National Health Laboratory Services strategic plan 2010

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Health

04 May 2010
Chairperson: Mr B Goqwana (ANC)
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Meeting Summary

The National Health Laboratory Service (NHLS) discussed the strategic plan focusing on areas of affordability, various costing and funding models, the position of the NHLS as a provider of information and the lack of framework and cohesive image and disciplined business environment for the NHLS. The strategic plan was one of the first in the history of the NHLS that had called on key stakeholders to take part in providing insight and guidance for the next five years.

Mention was made of the continued issues with provinces not paying their debts. Key strategic issues were divided into three areas: service delivery, operational processes and the human resources and training pipeline. The NHLS then laid out its ten point plan which would fall into place over the next five years and its five year strategic dream. It was stressed that the goal was to ensure that in five years the NHLS was a household name with a single identity, providing quality services in South Africa and a leader in this regard in Africa.

The Committee asked about the status of research in certain areas and what the connection between research and operations within the NHLS had been in the past. They also asked about the current financial situation of the NHLS particularly with regards to provinces that had paid their debt since they last met. The fact that the strategic plan would require a substantial budget that was often put in jeopardy by unpaid debts was also noted. Members asked about the current prices of tests and whether or not they were competitive or could be reduced. The Committee also discussed the lack of skilled employees and the difficulties the NHLS faced in training and retention of staff across the board but particularly in the area of pathology.

Members then welcomed the Medical Research Council (MRC). There was some confusion over a letter received from the Minister via the Speaker stating that the MRC would be up for review in the coming weeks and that this could affect their current proposal before the Committee. Discussion over whether or not to hear the proposal took place. A member of the Department informed the Committee that the proposal before them had not been through the Department as required. The MRC stated they had sat down with the Department and were ready to present a one year plan for the MRC to the Committee. The Committee decided it would be in both parties’ best interest to hear a five year plan once the review had taken place and they requested that the DOH speed up the review process.

Meeting report

Mr Sagie Pillay, Chief Executive Officer (CEO) for NHLS presented the Committee with its strategic plan for 2010-2015. He highlighted that although the document stated that it was a draft, this was simply procedure and that this was, in fact, the final copy. He explained to the Committee that the mission of the NHLS was to provide quality, affordable and sustainable health laboratory and related public services, to train for health science education and to promote and undertake health research.

He outlined the guiding principles of the NHLS. He noted that their first responsibility is to their customers who deserve quality and affordable service. This was an area they were constantly improving and their aim was to make the NHLS a household name in health. They were committed to making a difference in communities and ensuring that they fulfilled their role in improving the nation’s health as a whole. The strategic plan was one of the first in the history of the NHLS that had called on key stakeholders to take part in providing insight and guidance for the next five years.

The discussion with key stakeholders was guided by the Maputo Declaration, Government’s Programme of Action 2009 for the Human Development Cluster, NHLS Strategy 2007-2010 and the NHLS Annual Report 2008/2009. He placed particular stress on the role of the Maputo Declaration both in discussion and in the creation of the strategy document. He briefly listed those that were invited to take part including the Deputy Director General of Strategic Health Programmes, the CD of Communicable Diseases, the CD for Non-communicable disease from the National Department of Health and all nine provincial heads of health.

He also highlighted those that were invited to take parts that are considered to be the key stakeholders in research and teaching. The list included members of the Department of Science and Technology, all nine Deans of University Faculties of Health Sciences, all nine Heads of Schools of Pathology and key representatives from the University of Technology. Lastly he touched on the internal stakeholders who had taken part in the strategic discussions these included the chairpersons of the NHLS Board and its subcommittees and the NHLS executive management team.

He pointed out to the Committee that the NHLS had come a long way from its original programmes; he highlighted the three phases it had gone through. He referred to phase one taking place from 2001-2005 as the amalgamation and formation phase; phase two taking place from 2005 – 2010 was referred to as the phase of financial and operational stability, and he noted that the NHLS had struggled here. The final phase, phase three for 2010-2015, was referred to as the customer focus and affordability phase.

