NHI Pilot Phase progress; Health Conditional Grants: report by Minister of Health

Standing Committee on Appropriations

04 March 2014
Chairperson: Mr E Sogoni (ANC)
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Meeting Summary

The Minister and the Department of Health briefed the Committee on grant allocations and gave a progress report on the National Health Insurance (NHI). The Minister said the main concern for the Department was to develop affordable health care and that the manner to do this had not been defined and the Department was still looking for a solution.

The Department gave a brief background on the imperatives of the NHI. Their approach had been to place all financial resources in one basket for the ease of movements of funds. For 2014/15 the Health Facility Revitalisation Grant (HFRG) allocation was R979m, the NHI allocation R395m and the Human Papilloma Virus Grant allocation was R200m.

The Minister said that there appeared to be a flawed understanding of what the NHI was meant to be as most people thought it was medical aid for everyone. The purpose of the NHI was to reduce the incidence of catastrophic health care expenditure for ordinary citizens. In addition, Universal Health Care (UHC) would better the quality of life. The first thrust to attain UHC was strengthening the capacity of public health infrastructures and financing investments, maintenance and recurring costs. The under spending of the Department was because there had been a need to relook and re-plan its activities in the light of this first thrust. The country needed to conduct a health census so that all these infrastructure needs could be audited and provide information on what was needed not only in terms of infrastructure but also of staffing.

The Department outlined the number of service providers and project management structures per province being appointed for the projects.

The Minister said the project management structures in the form of the national project office would be integral to revitalising the over 800 institutions. If it were not present the private sector would take advantage of the absence of monitoring of contracts.
 
The Department then covered the strategic goals of the NHI and shared performance by the pilot districts against key indicators and the way forward to hospital reform. In general there was improvement across the board. A baseline health facility audit had been completed in 2011/12 and facility improvement teams had visited the pilot districts where a number of policies and strategies had been launched and an executive leadership and management program had been established. There were currently 96 general practitioners contracted nationally for doctor coverage.

The Minister said that the NHI pilot had tried to encourage doctors to leave hospitals to go to clinics by paying all doctors the same rate at the highest level of the scale. If the NHI continued to be seen as a pot of gold, then South Africa would become like America and spend 18% of its GDP on Health and have 53m people struggling to have health care.

Members said that the previous year there had been a shortage of pharmacists and asked what the situation was this year. Members said that doctors would work for free one day a week if they could get a tax rebate.
Members asked if the Department had signed off on the staff complements. Were provinces toeing the line as far as compliance to the conditional grants? What differences would the Committee see regarding the third quarter expenditure? Members said that the staffing issue always gave emphasis to doctors and forgot about nurses. Where were disabled people placed in the learnership programs? Members said that outsourcing always seemed to go to the Development Bank of Southern Africa (DBSA) which appeared to be stretched as all departments outsourced to the DBSA.

The Minister said two problems essentially needed to be solved. The quality of health services provided needed to be dealt with so that the gap between private and public health was not huge and secondly the costs of private health care had to be tamed. If these were solved then South Africa would have the best health care system in the world.

He commented that, "federalism is destroying the country" saying that the National Department of Health had received money from Treasury but its use had been stymied by provinces exercising its right to prioritise the use of these funds.
 

Meeting report

The Chairperson said that spending on the NHI and the Health Facility Revitalisation Grant (HFRG) to the end of the third quarter was not performing well, while grants had been increasing. What were the challenges the Department faced and what was the way forward.

The Minister of Health, Aaron Motsoaledi, said that he had left a cabinet meeting to attend the Committee meeting because the Director General was absent dealing with a serious legal matter concerning the Department but would be rejoining the Cabinet meeting in the course of the morning.

The Chairperson said that presentations had to be with the Committee at least three days before the meeting and that the accounting officer, the Director General, had to represent the Department or provide a written apology according to Public Finance Management Act regulations.

Briefing
The Minister said the main concern for the Department was to develop affordable health care and that the manner to do this had not been defined and the Department was still looking for a solution.

