Medical Innovation Bill: rejection; Department of Health Quarter 2 performance

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22 November 2017
Chairperson: Mr A Mahlalela (ANC) (Acting)
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Meeting Summary

The Medical Innovation Bill, initially tabled by the late Dr Mario Oriani-Ambrosini as a Private Member’s Bill to legalise the use of cannabis for medical purposes and for beneficial commercial and industrial uses, was considered and rejected by the Committee. This was because the introduction of the Medical Innovation Bill had already resulted in significant developments. As a consequence of the Bill and Committee deliberations, the Department of Health amended the scheduling status of registered cannabis products for medicinal use and this was gazetted on 17 November 2017. The Department of Health has finalised the guidelines on the cultivation and manufacture of cannabis for medicinal and research purposes. On the 5 November 2017, the Medicines Control Council published licence application forms on its website to cultivate, manufacture or import cannabis for medical and research purposes. Interested parties can now apply for a licence.

Mr Narend Singh, Chief Whip of the IFP, of which Dr Ambrosini had been a leading Member, expressed his sincere appreciation for the manner in which the Committee had dealt with the matter. The Bill represented a major policy shift in the use of cannabis products for pain relief, and brought the country into line with international players. 

The Committee heard that the national Department of Health (DOH) was having problems with National Treasury (NT) in many respects. They did not agree on the financing vehicle to be used for the National HeaIth Insurance (NHI) interim fund. Where Treasury leaned towards using it in a programme-structured vehicle, where it would become part of a budget and a conditional grant, the Department of Health said they needed the fund to work with the government agency vehicle. Perhaps then it would be able to employ the 10 000 available candidates, including 1 000 unemployed graduates, nurses and doctors, as well as allied health professionals, health promoters, environmental healthcare workers and around 8 000 community service employees who would finish their internships this year, to provide services in the health sector on 1 April next year. 

There were medical students awaiting internships. The problem was with provincial budgets. For example, the Western Cape had 80 students allocated, but had a budget for only seven. The DOH realised the urgency of the matter, and the Minister had made it his personal project by formally writing and calling Members of the Executive Council to plead with them to accommodate students. Other concerns regarding Treasury were its recommendations that the DOH should not fill any additional posts, and that it should focus only on larger maintenance projects as opposed to a mix of big and small projects.

The DOH’s view was that the matter of filling posts should be discussed with the Portfolio Committee through the Appropriations Committee. The widely publicised oncology crisis in KwaZulu-Natal had been the result of the province freezing and abolishing posts in order to look good on paper. This had led to a Human Rights Commission investigation and lawsuits. The Department would deal with the larger maintenance issue in terms of the Public Finance Management Act (PFMA).
Issues raised by Members were the need to counter the incidence of malnutrition, particularly in the rural areas, and to increase efforts to educate communities on proper nutrition; the DOH’s response to the resurgence in malaria cases in Limpopo and Mpumalanga; and concern that further training of Basic Ambulance Assistants was not being carried out. 


Meeting report

Medical Innovation Bill [PMB1-2014]: rejection
The Acting Chairperson said that the Committee Report rejecting the Bill had been circulated. Parties had been given an opportunity to provide input and this had been incorporated into the report before them. More input may be given at this meeting.

Once the Committee Report was agreed to, the process for rejecting a Bill required that a motion must be tabled in the National Assembly.

The Chairperson went through the Committee Report page by page so the Committee could agree to the proposed changes in the report and make any further changes:

