hiv/aids financing and health policy in south africa

Inaugural Conference of the African Health Economics and Policy Association (AfHEA)Accra - Ghana, 10th - 12th March 2009

HIV/AIDS Financing and HIV/AIDS Financing and Health Policy in South Health Policy in South

AfricaAfricaBy

Chrystelle TSAFACK TEMAH


Background Abolition of apartheid and election of the

government of National Unity in 1994 with adoption of the Reconstruction and Development Plan « Render health care unified and accessible to all South

Africans » District health system and free primary health care

Mid’ 90s: HIV/AIDS reaches epidemic dimension Highest absolute number of infected people in the world Highest number of deaths due to AIDS and AIDS orphans

End 2003: Adoption of a national roll-out plan to provide free ARV to all people in need

711,000 people in need, but only 225, 000 were received treatment in 2007


Motivation Despite its gravity, HIV/AIDS, it is only one of

the many public health issues in South Africa South Africa is still dealing with infectious diseases,

infantile mortality and malnutrition

Growing toll of chronic diseases (obesity, cardiovascular diseases, diabetus, etc…)

Two questions addressed in this paper: How does HIV/AIDS financing fit into the overall

health policy in South Africa?

Are the resources allocated to the fight against HIV/AIDS in the country used efficiently?


Overview

South African health System

HIV/AIDS Financing

Efficiency of HIV/AIDS Financing


South African health System

Post-apartheid health reforms Free primary health care, free care to pregnant women,

nursing mothers and children under 6.

District health system: services offered according to local conditions and health problems. Financed through conditional grants and equitable shares.

Health financing Public sector: 40% of THE and accounts for 80% of

population. Financed through tax collection and user fees

In 2000, private sector was spending € 91 per patient, opposed to € 6,75 in the public sector. Financed through prepaid plans and OOPE


Table 1: Trend of Indicators of health expenditure in SA (1998- 2005)

1998 2000 2002 2005

Total expenditure on health as % of Gross domestic product 8,4 8,4 8,7 8,7

General government expenditure on health as % of Total expenditure on health 44,8 42,4 40,6 41,7

Private sector expenditure on health as % of Total expenditure on health 55,2 57,6 59,4 58,3

General government expenditure on health as % of General government expenditure 11,5 11 10,7 9,9

Social Security funds as % of General government expenditure on health 4 3,3 3,8 4,1

Prepaid and risk-pooling plans as % of Private sector expenditure on health 74,7 75,6 77,7 77,3

Private households' out-of-pocket payment as % of Private sector expenditure on health 23,6 22,8 20,9 17,4

External resources on health as % of Total expenditure on health 0,2 0,4 0,3 0,5

Total expenditure on health per capita at exchange rate 261 244 206 437

Total expenditure on health per capita at international dollar rate 585 625 689 811

General government expenditure on health per capita at exchange rate 117 103 84 182

General government expenditure on health per capita at international dollar rate 262 265 280 338


HIV/AIDS Financing

National sources of financing

Conditional grants (10%): ring-fenced funds allocated to health, education and social development sectors. Allow to ensure that national priorities will be sufficiently resourced in provincial budgets

Equitable shares (86.5%): means found by the government to correct distorsion due to differences in provincial tax revenues. Allow discretionary spending by the provinces


HIV/AIDS Financing (ct’d) External sources of financingExternal sources of financing

The Global Fund : 4 main projects funded at the end of 2005

LoveLife initiative (2003): $12,000,000. Promotion of healthier sexual practices among adolescents

Institute for Health and Development Communication (2003): $2,354,000. Producion of the new series of Soul City

“Enhancing the Care of HIV/AIDS infected and affected patients in resource-constrained settings in KwaZulu-Natal” (2003):$12,873,456

“Strengthening and expanding the Western Cape TB and HIV/AIDS prevention, treatment and care” (2004): $8,282,075

disbursed a cumulated amount of more than 128 million dollars at the end of 2008

NGOs and international aid PEPFAR, G7, OECD, DFID, EU, USAID, foundations, private business


