Supplementary Budget 2020

NHI Fund to be established

Pretoria – Treasury plans to prioritise finalising the National Health Insurance (NHI) Bill and it will establish an NHI Fund.

This is according to the National Budget which was delivered by Finance Minister Pravin Gordhan in Parliament on Wednesday.

"We are committed to achieving universal health coverage, in line with the National Development Plan (NDP)," said Gordhan.

The NHI is critical to this goal, and in his speech, Gordhan highlighted some of the focus areas of the fund.

These include improved access to maternal health, antenatal services and family planning services, as well as expanding integrated school health programmes, including the provision of spectacles and hearing aids, said Gordhan. Further, the fund would focus on improving services to people with disabilities, the elderly, and mentally ill patients.

"The service package financed by NHI Fund will be progressively expanded," said Gordhan.

R5.2bn allocated for NHI

To set up the fund, Treasury would consider possible adjustments to the tax credit on medical scheme contributions. More details regarding this would be revealed in the mini budget in October.

Gordhan also highlighted insights gathered from 11 NHI pilots. These are related to the design of contracts with general practitioners, more effective chronic medicine dispensing, strengthening of district health services through clinical specialist teams, ward-based outreach teams and school health services, and supportive information systems, he explained.

Treasury would allocate R5.2bn of the Department of Health’s budget to the NHI over the medium term. So far, R1bn was to be allocated for the recruitment of health care professionals. About 1.5 million chronic patients are set to benefit from the access to medication through centralised medicine dispensing and distribution. This would help alleviate pressure on public health facilities, according to the budget.

Spend on these interventions would increase by 21.2% per year over the medium term.

Other health expenses

Health has a budget of R187.5bn. District health services will be allocated R83.6bn, central hospital services will be allocated R35.9bn, and provincial hospital services will be allocated R32.3bn. Facilities management and maintenance are allocated R9.9bn and the remaining R25.8bn will go towards other health services.

Gordhan would also be working with other ministers to establish a new medical school in Limpopo, and would be involved in the planning of Limpopo Central Hospital.

Treasury has also allocated R885m for the universal test and treat policy for HIV, and R600m will be allocated to commission the new Nelson Mandela Children’s Hospital.

Expenditure estimates for 2017/18 come to R42.6bn. For the NHI, R735.1m is allocated and more than R18bn is allocated to HIV and Aids, tuberculosis, and maternal and child health.

About 88.3%, or R123.4bn, of the Department of Health’s budget will be transferred to provincial departments over the medium term through conditional grants.

R606bn on health

Compensation for employees will also be reduced by R9.7m as part of lowering the expenditure ceiling.

Refurbishment of hospitals will require R20.8bn investment in infrastructure over the medium term.  

Tertiary health services will be provided to 28 hospitals with a grant of R11.7bn in 2017/18.

"Government is committed to increasing investment towards health promotion, targeting non-communicable diseases alongside the implementation of the sugary drinks tax, such as diabetes screening and nutrition education," Gordhan said.

Government intends to spend R606bn on health over the next three years. R59.5bn will be in the form of an HIV and Aids conditional grant.

* Visit our Budget Special for all the budget news and in-depth analysis.

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