In February, a broad cross-section of South African civil society organisations (CSOs) called on Parliament to halt the proposed increase in value-added tax (VAT), demonstrating that such a move for general revenue collection would make the tax regime more regressive, potentially violate the equality clause in the Constitution, and worsen already unacceptably high levels of poverty and inequality. They illustrated that more progressive alternatives exist. The organisations argued that a reconsideration of the tax regime was not to be taken lightly and therefore not something National Treasury could unilaterally decide on, without proper public consultation. The CSOs highlighted that tax can and must play a redistributive role in the economy, while ensuring sufficient revenue collection for pressing social needs. Yet the proposed 2018 budget not only increases the fuel levy and VAT, the least progressive tax instruments, but also opts to cut down on social spending in areas such as basic education, health care, housing, municipal infrastructure, informal settlement upgrading and transport. They argue that the VAT increase for general revenue (and not specifically for health), will have negative consequences for service delivery and affect poor and working class communities the most.
Resource allocation and health financing
This synthesis paper brings together the research findings from four papers prepared by the Uganda team in the UNRISD Politics of Domestic Resource Mobilisation for Social Development project. It addresses three broad themes: bargaining and contestation, key relations, and institution building with regard to mobilising resources for social development. The authors analyse how political economy factors affect revenue raising and social spending priorities in Uganda. It applies a political settlement theory, exploring revenue bargaining or political negotiations that shape revenue mobilisation, revenue composition and policy priorities guiding revenue allocation. The authors focus on three instances of revenue bargains: legislative tax reform, institutional performance of the revenue agencies, and policy making. The first two instances relate to the actual mobilisation of resources, whereas the third example focuses on bargains over spending priorities within a given revenue base. The findings indicate that in Uganda, a low-income country with competing political factions, there are specific challenges to mobilising resources for social development. The need to maintain political power is argued by the authors to have led to reduced tax intakes as taxes levied on rural voters are abolished and tax exemptions introduced for powerful supporters. On the spending side, social development concerns are argued to compete with other public policy areas as well as the pressure to allocate resources for political purposes.
Nets treated with insecticide have proved to be an effective method of reducing malaria. Before increasing the scale of this intervention, however, policymakers need to be fully informed of the costs involved and the effect that the scaling-up will have. Cost-effectiveness has been measured in trials, but what does the intervention cost in practice?
States emerging from protracted crises struggle to provide basic services. This is no more crucial than in the health sector where vulnerable ‘post-conflict’ populations are frequently in dire need of care. However, development actors are frequently faced with difficult choices – particularly how much emphasis to place on ‘humanitarian’ emergency health relief in the face of a need for health systems building. Yet is it possible to simultaneously provide basic health services whilst also developing local health provision? This paper considers how aid mechanisms can engender a ‘twin approach’ and sustain a continuous flow of resources during the progression from humanitarian to development aid. A paradigm shift is required which allows for an integrated mix of modalities in early recovery settings. Better coordination of donor agencies at country level is also needed to determine the choice of aid instruments and their complementarity, in order to ensure that health service coverage for vulnerable populations is maintained while simultaneously (re)building the health system.
The African National Congress has released a rough outline of how it sees the proposed National Health Insurance scheme on its website. But the document is short on detail and has no timelines. The broad objective of the NHI is to put into place the necessary funding and health service delivery mechanisms, which will enable the creation of an efficient, equitable and sustainable health system in South Africa. It will be based on the principles of the right to health, social solidarity and universal coverage.
Oxfam have announced that it is now possible to count the cost of paying for healthcare for households around the world. A group of experts tasked with developing the indicator framework to measure progress towards the Sustainable Development Goals (SDGs), have agreed to measure financial risk protection of universal health coverage by ‘’proportion of the population with large household expenditures on health as a share of total household expenditure or income”. This signals a great shift in from the previous dangerous indicator that would just measure population with access to health insurance or a public health system. The previous indicator was flawed because it did not measure whether or not people were actually financially protected against potentially catastrophic costs for health care. It would have also failed to measure progress across different income groups or by gender. It was also dangerous as it sent a signal to governments around the world that health insurance was the route to achieving Universal Health Coverage despite robust and scientific evidence that many voluntary health insurance schemes have exacerbated inequality. The change to the new indicator that ‘measures what matters’ was advocated for civil society organisations, academics, development agencies and statistical authorities expressed their deep concerns through letters, lobbying and public statements.
Tiered pricing - the concept of selling drugs and vaccines in developing countries at prices systematically lower than in industrialised countries - has received widespread global support as a way to improve access to medicines for the poor. Researchers in this study carried out case studies based on a review of international drug price developments for antiretrovirals, artemisinin combination therapies, drug-resistant tuberculosis medicines, liposomal amphotericin B (for visceral leishmaniasis), and pneumococcal vaccines. They found several critical shortcomings to tiered pricing: it is inferior to competition for achieving the lowest sustainable prices; it often involves arbitrary divisions between markets and/or countries, which can lead to very high prices for middle-income markets; and it leaves a disproportionate amount of decision-making power in the hands of sellers rather than consumers. In many developing countries, resources are often stretched so tight that affordability can only be approached by selling medicines at or near the cost of production. Policies that ‘de-link’ the financing of research and development from the price of medicines merit further attention, the authors argue, since they can reward innovation while exploiting robust competition in production to generate the lowest sustainable prices.
A study conducted by the WHO Uganda Office suggests that there is a financial barrier created by cost-sharing that decreases access to services, especially among the poor in Uganda. The study found that there was a marked increase in utilization of health services after the abolition of user fees in all population groups that was fluctuating in nature. The increase in utilization varied from 26% in public referral facilities in 2001, rising to 55% in 2002 compared with 2000. The corresponding figures for the lower level facilities were 44% and 77%, respectively. Increase in utilization among the poor was more than for other socio-economic categories. Women utilized health services more than men both before and after cost-sharing.
Total funding for the response to AIDS in the world's low- and middle-income countries is only half of what will be required in 2005 to effectively confront the epidemic, according to a Joint United Nations Programme on HIV/ AIDS. This report, presented at ICASA 2003 in Nairobi, assesses current global commitments to addressing HIV/AIDS. It states that, despite the fact that the pandemic has recently reached the top of the African and international agenda, resources are still nowhere near sufficient.
The authors of this study conducted a review of the international literature on funding issues faced by church- and faith-based service providers in Africa and in Papua New Guinea. They found that funding constraints have been overcome in some cases through greater collaboration between government and church health providers, through the restructuring of user fees to minimise the impact on the poor and through more streamlined and transparent financial reporting. However, failure to fully implement agreed government funding to church health services can cause facility closures and reduced treatments, driving up costs for government and increasing the burden on public provision. The authors also report mixed findings as to whether greater engagement by church health services with government has translated into broader participation in policy formulation, as well as of implementation of community-based health insurance schemes and micro-insurance. Funding constraints influenced the retention of skilled staff by church health services, as workers move from church-managed, rural and remote facilities to public facilities in urban centres.