Efficiency of HIV/AIDS Financing

Crowding-out effect on health sector: public health issues Burden on health facilities (e.g: Kwa-Zulu Natal

provincial health services, Veenstra 2005) HIV/AIDS stay longer at the hospital, use more expensive drugs;

also more lab and radiology costs associated with HIV/AIDS patients

This difference increases with the reference level; it is higher for regional than for district hospitals

Millennium Development Goals and major public health issues

Treating 6.000 patients on ART costs just as much as providing full immunization coverage against measles and tetanus for all children in South Africa. Assuming cost per patient per year =1,000 USD

Treating 12.000 HIV/AIDS patients with ART costs as much as providing clean water to all people in need and ORT to all children aged 0-4 infected with diarrhoeal diseases


Decomposing resources allocation Expenditure as shares of budget Trends in

expenditure by functional area and GDP (R million,

real 2003 prices) 99/00 01/02 02/03

05/06 Annualchange

(%)

Hospitals

21 958

22 861

21 572

23 580

1.2

PHC 4 906 5 295 5 701

6 346 4.4

HIV/AIDS

83 104 750 880 48.2

Nutrition

617 673 760 833 5.1

EMS 911 942 1 362

1 507 8.7

Admin 1 244 1 377 1 427

1 574 4.0

Total 32 212

34 589

35 117

3.0 3.1

2000/12004/

5

Change

(%)

Health as % of total budget 11.56 11.33

-1,98

Health as % of GDP 2.96 3.06

3,37

HIV/AIDS as % of total budget 0.09 0.49

444

HIV/AIDS as % of total health budget 0.67 3.86

476


Efficiency of HIV/AIDS Financing (ct’d)

Justification for HIV/AIDS financing Burden of diseases and death

5, 700 infected people at the end of 2007 HIV/AIDS was responsible of 30 % of all deaths in 2000

and 47 % in 2007 Among 15-49 age group, it is responsible of 71 % of all

deaths

Cost-effectiveness Absorption capacity


Efficiency of HIV/AIDS Financing (ct’d)

Cost-effectiveness of ART: Comparison of ART to the status quo (treatment for opportunistic infections only) in Khayelitsha

ART is efficient in economic terms costs R13 754 per QALY versus R14 189 per QALY for

patients who do not receive ART

ART leads to an average gain in life expectancy of 6.06 years.

Several reports confirm good outcomes of ARV use in the public health sector


Percent spent from 2000 to 2003 on HIV/AIDS, conditional grant

allocation

22,30%

59,50%

35,60% 36,50%

66,10%

82,90% 81,30%

74,50%

86,50%

92,70%

85,00%

82,20%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Education sector Health sector Social development

Sector

Total HI V/ AI DS

Conditional Grantsperc

ent

actu

ally

spe

nt o

n cu

rren

t CG

's a

lloca

tion

2000/ 01

2001/ 02

2002/ 03


Conclusion Overall, HIV/AIDS financing differs from

health policy in South Africa in three points ARVs, which are not included in the PHC package are offered free in the

public sector HIV/AIDS financing is not confined to the health sector external funding account for a greater part of financing in the case of

HIV/AIDS

Evidence that HIV/AIDS is highly affecting health system

In terms of resources allocated In terms of utilization of facilities In terms of crowding out of public health issues

Evidence that amount spent on HIV/AIDS financing is justified

HIV/AIDS has became the top single cause of deaths in the country ARVs allow to gain 6 years over the baseline scenario Provinces are increasing their ability to spend HIV/AIDS funds


Recommendation

HIV/AIDS is striking people in their most productive years, thus undermining human capital, a development pillar. This alone justifies the amount of money devoted to the epidemic. Yet, other public health issues, cheaper and more cost-effective deserve attention and should be resolved in order to ensure fairness and ‘equity’ between patients suffereing from any cause.


Thank you for your attention

hiv/aids financing and health policy in south africa

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