1. Inaugural Conference of the African Health Economics and Policy Association (AfHEA) Accra - Ghana, 10th - 12th March 2009 HIV/AIDS Financing and Health Policy in South Africa By Chrystelle TSAFACK TEMAH

2. Inaugural Conference of the African Health Economics and Policy Association (AfHEA) Accra - Ghana, 10th - 12th March 2009 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

3. Inaugural Conference of the African Health Economics and Policy Association (AfHEA) Accra - Ghana, 10th - 12th March 2009 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?

4. Inaugural Conference of the African Health Economics and Policy Association (AfHEA) Accra - Ghana, 10th - 12th March 2009 Overview  South African health System  HIV/AIDS Financing  Efficiency of HIV/AIDS Financing

5. Inaugural Conference of the African Health Economics and Policy Association (AfHEA) Accra - Ghana, 10th - 12th March 2009 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

6. Inaugural Conference of the African Health Economics and Policy Association (AfHEA) Accra - Ghana, 10th - 12th March 2009 Table 1: Trend of Indicators of health expenditure in SA (1998- 2005) 1998200020022005 Total expenditure on health as % of Gross domestic product8,4 8,7 General government expenditure on health as % of Total expenditure on health44,842,440,641,7 Private sector expenditure on health as % of Total expenditure on health55,257,659,458,3 General government expenditure on health as % of General government expenditure11,51110,79,9 Social Security funds as % of General government expenditure on health43,33,84,1 Prepaid and risk-pooling plans as % of Private sector expenditure on health74,775,677,777,3 Private households' out-of-pocket payment as % of Private sector expenditure on health23,622,820,917,4 External resources on health as % of Total expenditure on health0,20,40,30,5 Total expenditure on health per capita at exchange rate261244206437 Total expenditure on health per capita at international dollar rate585625689811 General government expenditure on health per capita at exchange rate11710384182 General government expenditure on health per capita at international dollar rate262265280338

7. Inaugural Conference of the African Health Economics and Policy Association (AfHEA) Accra - Ghana, 10th - 12th March 2009 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

8. Inaugural Conference of the African Health Economics and Policy Association (AfHEA) Accra - Ghana, 10th - 12th March 2009 HIV/AIDS Financing (ct’d)  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

9. Inaugural Conference of the African Health Economics and Policy Association (AfHEA) Accra - Ghana, 10th - 12th March 2009 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

10. Inaugural Conference of the African Health Economics and Policy Association (AfHEA) Accra - Ghana, 10th - 12th March 2009 Decomposing resources allocation Expenditure as shares of budget Trends in expenditure by functional area and GDP (R million, real 2003 prices) 99/0001/0202/0305/06Annual change (%) Hospitals21 95822 86121 57 2 23 5801.2 PHC4 9065 2955 7016 3464.4 HIV/AIDS8310475088048.2 Nutrition6176737608335.1 EMS9119421 3621 5078.7 Admin1 2441 3771 4271 5744.0 Total32 21234 58935 11 7 3.03.1 2000/12004/5 Chang e (%) Health as % of total budget11.5611.33 -1,98 Health as % of GDP2.963.06 3,37 HIV/AIDS as % of total budget0.090.49 444 HIV/AIDS as % of total health budget0.673.86 476

11. Inaugural Conference of the African Health Economics and Policy Association (AfHEA) Accra - Ghana, 10th - 12th March 2009 Efficiency of HIV/AIDS Financing (ct’d)  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

12. Inaugural Conference of the African Health Economics and Policy Association (AfHEA) Accra - Ghana, 10th - 12th March 2009 Efficiency of HIV/AIDS Financing (ct’d)  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

13. Inaugural Conference of the African Health Economics and Policy Association (AfHEA) Accra - Ghana, 10th - 12th March 2009 Percent spent from 2000 to 2003 on HIV/AIDS, conditional grant allocation

14. Inaugural Conference of the African Health Economics and Policy Association (AfHEA) Accra - Ghana, 10th - 12th March 2009 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

15. Inaugural Conference of the African Health Economics and Policy Association (AfHEA) Accra - Ghana, 10th - 12th March 2009 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.

16. Inaugural Conference of the African Health Economics and Policy Association (AfHEA) Accra - Ghana, 10th - 12th March 2009 Thank you for your attention