• The Medical Innovation Bill [PMB1-2014] (National Assembly – section 75) had been introduced and privately tabled to the Committee on 9 September 2014.  
• The provisions of the Bill were listed from 1.1 to 1.6 in the the Committee Report. The next part dealt with what had happened when the former Member, Dr Mario Oriani-Ambrosini, had passed away. The Bill had then been re-introduced by Mr Narend Singh, Chief Whip of the Inkatha Freedom Party (IFP) at a briefing on 17 September 2014.
• Various inputs from clinical experts and medical researchers, including the Central Drug Authority, had been received. More input from the Department of Health (DOH) had been received on 23 November 2016, 13 September 2017 and 15 November 2017.
• The Committee acknowledged that the Bill resulted in significant developments. As a consequence of the introduction of the Bill and Committee deliberations, the Department of Health amended the scheduling status of registered cannabis products for medicinal use and this was gazetted on 17 November 2017. The Department of Health has finalised the guidelines on the cultivation and manufacture of cannabis for medicinal and research purposes. On the 5 November 2017, the Medicines Control Council published licence application forms on its website to cultivate, manufacture or import cannabis for medical and research purposes. Interested party can now apply for a licence.
• As a direct result of the positive developments in the legal framework, the Committee adopted a motion that the Private Member’s Bill is not desirable, as the objectives of the Bill have been addressed through the amendments to the legislative framework.
• However, as a direct result of the positive developments in the legal framework on the use of cannabinoids for medical and research purposes, the Committee had adopted a motion that the legislation was not desirable, as the purposes of the Bill had been addressed through the amendments to the legislative framework as outlined.

No further changes were made and the Chairperson asked if the Committee could adopt the report.

Dr P Maesela (ANC) asked if the Committee was confident to talk about the import and export and growing of cannabis. Referring to a part of the report on this aspect, he asked if that was not in the Department of Agriculture’s sphere.

The Chairperson replied that that was something that had been published and gazetted by the Department of Health (DOH), and could be found on its website. The Department may import and export cannabinoids for medical research. It was not for commercial or industrial purposes.

Mr Maesela moved the adoption of the report. Ms C Ndaba (ANC) seconded.

The Chairperson read the motion of desirability which said that the Portfolio Committee had considered the subject of the Medical Innovation Bill and using the joint tagging mechanism of Section 75, the Bill had been tabled, introduced and referred to the Committee in September 2014. The Bill sought to make the intervention to legalise the use of cannabinoids for medical purposes and regulate cannabis for commercial and industrial use. After due deliberation and in terms of the relevant rule, the Bill was then put in front of the Committee to vote on it.

The Committee unanimously voted to reject the Bill.

The Acting Chairperson explained that the report would appear in the Announcements, Tablings and Committee Reports (ATC) and it would possibly be part of the following week’s National Assembly programme. It was agreed that the motion on the Bill would be debated. He thanked Mr Singh for arriving at a win-win situation.  

Mr Singh replied on behalf of the late Dr Oriani-Ambrosini and his IFP colleagues, expressing his sincere appreciation for the manner in which the Bill was dealt with. He expressed thanks towards the Chairperson of the Committee, in her absentia, and all the Committee Members for a major policy shift in the use of cannabis products for pain relief, which brought the country in line with international players.

Department of Health: Second Quarter Performance Report.
Ms Malebona Matsoso, Director General (DG): DOH, said four provinces had received unqualified audit reports. These were different provinces from the ones that had received unqualified audits previously, as the Free State had improved.

The report covered the Department’s six programmes, in which there were a total of 95 quarterly targets and 114 total targets.

The strategic objective to ensure efficient and responsive human resource services was not achieved. The vacancy rate was 3.1% instead of 10%, and the health attaché in Cuba had not signed his performance agreement. The objective to provide support for effective communication by developing an integrated communication strategy and implementation plan was overachieved, as 20 more communication interventions were implemented than the quarterly target of 14.

Health Planning and Systems Enablement

The draft National Health Insurance Bill was presented to the Forum of South African Directors-General (FOSAD) social cluster in September 2017 and was recommended for submission to Cabinet. The target to establish a national stock management surveillance centre to improve medicine availability was exceeded, with 188 more health facilities reporting to the DOH. The target for the number of patients receiving medicines through the centralised chronic medicine dispensing and distribution (CCMDD) system was also exceeded, with 467 084 more patients. The strategic objective to develop and implement an integrated monitoring and evaluation plan aligned to health outcomes and outputs contained in the health sector strategy was not achieved, due to delays in sourcing funding for the evaluation. Workshops for three provinces on guidelines to manage complaints, compliments and suggestions for the public health sector and guidelines to manage patient safety incidents in the public health sector, were postponed as more time was required for provinces to prepare implementation tools and intra-provincial training workshops.

