Medical Research Council, Council for Medical Schemes & Office of Health Standards Compliance on their 2015 Strategic Plans

Meeting report

Briefing by the South African Medical Research Council

Prof Mike Sathekge, Chairperson of the Board, said the South African Medical Research Council’s (SAMRC’s) strategic goals were to administer health research effectively and efficiently, to lead the generation of finding new knowledge, to support innovative ideas and technology development as a way of improving health, and building enough capacity to sustain health research. He listed the names and duties of the members of the SAMRC Board. He paid tribute to their ability to administer health research effectively, for having clean audits and for having become great leaders in science. However, there was a burden of diseases in South Africa and the SAMRC was committed to addressing these burdens which impacted on health. He listed some of the major causes of death in SA -- HIV/AIDS, hypertension heart disease, lower respiratory infections and cerebro-vascular diseases, among others.

Mr Nick Buick, Chief Financial Officer, said the SAMRC’s total estimated funding for 2014/15 year was R784.6m, which they expected to increase by 30 percent to R1.02m in 2015/16. Their estimated income over Medium Term Expenditure Framework (MTEF) period included a permanent baseline funding in 2014/15 of R303.8m, which increased by 56 percent to R473.9m in 2015/16. Their Economic Competitive and Support Package for 2015/16 was R150m, and it also increased by 40 percent from the 2014/15 financial year. The total allocation from the National Treasury for 2015/16 was R623.9m. Their other income included R25m from the Investment Income account and R14.2m from sundry Income, with a total baseline allocation of R39.2m for the 2015/16 year. Their expenditure per programme for 2015/16 was a total of R828.6m, which they planned to spend on administration, research, innovation and technology and developing capacity. The administration programme’s expenses were R161.8m, the research programme was R549.3m, the Innovation and Technology programme was R83.2m and the Capacity Development programme amounted to R34.2m.

Mr Mbulelo Bikwani, Head of Human Resources, compared the Employment Equity (EE) profile from 1 January to 31 March 2015, to the quarter from 1 October to 31 December 2014, The employee headcount was 597 in the fourth quarter and 604 in the third quarter. The Executive Management Committee (EMC) had approved a plan and composition of a widely representative transformation forum, which would be a monitoring body for the transformation. The forum would be responsible for producing the EE plan which would deal with matters pertaining to: organisational culture and diversity, talent management -- including interventions to build a healthy pipeline of the under-represented scientists -- age retirement management, leading to succession planning and monitoring, and implementation of transformation interventions with the MRC. In their EE plans, they have identified that in the next eight years they would have 11 Unit Directors/Executives that would either have retired or would have had their contracts ended, hence the age/retirement management planning. This would give the MRC the opportunity to transform the Executive and Senior leadership levels.

Prof Glenda Gray, SAMRC President, said they were a national resource, in the sense that they were leaders in health research at a national level, they had access to other international health bodies, were able to create the ideas to drive innovation and were capable of driving national priorities of medical research. The 2015/16 Annual Performance Plan sought to administer health research effectively and efficiently in SA and in doing this, the SAMRC would have to ensure there was good governance, effective administration and compliance with government regulations. They wanted to lead a new generation of new knowledge and facilitate its transition into policies and practices to improve health, and support innovation and technology development. To reach these goals the SAMRC would have to produce and disseminate new scientific findings and knowledge on health, promote scientific excellence, provide leadership, provide funding and enhance the long-term sustainability of health research in SA.

The strategic goals would have performance indicators and these would be determined by the number of peer reviewed articles, with an MRC affiliated author, that were published in the Institute for Scientific Information (ISI) journals during the reporting period, the number of new local/international policies and guidelines that referenced MRC research during the reporting period, the number of innovation and technology projects funded by the MRC to develop new diagnostics, devices, vaccines and therapeutics during the reporting period, and the number of bursaries provided for post-graduate study at Masters, Doctoral and post-doctoral levels during the reporting period.

Their funding as an organisation had gone as far as funding universities who did research on child and adolescent lung health, stem cell research and therapy, hypertension, cardiovascular disease and herbal drugs. As a way of addressing transformation, the SAMRC planned to create a new model for funding early stage investigators, creating partnerships with local and international universities (University of California, Los Angeles and University of KwaZulu Natal) and accelerate the progression of black scientists within the SAMRC which would create new associate directors. The Strategic Health Innovation Partnerships (SHIP) human capacity development included post-graduates, technicians and senior scientists of which there were a total of 134 students.

