MPUMALANGA
This input has been mainly prepared from the Department of Health Perspective
1.
This matter will have been covered by briefing documents to NCOP members. Basically, the Division of Revenue Bill deals with allocating the funds between National, provincial and Iocal level government after consideration of the FFC recommendations.
However, from the Health Mpumalanga viewpoint the key point for this review, is that the FFC has now made recommendations that, consistent with the constitutional mandate of the FFC,deal specifically with ONLY the provision of Basic Health Services. Provinces are therefore to be directly funded (fully) for the costs of primary health care, and the other (secondary, etc.) levels of health service provision (in the FFC formula) will have to come from the total provincial budget allocation (the basic combined portion of the formula).
Mpumalanga Health would therefore expect that (a) the basic health provision would be earmarked; and (b) the other provision for health in the general provincial formula, should take into account the enormous backlogs that this province faces, due to Gauteng taking most of the old TPA facilities and services from 1994 on. If that provision (b) is going to be supplemented adequately by Conditional Grants for the province to upgrade Witbank (and other) referral hospitals, the department will be appreciative.
2. Broad policy Issues and legal framework that informs and guide the FFC. The key focus of the FFC recommendations for 2001 was: "the costed norms approach is a formula based method for calculating the financial resources necessary for the provision of basic social service levels, given nationally mandated norms and standards". This means that where a province has MORE senior citizens (for example) their share would rise accordingly Mpumalanga Health have no problem with that approach.
There are, however; major concerns about the accuracy of the statistics and assumptions underlying the figures used in the actual formula. For example, it is well known that senior citizens move from Gauteng and other provinces; to retire to the rural provinces, such as Mpumalanga, but there may not be adequate census-taking on a regular basis to establish the magnitude of this. This will impact on health, social services, and to a lesser extent, Public Works and Education.
There are also concerns that making no adjustment for PRIVATE health care coverage (ie. by NOT removing the medical aid funded population from the population part of the formula) may inadequately address our needs. The FFC says ‘’this is covered by the poverty factor in the formuIa’’. The province does not have adequate population and demographic statistics to confirm or deny this; maybe the Population Unit at Social Services can enlighten the NCOP members on whether they have adequately investigated the linkages.
3 Social Sector: Education, Health and Welfare The FFC has taken the view that 85% of the equitable share to provinces should be on social services, (Health, Education and Welfare), and that of that about 18% should be focused on Health. By subtracting or adding the Conditional Grants, the percentage allocation for Health radically changes, and this should not be. Mpumalanga Health want it clearly stated that the 18% is WITHOUT Conditional Grants ie. the Conditional Grants must be subtracted immediately from the prnvincial figure, THEN 18% allocated to Health. The FEC says, ‘These are indicative percentages only’.
4. Equitable share to different spheres of government of the nationally raised revenue The Mpumalanga Health Department is aware that the question of giving direct funding to the new local authoritiesI district councils etc, was postponed by the FFC for a year due to the Local Government Elections (2000) and the rearrangements conditional upon the Demarcation process.
The department is anxious that the province really concentrate on the development of norms and standards, monitoring and auditing the service delivery aspects, and moves away from service provision itself. The sooner that the FFC takes the local government issues on board,and makes a statement about this,the better. It will remove uncertainty, and give provinces a deadline to work towards in the devolution and decentralization of service provision,and of budgets.
Local governments, naturally, are equally anxious to take over the full budget allocations for health. This may require that the NCOP look seriously at the definition of "municipal health services" as found in the Constitution.
5. Vertical division of revenue. In respect of the vertical division of revenue, the split between provinces, the FFC seems to be unwilling to force the Department of Finance (now, national Treasury) to speed up the equitable share of the budget to provinces. There was to be a phase-in period, whereby the better-off provinces (Western Cape, Gauteng, etc.) would get lower and lower allocations, and the poorer and more rural provinces - such as Mpumalanga - would come nearer their equitable share.
That phasing-in period has been halted. The conditions of provincial allocations has been amended. The FFC and the national Treasury must not handicap those provinces that are still battling with major backlogs. They must be treated on a more generous basis than the well-to-do provinces.
6. Conditional Grants Mpumalanga Health is appreciative of the system of Conditional Grants whereby some attempt is being made to address the backlogs caused by decades of neglect.
The conditions attaching to some of the grants, however,is problematic, and the administration, via the provincial Treasury, needs reconsideration. For example, the Province may receive direct to a bank account some funds for a conditional grant, without the receiving department being made aware, and without the amount going directly onto the budget of that department The cash and the bureaucracy around accessing the grants from the provincial Treasury is unwieldy.
The recommendation here should be that the provincial departments be authorised to keep separate bank accounts for each conditional grant, and thereby monitor arrival and expenditure of those specific funds. My interest accruing on unspent funds would then be applied to further the purposes of the grant. Specific expenditures from the grant moneys would easily be verified from the bank statement.
7. Provincial Own Revenue The Department of Health has long been highlighting the need to authorise retention of revenue at hospitals as the first step towards improving revenue collections. The advent of "Free Health’’ in primary health care areas, and for pregnant women and children under 6 years not covered by medical aids, has been a major factor in the fall off in revenue collections in the health sector acrossthe country.
Another factor contributing to the drop in revenue at institutions has been the requirement of health care funders (medical aid societies) to deposit their payments by electronic bank funds transfer (EFT), with inadequate reconstruction occurring by provincial treasuries. Thus, payments may be ‘’lost’’ in the general revenue account, and not informed to the relevant hospital with the patient record details amended accordingly. This has been a major problem h 2000/1. It this problem is sorted out, the amount of revenue coming to the province could be increased dramatically.
Athird factor, for this province, has been the delay around the introduction of new patient fees schedules. National Health MINMEC is to consider the approval of new fees structures, with which this province concurs. After appropriate Treasury approval and a period of public notification,the new feeswould likely have a 30% improvement in health revenue collection for the province.