Within the strategic dialogue a number of strategic issues were established these related to service delivery, operational processes and the teaching and human resources pipeline. In terms of the service delivery he noted that there were issues with regards to the affordability of the current fee-for-service model. This was largely due to the fact that the growing number of invoices related to fees-for-service exceeded the Department of Health’s Budget (DOH). He noted that this cost needs to be weighted against the accessibility of NHLS services particularly in relation to the expectation on the part of the DOH that laboratories be available at the most local level. He suggested that the NHLS needed to get clarity on who was or should be responsible for keeping the DOH costs in line, noting that a type of gate-keeping would be needed to balance the volume of tests in relation to established guidelines.

He stressed the need for the NHLS to establish a costing model and correlate this to its key cost drivers. The importance of this would be what he referred to as a “McDonald’s” effect in that all tests would be standardised and at a standard pricing with standardised service. He highlighted the need for a funding model, which would generate meaningful tariffs. In order to create this, the current fee-for-service model would need to be taken into consideration along with other options such as lump sum estimate, conditional grants or a combination of all three. He noted the recent alignment of the NHLS with Government’s Programme of Action and stressed the need for the NHLS to ensure it had capacity in terms of human resources, technology and infrastructure, to respond to help address the emerging burden of disease.

He noted that the NHLS realised it was underutilising its potential to provide information to the DOH which could assist it with decision making particularly in areas of policy. He stressed the lack of an overarching framework such as a National Policy for Laboratory Services to guide and inform the NHLS in areas such as monitoring and evaluation, training and quality assurance. In terms of strategic issues with regards to operational processes he noted that the skills shortage and the inequitable geographical distribution of talent is a major issue for the NHLS. He stressed that the NHLS was suffering a shortage in certain professional grouping and that this was affecting their performance, functionality and ability to attract other professionals into their employment. A suggested solution was the training of mid level laboratory workers in order to fill the skills gap.

The NHLS would also be investigating the possibility of in-sourcing key auxiliary services such health care waste removal against the current option of out sourcing along. This was raised in light of the particular issue widely reported in the news if inadequate health care waste removal by companies this task had been outsourced to. The NHLS would also be striving for a standardisation of technology in order to reduce cost, he noted that a number of the systems they currently worked on were outdated and in desperate need of upgrading. With regards to customer related concerns he noted that there were a number of issues that required addressing including turnaround time problems, the DOH’s need to eliminate duplicate test requests, training on systems and the poor communication between stakeholders contributing to unmet expectations. He also noted the need to address the space requirements of the NHLS as the inability of the DOH to fulfil these adversely effected the ability of the NHLS to complete their work. He reiterated that the NHLS has major cash flow issues, particularly with regards to the debts rung up by provinces. He informed the committee that there was lack of public awareness with regards to the role of the NHLS suggesting that it lacked a single identity.

Staff also suffered poor morale compromising the ability of the NHLS to retain skills and a positive identity. With regards to strategic issues related to teaching and human resources pipeline the NHLS lacked a 10 year Human Resource Plan for its core professionals such as pathologists, scientists, technicians and medical technologists. The NHLS was not leveraging its relationships with academic institutions; this was understood as central to the future sustainability of laboratory services.

The NHLS was struggling to recruit core professionals. The NHLS needed to recognise that academic institutions do not simply teach and research, they also provide academic leadership. In light of the reduced capacity of the NHLS the failure rates of medical technologists was of great concern. The NHLS needed to play a greater role at an undergraduate level in order to expose students to the possibility of pursuing a career in pathology. He noted the current reduction in applications for clinical pathology as a discipline which meant that tertiary institutions were in the process of reconsidering its profitability. This would have a serious impact on the NHLS. He noted the possibility of greater partnering with academic institutions in order to extend teaching into Africa.

The NHLS faced a challenge in trying to find the right workforce balance between service, teaching and research. He explained that from these strategic issues the NHLs was able to draw its key strategic dilemmas, which it currently faces. Within the service delivery model he reiterated the issues of outsourcing versus insourcing, the NHLS capacity and capability to respond to massive increases in programmes and the discussion around the benefits of onsite lab access versus on site test access.