Mr Ian van der Merwe, CFO in the Department, gave a brief background on the imperatives of the NHI. He said their approach had been to place all financial resources in one basket for the ease of movements of funds. These were the Health Grant indirect allocation, the HFRG and the NHI Grant for General Practitioners contracting and for the development of diagnostic related groups and revenue management..

For 2014/15 the HFRG allocation was R979m, the NHI allocation R395m and the Human Papilloma Virus Grant allocation was R200m in a total of R1.5b. Other conditional grants to the provinces totaled R29,9b of which R10,1m was for National Tertiary Services.

The Minister said that there appeared to be a flawed understanding of what the NHI was meant to be as most people thought it was medical aid for everyone. He quoted from an address by a Dr Sambo on what Universal Health Care (UHC) coverage was because some people only thought of the NHI as a funding instrument. The purpose of the NHI (or UHC) was to reduce the incidence of catastrophic health care expenditure for ordinary citizens. Ban Ki Moon was reported to have said that the incidence of catastrophic health care expenditure affected 100m people worldwide. In addition, UHC would facilitate the attainment of the Millennium Development Goals and better the quality of life. Many African countries had tried different health systems and Dr Sambo had proposed four major thrusts for attaining UHC, the first of which was strengthening the capacity of public health infrastructures and financing investments, maintenance and recurring costs.

The Minister said the under spending of the Department was because in the light of this first thrust, there had been a need to relook and re-plan its activities. The country needed to conduct a health census so that all these infrastructure needs could be audited and provide information on what was needed not only in terms of infrastructure but also of staffing. The Department had sent a team of engineers to visit health facilities in the 11 NHI pilot projects. A picture was emerging of overcrowding at clinics and a shortage of space at rural hospitals. In the case of overcrowded clinics, 102 steel framed clinics were being erected because they were faster to put up and could be easily expanded because they were of a modular design. Progress and condition assessments at the Pretoria West, Jubilee, Odi and Tshwane district hospitals were noted.

Dr Massoud Shaker, Head of the Infrastructure Unit in the Department, noted that the Eastern Cape would get eight clinics and Gauteng would get a new hospital in Soshanguve from the Medium Term Expenditure Forecast (MTEF) budget allocation (p24 of the presentation).

In reply to the Chairperson asking why there was no allocation for the Western Cape and KwaZulu-Natal,
Dr Shaker said that the reason was that there had to be agreement between the national and provincial departments.

Dr Shaker continued that there were 872 health facilities in the 11 pilot NHI districts of which 831 were primary health care facilities. Major maintenance would be done by three appointed term contractors to ensure systematic maintenance work.

The Minister said this had been one of their biggest problems, when money had been given to the Department of Public Works but no maintenance had been done by them.

Dr Shaker then outlined the number of service providers and project management structures per province being appointed for the projects.

The Minister said the project management structures in the form of the national project office would make life for the Auditor General easier, not only in terms of infrastructure, but in terms of contract management as well. This would be integral to revitalising the over 800 institutions. If it were not present, the private sector would take advantage of the absence of monitoring of contracts.
 
Ms Jeanette Hunter, DDG: Primary Health Care, said her presentation covered the strategic goals of the NHI and shared performance by the pilot districts against key indicators and the way forward to hospital reform. The key indicators presented were for the incidence of pneumonia and of severe malnutrition in children under 5 years, inpatient deaths of children under one year and under five years old, cervical cancer screening rates and TB cure rates amongst others. In general there was improvement across the board. A baseline health facility audit had been completed in 2011/12 and facility improvement teams had visited the pilot districts where a number of policies and strategies had been launched and an executive leadership and management program had been established. The Department had established that an ideal clinic would comprise ten components within which there were a total of 185 elements. This dashboard was coded green if the elements were present, orange if there were plans to put it in place or were in the process of putting it in place and red if it was absent or there was no plan to put it in place. There were currently 96 general practitioners contracted nationally for doctor coverage.