Mr Nkosinathi Bhuka, Head of Legal Services, said that since its enactment in 1991, the SAMRC Act had never been reviewed. The review of the Act had to be aligned with other statutory bodies which are similar to the SAMRC in terms of their mandate, governance, business, funding and budget model. Once the Act had been reviewed, the intended outcome was that there would be more efficiency and empowerment of the research regulatory regime and it should be aligned with other legislation such as the National Health Act 61 of 2003, the Protection of Personal Information Act 2013 and the Public Finance Management Act 1 of 1999. There were, however, financial implications for the review. The SAMRC estimated that it would take three years to review the Act with an estimated commitment of five hours a day, 2 days a week, and a rate of about R1 200 per hour, which would place the total at R3 456 000. This did not include disbursements.

Ms Chesa Chauke, Primate Unit and Delft Animal Centre (PUDAC), said research involving the Non-Human Primate (NHP) played a vital role in medical advances. Animal models were an essential component of biomedical research. The information developed in NHP models was critical for designing human studies and the evaluation of new medical interventions into human health care. The services provided by PUDAC were animal care and management, technical and scientific support, research, and production and administration of special diets.

Discussion

Dr P Maesela (ANC) suggested that the entity must ensure that the review of the Act should not take more than 18 months because it would prolong the process. The Act would still have to come to Parliament before it could be adopted and that could also take up to three years. The tuberculosis (TB) survey which they planned on conducting must be prioritised as the information would be essential to the health sector. He asked if the Road Accident Fund (RAF) funds could not be used for other purposes, such as installing more cameras on the roads to prevent people from speeding, instead of spending the money on events and campaigns. He noticed that the entity was not planning on addressing issues of malnutrition, and suggested that they should target the schools and implement programmes which must be managed by the Department of Health, and not the schools themselves.

Mr I Mosala (ANC) asked the entity why the Act had not been amended for such a long time and how the Act affected or contributed to the management of the entity. He had noticed that their report did not have indicators as to how they planned on solving the problems which they currently faced, and he would have liked it if the entity could have explained whether they had any working relationship with the BRICS countries, and what type of relationship it was. What were the advantages and disadvantages of the working relationship?

Ms L James (DA) asked why they had not included time frames or guidelines for their programmes.

Ms M Scheepers (ANC) asked if they funded all the students’ expenses with their bursaries, or whether they covered the tuition fees only. What was the status of the current Accounting Officer?

Mr A Mahlalela (ANC) asked if they had programmes which could help enhance the university students’ interest in working for the SAMRC. He asked why their financial year was indicated only from October and April, when a financial year started, and said their strategic and annual performance plans did not align with each other. Would the entity be amending the Act or were they planning on rewriting the whole Act?

Ms C Ndaba (ANC) asked why they had not developed a programme for the National Health Insurance (NHI) scheme.

The Chairperson asked if their programmes would also include mental illnesses, because this had not been stipulated in their report. The entity also reported to the Science Committee, and she asked what impact this has had on the entity, and whether they had experienced any problems in reporting to two different Committees.

Prof Sathekge replied that it was the Department of Health’s responsibility to amend the Act, but they would be receiving help from the SAMRC. The previous Accounting Officer had not been permanent, but on a contract, so he had not completed his term. The current officer would complete the term and they were not expecting any resignations.

Prof Gray said they were currently working with BRICS countries on child development programmes which would look into issues of mental health and childhood depression. It was a long term goal to start programmes within schools which would help develop interest in the entity as a way of recruiting university students.

Briefing by the Council for Medical Schemes

Mr Daniel Lehutjo, Acting Chief Executive Officer/Chief Financial Officer, said the Council for Medical Schemes (CMS) legislative mandate was established in terms of the Medical Schemes Act 131 of 1998 of Section 7. The Act requires the Council to protect the interests of the beneficiaries at all times, control and co-ordinate the functioning of medical schemes in a manner that was complementary with the national health policy, investigate complaints and settle disputes in relation to the affairs of medical schemes as provided in the Act, and advise the Minister on any matter concerning medical schemes and perform any other function conferred on the Council by the Minister. Other areas influencing the CMS’s activities were the Constitution of SA, the National Development Plan Vision 2030 (NDP) and the National Department of Health strategic goals 2014-2019.

The Council had listed four goals:

- access to good quality medical schemes;

- properly governed medical schemes which are responsive to the environment and beneficiaries are informed and protected;

- to ensure the CMS had the capacity to be responsive to the needs of the environment by being an effective and efficient organisation; and

- provide influential strategic advice and support for the development and implementation of strategic health policy, including support to the National Health Insurance (NHI) development process.