In regards of the service funding model he noted the need to reduce costs at the customer level whilst still maintaining quality and standards. This was very closely linked to issues around whether the current fee for the service model was the best model to utilise or if other options such as fixed fee or conditional grant would be of better use.  The NHLS also faced a strategic dilemma with its positioning of the National Health Insurance. The NHLS also faced strategic dilemmas in the use and management of information. He raised issues around the ownership of data and its translation into usable information. This affected their ability to aid in policy input and advocacy particularly with regards to translating information into knowledge.

The NHLS also faced strategic dilemmas with regards to technology and innovation. He noted that the NHLS recognised a real need to find the balance between acquiring and utilising highly advanced technology verse technology appropriate to resource limited settings. Along with this the NHLS would need to explore other innovative ways to deliver laboratory services in resource limited settings and in remote settings. He also noted the need for the NHLS to upscale its capacity and capability to deal with the demands being placed on it. The final strategic dilemma focused on stakeholder collaboration and partnerships. He suggested that these needed to be better managed and that they should be active and not reactive partnerships.

He informed the Committee that these strategic dilemmas had served as a platform for the NHLS to create its five-year strategic dream. He then laid out the goals of the dream as understood by the NHLS. It was the aim of the NHLS to become a household name in five years with a single identity, accessible and understood by the public. The NHLS would be the laboratory services provider of choice. Touching on the notion of the “McDonald’s effect”, the NHLS would be a provider of quality and cost efficient services through lab standardisation. The NHLS aims to be an African leader in laboratory services within this they would provide the World Health Organisation African surveillance and become the primary reference point for promoting worker health in sub-Saharan Africa. The NHLS aims to become a South African health information powerhouse and a key player in health policy formulation. The NHLS also aims to make laboratory services and employer of choice, attracting young qualified job seekers. It aims to be a protector of the environment through efficient resource and energy use.

He noted that these goals were achievable and that the five-year strategic dream had been broken down into a year-by-year journey in order to arrive at the necessary destination. In year one, 2011, the NHLS would be focusing on finalising funding and costing models, streamlining business disciplines to appropriate sites, engaging strategic partners, implementing the ten-year human resources operational plan, gearing up for National Health Insurance, providing universal health information access to provinces and universal web based access to lab results by clinicians.

By year two, 2012, technologies would be aligned and serving both current and future needs, a national network of surveillance labs will be in place and supply chain management will be streamlined. By year three – 2013 – the NHLS plans to have a footprint in the SADC and have institutionalised knowledge management. By 2014 the NHLS plans to be informing policy and advocating change in practice, have fully automated central labs in every NHLS region, providing quality affordable services and have fully accountable pre and post analytical processes in place. 

He noted that in order for this vision to be implemented and fulfilled the NHLS would be following a ten-point plan. Point one would be to deliver affordable services to the public sector in order to do this the NHLS. Point two of the plan would require the NHLS to determine the ‘best-fit’ service delivery model. Point three dealt with delivering quality, customer focused service. Point four focused on resources, support services and infrastructural development for service delivery. In light of point five - becoming a laboratory services employer of choice versus the current understanding as employer of last resort, he noted that the NHLS would need to recruit and maintain key talent in core professional groups and support services. He also suggested that they would need to strengthen their leadership and management capacity and drive a disciplined, accountable, and collaborative and purpose filled organisational culture.

He suggested that with regards to point six – the positioning of the NHLS as the provider of choice for the NHI - that the NHLS would need to investigate joint ventures with other providers and suppliers. In terms of point seven – priorities innovation and research - he stressed the need for the NHLS to develop new diagnostic tools applicable to resource-limited settings. Point eight of the ten point plan required the NHLS to become a health information powerhouse, He highlighted that in order to do this the NHLS would need to safeguard national assets. They would also need to expand their monitoring and evaluation of programmes and health outcomes, provide health system information to decision makers, convert information to knowledge which would in turn advocate policy and practice and change and lastly, provide information which would manage the organisation and promote accountability.

