National Health Laboratory Service Amendment Bill: briefing; Committee Report on Malmesbury District Hospital visit

Meeting report

National Health Laboratory Service Amendment Bill [B15B-2017]: briefing

Ms T Mphambo-Sibhukwana (ANC), NCOP Permanent Delegate, said that in 1994, after the first democratic elections. Minister Dr Nkosazana Dlamini-Zuma had appointed a task team to investigate and make proposals for the restructuring of laboratory services. The largest component of public laboratories was the South African Institute for Medical Research (SAIMR), which had been established in 1912 and formalised in a ‘Founding Agreement’ in 1917. The two parties to the agreement were the Department of Health (DoH) and the Chamber of Mines. The other laboratories had been established by the several homeland and provincial administrations, as well as medical schools of universities, and these were managed largely by the new provincial administrations.

After 1994, the public health laboratory services were fragmented owing to historical developments and policies. Laboratory services were non-existent in former homeland areas, with the exception of KwaZulu-Natal province. This resulted in provinces being dependent on the SAIMR for the provision of laboratory services, and by 1998 the SAIMR was insolvent due to poor payments from the provinces.

Following extensive deliberation, the Health MINMEC -- a committee comprising of the Minister of Health as Chairperson, and the nine provincial Members of Executive Councils responsible for health -- resolved that owing to the poor state of laboratories within the SAIMR and the provincial DoHs, there was a need for greater equity in access to health care and thereby within laboratory services, and a need for a uniform and coordinated laboratory service.

A provincial model of the provision of laboratory services was not appropriate, and all laboratory services comprised of the SAIMR, provincial laboratories and homeland laboratories had to be amalgamated.

Two of the major questions that had delayed the amalgamation of all of these services and their reorganisation were whether to privatise, nationalise or manage the service as a parastatal, and the ownership of the SAIMR as an existing institution.

The MINMEC -- now the National Health Council -- resolved in October of 1998 that the National Health Laboratory Service (NHLS) would be a parastatal organisation.

The NHLS was established in terms of the National Health Laboratory Service Act, 2000 (Act No. 37 of 2000) to provide a quality affordable and sustainable health laboratory and related public health service. The objectives of the service were to:

• Provide cost-effective and efficient health laboratory services to (i) all public sector health care providers, (ii) any other government institution inside and outside of the Republic that required such services, and (iii) any private health care provider that requested such services;
• Support health research; and
• Provide training for health science education.

While the NHLS had achieved certain objectives, such as consolidation and strengthening of laboratory services, infrastructure and improvement in access, and offered high quality teaching, training and research structures, it was the overall leadership and governance of NHLS that had created problems and challenges.

The problems and challenges were:

• Leadership, management and governance;
• Service versus business. Laboratory tests were primarily conducted to generate revenue and not from a service perspective, resulting in complications;
• The interface between the NHLS and external stakeholders, which included the managing of reconciliations, gate keeping and debt management;
• Using fee revenue to fund national functions; and
• Poor internal policies and controls.

The problems undermined the good efforts made by the NHLS since 2000, and had started to impact on the service delivery.

It had been decided to amend the NHLS Act, 2000, so as to:

• Define certain expressions and to amend or delete certain definitions;
• Make the Preferential Procurement Policy Framework Act, 2000, applicable to the NHLS;
• Adjust the objectives and duties of the NHLS;
• Strengthen the governance and funding mechanism of the NHLS; and
• Provide for matters connected therewith.

The proposed amendments were:

Clause 1

This clause sought to amend Section 1 of the Act by deletion of the definition of “teaching environment” (the expression was never used in the Act). It also sought to amend the expression of “chief executive officer” and add the definitions of “diagnostic health laboratory services”, “National Health Council”, “prescribed” and “private health sector.”

Clause 2

This clause sought to amend Section 3 of the Act by including the Preferential Procurement Policy Framework Act, 2000 (Act No.5 of 2000) to apply to the NHLS, and also to provide that the Board of the NHLS was the accounting authority of the service.

Clause 3

This clause sought to amend Section 4 of the Act by adding the word “diagnostic” to paragraph (a) to ensure that the NHLS’s core mandate was to provide diagnostic health laboratory services to the public. Furthermore, paragraph (b) was amended by inserting the word “support”, and deleted the word “provide” to reduce the burden on the NHLS by giving the NHLS a supporting role, instead of it being the provider of training for health science education.

Clause 4

This clause sought to amend Section 5 of the Act by making it clear that the training that must be undertaken by the NHLS must be for its staff members only.

Clause 5

This clause sought to strengthen the governance of the NHLS and the accountability thereof by replacing section 7 of the Act and provide for the composition of the Board of the service anew. The Board would consist of the following members, appointed by the Minister:

• The chief executive officer by virtue of their office;
• The chief financial officer of the Service by virtue of their office;
• Three members representing -

1. the national Department of Health;
2. the Department of Science and Technology, nominated by the Director-General of that Department;
3. the higher education sector, nominated by the Council on Higher Education;

• Six members who must have extensive experience in the fields of:

1. commerce, finance, auditing and economic matters;
2. corporate management;
3. public health;
4. diagnostic laboratory services;
5. legal matters; and
6. epidemiology;

• One representative of organised labour.

