The Gauteng Department of Health is a public health department for the Gauteng province located in Johannesburg, South Africa. As a province-level department, the department is responsible for the costs related to the delivery of health services, while personnel costs are assigned to the national government. This paper will present a financial strategy for the department focused on mitigating primary drivers of healthcare costs that fall under its control and are allocated to other departments.
In order to devise a financial strategy for the Gauteng Department of Health, it is crucial to understand what drives its costs. According to the Provincial Government of South Africa (2022), employee compensation is the primary expenditure for the department, while unauthorized, irregular, and fruitless expenditures account for a significant proportion of overall costs. In order to mitigate the costs borne directly by the department as well as the national government, it is crucial to increase revenue (Gildenhuys, 1997). Specifically, patient service revenue should be increased to fund the department. According to Black et al. (2015), local departments are required to focus on sustainability and infrastructure maintenance in order to be able to provide their clients with high-quality care. However, the initial investment of funds to support the department can substantially hinder its ability to offer care to patients. Therefore, a grant can be obtained from the national government with the purpose of updating the department’s infrastructure and equipment (Fisher, 1996). Thus, the financial strategy for the department focuses on increasing patient revenue.
In summary, the Gauteng Department of Health is recommended a new financial strategy to mitigate rising expenditures on patient care and staff remuneration. The presented strategy aims at an adequate growth of patient service revenue by improving the infrastructure and equipment available to the department. It should be noted that within the strategy, the funds to enhance infrastructure and equipment are to be obtained through an intergovernmental grant.
References
Black, P., Calitz, E., & Steenkamp, T. (2015). Public economics. Oxford University Press.
Fisher, R. C. (1996). Intergovernmental grants. In State and local public finance. Irwin Professional Publishing.
Gildenhuys, J. (1997). Intergovernmental financial relations. In Public financial management. J. L. van Shaik Publishers.
Provincial Government of South Africa. (2022). Gauteng department: Health – Financial information. Web.