Fiscal Federalisn and Equity in Resource Allocation to Primary Health Care

Presenter: Okore Okorafor, University of Cape Town

Abstract

Rationale: Since the adoption of fiscal federalism in South Africa in 1996, progress towards a more equitable distribution of health and primary health care resources slowed down considerably. Evidence has shown that after 1996, there remained huge inequities in the distribution of allocated resources to primary health care between geographic areas. This pause in the progress towards a more equitable distribution of these allocations has been attributed to the tranafer of fiscal auhority to sub-national governments and the lack of capacity at sub-national levels to manage significant shifts in health care financial resources. These ascertions are not surprising as literature on the subject predicts greater scope for geographic inequities in resource allocation to primary health care under the nature of intergovernmental arrangements adopted in South Africa. However, in recent years, the distribution of PHC allocations across geographic areas has consistently shifted towards a more equitable outlay, without any change in the intergovernmental fiscal structure.

Objective: The aim of this study is to explain how South Africa managed to achieve these shifts in financial resources for primary health care to favour geographic areas of greater health needs.

Methods: The study used both primary and secondary data. Primary data was collected through in-depth interviews with key government officials involved in decision making for resource allocations to sub-national governments, the health sector and primary health care. These included Department of Health officials at national, provincial and district levels, and Treasury officials from the national and provincial governments. Interviews were carried out in four out of the nine provinces in South Africa. There are Western Cape, Gauteng, Limpopo and Eastern Cape. Secondary data was used to calculate measures of need (at district and province levels) which were compared with primary health care allocations.

Results: The results show that equity in allocations to primary health care has been achieved by garnering the support and buy-in of all stakeholders for equity. This has been achieved through continued emphasis of equity in the policy arena, supported by evidence of inequities from numerous studies conducted by various research organisations in collaboration with the government. Interestingly, no government unit or level can be credited solely with steering the change towards a more equitable distribution of primary health care resources. Each government unit involved in making decisions that determine the final allocations to primary health care have all acted independently to promote equity. Also, these shifts were achieved without any significant changes in levels of autonomy at sub-national government levels, or changes in the conditionality of transfers to sub-national governments. This result emphasises the importance of political support in achieving equity in resource allocation for countries operating within a fiscal federal context or a decentralised health system.