HIV & AIDS, TB and Maternal Child and Women’s Health (MCWH)

The strategic objective to improve access to cervical and breast cancer treatment in South Africa was not achieved, as guidelines were delayed due to readiness assessments that needed to be done, as resolved by the National Health Commission (NHC). The provincial remedial plan in the Eastern Cape to reduce severe acute malnutrition was not yet approved. The revision of the “Road to Health” booklet was not achieved due to delays in procurement and printing. The exocrine pancreatic insufficiency (EPI) coverage survey was not conducted, because the process of mobilising financial resources took longer than anticipated. Targets that were overachieved included the amount of hospitals implementing “finding TB cases actively, separating safely and treating effectively” (FAST), and the number of primary health care (PHC) facilities assessed to determine functionality.

Primary Health Care (PHC) Services

Some of the objectives not being achieved for the fourth programme included:

Regulations relating to the labelling and packaging of tobacco products and smoking in indoor and outdoor public places being developed;
The random monitoring of salt content in 13 foodstuffs;
The total elimination of malaria by 2018. There was an increase in malaria cases following outbreaks in Limpopo and Mpumalanga. The DG said this was due to dichloro-diphenyl-trichloroethane (DDT) not being used;
Regulations on organ transplant and dialysis were not developed.

Hospitals, Tertiary Services and Workforce Development

The most deviations from the target breakdown was seen under the strategic objective, “to improve the quality of health infrastructure in South Africa”.  Most other objectives under this programme were also not achieved, including:

Ensuring quality health care by improving compliance with national core standards at all central, tertiary, regional and specialised hospitals.
Increasing capacity of central hospitals to strengthen local decision making and accountability, to facilitate semi-autonomy of 10 central hospitals.
Developing and implementing health workforce staffing norms and standards (the piloting of normative guides could commence only after they had been finalised).
Improving the management of health facilities at all levels of care through the Health Leadership and Management Academy.
Ensuring access to an effective delivery of quality Emergency Medical Services (EMS), where it was seen that most staff needed to be up-scaled from Basic Ambulance Assistants (BAAs).
Contributing to a comprehensive and inter-sectoral response by government to violence and injury, and ensuring action.
Providing food analysis services, as there were food groups where antibiotics were used, which then builds up a basis for resistance.

Health Regulation and Compliance Management

Under the last programme, a Chief Executive Officer (CEO), executive managers and committees had not been appointed yet in respect of the objective to establish the South African Health Products Regulatory Authority (SAHPRA).

Mr Ian van der Merwe, Chief Financial Officer (CFO): DOH, presented the Department’s financial performance. Up to the second quarter, it had spent R21.1 billion (49.5% of the total annual budget), R522.3 million less than projected.

Overall spending of conditional grants by the provinces was within the current norm of 50%. Overall spending on the Health Professions Training grant had also improved in the current financial year, although all provinces except KwaZulu-Natal (KZN), Limpopo and the Western Cape were under-spending. This was attributed to:

Delays in the payment of R1.1 million to Rhodes University, and R42 million to Walter Sisulu University.
Delays in the payment of invoices on medical supplies and medical equipment.
The late submission of invoices by the University of Pretoria; and
Delays in the procurement of medical equipment.

Overall spending for the National Tertiary Services grant had improved from 48.3% to 50.5%, which was within the acceptable norm. The same applied to the comprehensive HIV/AIDS & TB grant.

Overall spending for the Health Facility Revitalisation grant had declined in the current financial year. All provinces except North West -- which was over-spending due to active projects running ahead of schedule -- were under-spending. This was attributed to delays in the appointment of scarce skills posts, slow procurement and delivery of medical equipment, and slow performance of payment of contractors’ invoices in all under-spending provinces.

