2008/09 drops to approximately R950. There is some clustering of districts within provinces. For example, three of the five districts with the highest total were in KwaZulu-Natal whilst three of the five districts with the lowest total PCE were in Gauteng. There was, however, also some wide intra-provincial variation which is clearly shown in Figure1 as well as in Figure 4,Trends in total PHC per capita expenditure on health, by province and district, 2005/06 - 2008/09.

Figure 2,Total PHC per capita expenditure on health, by metro district, 2008/09,illustrates the range of total PCE in the metros with an overall average of R728, 10% below the national average. Ekurhuleni has the lowest PCE values of all the metros, both for total district PCE and for non-hospital PCE⁶. Provincial health managers need to explore and explain the reasons for the inequity in the resource allocation to this district compared to the other Gauteng metros.

Figure 3, Total PHC per capita expenditure by ISRDP district, 2008/09,shows that the average of the total PCE for the twelve rural development districts, R786, is very close to the national average. It also illustrates that there is a wide range in values among these districts with some clustering of the four KwaZulu-Natal rural districts above the average.

The high total PCE in Central Karoo (WC) is probably due to a combination of the proportionately large number of district hospital beds (around 1 bed for every 534 people) and the high non-hospital PCE⁵, to cope with the low population density. It is not obvious why the five Gauteng districts clustered below the average have such low total PCEs - this needs in-depth investigation.

Figure 4 shows the annual trends in total PCE since 2005/06. This figure clearly highlights the lack of narrowing of any inequity between provinces and districts. It also shows that in some districts there are still swings in the total PCE.

Map1: Total PHC per capita expenditure per district, 2008/09

Figure 1: Total PHC per capita expenditure by district, 2008/09

Figure 2: Total PHC per capita expenditure by metro district, 2008/09

Figure 3: Total PHC per capita expenditure by ISRDP district, 2008/09

Figure 4: Trends in total PHC per capita expenditure by province and district, 2005/06 - 2008/09

1.2 PHC Non-Hospital Expenditure per Capita

Non-hospital per capita expenditure (non-hospital PCE) on primary health care (PHC) measures the amount of money, excluding expenditure on hospitals⁷, which each district spends annually per person not covered by medical insurance.⁸

The national non-hospital PCE has grown faster than inflation for the past decade, and this by significant amounts. In 2008/09 the PCE was R367 compared with R302 in 2007/08 (with R256 in 2006/07 R232 in 2005/06 and R168 in 2001/02). The real increase (i.e. after taking inflation into account) in the PCE from 2001/02 to 2008/09 was R103. This represents a total increase of 39%.

A steady improvement in the range of non-hospital PCE spending is evident amongst the provinces. The ratio between the highest and lowest spending provinces has dropped from 4.4 in 2001/02 to 1.7 in 2008/09.

Figure 1 and Map 1,Non-hospital PHC expenditure per capita, 2008/09, illustrate the range of spending amongst the districts in 2008/09. The two top spending districts, Namakwa (NC) with a non-hospital PCE of R736 and Central Karoo (WC) with a PCE of R625, are non-typical districts that have very low population densities (one and two people per km² respectively, compared to the national average of 39 per km²). These districts also have the two lowest total populations of the 52 districts in South Africa. These factors probably contribute to the high transaction costs and, therefore, the high non-hospital PCEs in these districts.

If the Namakwa (NC) and Central Karoo (WC) districts are excluded then the ratio between the districts with the next highest non-hospital PCE of R505, Ngaka Modiri Molema (NW), and the lowest of R220 in Lejweleputswa (FS) is 2.3 to 1. In 2001/02 there was a nine-fold difference between the highest and lowest spending districts. It is likely that the narrowing of the difference in districts non-hospital PHC spending is the result of the current policy of improved equity in resource allocation.

Despite the overall reduction in their resource allocation there is still a trend for districts with higher economic status (as indicated by the deprivation index⁹) to have a higher PCE and districts with a lower economic status to have a lower PCE. In the ten top spending districts there are no ISRDP¹⁰ districts, while there are four ISRDP districts in the ten lowest spending districts.

