National Health Laboratory Service (NHLS) Amendment Bill: Department of Health briefing

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20 June 2017
Chairperson: Ms M Dunjwa (ANC)
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Meeting Summary

The meeting was held to enable the Department of Health (DoH) to brief the Committee on the amendments to the National Health Laboratory Service (NHLS) Amendment Bill, but the Committee took advantage of the opportunity ask the Department to provide feedback on the forensic pathology officers issue, and the investigation that had been conducted in KwaZulu-Natal (KZN).

The DoH explained that there were forensic pathology officers who were not trained nor qualified for the job, but through their years of service with the DoH they had managed to acquire the necessary skills. They used to receive danger allowances, but when this function was transferred from provinces in 2006, the allowance had also been withdrawn. The DoH felt that it was unfair that the danger allowance had been withdrawn, because pathology officers were indeed exposed to danger. An example of this was the Ebola outbreak. They had been exposed to it and were vulnerable to contracting it. They also needed protective clothing and counselling from time to time, because the work that they did could be traumatic. The DoH had then come into an agreement with the Department of Labour (DoL) that the original structures must be implemented, forensic pathology officers must have a career path, meaning that they must be trained because most of them were not trained, they must have proper supervision, they must have counselling, they must be given the danger allowance, and receive a dissection allowance.

The DoH had gone to KZN to visit public hospitals and had found various issues which were impacting on service provision in the health sector. Some of the problems were related to budgeting, procurement processes, and hospital facilities. The DoH was doing all it could to fight the challenges faced by the province, to avoid further withdrawal of accreditation at the University of KZN’s health faculty.

The DoH proposed amendments to 17 clauses of the National Laboratory Service Amendment Bill, After the presentation, there were discussions pertaining to the amendments and issues concerning the DOH, the NHLS and its Board. The DoH held that the NHLS needed funds for the training of students in the field, and for research and sustainability purposes. In addition, the DoH had developed a model for the NHLS to avoid an imbalance in its service fees, because it sometimes either over-charged or under-charged, and the model would remedy that anomaly. 

Meeting report

Forensic Pathology Officers: DoH submission

Ms Precious Motsoso, Director-General, Department of Health (DoH), first briefed the Committee about forensic pathology and mortuary services, which had been transferred to the Department of Health in 2006. Only two provinces had retained the structure, where functions and job descriptions were clearly defined, namely the Eastern Cape and the Western Cape, and the other seven provinces had changed their structures. This meant that there was a flat structure.

Forensic pathology officers used to receive danger allowances, but when this function was transferred, the allowance had also been withdrawn. As a result of this, the Department of Labour (DoL) had approached the DoH raising a number of concerns, one of them being that the pathology officers were not trained for the functions they were performing, thus they were not competent. In an attempt to address the concerns raised by the DoL, the DoH had consulted the two provinces that had retained the original structure and asked them to give the DoH their structures in order for the other seven provinces to go back to these original structures. The seven provinces were then asked to go back to the original structures and implement them. Last week they had gone to the bargaining chamber to agree on the terms.

The Department of Health felt that it was unfair that the danger allowance had been withdrawn, because pathology officers were indeed exposed to danger. An example of this was the Ebola outbreak. They had been exposed to it and were vulnerable to contracting it. They also needed protective clothing and counselling from time to time, because the work that they did could be traumatic. The DoH had then come into an agreement with the DoL that (1) the original structures must be implemented, (2) forensic pathology officers must have a career path, meaning that they must be trained because most of them were not trained, (3) they must have proper supervision, (4) they must have counselling, (5) they must be given the danger allowance, and (6) receive dissection allowance.



The Chairperson thanked the Director-General for the information that she had given the Committee.

Dr S Thembekwayo (EFF) proposed that, in terms of the training of forensic pathology officers, there were people who had been performing this job even though they were not trained, and certification through assessment based on experience would be a good idea, as a way of acknowledging them for the job they were doing.

Ms L James (DA) wanted to know how long it would take for other provinces to go back to the original structure.

Ms S Kopane (DA) thanked the DoH for the speedy intervention, and wanted to know how this would affect the budget, because there would now be allowances. She held that if this was not part of the budget, it would be problematic.