The NHI indirect grant -- the CCMDD and health professionals (HP) contracting component -- was spending above the norm, and virement shifting for R200 million had been requested from National Treasury (NT). This was, however, not sufficient, and the general practitioner (GP) contracting portion had been under pressure with R125 million. The infrastructure, ideal clinic and human papillomavirus (HPV) components of the NHI indirect grant were all spending below the norm. As for the Information Systems Component, a virement shifting had been approved, the process of procurement had begun, and R77 million had already been committed. Expenditure was expected to improve in the next quarter.

Mr van der Merwe said that the NOH would continue monitoring expenditure for all grants. It would be considered that provinces projecting under-spending would have to surrender funds to provinces that had financial pressures.


Dr Maesela said he had a sense of a calamity about to happen, combined with a sense of improvement that was always promised to happen -- but nothing actually happens. Perhaps it was time to look afresh at what was expected to work and what was actually working. He asked why vacancies were not being filled, saying warm bodies were better than robots. The DOH should not be telling them that they were sourcing warehousing in Mpumalanga -- referring to NT being requested to shift an amount of R6.7 million to capital for the procurement of capital equipment and hardware required to support the Warehouse Management System (WMS) project. The DOH could not just outsource anything it liked. He said that perhaps it was a matter of legislation, because if one allowed people to do certain things, they did it. He said the human resources shortage was a perennial problem and asked the DOH to please do something about it.

Why was malnutrition rearing its ugly head again? Was it because of the migrant labour system? If malnourished people were arriving in the Eastern Cape, it was not only the DOH’s problem but also a labour and social problem, which meant the DOH had to push to work with other Departments. Malnutrition could lead to children having problems later in life, when their cognitive abilities were destroyed. If this was a trend that was increasing, other Departments could and must help to do something about it. He referred to a report about the nutrition strategy and asked what additional measures were in place and if the Committee could be provided with an audited municipality nutrition report. Government could not keep giving money for meals in schools without monitoring -- what was done with the money? He had visited schools unannounced and seen that children were not given what was on the menu and when asked why, he was told that the schools did not have facilities to store food and therefore they just went to the market to buy what there was. Also, less food was cooked than should be cooked for the money being paid. Municipalities should monitor this.

Dr Masaela asked whether the fact that South Africa had malaria again after it had been almost non-existent was related to the fact that the country had neglected to train chemical engineers? One could not keep saying that South Africa must buy DDT elsewhere.

He said the problems of Cuban trained medical personnel were repeating themselves. He referred to clinical associates that were trained at two universities and then were abandoned and forgotten after their training. That matter must be looked at.

The fact that Basic Ambulance Assistants were yet not further trained was a scandal, and asked the DOH to do something about it very urgently.

Ms Ndaba said she had been approached by medical students who were awaiting internships. It seemed that the provinces could not place them because of a problem in the national DOH, where their placements were overseen. These students had certificates, but had not yet been placed in internships. Why was this process so slow when the country was short of doctors? She had forwarded the students’ concerns to the Chairperson and other Members, as this was a matter that needed to be urgently addressed.

She was very concerned at the recommendation made by NT that the DOH should not fill any more posts. There was no way to deliver quality healthcare when the Department was short of personnel. It seemed to her the Committee was not getting any response on the matter, and said the Department should share with the Committee how they would deal with it.

Can the Department update the Committee on the effectiveness of the method of procurement through the Office of the Chief Procurement Officer?

She was also concerned over the NT recommendation to have the NOH focus on large maintenance projects instead of a mix of small and large projects. How would the Department respond to that recommendation?

How had transfers not being made to Aids NGOs, as reported in Programme Three, affected the functioning of these organisations? In the same programme, how many condoms had been supplied for the period under discussion, and was there any evidence yet that the new Max condoms were increasing actual condom use? Lastly she asked how much the Department spend on international trips and audit fees.

