National Health Insurance (NHI) implementation progress report: Minister & Department of Health

Standing Committee on Appropriations

22 February 2013
Chairperson: Mr E Sogoni (ANC)
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Meeting Summary

The meeting began with some unhappiness being expressed by the Committee that they had not received copies of the presentation on progress of the National Health Insurance (NHI) system prior to the meeting, so that they could prepare themselves properly, and they also questioned the absence of the Director General. The Minister of Health apologised and explained the reasons for the logistical difficulties, and the Committee decided to let the presentation continue. The Minister noted that the Department had highlighted five areas that would need attention in the first phase of implementation of the NHI. These were, in brief, infrastructure, human resources, implementation of compliance standards, the re-engineering of the primary health care system, with a change in mindset so that improvements went wider than hospitals and clinics, and so that there was more of a focus on prevention and healthy living, as well as contracting of general practitioners to work in public clinics, and deployment of specialists to districts. The general practitioner initiative had not yet started, as sufficient resources and facilities must firstly be put in place, and spending would improve once this was done. Residents and stakeholders in districts must firstly be briefed. He took full responsibility for delays in this area, saying that this had taken him far longer than anticipated. Departmental officials outlined the goals of the programme, stressing that overall it was attempting to strengthen existing methods and structures. Although R150 million was budgeted, so far only R20.9 million had been spent, which, taken together with commitments in districts, came to 79.7% of the total budget. Explanations for variances by districts were outlined, mostly due to delays in supplier appointments or performance.

National Treasury noted that it had financed the NHI pilots to test a number of possibilities for implementing the framework in order to determine where the most suitable investment would be, and to strengthen public health services in preparation for the national rollout. It recommended that the Committee should thoroughly investigate the reasons for underspending. National Treasury believed that there was not a robust enough evaluation strategy to satisfy the first purpose of the pilot programmes, and that the methods were costly, but perhaps not subjected to sufficient analysis. The Department of Health took issue with this interpretation, noting that there were various innovations, including development of a comprehensive information system, and also expressing the view that a credible monitoring and evaluation system was also being used, although it conceded that this may not have been properly implemented. It stressed that NHI should not be perceived as a standalone project, and said that provinces had detailed business plans, although implementation was problematic in some cases. The DoH believed it was necessary to fix existing systems before implementing new ones. With a more flexible approach in the following financial year, the Department of Health would be able to exercise greater control
Members asked how much the NHI was likely to cost once fully implemented as they believed it was necessary to fix this figure before making decisions. They questioned the scheduling of the grants, asked what the challenges were in getting participation from practitioners, and noted that very strong human resources would be needed to run the system. Noting the difference of opinion on the evaluation and monitoring, Members wondered if the parties had the same information, and stressed that a common understanding was needed on what was to be achieved. It was agreed by all parties that the NHI programme was of the utmost importance and that all efforts for the pilots to succeed should be made. The Committee would invite the provinces to present on their plans and budgets, and it was necessary that the DoH and National Treasury meet to discuss and settle the issues prior to presenting again to the Committee.

Meeting report

Chairperson’s introductory comments
The Chairperson was critical about the behaviour of the Department leading up to this meeting, noting that the Department of Health (DoH or the Department) had not provided copies of the presentation for Members prior to the meeting. In addition he was concerned that the Director General was not present.

Other Members expressed their view that this was extremely unprofessional and it was proposed that, in the absence of proper documentation, the meeting could not serve its proper purpose and should therefore be cancelled.

Dr Aaron Motsoaledi, Minister of Health, apologised for his own late arrival. He also noted apologies, both on behalf of the Director General, who had been required to go to Geneva on short notice, and was therefore not able to attend this meeting, and said that this was also the reason for the disorganisation in regard to the documentation. He said this was the explanation, accepted that this was not an excuse for the Department’s failure, but took responsibility and asked for the opportunity to present nonetheless.

The Chairperson noted the explanation, but asked that this should not happen again. He said that Parliament had a very tight programme. Although the Committee would have been justified in postponing the meeting, it would also be difficult to find another time suitable for the Committee and Department. He asked that the presentation be given.