Chairperson advised that the DoH should look into the recognition of prior learning, because those employees had been there for a long time and had acquired skills.

Ms Motsoso replied that on the issue of budget, there was a total of 1 008 people who were affected. She used the word ‘people,’ because some were correctly designated as forensic officers – a title that was befitting -- and there were others who were cleaners, who were not supposed to be designated as forensic pathology officers. The number of people who had been transferred was just over 300, which was not a lot, and this had been in 2006, and over this period there had been attrition and others had passed on. There were not a lot of people who had had that allowance withdrawn when the transfer took place. Going forward, there were 1 008 workers, and the DoH had done its calculations, and this was money that could be absorbed by the provinces. The amount could be around R156 000, and this was not a lot of money for the type of risks they were exposed to.

In terms of recognition for prior learning, a curriculum had been developed for training. There was a dispute that pathologists needed to supervise them, but the supervision should be for those who had certain requisite skills and qualifications. The only university that provided training was the Cape Peninsula University of Technology. The DoH was currently engaging with other universities to provide formal training, and there would be recognition of prior learning. The DoH had also written to the Health Council for recognition.

With regards to KZN, the DoH had noticed that it was quite popular in the news. The DoH had received formal communication from health workers themselves requesting it to intervene two months ago. The DoH had sent a delegation to KZN to investigate what the issues were, and it was indeed a very disturbing situation. It seemed that over the years, in an attempt to try and meet audit outcomes, KZN had deliberately, increasingly and continuously frozen posts and abolished them, and this had led to the sector being understaffed.

This could be described as the KZN health sector being in ICU without ventilators, because over a number of years, if there were a certain number of posts and they were frozen and abolished, there would be no staff. The number of specialists’ posts first had to be registrars’ posts, and there had to be training in order to have specialists, and these had been repeatedly abolished. However, they had created supernumerary posts, meaning that they were providing training for foreigners to be specialists, whereas they were freezing the training of South Africans.

They had also changed the procurement processes which were consistent with the Treasury procurement rules. The first rule was that anything above R500 000 should go out on tender, but anything below R500 000 must have a database and then have quotations. They dropped that to between R30 000 and R200 000, and this meant that they gave hospitals a threshold of R200 000, but if a chief executive officer (CEO) of a hospital wanted to buy anything that cost R30 000, they had to publish it in a provincial gazette. The DoH had gone to five different hospitals and they all said they had a budget of R5 000 to buy any equipment, and there was no equipment for that kind of money. The report was shared with the Minister and MEC.

Chairperson thanked the Director-General for the feedback, and mentioned that KZN had been the last province to present last week, and had raised some concerns. The Committee was aware that there would be a province that would be visited by national department, but it was not certain which province that would be. She also wanted to know the DOH’s view on the issue of oncology.

Ms Motsoso replied that it was not just oncology. The University of KwaZulu-Natal (UKZN) was one of the key training platforms for the production of medical students, and oncology was one of the departments which had lost their accreditation, along with others such as neurology, ear, nose and throat (ENT) and haematology. There were registrars who were in training to become specialists. They had campuses in Durban and Pietermaritzburg, and this meant everyone in the Durban campus would have to be moved to the Pietermaritzburg campus. Due to the fact that there was a lack of posts and heads of departments, the Health Professions’ Council had withdrawn accreditation. In terms of oncology, because of the issue of accreditation, there were two problems; one hospital was found to have machinery problems, and the other hospital was found to have many machines but there was not sufficient staff. As a way of solving this, some of the personnel from the former hospital would be moved to the latter hospital. The DoH had met with a professor who heads the oncology centre at Stellenbosch last week, and he was bringing in teams that would provide support to KZN.


National Laboratory Service Amendment Bill, 2015

Dr Anbay Pillay, Deputy Director-General, DoH, presented on the National Laboratory Service Amendment Bill, 2015, and focused on the clauses that the Department of Health had amended in the Bill.

The presentation gave a brief historical description of the South African health sector. After the first democratic elections in April 1994, the then Minister of Health, Dr Nkosana Dlamini-Zuma, had appointed a task team to investigate the services and to make proposals for the restructuring of the laboratory services. The largest component of the public laboratories was the South African Institute for Medical Research (SAIMR), and it had been established in 1912.