Ms L James (DA) said she had not heard anything on the Eastern Cape and KZN situation -- the lawsuits and oncology crisis‚ where people with cancer struggled to get treatment -- and she asked how the DOH was going about remedying the situation. She said the country could not have malnutrition. Before babies were born, mothers should be educated on breastfeeding and onward nutrition. She agreed with Dr Maesela that meals in schools should be monitored. Implementation and monitoring should go together.

About the role of Ideal Clinics, she said the poor had got to go to these clinics, and asked when all clinics would be Ideal Clinics, because that was when democracy would be enjoyed. Nurses should be placed. She was glad that the DOH was listening to the users and planning according to what the community was expecting. She asked how and where the mass media communication campaign it was running. There had to be education in the community about sugar and diabetes, instead of hitting them with a sugar tax. The community had to be empowered to manage their own health.

Dr S Thembekwayo (EFF) said a letter was under way to the Department about 322 graduates, who had been trained as provincial technical support officers, but were now being frustrated because they had not been placed in employment. She said that delays in procurement and printing were not a good excuse for the “Road to Health” booklet not being published yet, as it needed to be used by the public to access very important information, such as reducing maternal and neonatal morbidity and mortality, improving access to cervical and breast cancer treatment, and reducing the mortality rate for children younger than five. The delays were unacceptable.

What had been the reason for the delay in provinces submitting invoices for the Ideal Clinic revitalisation and maintenance projects, and how would this be improved? What was the reason for the slow progress in the payments for the Ideal Clinic realisation and maintenance peer reviews? She also asked that the Committee be updated on the work of the district mental health teams.

Mr T Khoza (ANC) asked what systems had been put in place to ensure that the provinces which had received unqualified audits retained these unqualified audits. For the provinces that had not received unqualified audits, had any measures been put in place to make sure that they would improve? What strategies for integrated communication and implementation had been employed to reach the poor and those in rural areas? About the postponement of the monitoring report on health facilities that were designated to render services for the management of sexual and related offences, he said that challenges had surely been encountered, and asked for an input on that.

The Chairperson emphasised the issue of health workers who had finished their training and then were not placed in jobs, saying it was extremely important as there was a huge shortage of health workers. He reminded the Department about a report on nurses who had not been placed in employment that had been promised by the Department in February. The Committee was still awaiting a report back on that, and the same went for the response on recently trained clinical associates that Dr Maesela had referred to. Without having an answer on these graduates, new graduates would be entering the system soon.
The Chairperson said the Auditor General had also raised the point about the outsourcing in Mpumalanga that Dr Maesela had asked about, and the Committee thought it would have been resolved by now. What was the problem? What was being outsourced, if the government built its own facility? The outsourcing of EMS was a huge challenge. All the facilities were complaining about response times and so forth.  How long was the NHI evaluation’s first phase – the piloting of innovations for contracting healthcare services - going to take? The DOH should not wait for the phase to be completed before seeing the system was not working. Lessons must be learned even if the DOH was waiting for sources of funding. Periodical and continuous evaluations must take place so that lessons could be learned even while the phases were being completed.

The Chairperson said he was hoping for an update on the matter in KZN, as a report by the Human Rights Commission had also been tabled.

Did the matter of regulations around dialysis mean that the DOH had no policy? He had seen a front page article in a newspaper two months ago, which said that a patient had been made to go and die at home. Was that because there were no regulations? What was the situation -- did it mean public institutions were doing things differently? Was there any system in place?

What were the new regulations from NT, and how new were they? How did they affect procurement processes for infrastructure? Did the new regulations apply to health revitalisation? Because he wanted to go and see the Ideal Clinics in his constituency, he asked for a list of these clinics and where they were.
On the under-spending of conditional grants, the Committee had been given the same reasons since they arrived. There had been no movement on the matter. Was it because of the tender system, which gave certain people preference or prolonged the tender process until the right tender was received from the right people, or were did the problem lie? When would it be changed around?

DOH’s response

Ms Matsosa said a report would be provided on the matter of interns.

