It will cost the country R30-billion a year to treat and prevent HIV by 2020, so the state has to lower costs and be clever with its health spending.
South Africa has made huge progress in fighting HIV and Aids over the past decade, lowering the rate of new infections by a third and saving hundreds of thousands of lives.
This was fuelled by a fivefold increase in spending, mainly from the government, and from external agencies, especially the United States President’s Emergency Plan for Aids Relief (Pepfar) and the Global Fund to Fight Aids, Tuberculosis and Malaria.
But with South Africa’s epidemic far from over, the price tag to expand treatment and prevention further is expected to grow from about R20-billion today to more than R30-billion by 2020 and could go even higher, according to the South African Health Review.
The country’s leaders have to address the country’s HIV financing needs with determination and resourcefulness. Their decisions on HIV spending will have a major influence on the success, or failure, of efforts to conquer Aids over the next decade and beyond.
South Africa started later than many other countries in mounting its Aids response, as a result of political denial and inaction in the 1990s and early 2000s, but the country has since made huge strides. For instance, the number of people on treatment has grown from 400 000 in 2008 to 3.42 million at the end of March this year, according to health department statistics.
This progress has been underwritten by steep increases in financing, from about R4-billion in 2008 to some R22-billion today. Of that amount, 85% comes from the government from earmarked conditional grants and discretionary contributions from provincial equitable share budgets, according to the South African Health Review. Pepfar and the Global Fund have contributed between $400-million and $500-million a year to South Africa’s HIV and tuberculosis (TB) programme, filling key gaps in areas such as prevention for drug users and female sex workers, and medical male circumcision.
But now, on the eve of the International Aids Conference in Durban from July 18 to 22, the financial future of South Africa’s HIV programme remains in the balance.
Donor dollars are going elsewhere
To expand treatment further, deepen prevention efforts so that the flow of new infections is blocked, and continue to build the health workforce and infrastructure (laboratories, drug supply systems) needed to sustain frontline efforts, the government’s own HIV and TB investment case, published in March, suggests that total spending might have to increase by another 50% to 60% over the next five years, to about R35-billion annually.
Where will this money come from, at a time when South Africa’s economy is growing very slowly and the national budget is nearly stagnant?
HIV spending as a share of the health budget has expanded from 7% in 2009 to more than 10% today, threatening to crowd out other health priorities such as diabetes and cancer.
Pepfar and the Global Fund are coming under increasing pressure to cut back in South Africa and spend their money in other countries with high HIV burdens and weaker economies than South Africa’s, such as Malawi and Mozambique.
The country’s leaders urgently need to explore financing options and pursue the most promising ones.
Finding money during tough times
There may be sources of additional financing to be tapped even though the fiscus is stretched. A small increase in the value-added tax rate might be possible, for example.
South Africa can also continue to lower its costs and become more efficient, for instance by buying antiretroviral drugs and HIV tests even more cheaply, or by shifting additional treatment responsibilities to nurses and community health workers. South Africa could maximise the health gains from existing spending on treatment by improving patients’ adherence to their drugs and lowering treatment failures, which have a high human and medical cost.
The government and its partners could target their spending to high HIV transmission districts and municipalities so that the money goes where it is most needed and can have the greatest effect.
The government can also integrate its HIV spending more closely with overall primary health care and with future National Health Insurance, in order to raise efficiency and improve sustainability. At the Durban Aids conference, Unaids will release a study exploring the feasibility and potential impact of such integration.
And finally, the government can strengthen its co-ordination with Pepfar and the Global Fund to reduce gaps, avoid duplication of effort, and ensure that it is ready to step in and take over in areas where the donors intend to cut back and transition out in the next few years.
Robert Hecht is president of Pharos Global Health Advisors. This commentary is based on his work for Results for Development Institute (R4D), where he was a managing director from 2008 to 2016.
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