National Health Insurance (NHI): Progress of implementation: Department of Health briefing
The Minister explained that when NHI was piloted, the Department had highlighted five areas that would need attention. The first was infrastructure, the second was human resources (HR), and the third was the implementation of standards of compliance. The fourth was the reengineering of primary health care, although there needed to be a change in mindset so that not only hospitals and clinics were improved. The healthcare system had to also focus on prevention and healthy living. Specialists, such as gynaecologists and paediatricians, had been identified who would be sent into all districts. The fifth area of focus was to ensure that general practitioners (GPs) were contracted to work in public clinics. He noted that although the DoH had already started with its school health programme, based on the specialist teams, the GP initiative, despite being the cornerstone of the NHI, would only begin later in the year. The bulk of the budget would be spent on this aspect of the NHI pilot programme, and the current underspending would be remedied once it was initiated in April. The GPs could only be contracted once sufficient resources and facilities had been secured to enable them to operate, hence the delay.

The Minister also noted that the pilot programmes could not be carried out without briefing residents and stakeholders in the relevant districts. He admitted that this was “an overwhelming task” that took him much longer than he had expected, approximately nine months. Over the following six weeks he intended to travel to the pilot sites to issue new instructions on the equipment and personnel that would be arriving in April for the next stage of the NHI plan. There were space constraints at most of the pilot sites, necessitating the use of mobile units, but standing personnel at the sites also needed to be briefed on the effective use of the small spaces when the new personnel arrived. He implored that performance be assessed after April, rather than now, drawing the analogy that the DoH was at this stage still digging the foundations for the building of the scheme.

What was contained in his briefing was compiled almost exclusively of preparatory work, such as Geographical Information Systems and analyses of infrastructure. Whilst the presentation did include a financial summary, he urged that this was not to be seen as fully indicative of progress, as many of the expenses were yet to come.

He concluded by reiterating that he took full responsibility for the delays in the NHI project, as they were due to his own shortcomings and underestimations. 

NHI Spending Progress Report
Mr Moremi Nkosi, Director: Health Insurance, Department of Health, said that the NHI Grant Framework included R150 million for the current financial year, with each pilot district being allocated R11.5 million and each of the seven selected hospitals given R5 million. A provincial breakdown of the allocation was shown, showing that Kwa Zulu Natal and Gauteng were receiving the most. In terms of providing strategic resources, he said that unemployed graduates had been sent to hospitals for revenue collection, support was mobilised from the World Bank, technical assistance was secured and Provincial NHI coordinators were appointed. He reiterated that part of the Health System strengthening involved re-engineering of primary healthcare, and the health workforce was being refined. Medical products and technologies were being introduced at Primary Health Care (PHC) facilities. Innovations necessary for implementation were being tested, such as active purchasing of service, different contracting models, rolling out PHC streams and mobile units for the school health programme.

The NHI Grant framework intended outputs included improved management capacity for offices and facilities, strengthened health systems, establishment of functional district health authorities and enhancement of managerial autonomy. At the time of the presentation, total expenditure was at R20.9 million, far short of the budgeted R150 million. This was broken down according to province. Commitments in the districts amounted to R98 million, which, combined with the existing expenditure, amounted to only 79.73% of the total budget. Brief explanations for variances were shown for certain districts and these were largely based on delays in appointment of suppliers or delays by the suppliers themselves. Many processes were still awaiting approval.

National Treasury input
Dr Mark Blecher, Chief Director, National Treasury, explained that there had been two broad purposes in financing the NHI grant. He gave some background, and noted that the NHI rollout across the country would be extremely expensive and would take a very long time. The pilot programmes would be used to experiment and test a number of ways of implementing the NHI framework, so as to establish which methods worked the best and deserved further investment, on a national level. The second key objective was to strengthen public health services in preparation for NHI, as these currently lacked adequate infrastructure. The expenditure by January 2013 had been far lower than was expected, and the reasons for this should be explored by the Committee. There did not appear to be a robust enough evaluation strategy to satisfy the first purpose of the pilot programmes, and the methods being used were consuming a large part of the budget but not being analysed properly.