The Minister said that the NHI pilot had tried to encourage doctors to leave hospitals to go to clinics by paying all doctors the same rate at the highest level of the scale. In Vhembe, there was no willingness by hospital management to encourage doctors to go to clinics because hospital management and doctors were in cahoots to share the doctors salary with the doctor being absent but management signing off that the doctor had been present. If the NHI continued to be seen as a pot of gold, then South Africa would become like America and spend 18% of its GDP on Health.

Ms Hunter said that there had been reforms in the hospital services with hospitals having to establish four committees and all hospital posts had been re-advertised.

Mr J Gelderblom (ANC) said that the previous year there had been a shortage of pharmacists and asked what the situation was this year.

Mr M Swart (DA) suggested that doctors would work for free one day a week if they could get a tax rebate.

Mr L Ramatlakane (COPE) said that unforeseen salary increases and staff complements were moving targets. He asked if they had signed off on the staff complements. Were provinces toeing the line on compliance to the conditional grants? What differences would the Committee see regarding the third quarter expenditure?

Ms Mfulo (ANC) said that the staffing issue always gave emphasis to doctors and forgot about nurses. Where were disabled people placed in the learnership programmes?

Ms Mashigo (ANC) said that outsourcing always seemed to go to the Development Bank of South Africa (DBSA) which appeared to be stretched as it appeared all departments outsourced to the DBSA.

The Minister replied that the World Health Organisation (WHO) document defined the pillars of the health care system: leadership & governance, the availability of medicines, staffing, health care finance systems, health information systems and health care delivery systems. He said it was not only about finance, even if the Minister of Finance doubled the health budget everybody in South Africa would not be covered. In America, which spent 18% of its GDP on health, there were still 53m people struggling to have health care. He said during apartheid and post apartheid health care services had never been scientifically approached. It had been guess work, a hit and miss approach. Now for the first time studies had been done to ascertain what was required. It was not only the health care system but even the training of health professionals that had been stagnant. In America there were 10 000 people trained in medical regulations while South Africa only had 300. The Department had established an institute and were recruiting people to do their Masters in Science for medical regulations and a health sciences university was needed. The WHO method of determining the number of doctors required was based on population numbers, but this was not working because of different socio economic systems in differing areas. The staff establishment numbers provided by departments were a thumb suck and could not be used as a guide.

On how long it would take to address the issues, he said that South Africa was far behind. Cuba with a population of 11m people had 27 health schools. The last medical school in South Africa was established 29 years ago. This while the country was growing apace.

On expenditure, he said that because the NHI was new it had been difficult to convince Treasury on a national (rather than a provincial) plan. The Department had received R600m but had been told it could not use it because the DoRB meant that it had to be split into an equitable share. However when the money had been transferred to the provinces they had exercised their right to prioritise the use of the funds and so the money had disappeared. The same applied for the NHI and so nothing was happening at the procurement stage. He said federalism was destroying the country. Contracts therefore would be done at the national level but some provinces did not like this and had argued against it, saying that it was taking away their powers.

Regarding wheelchairs and the disabled, he said the new plan included how to cater for disabilities. The pilot projects were where one learned the shortcomings of the system. There was only one metro in the pilot project, Tshwane, so that they could compare metros with the rural areas.

He said the outsourcing to the DBSA was not really outsourcing as DBSA was a development bank helping the country to develop. KZN had elected to fund an extra pilot district because the burden of disease in this province was greatest.

On the question of whether the country had the skills, he said that a foreign official had told him that the country had the skills to build world class stadiums but could not build toilets. The country definitely had the skills. He had found that the Department of Public Works organogram reflected that they had appointed managers not technicians. He had appointed Dr Shaker, an engineer, to manage the infrastructure program. The country would fail continually if it kept on filling posts with managers only. In the past while managing contracts and supplies with managers, the Department had been price takers but now they were becoming price givers.

On what happened when provinces did not cooperate, he said that it was important for the department to understand the new infrastructure required so that they could fast track the system. Two problems essentially needed to be solved. The quality of health services provided needed to be dealt with so that the gap between private and public health was not huge. Secondly, the costs of private health care had to be tamed. If these were solved then South Africa would have the best health care system in the world.

The meeting was adjourned.

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