Figure 4,Trends in non-hospital PHC expenditure per capita, 2008/09, shows the annual trends in non-hospital PCE since 2005/06. Despite the overall national narrowing of inequity between provinces and districts at a provincial level there are still wide differences and swings in this PCE. In 2008/09, instead of a convergence of district spending, there was a divergence within most provinces (high PCEs increasing and low PCEs dropping further). Examples of divergence include Alfred Nzo (EC) Xhariep (FS) West Rand (GP) Sisonke (KZN) Capricorn (LP) and Bojanala Platinum (NW). Management in districts and provinces need to review these situations and seek explanations.

In 2008/09 the metro districts averaged a non-hospital PCE of R415. This is a continuation of a pattern that has metro average spending well above the South African average and which shows clearly in Figure 2,Non-hospital PHC expenditure per capita by metro district, 2008/09.The pattern of higher average spending is due to the substantial contribution made to PHC by Local Government from its 'own' revenue. There is a clustering of the metro districts around the metro average, with the exception of Ekurhuleni (GP) where there has been an overall decrease in real expenditure for the second year in a row.

Figure 3,Non-hospital PHC expenditure per capita by ISRDP district,2008/09, illustrates that the average PCE in the ISRDP districts, R316, is well below the national average. Whilst the four ISRDP districts in KwaZulu-Natal are fairly closely clustered above the ISRDP average, the four Eastern Cape districts have diverged, with a small increase in Alfred Nzo and a large increase in Ukhahlamba. The diverging spends in these districts should be reviewed and explained by the Eastern Cape provincial management.

Figure 1: Non-hospital PHC expenditure per capita, 2008/09

Figure 2: Non-hospital PHC expenditure per capita by metro district, 2008/09

Figure 3: Non-hospital PHC expenditure per capita by ISRDP district, 2008/09

Map 1: Non-hospital PHC expenditure per capita by district, 2008/09

Figure 4: Trends of non-hospital PHC expenditure per capita by province and district, 2001/02 - 2008/09

Resources:

The indicators in these sections are calculated from the Basic Accounting System (BAS) data obtained from National Treasury, North West Province's financial data, National Treasury data on Local Government expenditure, the current DHIS mid-2008 population estimates and the 3-year rolling average of medical aid coverage calculated using the General Household survey data 2005-2007.

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The downloadable pdf version of this article can be found athttp://www.hst.org.za/publications/864

The undelying data spreadsheets can be found athttp://www.hst.org.za/publications/864

^{1. The District Health Barometer has calculated the total as being R31.5 billion for the same time period, based on more recently extracted data, which correlates closely to the Treasury figure.}

^{2. National Treasury. Provincial Budgets and Expenditure Review, 2005/06 - 2011/12. National Treasury, Pretoria September 2009.http://www.treasury.gov.za/publications/igfr/2009/prov/default.aspx}

^{3. The misleading nature of the name 'non-hospital' PCE is acknowledged as the indicator excludes more than just district hospital expenditure, but customary usage suggests retaining the name.}

^{4. These figures cover all of provincial Budget Programme 2 in the BAS (and the equivalent in the NW financial system) plus Local Governments 'own' contribution to health.}

^{5. It is assumed that expenditure on public sector services is for the uninsured population (as quantified in the General Household Survey, 2007) although it is known that a small proportion of insured people make use of public sector facilities and in some areas a substantial proportion of uninsured people make use of the private health sector.}

^{6. See section 1.2 PHC (Non-hospital) per capita expenditure}

^{7. These figures cover provincial spending on District Management, Community Health Clinics and Health Centres, Community-based Services and Other Community Services.}

^{8. It is assumed that expenditure on public sector services is for the uninsured population (as quantified in the General Household Survey, 2007) although it is known that a small proportion of insured people make use of public sector facilities and in some areas a substantial proportion of uninsured people make use of the private health sector.}

^{9. Deprivation indices by district can be found in Section 1, District Health Barometer 2007/08 and in the DHB data Excel file data under socio-economic indicators}

^{10. Integrated Sustainable Rural Development Programme}

Keywords	This Item is associated with the Following Keywords: District Health Barometer (DHB).
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