Mr M Swart (DA) asked how much the NHI would cost the country once it was fully implemented on a national scale. He said that it would be impossible to make any decisions without getting that figure. He also requested clarity on the statement that the money was not being used to develop new strategies but was rather strengthening existing strategies.

Mr J Gelderblom (ANC) asked what the biggest challenge was with encouraging the GPs to participate, and if they were being paid enough.
Ms R Mashigo (ANC) said that there was a clear and unavoidable need for NHI. Following the Minister’s presentation, it was clear that a strong Human Resources department was necessary, in order to operate the system properly. She asked if the conditional grant was placed in the best hands possible, suggesting that it might be more suitable to move it to another schedule.

Mr L Ramatlakane (COPE) asked if the National Treasury’s concerns over the allocation process, based on the provincial plans, matched its concerns when it had first been notified of the plans. He also asked for an explanation of what constituted a credible evaluation strategy.

Ms Jeanette Hunter, Deputy Director-General: Primary Health Care Services, National Department of Health said that she disagreed with Dr Blecher’s analysis and criticism of the programme thus far. She said that there were innovations being pursued, not least of all the development of a comprehensive information system. New methods, never used before, were being used. She believed that a credible monitoring and evaluation system was also being used, although she did concede that this may not have been properly communicated to National Treasury. She spoke also to the challenges for the GPs, saying that the main issue was that although letters had been sent out, requesting their presence at meetings, they had not in many cases received these.

Mr Nkosi remarked that NHI should not be seen as a standalone item and that it needed to be integrated into the existing health care system. He said that there was no provincial uncertainty over where the money would be spent, as each province had a detailed business plan. However, he said that these business plans were not always being implemented properly, and one of the main problems behind this was supply chain management. It was necessary to firstly fix existing systems, in order to develop and implement innovative systems. He said that the structure of the grant also needed to be changed. He also disagreed with Dr Blecher’s comment that there was no robust evaluation system, saying that there were established teams who were monitoring and evaluating the impact of interventions.

Mr Ian van de Merwe, Chief Financial Officer, National Treasury, said that the scheduling of grants was changing, so that the national department would have greater flexibility for moving around grants. Provinces with excess budgets would be able to assign the overflow to more needy provinces.

Dr Anban Pillay, Deputy Director General: Regulation and Compliance, Department of Health, said that the intention of the NHI grant was to be found in the business plans of the provinces, and that it was on this basis that money was allocated and was being spent. In terms of the GP coordination, he commented that it was impossible to innovate without first ensuring that there was a platform from which to innovate. The ultimate cost of NHI was being looked into, and at a broad level it would have to take into account volume and price. The burden of disease would play a part, and the costing would ultimately be an estimate rather than a factual amount. With a more flexible approach in the following financial year, the Department of Health would be able to exercise greater control and therefore be subject to greater accountability.

Dr Blecher said that a credible evaluation strategy needed to go beyond the existing system.

Mr Ramatlakane commented on the difference in opinion on whether there was a sufficient system for evaluating and monitoring performance, asking why National Treasury was not satisfied by the data although the DoH apparently was. He asked if both parties had the same information.

The Chairperson noted that the focus of the NHI as given in this presentation was that the DoH must develop, support and strengthen systems. The business plans for the provinces had been finalised and the budget had been allocated on that basis, but there were still differences in opinion about the objectives of the NHI. There needed to be a common understanding of what was to be achieved. He suggested that the Committee should invite the provinces to present on their plans and budgets, so that the extent of their obligations could be properly known.

Mr Gelderblom said that this was a valuable programme, but that there seemed to be implementation problems, that carried further financial implications. He proposed that the Department and National Treasury should meet to iron out these problems. He was of the view that there would be little point in continuing the present discussion prior to these departments meeting.

Dr Pillay said that there were engagements between the various departments but that there would be reduced opportunity for different interpretations after 2013, given the greater national oversight.

The Chairperson expressed his appreciation for that comment, saying that a single, national plan would lend clarity to the project.

Members agreed that the Committee would invite the delegation back in the future.

The meeting was adjourned.


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