Health Funding

Budget heralds sharp cuts to university hospitals

Gauteng and the Western Cape will be hard hit by funding cuts to university hospitals announced in finance minister Trevor Manuel’s budget. Conditional grants that allocate funds to teaching hospitals directly from central government are to be rationalised. The move which is designed to promote greater health equity among the provinces will fund tertiary units in 27 hospitals around the country.

Rationalisation in the conditional health grants to provinces is likely to spell good news for the poorer provinces but is unlikely to please hospital managers in Gauteng and the Western Cape.

The National Tertiary Service Grant which amounts to R3,7 billion in 2002/3, will fund tertiary units in 27 hospitals around the country – a move which will imply cuts in funding to the university hospitals in Gauteng and the Western Cape.

“This is a significant change in policy,” said Dr Di McIntyre who said that the National Tertiary Service Grant had replaced the Central Hospital Grant which had previously allocated funds to a limited number of national hospitals.

“They’re no longer going to protect the big university hospitals as much as before. Instead they will use the new grant as a mechanism to fund specialist tertiary units in a larger number of provinces and hospitals with the explicit aim of facilitating redistribution.”

McIntyre said that while redistribution was important and the National Tertiary Service Grant was to be welcomed, it needed to be backed up by strategies to ensure that provincial cabinets allocate sufficient funds from their own budgets to maintain and improve hospital services.

“Western Cape and Gauteng will be hard hit by this. It will be worth it providing the other provinces use the Grant appropriately. What one must guard against is that provincial treasuries do not use the new grant as an excuse to reduce their health budgets because they are receiving additional amounts through the conditional grants,” said McIntyre.

About the author