She could not answer Dr Maesela on what he was calling “a calamity,” and said the matter of filling posts should be discussed with the Portfolio Committee through the Appropriations Committee, as it was a problem about non-compliance and not meeting audit objectives. What had happened in KZN was that they had frozen and abolished posts instead of filling them because they wanted to look good on paper. The Department had met with doctors and nurses there, who had said that there was no way they could render required the services by themselves. She had wanted the matter discussed because the DOH was equally aggrieved.

On an annual basis, just over 8 000 professionals finished their community service and had to be absorbed. Unemployed graduates with information technology (IT), human resources (HR) and financial skills were supposed to be on an internship programme for a year, and they were kept and paid for with European Union (EU) money. Provinces were asked to absorb them in the category of becoming support teams that actually raised revenue, which could have been portioned to pay for their continued employment. The Head of Corporate Services, Ms Tiny Rennie, would update the Committee on the matter.  

On malnutrition, the report had focused specifically on the Eastern Cape and the North West. The areas of the Eastern Cape were specifically in the former Transkei, OR Tambo and Chris Hani, and were of great concern. The Department would share the nutrition strategy. To the category of clinical associates, who had trouble finding employment, two other categories -- health promoters and environmental health practitioners -- could be added. Ms Rennie would explain more about how the problem that was not even about creating employment, but responding to health issues, must be solved.

Ms Matsosa said that the problem with DDT was that it was produced only in India. Although it was banned in the US, DDT had eliminated the problem of malaria in Europe and where it was used for soldiers. She expressed the hope that the Southern African Development Community (SADC) countries would take a firm stand on the issue surrounding the use of DDT.
The DOH had made a proposal to NT of a project for reducing the average size of people in the country to a size 36, as part of getting ready for the NHI, but the proposal, as well as the idea of reconfiguring the Department into teams that focused on the performance of the health system, diseases, primal health care et cetera, had been turned down. This was a source of great frustration for the Department.  

She confirmed that the medical students had accurately communicated their situation to Ms Ndaba. She referred the Committee to a column in the presentation in which it was stated that the Western Cape, for example, had been allocated 80 students, but they had a budget for only seven. Some provinces, like Gauteng, had not even communicated yet to the Department how many student intern doctors they could take. The DOH realised that there should not be a situation where these young students could not be accommodated, and there would be a meeting on the matter the following day. Minister Aaron Motsoaledi had made it his personal project -- also regarding pharmacists in the same situation -- by formally writing and calling members of the executive council (MECs) in the country to accommodate students, as it was what the law required for the students.

She said that 88 million male and 4.04 million female condoms had been distributed in the second quarter.

She agreed that a solution on HR funding was needed in the country. The DOH had met with community services’ allied health workers, including dieticians and physiotherapists. These workers said they wanted to work for the government. When looking at the data, the Department saw that over 500 000 learners needed the services of these allied health workers. The Department had then written to NT and asked them, as a part of the NHI programme, to have a special fund in order to employ these workers whose services were needed. Currently there was a dispute on what the funding vehicle should be. The CFO would explain the several options, but having a grant was not workable and would even undermine the very notion of the NHI.

Because of financial constraints the DOH’s policy regarding international trips was that trips were approved only when they were funded.
She agreed with Ms James that education on nutrition was needed, and the DOH needed to go beyond pregnant women and target crèches and primary schools as well. Some NGOs were not given adequate money to buy appropriate food, and some not even given any money. The DOH had proposed to NT that there should be a move from a sugar tax to a levy that would be used to create an education fund, which would also give an opportunity to use health promoters.

She said that the DOH had 52 districts, and the aim was to have a mental health district team in every district. Some districts were provided with support at the provincial and hospital level, but that was not sustainable as the psychiatrists, for example, should also work in the hospitals. Because every single province was assessed, there were teams covering three provinces each to look at the status and how to assist. Where possible, national support would have to be provided.
The DOH worked with the former Auditor General and the South African Institute of Chartered Accountants (SAICA) to help four provinces achieve clean audit outcomes, but it could provide support only where assistance was welcome and agreed to. For communication in rural areas, the DG believed that health promoters could offer that kind of support. What was needed was for the NT to create a vehicle. The 500 000 children that had been identified could be started with.