After 1994, the Public Health Service laboratory services were fragmented due to historical developments and policies. Laboratory services were non-existent in the former homeland areas, with the exception of KZN. As a result of this, provinces like Limpopo, Mpumalanga and North West had difficulty in accessing these services -- if samples were collected and sent to a laboratory and could not be tested, the process ended there, and there was no further referral. Later it was found that there were major discrepancies in the accuracy of testing. This was done through comparing tests between the private and public sector. However, the SAIMR became insolvent in 1998 due to poor payments from the provinces.

Owing to the poor state of laboratories within the SAIMR and provincial departments of health, the DoH realised the need for greater equity in access to healthcare and thereby within laboratory services, and for a uniform and coordinated laboratory service. After much deliberation, the health sector had decided to amalgamate services comprising the SAIMR, the provincial and homeland laboratories, and establish this as a parastatal organisation -- the National Health Laboratory Services (NHLS).

NHLS had achieved its objectives, but continued to face numerous challenges, such as leadership and governance, services versus business, interface between the NHLS and external stakeholders, using fee revenue to fund national functions, and poor internal policies and controls. These challenges impacted on the delivery of services.

The amended clauses were:

Clause 1

This clause proposed the deletion of the “teaching environment” definition, and further defined other words and expressions inserted in the Act by the Bill

Clause 2

This clause seeks to amend section 3 of the Act by including the Preferential Procurement Policy Framework Act, 2000 (Act No. 5 of 2000). In addition, it seeks to provide that the Board of the Service was the accounting authority of the Service.

Clause 3

This clause seeks to propose amendments to section 4 of the Act, by adding the word “diagnostic” in paragraph (a) to ensure that the core mandate of the Service was to provide “diagnostic health laboratory services” to the public. In addition, the word “provide” was replaced with the word “support” in order to reduce the burden on the Service. This would enable the institution to play a supporting role, instead of being a service provider of training for health science education.

Clause 4

This clause seeks to amend section 5 of the Act in order to clarify that the duty of the Service was to promote the training of its staff members only.

Clause 5

This clause seeks to replace section 7 of the Act and to provide for the composition of the Board of the Service anew. In terms of the new section 7, the Board would consist of: (a) the chief executive office by virtue of his or her office, (b) the chief financial officer by virtue of his or her office, (c) the three members representing (i) the national Department of Health, (ii) the Department of Science and Technology, and (iii) the higher education sector, (d) three representatives of provincial departments, and (e) six members who must have extensive experience in the fields of commerce, finance, auditing and economic matters, corporate management, public health, diagnostic laboratory services, legal matters and epidemiology. In addition, the Board was accountable to the Minister of Health.

Clause 6

This clause proposes amendments to section 8 of the Act in order to align that section with the amendments proposed to section 7. In addition, the words “and must ensure that appropriate laboratory professionals were appointed” be omitted in section 8(1) of the Act, as the members from the bodies and institutes referred in the new section 7 were not necessarily laboratory professionals.

Clause 7

This section seeks to replace section 9 of the Act and to provide the appointment of the chairperson and vice-chairperson of the Board of the Service in more detail. The chairperson and vice-chairperson were appointed from among the non-executive members of the Board of the Service by the Minister. In addition, when the chairperson was absent or unable to perform his/her functions, the vice-chairperson becomes the acting chairperson, and if they vice-chairperson was also absent or unable to act as the acting chairperson, then the members must designate another member of the Board to act as a chairperson until the chairperson or vice-chairperson was available. Lastly, it also proposes that in the case that the chairperson or the vice-chairperson were absent or unavailable for two consecutive meetings, the Board in consultation with the Minister, should designate a member to act as chairperson or vice-chairperson until such time that the chairperson or vice-chairperson was able to resume his or her functions as chairperson or vice-chairperson.

Clause 8

This clause seeks to amend section 10 of the Act in order to provide that a member of the Board must vacate his or her office if they have been absent for two consecutive meetings of the Board without the leave of the Board. The current position was that the member must be absent “from more than” two meetings without such a leave.