Mr Paresh Prema, General Manager: Benefits Management, said goal one would be achieved by enacting the pillars of the Medical Schemes Act (MSA) which sought to have community ratings, open enrolment, prescribed minimum benefits and frequent reporting. The prescribed minimum benefits were a feature of the MSA in terms of which medical schemes had to cover the costs related to the diagnosis and treatment. The affordability of medical schemes could be determined by a health price framework. The problem with affordability of medical schemes was considered to be the greatest obstacle to growth in the industry. The Council had approved a framework for schemes to consider Low Cost Benefit Options (LCBO), and the intention was to expand the coverage to those that were currently not covered. The benefit would ensure it met the healthcare needs and defined benefits which were affordable.

Ms Tebogo Maziya, General Manager: Financial Supervision, said there were eight million beneficiaries in 2013 on open and restricted schemes. The average age of the beneficiaries was 35 years. In 2014/15, the schemes alone spent R86.4 million and R12.2 million on the National Health care. Total healthcare expenditure was 75.8 percent of the total estimated amount, and of these amounts only hospitals, medical specialists and medicines were included. In total, the expenditure for the year was R40 billion. In 2013, they had managed to pay out R189 million in benefits to general practitioners, dentists, dental specialists, and provincial hospitals and ex gratia payments.

Mr Craig Burton-Durham, General Manager of Legal Services, said they were governed by the MSA Section 7 which indicated the general provisions on governance that must be catered for by medical schemes. The scheme structure consisted of members, a principal officer and a board of trustees. The governance provisions in the MSA should be strengthened -- there should be a continued enforcement of the existing provisions in the MSA, as some schemes were under curatorship. The structure of the CMS consisted of a Registrar of Medical Schemes, a Council, an Appeals Committee, an Appeals Board and the courts of SA. The CMS intended to improve systems which would allow for a better data collection system, and had proposed a low cost benefit framework as a way of dealing with the strategic challenges.

Mr Lehutjo said there should be an improved Information Technology (IT) structure to deal with efficiency and effectiveness problems, as well as a drive to improve their recruitment and retention programmes. A continuous performance management programme would be in place and a succession planning systems would be developed. The management of the CMS finances was governed by the Public Finance Management Act (PFMA), National Treasury and the Supply Chain Management Act (SCMA). There were also internal controls such as the Internal Audit services and the Audit and Risk Committee. The budget management system ensured there was an adequate limit on unnecessary expenditure, legal fees were not too exaggerated and office accommodation was affordable and within their limits. They assumed there would be an inflationary increase of 5.6 percent and a general salary increase of 6.6 percent in the 2015/16 financial year. New positions would be created for a Human Resources Administrator, an IT help desk technician, an IT software developer and a Strategy Clinical Analyst. The budget which had been proposed for 2015/16 was R141.1m, which included the operational and capital expenditure. The total income, excluding levies, was R15 975 928, which was a combination of surplus funds, accreditation fees, registration fees and interest.

Discussion

The Chairperson said the CMS had not reported on the issues which the Committee had been expecting, and their presentations had been too simplistic. There was not enough information to help the Committee understand what they were talking about – the presentation did not speak about the Annual Performance Plan (APP). In order for the public to understand what their presentation was about, the Committee had to understand as well.

Dr Maesela said the presentation was not clear about what the CMS wanted as an entity, or what they were talking about. There was no mention of how much money had been spent, or when they needed money. It was not clear whether their budget was for 2014 or 2015, or how much they had received from the National Treasury.

Ms Scheepers said she also did not understand why there was confusion between the 2014 and 2015 financial year in the report.

Mr Mahlalela said he had tried to read the document but it had confused him even further. Did the CMS have its own framework on how to write the APP and strategic plan, because they had not followed the plan which the Committee sent to the entities. There was no explanation of the structure of the programmes, there was no mention of oriented goals, and there were no performance indicators for the APP and baseline information. It was impossible to conduct oversight as a Committee when there was not enough information in the APP and strategic plan.

Dr Anban Pillay, Deputy Director General, Department of Health, said there may have been some misunderstanding of what was expected of them.

The Chairperson said the CMS must go back and prepare another presentation which followed the structure which had been sent to them.

Mr Mahlalela requested that the presentation should be linked to the strategic plan. The graphs which had been presented by Ms Maziya were not part of the APP booklet.

Mr H Volmink (DA) said page 83 of the booklet also needed to be re-written because the financial figures were not coherent with the information in the report.

