Occupational Health And Safety And Fund Payments For Treatment Of Injury And Disease - What Do We Know?

Occupational Health And Safety And Fund Payments For Treatment Of Injury And Disease - What Do We Know?

Charles Simkins | Jun 15, 2021
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. The second considers the impact of local government on health. The third brief sets out information on the pattern of health expenditure from 1 April 2019 to the 31 March 2020. This forms the baseline for examining the implications of the 2021 Budget for health expenditure over the medium term, the topic of the fourth brief.

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[1], in South African is remarkably thin. The reason is not far to seek: there is a lack of systematic collection of information about them, either in terms of persons 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 minimize 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.

Table 1 - Occupational health and safety data

South Africa

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

Source: International Labour Organization, ILOSTAT

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[2].

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.

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 R 1 000 in 2019, that mean expenditure per covered employee outside mining was much lower at R 250 per year and that 20% of formal sector workers outside of agriculture, mining and community services are provided with workplace health services, aggregate expenditure, estimated in Table 3, was R 880 million during 2019. This represents about 0.025% of gross value added in the formal sector in that year.

Table 2A

2019

Screening testing and treatment

 

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%

Sources: Mine Health and Safety Inspectorate, Annual Report 2019/20, Tables 3.1.1.3 and 3.3.5

Table 2B

2019

Occupational diseases reported

 

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

Source: Mine Health and Safety Inspectorate, Annual Report 2019/20, Table 3.1.2.1.1

Table 3

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 Funds

Tables 4 and 5 present information on expenditure on medical benefits by the Compensation Fund and the Road Accident Fund.

Table 4 - Compensation Fund

Medical benefits

Year

R million

2015/16

2,670

2016/17

2,964

2017/18

2,426

2018/19

2,538

2019/20

2,741

Source: Compensation Fund, Annual Report 2018/19 Note: 2019/20 benefits estimated at 8% higher than in 2018/19

Table 5 - Road Accident Fund

Medical compensation

   

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

Source: Road Accident Fund, Annual Report 2019/20

Other compensation funds

There are a number of sectoral compensation funds.

Associations founded before 1940 for the purpose of insuring employers against liabilities to workers continue to exist. These are:

Rand Mutual Assurance. Identifying a need to help care for miners who were injured while on duty, RMA was founded in 1894 by three mining companies on the Witwatersrand as a non-profit mutual assurance company. RMA covers workers in mining, and the iron, steel and metals industries. It pays COID benefits for covered workers and also offers Augmentation cover (for people earning above the COID maximum), Commuting Journey policies (cover for employees in the event of death or disablement from accidental injury that occurred while travelling to or from work and work events), and Crime and Injury Commuting Journey policies (cover for employees against crime and injury up to R7.5 million in the event of death or injury from an incident while travelling to or from work and work-sanctioned events).  

The Federated Employers Mutual Assurance Company. FEM was established as a mutual insurer in 1936 and pays COID benefits for the construction industry.

In addition, there are two government programmes.

The Medical Bureau for Occupational Diseases and the Compensation Commissioner for Occupational Diseases. These had their origins in the Miners’ Phthisis Act. The funds are administered by the Department of Health. In 2017/18, they paid 10 324 claims amounting to R 254 million.

The Government Pensions Administration Agency administer funds voted by Parliament for injury on duty for government employees. In 2018/19, 9 833 payments were made.

It is impossible to provide an estimate of expenditure in 2018/19 from published data on these other compensation funds.

Conclusion

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

Workplace expenditures

R 0.9 billion

Compensation Fund

R 2.7 billion
Road Accident Fund R 3.4 billion
Total R 7.0 billion


Charles Simkins
Head of Research
charles@hsf.org.za

Annexure – Annotated bibliography of information sources

1. Jeebhay MF, Jacobs B. Occupational Health services in South Africa, Chapter 19, South African Health Review 1999, Health Systems Trust.

2. Shahieda Adams, Reno Morar, Tracy Kolbe-Alexander and Mohamed F Jeebhay, Health and Health Care in the Workplace, Chapter 7, South African Health Review 2007, Health Systems Trust. The section on the legislative framework is still largely relevant, but statistical data are outdated.

3. Debbie Budlender and Shaheeda Sadeck, Bargaining Council and other benefit schemes, Report prepared for the National Treasury, Community Agency for Social Enquiry, June 2007[3]. The report is good on how these schemes work, but statistical data are outdated. Budlender and Sadeck reported that, in 2007, 15 bargaining councils indicated that they had a medical or sick benefit fund or scheme of some sort. All these funds assist employees in meeting the costs of health care. Ways in which this is done include covering medical fees, providing free or cheap consultations with panel doctors, and provision of care through clinics operated by the fund[4]. The Council for Medical Schemes Annual Report for 2019/20 lists five Bargaining Council medical aids: the Building and Construction Industry Medical Aid Fund, the Fishing Industry Medical Scheme, the Food Workers Medical Benefit Fund, the LA-Health Medical Scheme, and Motohealth Care. Some bargaining councils also have sick pay funds, disability cover schemes, and survivor benefit funds, but these provide income replacement rather than health services.

4. Heather McLeod, NHI and Workplace Healthcare, National Health Insurance Policy Brief 15, Innovative Medicines South Africa, 15 December 2010

5. Tracy Hancock, Economic difficulties creating OHS challenges in South Africa, Creamer Media’s Engineering News, 20 September 2019

6. Department of Labour, Compensation Fund Annual Reports. The most recent is the 2018/19 report. It provides information on medical benefits paid out in 2018.

7. Road Accident Fund, Annual Report. The most recent is the 2019/20 report. It provides information on medical settlements paid out in 2019.

8. Department of Energy and Mineral Resources, Key facts and figures, Mine health and safety statistics, January 2020

9. Department of Mineral Resources and Energy, Mine Health and Safety Inspectorate, Annual Report 2019/20

10. International Labour Organization, ILOSTAT, Statistics on safety and health at work, available at https://ilostat.ilo.org/topics/safety-and-health-at-work. Data are reported on days lost due to occupational injury, fatal and non-fatal injuries and inspections up to 2018. The data are spotty and sometimes clearly unreliable.

11. Occupational Health Southern Africa. This is the only dedicated journal for the occupational health disciplines in southern Africa. It is the official journal of The South African Society of Occupational Medicine, The South African Society of Occupational Health Nursing Practitioners, The Southern African Institute for Occupational Hygiene, and The Mine Medical Professionals' Association. Its objective is to keep occupational health practitioners current with the latest research, especially African research. The focus is on occupational medicine, nursing and hygiene, as well as primary health care at the workplace, safety and other employee health benefits.


[1] 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.

[2] See Source 5 in the Annexure

[4] Budlender and Sadeck, op cit.