Debt could cripple East Cape health

Provincial department may have to cut back on medical services

The Eastern Cape Department of Health will have to curtail medical services to keep its spiralling debt down, spokesman Sizwe Kupelo said yesterday.

The department’s accruals have doubled since 2014, according to an answer provided to the provincial legislature by Finance MEC Sakhumzi Somyo.

Accruals are outstanding payments or debt carried over to the next financial year, which starts in March.

Kupelo said despite a treasury bailout of R230-million in the adjustment budget, the department was expecting to end the year with R2.4-billion in accruals.

“We are constantly trying to keep the department’s consumption in check through our ongoing cost consumption measures.

“Unfortunately, until we either get a bailout or we reduce services, accruals will continue to accumulate.”

The DA’s Bobby Stevenson said if the accruals continued to climb at the current rate, the Eastern Cape finances would become a pyramid scheme which was on track for overall collapse.

“Given the fact that the national tax revenue shortfall for this financial year is in excess of R50-billion, it is unlikely that we are going to get any bailouts.

“These accruals have a crippling impact on some of the provincial departments as well as our struggling Eastern Cape economy,” he said.

“The knock-on effect of businesses not being paid within 30 days – last year 6 478 cases – is horrific.

“It results in bankruptcy and layoffs, which add to the unemployment rate, of which the Eastern Cape has the highest in the country at 35.5%.”

Stevenson said given its continuous increase in accruals the Department of Health would by 2022 have no money left except for salaries.

“This means it is on the road to becoming completely dysfunctional.”

Somyo said the department’s accruals increased from about R800-million in 2014-15 to R1.3-billion in 2015-16 to R1.9- billion this year to be carried over to next year.

Eastern Cape Health Crisis Coalition spokesman Fikile Boyce said the financial shortfall had a clear and demonstrated effect on service delivery in the province.

“Poor financial management is a major contributing factor to the troubles of the department.”

Kupelo said they were expecting R2.4billion in accruals by the end of the year.

“The main reason is the cumulative nature of the medical legal court order payments which have not been funded.”

The head of monitoring and advocacy at the Public Service Accountability Monitor, Zukisa Kota, said while health was acknowledged as one of the government’s key policy priorities, the overall quality of services provided at clinics and hospitals needed major improvement.

“While Finance Minister Malusi Gigaba contended in his mid-term budget speech that some medical negligence claims are unjustified or excessive, estimated payouts for such claims have grown at an average rate of 45% since 2012-13, and amounted to R1.2-billion in 2016-17,” Kota said.

“Efforts to improve the quality of public health services are not always dependent upon increased budgets, but often upon improved management and accountability within this vital sector.”

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