Clause 9

This clause proposes the insertion of section 10A in the Act, and seeks to provide dissolution of the Board by the Minister under certain circumstances and the appointment of an Interim Board. In addition, the section proposes that the new Board must be constituted within 180 days of the dissolution of the old Board.

Clause 10

This clause seeks to amend section 11 of the Act by providing that the meetings of the Board and the conduct of business at meetings must be “determined” by the rules. The replacement of the word “prescribed” with “determined” was necessary as a result of amendments proposed to section 27 of the Act. In terms of those proposals, the Minister would be empowered to “prescribe” certain matters by the making of regulations.

Clause 11

This clause seeks to amend section 13 of the Act by providing that the Chief Financial Officer must be appointed to the executive management committee of the Board.

Clause 12

This clause proposes the insertion of sections 13A and 13B in the Act. Section 13A provides for the appointment of the chief executive officer of the Board, and section 13B for the functions of the chief executive officer.

Clause 13

This clause seeks to amend section 18 of the Act by replacing the words “income earned from fees for services rendered” with “fees collected” in order to provide clarity on the nature and source of funding.

Clause 14

This clause seeks to replace section 20 of the Act by providing that the Service may charge such fees for services rendered as may be prescribed by the Minister, after consultation with the National Health Council and the Minister of Finance. In terms of the proposed definition of “prescribed”, the Minister may, by regulation, prescribe the fees that may be charged by the Service. The current position was that the Service determines the fees after consultation with the Minister.

Clause 15

This clause seeks to repeal section 25 of the Act. The provisions of that section have become redundant due to the proposed insertion of section 10A in the Act.

Clause 16

This clause seeks to amend section 27 of the Act. The section was to be amended to empower the Minister to make regulations regarding, amongst others, anything that must or may be prescribed in terms of the Act. The Minister makes the regulations after consultation with the National Health Council. Before the Minister makes any regulation, the regulation must be published in the Gazette for at least one month, calling for interested persons to submit their comment.

Clause 17

This clause proposes transitional provisions in respect of the current Board and chief executive officer of the Board.

Clause 18

This clause provides for the short title and commencement date.



Dr P Maesela (ANC) wanted clarity on clause 14. If the Minister did not consult anyone, then how did he determine and prescribe fees that may be charged by the Service?

Dr Pillay replied that what usually happens was that the Service determines what it anticipates, based on its costs and expenditure. This was proposed to the Minister, and he discusses this with the National Health Council, and they look at whether this was reasonable and appropriate. Thereafter the Minister shares this information with the Minister of Finance, and if the Minister of Finance agrees, then this becomes approved.

Dr Maesela wanted to know why this was not in the Act.

Dr Pillay replied that the Act states that the Minister had to consult with the Minister of Finance.

Ms Kopane wanted to know the current status of the suspension of the NHLS’s former CEO and chief financial officer (CFO). In addition, why was organised labour not part of the board?

Dr Maesela proposed a different sequence for a few clauses.

Chairperson asked who determined the charges for a full blood count.

Professor Eric Buch, Chairperson, NHLS, replied that the NHLS determined its fee proposals based on a cost recovery basis, and then recommends an annual increase to the Minister of Health, and the Minister was the one who approves the increase based on the motivation from the Board. This also needed to be consulted with the provinces as well. At the moment, some of the fees of the NHLS were a bit imbalanced -- in some, the Service overcharges and in others, they undercharge -- but they were a lot cheaper than the private sector, anyway.

The Chairperson asked for clarification on the duplication of charges when tests were duplicated.

Professor Buch replied that the Director-General would talk about the development of the unit patient identify, which the NHLS would be involved in. At the moment there were two provinces that had already implemented the unit patient identify to prevent the duplication tests, and the NHLS was working on systems to avoid duplication.

Ms Motsoso added that they were also working on a different model for identification. There were two problems -- one was that provinces did not file details, and as a result when blood results came back they did not have the details of the patient, while the second was that sometimes a doctor ordered a blood test and did not include the details. The system at NHLS did not pick up such duplications. Looking at another problem, there were certain tests that could never be done at the primary healthcare level. They were working on an analysis to inform the healthcare sector on which tests could be done where. The sector was also working on a plan to balance the fees charged by NHLS.

