HIV/AIDS Financing and Health Policy in South Africa

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HIV/AIDS Financing and Health Policy in South
Africa

• By
• Chrystelle TSAFACK TEMAH

2
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

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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?

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Overview

• South African health System
• HIV/AIDS Financing
• Efficiency of HIV/AIDS Financing

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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

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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
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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

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HIV/AIDS Financing (ctd)

• External 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

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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

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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 Annual change ()
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
  2000/1 2004/5 Change
  2000/1 2004/5 ()
Health as of total budget 11.56 11.33  
Health as of total budget 11.56 11.33  
Health as of total budget 11.56 11.33 -1,98
Health as of GDP 2.96 3.06  
Health as of GDP 2.96 3.06  
Health as of GDP 2.96 3.06 3,37
HIV/AIDS as of total budget 0.09 0.49  
HIV/AIDS as of total budget 0.09 0.49  
HIV/AIDS as of total budget 0.09 0.49 444
HIV/AIDS as of total health budget 0.67 3.86  
HIV/AIDS as of total health budget 0.67 3.86  
HIV/AIDS as of total health budget 0.67 3.86 476
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Efficiency of HIV/AIDS Financing (ctd)

• 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

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Efficiency of HIV/AIDS Financing (ctd)

• 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

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

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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.

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• Thank you for your attention