Our health in brief - part one: Workers’ compensation and the Road Accident Fund

Illustration: Lisa Nelson

This is the first of a four brief series on health expenditure in the public and private sectors. It discusses commonly ignored components of health expenditure: provision in workplaces, and medical expenditure financed from the Compensation Fund and the Road Accident Fund.

Introduction

The literature on the extent of health services provided at work places or funded by institutions, such as the Department of Labour’s Compensation Fund and the Road Accident Fund in South African is remarkably thin. The reason for this is a lack of systematic collection of information about them, either in terms of people served or of expenditure on them. This means that there is a gap in estimates of aggregate expenditure on health and its distribution across classes of beneficiaries.

To be clear: expenditure on occupational safety and measures to minimise the incidence of occupational disease are part of the cost of doing business and should not be counted as part of aggregate health expenditure. But, even when best practice is applied, there will be accidents and occupational disease, and the cost of treating these at the workplace and through fund payments is part of health expenditure. Moreover, some workplaces offer health services which go beyond the treatment of accidents and occupational diseases.

The legal framework

The Occupational Health and Safety Act (85 of 1993) and regulations establishes obligations on employers in sectors other than mining and provides a governance framework. The Mine Health and Safety Act (29 of 1996) and regulations cover mines. The Labour Relations Act (66 of 1995) allows for the establishment of bargaining councils that have the right to establish and administer pension, provident funds, sick pay and medical aids for the benefit of the members.

The Road Accident Fund (56 of 1996) and the Compensation for Occupational Injuries and Diseases Act (130 of 1993) cover the Road Accident Fund and the Compensation Fund respectively.

Occupational health and safety data

Table 1 sets out occupational health and safety information submitted by South Africa to the International Labour Organization. The data are spotty and a few implausible estimates are omitted.

Court awards against provincial health departments in medical malpractice suits are another source of funding for medical expenses. These awards will be counted as part of provincial expenditure on health.

Table 1 - Occupational health and safety data. (Source: International Labour Organization, ILOSTAT)

Year	Days lost to occupational injuries	Fatal injuries	Non-fatal injuries	Inspections	Inspectors
2010	347,757	185		192,129	1,318
2011				172,300
2012				101,792
2013				101,792	1,252
2014				180,818	1,250
2015				186,971
2016	685,405	307	155,427	185,958	1,310
2017				214,946	1,294
2018				218,919	1,280

Creamer Engineering News reports that according to the National Institute of Occupational Health, only about 11% to 18% of private-sector employers, excluding mines, provide workplace-based health services, with larger employers more likely to provide these services (See source 5 in the gray box at the end of the article).

The mining industry has the most intensive workplace health care. It aims to screen all workers for HIV, TB, hypertension and diabetes. Table 2A sets out the achievement in 2019. Table 2B presents reported occupational diseases in 2019.

Table 2A: Screening testing and treatment in 2019: (Source: Mine Health and Safety Inspectorate, Annual Report 2019/20, Tables 3.1.1.3 and 3.3.5)

Total employment	449,246
Initial medical examinations	168,347
Periodical medical examinations	464,931
Exit medical examinations	101,354
Counselled for HIV	315,381
Tested for HIV	210,456
HIV positive	13,101
HIV plus TB	895
On ARVs	12,858
Screened for TB	437,199
Diagnosed with TB	1,403
On TB treatment	1,729
Screened for hypertension	72%
Screened for diabetes	69%

Table 2B: Occupational diseases reported in 2019 (Source: Mine Health and Safety Inspectorate, Annual Report 2019/20, Table 3.1.2.1.1)

Silicosis	374
Pulmonary TB	1,533
Silico-TB	22
Noise induced hearing loss	903
Coal workers pneumoconiosis	46
Asbestosis	8
Other	244
Total (as given)	3,130

For the purposes of estimating aggregate health expenditure, one needs an estimate of expenditure on workplace health services. Only a back of the envelope estimate is possible.

Assuming that mean expenditure per employee in mining was R1,000 in 2019, that mean expenditure per covered employee outside mining was much lower at R250 per year, and that 20% of formal sector workers outside of agriculture, mining and community services are provided with workplace health services, then aggregate expenditure was R880 million during 2019 (see Table 3). This represents about 0.025% of gross value added in the formal sector in that year.

Table 3: Estimate of health expenditure in the workplace in 2019

	Employment	Covered workers	Expenditure per worker	Expenditure
	Thousands		Rand	R million
Mining	449	449	1000	449
Other formal sector	8619	1724	250	431
All				880

Medical benefits paid by the Compensation Fund and Road Accident Fund

The next two tables present information on expenditure on medical benefits by the Compensation Fund and the Road Accident Fund.

Table 4: Compensation Fund medical benefits (Source: Compensation Fund, Annual Report 2018/19. Note: 2019/20 benefits estimated at 8% higher than in 2018/19)

Year	R million
2015/16	2,670
2016/17	2,964
2017/18	2,426
2018/19	2,538
2019/20	2,741

Table 5: Road Accident Fund medical compensation (Source: Road Accident Fund, Annual Report 2019/20)

Year	Claims	Average settlement	Aggregate (R million)
2015/16	116,380	10,447	1,216
2016/17	137,740	15,030	2,070
2017/18	174,106	10,621	1,849
2018/19	234,146	15,392	3,604
2019/20	180,443	18,568	3,350

Conclusion

Medical expenditures in 2019/20 identified in this brief are estimated at:

Workplace expenditures	R0.9 billion
Compensation Fund	R2.7 billion
Road Accident Fund	R3.4 billion
Total:	R7.0 billion

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