The Department was planning to absorb just over 1 000 unemployed graduates, including those Dr Thembekwayo had referred to, as well as nurses, doctors and allied health professionals. This also included foreign doctors who could not go back to their countries as they had got married here. To this must be added health promoters and about 400 environmental healthcare practitioners, plus around 8 000 community service employees who would finish their internships. That amount to 10 000 who were ready to render their services on 1 April next year. According to the DG, that could be done if there was agreement on changing the model and agreement on the funding. Support and commitment was needed.

Ms Matsosa referred to the problem of clinical associates who were needed at the time to work in district hospitals. She still wanted to understand, with the country producing doctors and sending 3 000 doctors to Cuba to be trained, whether the clinical associates were really needed, for in South Africa professional nurses were assisting doctors.  Pharmacy technicians fell into the same category. Why were they needed, when pharmacy assistants were already at work? The question had been answered that the qualifications for pharmacy assistants were poor, but she argued that then the qualifications issue must be resolved. Clinical associates and environmental healthcare practitioners must be employed in provinces and paid for through a national fund. The NHI fund in its interim form could do that, and would demonstrate the potential of the fund.

The DG concurred with the Acting Chairperson that EMS should not be outsourced, saying that there was evidence in the Free State, where maternal mortality had gone up by 50% when EMS was outsourced.

Regarding the NHI pilots, evaluation had to look at the programme broadly. The DOH had been reporting periodically, and these reports were available.

Mr Van der Merwe, responding on financial matters, said that there were four vehicles to use for the NHI interim fund: a trading account; as part of a programme structure and voted funds; a public entity (which was more long term); and a government agency. NT was pushing for programme structure where it would become part of a budget and a conditional grant with two legs -- a direct and indirect grant -- but the DOH was leaning towards the government agency vehicle. Some of the legalities still had to be worked out.

About the NT recommendation for larger maintenance projects, it was true that the DOH did more maintenance -- phase 2 maintenance, which was classified as expenditure that added value to the life of the asset -- than larger projects. DOH could deal with it in terms of the Public Finance Management Act (PFMA).

Most of the NGOs that did not receive funds were either late with their annual reports or financial statements, and they had to give the DOH certificates that they had sufficient financial systems in place before funds were transferred. Some NGOs also wanted to retain unspent funds, and that had to be applied for and approved.

The DOH had spent just over R4 million on international travel and around R14.3 million on audit fees in the last financial year. The budget for audit fees -- both the audit of legality and performance audit – had been R24 million.

The CFO was convinced that after the intervention with provinces and their audits, there would be at least six provinces with unqualified audit opinions.
The new NT regulations had to do with project approval processes. Feasibility studies were needed and the DOH had to go back to NT with variation orders.

Ms Matsosa answered the question about the policy on organ transplants and dialysis, saying that the DOH was increasingly getting requests from foreigners for organ transplants, and that the policy on dialysis was largely informed by one constitutional court case.

Ms Rennie said that progress had been made in KZN by a direct intervention with oncology equipment. An order for a new oncology machine had been made mid-October, and the Department was now waiting to hear from providers when they were bringing the machine. The Department would go to the KZN hospital in the following week to ensure that infrastructure was being prepared, as there was a problem with a ceiling where the machine had to be installed. The hospital was on the verge last week of signing with the service provider to repair and maintain the second machine. The DOH and the provincial department were mindful of the challenge of human resources, as oncologists were needed to operate the machines. Critical posts had been advertised and would be filled in a joint effort between the hospital and the university, thus regaining accreditation. The other matter in the province involving HR and supply chain management and procurement had been dealt with.

Having realised the high cost drivers of the health sector -- linen and laundry, catering, cleaning services, waste management and medical equipment -- the DG had started a special project a couple of years ago that included a pricing cap, such as not buying a loaf of bread for more than R16. This would be implemented in April 2018.