The Chairperson wanted to know how and where the NHLS would get funding for the other functions that they would perform.

Ms Motsoso replied that on the cost recovery basis, the NHLS did not just pay for its own staff and expenses, it also had to cover the National Institute for Communicable Diseases (NICD), the National Institute for Occupational Health (NIOH), and the National Cancer Registry. These were the core business of government, and were institutions that had different governance, and different countries invested in them because they protected the country, so they needed to be functional when there were virus outbreaks. In essence, these institutions needed to be able to sustain themselves, render services, conduct research, pay expenses and be able to provide training, because they were not subsidised. They needed to be budgeted for, as they could not operate on a cost recovery basis, and they needed to be ready at all times.

Dr Tim Tucker, Board member, NHLS, in terms of the NHLS Amendment Bill, the objects remained the same -- rendering services, teaching and research. The three pillars of the NHLS would remain, even though there was a spinning out of the National Public Health Institute of South Africa NAPHISA.

Ms Motsoso added that the institution could not use the cost recovery method to provide training, but training must be provided for. The functions would be separated too, and this needed funds as well.

Dr Pillay said that the NICD and NIOH costs were not related to the laboratory costs, so when funding this there had to be enough tests, and to make enough income, there had to be direct access to the public.

The Chairperson wanted to verify whether this Act was trying to address income-related issues.

Ms Motsoso replied that there would be a new funding model, and this had been discussed with the Treasury.

Professor Buch also said that NAPHISA was merging with other institutions into one for a public health mandate, and this needed funding. NHLS had three functions -- to provide laboratory services, especially for the poor, to provide a platform for the training of students in this field, and all the university departments in the pathology discipline had to do research, together with employees. In terms of laboratory services, this not only needed funding, but training as well. The problem with this was that it was very dependent on provinces, and this was a high risk.

Another problem was that the NHLS does many tests and charging needed to be balanced. As a result of this, a new model, the Modified Reimbursement Model (MRM), worked on the costs of the tests. It would create stability for the NHLS, and was a simpler system. NHLS was also working on a model for academics. The other income would be research funding. The NHLS had a particular mandate to serve the poor, not to make huge amounts of profit – that was for the private sector, while NHLS was a public entity.

Professor Buch replied on the suspension of the CEO, CFO and the Supply Chain Manager, saying he could not divulge much because the cases were ongoing, and this would jeopardise the cases. However, dates had been set but they kept being postponed, and currently there was new date set for the CEO and CFO. It had been mentioned that the CEO and CFO had gone to the Commission for Conciliation, Mediation and Arbitration (CCMA) to lay a charge against the NHLS, and the NHLS had in turn gone to the CCMA, and the outcome was that there would be arbitration. The Head of Internal Audit had also been suspended, based on misleading the Board. In addition, this was not to say that these were the only people who were involved, as the investigation was still ongoing.

There was a new acting CEO and CFO in place to replace the previous ones. The Board had also put in extra time to ensure the success of NHLS, together with the acting CEO and CFO.

Ms Motsoso commented that the funding model for NHLS was not sustainable. One of the reasons why the law had to be amended was to change the way NHLS received its funds, because currently they received income through services charged, and this was imposed on them by law.

Chairperson thanked the DoH, and said these questions and concerns had been raised because these institutions were the ones that ensured that the sector was able to provide these services to the poor. Questions of governance would be asked continuously, because it was crucial. In the near future, there should be a meeting for interaction with public entities to see how they were functioning.

Professor Buch commented that the Minister and the Director-General had been exemplary in their support, and they have made it clear that corruption had to be dealt with to ensure clean governance. They had also provided guidance for the NHLS too. His function as a Chairperson was to keep them updated at all times.

Ms Motsoso also commented that the patients at Esidemeni had had to be moved from the non-governmental organisations (NGOs) back to the institutions that were appropriate for their care. The NICD had been used for this. She felt that she had to acknowledge the institution, because this could not have happened without them. This had been treated as an emergency and they had done an excellent job.

Chairperson thanked everyone, and concluded with the details for the NAPHISA meeting the following day.


The meeting was adjourned.                                                                                                                     

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