Severe funding cuts could cause three Western Cape academic hospitals to run out of cash by 15 January.
Also read: New central hospital on Tygerberg Campus announced for Cape Town
A national budget shortfall of at least R570 million has put three tertiary hospitals in a precarious position, forcing them to make crucial and potentially catastrophic service delivery cuts to avoid running out of money next year.
According to the Daily Maverick, the Groote Schuur Hospital, Tygerberg Hospital and the Red Cross War Memorial Children’s Hospital have to de-escalate their services from mid-December to mid-January. They also have to save 50% on consumables, stop filling vacant posts and reduce surgical procedures.
The issues they face have in part been caused by the state-approved public sector wage increase, which has not been funded. This has a substantial impact on the amount of money the government allocates to hospitals. The country’s total wage shortfall for all the health departments currently stands at R8.7 billion.
Furthermore, Tygerberg Hospital is now dealing with an R275 million shortfall, Groote Schuur R264 million and the Red Cross War Memorial Children’s Hospital R31 million.
To this end, the three CEOs of these hospitals sent a memorandum to departmental heads to put a spotlight on the situation. ‘Unfortunately, if we continue to function as we have over the past six months, our cash flow will run out by mid-January (our Day Zero),’ it reads.
‘The implication of this could mean a non-payment of salaries, a non-payment of all accounts, a non-delivery of consumables, the inability to order essential pharmaceuticals and other items, and we will have to carry these costs over into the new financial year, which is predicted to offer another reduction in our budgets.’
The three institutions that fund the hospitals’ budget include:
- The National Tertiary Services Grant, which is allocated by the National Treasury via the National Department of Health
- The Human Resources and Training Grant, which is allocated by the National Treasury via the National Department of Health
- The Provincial Equitable Share, which is allocated by the Western Cape’s Department of Health and Wellness.
Tygerberg’s total budget is R3.385 billion for the 2023/24 financial year, followed by Groote Schuur with R3.339 billion and the Red Cross War Memorial Children’s Hospital with R937 million. Together, they spend between 63% and 66% of their budgets to pay staff, while the remainder is used for operational costs.
The National Treasury Services Grant, the Human Resources and Training Grant and the Provincial Equitable Share all received significant cuts earlier this year, and further cuts are expected for the next few years.
Departments in academic hospitals have been advised to reduce their consumables by 50%, reduce overtime, cut the use of agencies to fill nursing shortages and delay filling positions for three months. Some staff have even reportedly been asked to take leave.
While the de-escalating of services occurs each year, one surgeon at one of the affected hospitals noted that it is usually only for two weeks. ‘This year it is four weeks. It is the longest period ever. Most elective surgeries will not happen, and only emergencies will be done.’
Cape {town} Etc discount: Looking for things to do in the city at half the price? Let these offers inspire you. Get them here.
Speaking to the Daily Maverick anonymously, he added that it is ‘irresponsible to have such a massive shortfall because it is starting to affect the core interests of the hospital. The education of doctors is also affected because posts may not be filled.’
‘There will be a knock-on effect by closing the outpatient clinics for longer during the de-escalation period as well as not performing elective surgery. Patients do present later with more complex disease.’
One specialist told the Daily Maverick that in addition to being academic teaching hospitals, the three facilities also treat the most complex cases in the province.
‘We treat very complicated cases from all over the country. Even before this [budget issue] we struggled with reduced theatre time. Due to surgery operating time cuts, specialists will not be able to keep up their own skills, let alone do training. All registrar training only happens at public hospitals.’
‘We are now seeing more and more advanced cases of pathology due to the backlog from Covid. Further reduction in our service capacity will severely compromise patients’ access to life- or disability-saving services.’
‘Everybody expects chaos by the 15th of January when we expect more cuts. Some people have already resigned due to the difficult conditions. The decisions we will be forced to make leave doctors with massive medical-legal issues.’
Each year, Tygerberg Hospital and Groote Schuur treat nearly 500 000 patients in their outpatient departments and nearly 65 000 in their emergency centres, while the Red Cross sees about 80 000 patients in its outpatient department and 36 000 patients in its emergency centres.
As of 31 October, the Daily Maverick reports that some 4 639 employees worked at Tygerberg, 3 694 at Groote Schuur and 1 152 at Red Cross. These figures include medical, nursing, administration and support.
Foster Mohale, the spokesperson for the National Department of Health, says the calculated wage bill shortfall was estimated to be about R8.7 billion for the health sector.
‘The National Treasury has estimated the shortfall to be equivalent to 18,000 posts within the health sector. The department is awaiting the budget adjustment speech by the Minister of the National Treasury to identify if the wage increase will be funded.’
‘The department and National Treasury had meetings which involved the nine provincial health departments, nine provincial treasuries and the National Treasury. The shortfall of R8.7 billion was discussed, with no funding proposals identified.’
‘There is no doubt that budget cuts will impact healthcare; however, the department is working with the provinces to ensure that essential services, including recruitment of health specialists, procurement of medical supplies and equipment are prioritised.’
Explore Cape Town and its surroundings with these incredible deals on cars for under R100 000. Find car listings here.
On Wednesday, Finance Minister Enoch Godongwana announced that an additional R24 billion was allocated this year and R74 billion over the medium term to fund wage increases in the health, education and police sectors. However, it is not clear how these funds will be distributed.
Western Cape Department of Health and Wellness spokesperson Byron La Hoe says it is difficult to predict how the Department of Health and Wellness will be affected during the current financial year and in the upcoming medium-term Expenditure Framework period (2024/25 to 2026/27).
‘There is no doubt that budget cuts will impact healthcare nationally. The department is engaged in the upcoming Medium-Term Budget Policy Committee and Provincial Government Medium-Term Expenditure Committee discussions, and further updates will be communicated in due course.’
‘Until such time, regular engagements are taking place with senior officials and service managers in the department on how we can prepare for these cuts, which will be across the health system.’
‘We acknowledge that there will need to be some service prioritisation and rationing across the public health system. The department is exploring a more holistic and pragmatic approach to achieving a balanced budget and includes working with variable budget scenarios and cash flow management planning as part of sound financial monitoring and sector financial planning.’
‘This is applicable across the public health sector and not limited to these three hospitals, as they will be affected the same way as all other facilities across the country.’
Also read:
Lions Club of Tokai drives renovation project for Tygerberg cancer ward
Picture: Hush Naidoo Jade / Unsplash