Ms Rennie said mediation on the law suits was a grey area for the DOH, as the provinces were all dealing with these matters differently. Mediation had been adopted by the National Health Council, but the provinces would decide on the approach each took. The DOH was working on terms of reference in order to find universal ground, and hope that it would be adopted as a guide.

Mr Gavin Steel, Chief Director: Sector Wide Procurement, ‎National Department of Health, said that in Mpumalanga, a notice for services had been put out for contracts. The DG had written to the Premier and the Head of Health in the province, and the outcome had been that the notice was withdrawn. The National Department was in the process of migrating Mpumalanga’s IT system to the G-governance system, which would put the Department in a fit and proper position to take over the function of the service provider.

The Department had just reached 1.9 million patients who used the Centralised Chronic Medicines Dispensing and Distribution (CCMDD), and 40% of those patients were living with HIV.

Mr Steel said that unlike medical practitioners, pharmacy internships were not statutory, but the number of posts was decreasing over time which was a problem, because the Department saw that a pharmacist starting in the private sector would most likely stay in the private sector, and vice versa. In the previous year, the Department had absorbed graduates as interns, also in the private sector pharmacies that worked with the CCMDD programme, so all interns were absorbed.

Dr Gail Andrews, Chief Operations Officer (COO) said that as the Chairperson had pointed out, any project that was set up had to be monitored and evaluated through the entire process. Throughout the five years of the first phase implementation of the NHI, the DOH had been monitoring progress and each year an evaluation report was produced that was shared with the Committee. The final evaluation, at the end of the five year process, was much more in-depth and broad, and was linked to a budget, which meant the same in-depth and broad evaluation could not be done each year. Specific objectives of the evaluation looked at what it would take to scale-up successful interventions and to establish collaborative and coordination mechanisms that would be required to facilitate the scale-up of phased implementation of the NHI. For the bid adjudication process, everything had been approved. The DG must still sign the service level agreement. The evaluation process was expected to be completed, with a report delivered by October 2018.

Dr Massoud Shaker, Head: Infrastructure, National Department of Health, said that one of the major areas of deficiency in the utilisation of the relevant grant was the new regulation of standards for infrastructure procurement and delivery management. There were attempts to link the regulation to Infrastructure Delivery Management Systems (IDMS), to be binding for national departments, provincial departments, municipalities and Schedule 1, 2 and 3 entities, with the huge regulation of authorising and enabling NT to provide approval and certain peer review and interaction at the full cycle of infrastructure development. Even the preparation of business cases and the appointment of clinical planners would need to be approved by NT. In nutshell, it meant that NT was assuming the oversight responsibility of the Department. Whenever there was a regulation, there must be enablers to be implementers. Dr Shaker said that the DOH needed time and manpower in order to comply with the high standard of regulatory matters, otherwise it would result in delay from the pre-implementation level to the design level, to the procurement and to the implementation level - both for fixed and removable assets.
He said the Department had been lamenting about capacity in the provinces for many years, although some provinces had achieved a great deal, but there still were many problems, such as advertising and applications. On average, the Department was sitting with about 20% of the total infrastructure unit, which was a problem that had been mentioned for several years. The Department had to operate in more systematic and supportive way, and it was definitely affecting the delivery of infrastructure. When looking at performance, some of the goals of infrastructure were not linear, and rather an S-curve. If over-regulation was put in place, the Department was not ready yet to make sure it was achieved. Dr Shaker said he had prepared a presentation on the matter that offered more detail.

The Chairperson thanked Dr Shaker and said that the analysis might be needed.

He thanked the DG, but pointed out that it would have been expected that some of the comments that had been made at the meeting would have already been made when dealing with Budget Review and Recommendation Report (BRRR) process. Then the NT would have been compelled to respond to whatever Parliament recommended. However, because that had not been done, these comments and concerns were not appearing anywhere. It remained now the Department’s matter with the NT.

The meeting was adjourned.

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