Prof Yusuf Veriava, Chairperson of the CMS, said he agreed that there should be consistency with what they reported. They had noted all the comments from the Members and would make the changes as required.

The Chairperson said the Committee would make contact with the entity as to when they should come back and make another presentation.

Briefing by the Office of Health Standards Compliance

Dr Carol Marshall, Interim Chief Executive Officer, said the Office derived their mandate from the National Health Amendment Act (NHAA). Their mission was to act independently, impartially, fairly and fearlessly for the people of SA in guiding, monitoring and enforcing health care safety and quality standards in health establishments. Their vision was to have safe and quality healthcare for and South Africans. Other legislative mandates included the Constitution of SA, the PFMA and other health related Acts. In terms of the NHAA, they particularly followed Section 78: “To protect and promote the health and safety of users of health services by:

• Monitoring and enforcing compliance by health establishments with norms and standards prescribed by the Minister in relation to the national health system;
• Ensuring consideration, investigation and disposal of complaints relating to non-compliance with prescribed norms and standards in a procedurally fair, economical and expeditious manner.”

The OHSC had the powers to assess, advise and recommend to health establishments. The monitoring of health establishments would help with indicating early warning signs of breach of norms and standards, investigating complaints relating to breaches of norms and standards, and inspecting to assess compliance with norms and standards. They would advise on the prescribed norms and standards for the health system and issue notices of non-compliance. The issuing of guidance relating to norms and standards, and recommending interventions and collaborations with other entities, was also a function of the OHSC. Their mandates were derived from the National Development Plan (NDP), Batho Pele and the Patient’s Rights Charter, National Health Insurance (Green Paper), the NHAA and the National Policy on Quality in Health.

To date, the OHSC had conducted over 1 000 “mock” training inspections, during which it had been found that there were large variations and significant deficits in the quality of health services between individual establishments, between provinces and in the degree of individual management responsibility for delivering basic quality care to users of health services. The results of the “mock” inspections indicated that 34 percent of the facilities inspected had shown improvement, which was a more than 10 percent change in score from the baseline.

The OHSC had the legislative authority to act as the new health sector public entity, thus an independent Board and Ombudsman had been established. There was a cross-sectoral mandate and a cross-sectional diverse and experienced Board. However, they had limited powers to enforce compliance directly, and since they were still in the start-up phase there were some challenges which they were facing, such as resourcing.

There was strong political and public support for the entity. They had a clear role within the NDP and their work made a significant contribution towards the NHI. There was resistance from health establishments and authorities who refuse to comply, however, and that had been a major challenge for the entity, as it did not allow the entity to carry out its functions properly. The role of having concurrent powers with other organisations had led to disagreements and there had sometimes been interference from other organisations over complaints and reports.

The OHSC sought to change the behaviour of establishments and the public as a whole by promoting or recognising systems which could be used to access and control risks for safety and quality, for the entity to become “user focused” and “provider focused” so as to ensure accountability, effective and efficiency. It wanted to discourage mediocrity, penalise ad hoc and arbitrary actions, and discourage negligence and non-delivery. They had strategised ways to implement regulatory mandates by prioritising the weakest establishments which were serving the most disadvantaged users, shifting the system towards safer care, using a progressive and developmental approach to enforcement to enhance change across the system, collaborating with key user, provider and leadership groups towards improved outcomes, and developing the capacity of staff and others as agents of change. The procedural regulations specified the obligations of the health establishment in relation to the OHSC and its regulatory mandate, the duties of the Office in respect of its regulatory functions, and the regulatory practices and processes.

Ms Ndaba interrupted the speaker and said that they had not yet mentioned anything about their APP or Strategic Plan. She asked that they move towards that part of their presentation.

Dr Marshall gave details of the Medium Term Expenditure Framework (MTEF) budget for 2014-2017 and said the total budget for the 2015/16 year was R88.9m. There had been some financial risks which were caused by both national and international constraints which could lead to a slower scale-up in achieving coverage and a higher threshold for risk. A mitigation plan was to demonstrate value for money, and to review the advantages and disadvantages of revenue generation. Some delayed expenditure from 2014/15 would have to be funded out of the 2015/16 budget.

The Chairperson interrupted Dr Marshall and said that her presentation was not related to the APP or the Strategic Plan. She gave them five minutes to try and get their presentation in order.