He explained that point nine would see the NHLS driving stakeholder collaboration this would be done to ensure integrated and unified plans of action amongst cross sector stakeholders. Point ten of the plan – protect our community and environment – mandated that the NHLS become energy and resource efficient, dispose of waste and assets in an environmentally friendly manner and strive for a paperless organisation. In terms of this he suggested that next time the committee would be receiving their information on flash drives and not on printed documents.

Please refer to attached document for further details.

He reiterated that the provinces all owed the NHLS money. Currently they only had
R30 million in the bank and that this was making their job exceedingly difficult.

Discussion
Ms T Kenye (ANC) asked about the mechanisms and current research dealing with blood transfusions, blood donations and the three month window period related to HIV.

Mr M Waters (DA) said the NHLS had mentioned their financial issues in a previous presentation to the Committee; he wanted to know if anything had changed. Previously the NHLS had suggested it was going to start charging interest on outstanding amounts from provinces; he wanted to know if this had been implemented. Previously the Committee had been provided with a breakdown of the debt province by province, he asked if the NHLS would be able to provide this again. He also asked whether or not the NHLS had been forced to close some of their labs due to lack of funding as they had suggested this as a possible route in their last meeting with the Committee.

Ms A Luthuli (ANC) asked what the NHLS was doing about the affordability issue with regards to laboratory tests. Often these tests were even too expensive for those who had medical aid let alone those who do not.

Ms E More (DA) noted that the NHLS had cut some of its working budget and asked they had made the right decision.

Mr Pillay referred the HIV question on to Dr D J Puren (Deputy Director NHLS). With regards to finances he stated that the NHLS continued to struggle but that provinces had been given a chance to pay their outstanding debt, which was about R1 billion by the end of March. Most of the provinces had settled their debt but there were one or two still outstanding, these provinces had been given until the end of April. They had started to charge interest on outstanding debt but that was a problem as they noted that provinces were already struggling to pay the initial amount so adding interest was definitely not going to improve the situation. Provinces were given amnesty on the interest if they paid within the agreed time period. He stressed that this only solved the problem for now, as provinces were dealing with a backlog of costs which would continue to build up and negatively affect future budgets.

He noted the need for a provincial breakdown and stated that the NHLS would be happy to provide this to the Committee. With regards to affordability it was a misconception on the part of the public that the NHLS was more expensive than anywhere else. He noted the need for a continued reduction in prices although he highlighted that the NHLS was the cheapest laboratory test provider in the country. He explained that when they had set up their pricing they had canvassed other laboratories, taken the cheapest one and undercut their prices based on that. In terms of the closing laboratories he noted that the NHLS had received a lucky windfall and that all labs were still open and functioning but that this did not draw away from the fact that they, at present, continued to struggle with financial issues. He also noted the worry over the budgetary cut versus the requirements being placed on the NHLS. However, he had every faith that the NHLS could achieve what was put before them and although it would be difficult in light of monetary issues, it was not impossible.

Dr D Puren explained that great strides had been made in the testing of blood and its related window periods particularly with regards to being able to find the proteins that indicate the presence of HIV in the blood.

The Chairperson asked if those carrying out tests were doing the necessary tests.

Mr Pillay said they were in most cases and that this was being done in a cost effective manner ensuring that the NHLS was still cheaper than elsewhere.

The Chairperson informed the NHLS that a Bill had been passed recently giving them permission to speak to the Department on the NHLS’s behalf should they need money for a project they could argue was important enough. He explained that the Bill allowed for a reshuffling of the budget in order to meet needs that may arise after it has been finalised. He suggested that the NHLS should take advantage of this and motivate for things that they may need additional finances for.

Ms Luthuli asked about the extent of interaction between scientific research and other sectors of the NHLS.

Ms K Begg (Acting Executive Manager NHLS) highlighted the growing need for pathologists and suggested the lack of skills in this area was due to the fact that pathology was not considered ‘a sexy’ vocation to follow. In terms of this she noted that the NHLS faced deficiencies in certain areas and that they were working on changing this. They struggled with training and staff retention at certain universities, she mentioned Walter Sisulu as one institution they were having issues with. She pointed out to the Committee that the lack of skills meant a lack of staff, which meant a lack of people available to teach others. This continues to have a wide impact on the NHLS particularly in areas of research. She stressed the need to train more practitioners in specific fields and retain more staff.

