Issued by: Gauteng Provincial Government
10 September 2001
For the second time in succession the Gauteng Health Department has been able to balance its budget of more than R6 billion for the financial year ending on 31 March 2001.
During this period the Department managed to collect a total amount of R118 million in revenue, exceeding the expected target by R27 million. The extra amount collected was appropriated back to the Department and was used to finance operational efficiency initiatives. This was result of several initiatives undertaken by the Department to ensure that debt collection is improved. These included the implementation of revenue incentives scheme for all hospitals, investigation into debt collection processes, training of staff and a campaign to educate patients to pay fees. The Department is determined to continue with the implementation of these initiatives as a way of encouraging and improving revenue collection. Furthermore, the Department is planning to establish a shared debt management centre at Head Office.
Similarly, during 2000/2001 financial year accounts raised amounted to R119 464 757, 06 and of that amount a sum of R73 017 955,15 had been recovered. This exclude accumulated debt not yet recovered or written off.
A tender for the development and implementation of revenue management tools for the Road Accident Fund and medical scheme patients within the six largest Gauteng hospitals was awarded and work has begun. This exercise is expected to result in a yearly increase of revenue.
Also during this period the Department managed to stabilise management of institutions and improve on health services by filling a number of key posts. More than 4000 posts were filled.
Clearly, a remarkable progress has been made to correct many of the shortcomings of particularly the past two financial years.
In the 1997/98 financial year the total budget allocated to the Department was R5 081 388 000 (a little over R5 billion). The Department had indicated that the allocated funds had, on the account of inflation, been insufficient to meet the minimum needs of the Department.
The demand for health services continued to keep pace with the growth of the population, accident and violence related injuries continue at an unacceptably high level, and the number of primary health care clinics and centres has increased, resulting in more people having access to health services and more referrals to hospitals. All of this places an enormous strain on the capacity and resources of the Department.
In order to meet these needs without compromising the quality of health care and the best interests of patients, the Department was compelled to spend a total of R5 299 177 in the 1997/98 financial year, resulting in an over-expenditure of R217 789 316,62.
This inadequate level of funding was repeated in the 1998/99 financial year. The total budget allocated to the Department was R5 084 586 (almost R6 billion) which, although being an increase of 0,6% on the allocation for the 1997/98 financial year and an increase of 3,34% on the actual expenditure for that year was, due to inflation, still well short of the minimum requirement of the Department. As the result, the Department was compelled to spend a total of R5 476 218 000 in the 1998/99 financial year resulting in an over-expenditure of R391 631 243,90.
It must be stressed that the Department has taken great care not to compromise on standards of health care and training. The stringent cost saving measures that are being employed by the Department cannot continue indefinitely, without detrimental consequences. This is because the bulk of the budget is tied to payment of existing staff, and there is little room for manoeuvre in the short term, except in capital expenditure and consumables. Cutting on the latter would result in drug shortages and severely compromise treatment. Inadequate budgets have resulted in maintenance of facilities falling behind, and equipment not being replaced as frequently as necessary. This is false economy, as maintenance, repairs and replacement simply become more expensive and eventually the expenditure must be incurred.
The Department continues to make progress in its endeavours to eliminate the over-expenditure on its budget, and the aforementioned measures, coupled with more realistic funding, and a positive shift to primary health care have made it possible to address the facilities, equipment and staffing backlog, while staying within budget in the 1999/2000 and 2000/2001 financial years.
For more information, please call
Popo Maja: 082-373-1169
Head of Communications