Dr Marshall said, referring to the red booklet, their strategic goals were to get health establishments to comply with quality norms and standards, deal effectively with patient and community complaints regarding poor care, ensure that situations of concern were heard and responded to, that the quality and safety of healthcare was progressively improved through effective communication and collaboration between the OHSC and users, and ensure an efficient and effective high performing organisation that was responsive and publicly accountable. Their strategic plan was for all the objectives to have functional running systems in 2015/16. The quarterly targets for the year were for systems for certification of complaints to be set up and functional, system procedures to be enforced, systems for communication and monitoring of Ombud recommendations to be functional, and the number of media and communication events and campaigns to increase awareness of the OHSC to be carried out. The expenditure estimates for the period 2015 to 2018 were provided.

Discussion

Mr Mosala said that with the few resources they had, how certain were they that quality health insurance would be implemented. He had noticed that the Western Cape had not been part of the “mock’ inspections, and asked why this had been the case. How had they concluded that they would need R10 million for travelling for the year -- what method did they use?

Ms Ndaba said according to her calculations, 50 percent of their budget was going towards consultation programmes. Why was so much money being given to these programmes? Why had the entity budgeted for external consultants -- was it due to a lack of capacity within the entity? She said the budget allocations for two of the programmes were confusing, and asked why there was provision for catering services when the entity was constantly travelling.

Mr Volmink said there should have been better investment made to the communication programme, which would help contribute to a better performing entity, instead of adding it under the office of the CEO. The computer services budget was also worrying, because IT had a way of “snowboarding”, and their budget may be exceeded.

Mr Maesela asked if they owned or rented the buildings which they used as office space, and what inequalities they had found in the provinces. He thought that certain measures should be taken to make sure that people complied with their regulations. He added that there were repetitions in the report which he asked them to amend the next time they reported to the Committee.

The Chairperson said the entity should have been specific about the hospitals which they had visited in the different provinces, and the report should have indicated when they planned to implement these programmes.

Dr Marshall replied that they had included the Western Cape in the “mock” inspections. There were graphs on page 14 which indicated the results which had been found in the different provinces and the Western Cape had been included as well. The R10 million estimated budget had been drawn up from their previous experiences while travelling. They had a team of inspectors who were nationally based, because the entity was national organisation as well. The reason for this was that they were trying to be objective and not allow the inspectors to be biased because of their location, hence the decision not to place them in different regions.

Dr Zameer Brey, OHSC Board Director, said he understood that the way the budget had been presented did not allow for proper oversight for the Committee. The budget had been split according to programmes, and the consolidated positions should not be of concern. The entity had tried to appoint people as experts, but had not been successful in filling these positions, so it had had to hire consultants. Their short term goal was to appoint permanent employees into those technical positions and do away with consultants, but that was not possible at the current phase which the OHSC was in. However, he thought they could have done better in explaining and defining what some of the categories in the programmes meant, such as advertising and communication, because they did sound similar.

Prof Stuart Whittaker, OHSC Chairperson, said the OHSC was a critical programme because it was linked to the NHI. The results which they had received from the “mock” inspections were alarming and the challenge was to continue to improve their tools so they could accurately reflect what was happening in the health system. They were currently negotiating with the MRC to help them with their statistical analysis and had been using various statistical consultants. They also planned to work closely with the MRC as part of their strategic plan, as a way of moving forward. They were facing challenges with their information system and it had been a priority for the entity to look into the matter, because it was important that they provided accurate information. He pleaded with the Committee to try and establish a framework which would allow the national department, local authorities and the private and public sectors, to work with the entity so that they could fulfil their mandate. It was impossible to carry out certain functions when they did not have the full co-operation of all parties involved, especially when trying to conduct inspections.

Prof Laetitia Rispel, OHSC Deputy Chairperson, said they were please that they have the Committee’s support. The entity would not be able to reach their goals alone, and required co-operation from other regulatory bodies.

Dr Marshall said they were currently renting offices which hosted 100 staff members. The offices were conducive, but were not large enough to accommodate their functions. They had also spent R800 000 on venues, which had been allocated as part of the catering expenses, and a large portion of this had been for booking office space in other building for meetings.

Dr Maesela said their questions had been based merely on the information which had been given to them. The issue which they had raised had not been indicated in the report.

Mr Mosala asked why they had not tried to recruit university graduates who had the technical skills which they lacked, instead of hiring consultants. He added that there were two slides which did not reflect the same information regarding the “mock” inspections, and that was why it had been asked why the Western Cape was not inspected.

The Chairperson advised the entity to visit mental institutions as well, and not only the hospitals. She suspected that they did not communicate with the DoH, and suggested that it was important they worked with the Department, as they needed the support that they spoke of. She asked that they visit private clinics and hospitals as well, because they were also within the health sector.

The meeting was adjourned.