Mr Pillay concurred with Ms Begg and added that the problem also effect laboratories.

Medical Research Council (MRC)
The Chairperson informed the MRC that he had received a letter from the Minister via the Speaker stating that the MRC would be undergoing a review within the next couple of weeks and that this could have an effect on their five-year strategic plan. He questioned whether they felt it would still be possible to present on this plan, knowing that there was a possibility it might change under review.

Mr A Dhansay (Acting President of the MRC) suggested that the review would have no impact on the current one-year plan before the Committee which they were here to present. He also noted that the MRC had been waiting to be reviewed by the DOH for some time and he was of the belief that it was unlikely that it would happen anytime soon.

The Chairperson asked the Committee what they thought about the Ministers letter.

Ms Kenye noted the letter but suggested that since the MRC were present they should simply present it.

The Chairperson asked Ms Kenye if she understood that the Minister was suggesting that it would not be prudent to listen to the MRC’s presentation at this point because they still would have to undergo review and that the document might change in this time.

Ms Kenye acknowledged that she was aware of this

Mr M Waters (DA) asked when the Chair had received this letter noting that the MRC were probably busy people and to bring them before the Committee and then suggest that they would not be able to present was a waste of their time, the Committee’s time and tax payers money

Mr D Kganare (COPE) suggested that if they did not let the MRC present the media might get hold of it and present it as though the Committee did not care to hear what the MRC had to say

Ms M Mafolo (ANC) noted that the MRC were here, they had prepared for this and questioned whether postponing their presentation would mean that they would not be able to see the MRC again due to time constraints around the World Cup.

Ms M Dube (ANC) requested that the Chair ask the MRC to leave the room so that the Committee could come to consensus on the issue.

The Chairperson decided against it, noting that the MRC were already present and privy to the conversation.

Ms Dube highlighted the fact that although the MRC were expected to present on a five-year plan they had only brought a document which suggested that they would only be talking about one year.

The Chair said this did not matter as the MRC would be coming up for review.

Ms Dube stressed that this one year was not next year or a year which had passed but this year and based on this she argued that the MRC’s presentation was of utmost importance.

Mr E Sulliman noted the arguments presented by all sides and asked the Chair to provide guidance and direction

Mr P Mnguni (COPE) suggested that what was necessary was a caucus amongst the Committee

The Chair asked the MRC to leave the room and informed the Committee that he had just been told that the document before them had not gone through the DOH. He suggested that in their position as lawmakers it would be wrong for them to give the go ahead to the document as this would prove problematic to future hearings including the review. He suggested that should the Committee accept the presentation, that the MRC would claim after that the Committee had given them the go-ahead and this would override anything that could come out of the review process.

Ms Kenye noted the new information and withdrew her viewpoint.

Ms Luthuli also withdrew and suggested that in light of the new information it would impossible to hear the MRC.

Ms C Dudley (ACDP) warned that unless the situation was handled with tact it could turn into a PR nightmare.

The Chair called the MRC back in and informed them that the Committee would not be able to hear their proposal. He noted the information received from the DOH and again highlighted the major points of the Minister’s letter. He suggested that the MRC come back to them at a future date, after their review, with a document outlining five years. He stated that he hoped the review would be in the following week

Mr Dhansay noted his concern but stated that the MRC had sat down with the DOH prior to coming to this meeting. He also informed the Chair that the review would, most probably not be the following week as the date had been moved a number of times. He also told the Chair that the review was voluntary on the part of the MRC and that it would probably take up to six weeks to complete.

The Chair suggested that since the review was being undertaken by the DOH he would talk to the members of the DOH present and ask them to speed up the review process. He also suggested that sitting down with DOH before coming to the Committee was not the same as getting their approval and that he could not continue without it. He apologised on behalf of the Committee.

The meeting was adjourned.

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