It was further proposed that the Board be accountable to the Minister.

Clause 6

This clause sought to amend Section 8 of the Act in order to align it to the new section 7 and delete reference to “[and must ensure that appropriate laboratory professionals are appointed]”. It was also proposed that the words “and must ensure that the appropriate laboratory professionals are 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 clause sought to replace section 9 of the Act and to empower the Minister to appoint the Chairperson and the Vice-Chairperson from the members of the Board amongst the non-executive members of the Board. It also provided for the Board, in consultation with the Minister, to designate a Chairperson or Vice-Chairperson amongst the members in the event the Chairperson or Vice-Chairperson was absent or unavailable for two consecutive meetings, until such time that the Chairperson or the Vice-Chairperson were able to resume their functions.

Clause 8

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

Clause 9

This clause sought the insertion of section 10A after section 10, to provide for the dissolution from office of a Board member or the Board under certain circumstances, such as:

• If the Board was unable to perform its duties in terms of the Act or on the grounds of mismanagement;
• If there was a total breakdown in the relationship between the Minister and the Board; or
• If there was a breakdown in the relationship amongst the members of the Board, which rendered the continued effective functioning of the Board impossible.

The clause also provided for appointment of an interim Board within 21 days of the dissolution, consisting of a minimum of three persons, and it was further proposed that a new Board must be constituted within 180 days of the dissolution of the previous Board.

Clause 10

This clause sought 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 as follows:

• Amend subsection (1) by deleting reference to “prescribed” and replacing it with “determined.” The replacement of the word “prescribed” with “determined” was necessary as a result of amendments proposed to section 27 of the Act.

• The clause also sought to amend sub-section (3) to allow for the member presiding at the meeting to have a casting vote in the event of an equality of votes by deleting reference to “in addition to their deliberative vote.”

Clause 11

This clause sought to amend section 13 of the Act by substituting paragraph 1(b) so as to empower the Board to appoint a chief executive officer and any other employees of the NHLS as the Board deemed necessary to the executive management committee.

Clause 12

This clause sought to insert sections 13A, 13B, and 13C in the Act after section 13 to provide for the appointment of the chief executive officer, the functions of the chief executive officer and the accountability of, and reporting by, the chief executive officer.

Clause 13

This clause sought to replace section 18 of the Act by providing that the Minister, in consultation with the Minister of Finance, may prescribe a financing mechanism for the service. It also provides for the funds of the service.

Clause 14

This clause sought to repeal section 20 of the Act. The provisions of that section had become redundant as a result of the new proposed section 18.

Clause 15

This clause sought to repeal section 25 of the Act due to the insertion of section 10A into the Act.

Clause 16

This clause sought to amend section 27 of the Act by inserting the word “Regulations” in the heading of section 27. It also sought to insert two subsections after subsection (3) to allow for the Minister to make regulations after consultation with the National Health Council. The regulations must be published in the gazette for at least one month before commencement.

Clause 17

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

Clause 18

This clause sought to provide for the short title or name of the proposed Act, and the commencement date.

Discussion

Mr D Mitchell (DA) asked if there were rules that guided what a total breakdown of the relationship meant, before the Board would get dissolved. He asked if the Committee could receive a copy of the draft regulations, preferably with a consultation meeting.

Mr B Kivedo (DA) commented that the roles of training and support were very similar in this circumstance. He asked if the universities were responsible for the training, and what the supportive role of the NHLS would entail.

Ms P Lekker (ANC) referred to the diagnostic health laboratory services for the public, and asked how service delivery would be impacted by this. Regarding Clause 13 (financing mechanism), to what extent would it be ensured that the NHLS was self-sufficient.

Ms P Makeleni (ANC) said that the bill seemed to seek to resolve an issue of gatekeeping, but it appeared as if the stakeholder engagement was being minimalised. Would this impact on the engagement between stakeholders and the Board? She asked for clarity on what ‘extensive experience’ would be defined as, and if the Chairperson and Vice-Chairperson would remain as non-executives after their appointment. In Clause 8, what motivated the specification of two consecutive meetings?

Ms M Gillion (ANC) referred to the goal of making the Preferential Procurement Policy Framework Act  applicable to the NHLS, and asked why this had not been implemented if it was amalgamated in 2000. Would this bill ensure that it would be implemented in its full capacity? Could this bill force other provinces also to ensure that this Act reached its full potential in effect? Could the bill help the National Department of Health to ensure that these services reached every corner of the Republic? Would the Board be accountable to the national Minister, and what would the role of the provincial MECs be in the oversight and implementation of this bill?

Department’s response

Ms Mpambo-Sibhukwana said that this was the first briefing by the National Department, and there would be provincial briefings where there would be a mandate that had to be followed. These amendments were what had been discussed by the National Council of Provinces (NCOP). The provinces would still have the opportunity to state their stance when the mandate came into effect -- this was procedural. The public participation still needed to be followed by the Committee.

Ms Nicolene van der Westhuizen, Provincial Laboratory and Blood Coordinator, Western Cape Government Health, said that she had been communicating with the Committee Coordinator regarding the process, and the Provincial Department would definitely be submitting comments, and draft comments had been prepared. As a part of the process, it wanted to hear what the National Department had to say. The public participation had not been finalised yet, and as a part of that process a deadline for comment would be set and communicated to stakeholders.

Ms Mpambo-Sibhukwana said the process that needed to be followed by an NCOP bill was a six week cycle, of which this was the first briefing. For the next stage of the public participation process, the dates would be decided after this meeting. After those comments had been received and reviewed, the Committee would have to formulate a mandate before the final mandate, and that was when a Member would go to represent in Parliament.

The Chairperson referred to Clause 17 and asked what the transitional provisions would entail.

Dr Anban Pillay, Deputy Director-General: National Department of Health, said that the NHLS currently had the requirement that it must deliver services to the public health sector throughout the entirety country. It had a presence in almost every public health facility in the country as of now, either as a laboratory or as a process in which specimens are collected and taken to laboratories. The challenge that the NHLS had was to achieve a level of efficiency while having a national footprint.

He continued that the NHLS bill had been promulgated before the Preferential Procurement Policy was in place, and consequently there was no reference in the NHLS bill to the policy framework. Although there was general compliance with the act, there was difficulty with some of the procurement officials who chose to deviate, particularly when taken through disciplinary processes. At the time when the National Treasury was bringing forward the preferential policy framework, there should have been a consequential amendment to make sure that that would not happen.

Dr Pillay said the reason for the change to a “supportive role” was that the Act effectively implied that for a person who wished to get some form of training in the field, the NHLS would be the institute that provided such training. Technically, the NHLS was not an institution of such a type -- it was a platform that helped to support the training instead.

By ‘Minister,’ it was meant that it would be the National Minister, and perhaps that should be defined as such in the act.

Regarding Clause 5 relating to stakeholders and the restructuring of the Board, in the current NHLS structure where there were provincial representatives, there was conflict. The provincial departments were technically clients of the NHLS, and some of the provincial departments would not timeously pay the NHLS despite being members of the Board. This amendment was to remove that conflict.

Dr Pillay said the legal interpretation of “extensive experience’’ was the normal English understanding of extensive.

Regarding non-executives acting as Chairperson and Vice-Chairperson, the intention here was to make sure that it was clear that certain members of the Board, such as a Chief Financial Officer, could not take that role.

On consecutive meetings, generally within the NHLS this was understood as two days, but it had been found that other organisations had this as three days.

He said that it was a good question asked on what ‘total breakdown’ meant, and the addition of a definition of such in regulations should be considered.

The intention in clause 13 was that the financing mechanism should not place the NHLS at risk, so that the NHLS was appropriately funded by the fiscus so it could deliver its services, at the same time ensuring its efficiency.

The idea behind the part in clause 16 stating that the regulations must be published in the gazette for at least one month before commencement, was that there must be time for public participation.

Transitional provisions were intended to take the NHLS structure in its current form and migrate it into its new form.

Ms Van der Westhuizen commented that the DoH had opened for public comments when the bill was first advertised in 2015, and it had been suggested that in section 16, where it related to the provision which stated that public health sector service providers must purchase laboratory services from the NHLS, that there should also be discretion to procure these services from private service providers. She asked if this comment had been considered by the DoH.

Ms Lekker asked if the NHLS would prescribe fees for the services rendered as a part of its self-sufficiency.

Ms Makeleni said that the Board only accounted to the Minister, and asked where the space for stakeholder engagement would be.

Ms Amanda Torr, State Law Advisor, asked if it was the norm to have a representative of organised labour on the Board, and whether this member would have a vote on the Board.

Dr Pillay responded that that suggestion had been received, and clarified that the bill had gone through the National Health Council where the provincial MECs and Heads of Departments (HoDs) were members. If the NHLS were to be the service provider of choice, the agreement was that National Treasury, together with the National Department and National Health Council, would prescribe the fees for the NHLS and in so doing, would have an account of what the costs of delivering the service would be and ensure that the NHLS was far more affordable and efficient than those in the private sector.

He continued that on stakeholder engagement, this bill would require regulations and guidelines which needed to be approved by the National Health Council, where provincial Departments of Health were representatives on that Council.

He said that organised labour was currently a part of the NHLS Board, but was not of the recommendation that went to Parliament. However, the Portfolio Committee on Health, after some debate, was of the view that since historically organised labour was a part of the Board, it should remain as such.

Dr Saadiq Kariem, Chief Director General, Specialist & Emergency Services, Western Cape DoH, replied to the comment on the private sector from the service perspective, and said a key issue that had been discussed was the long turnaround time and sometimes the poor quality of the services rendered by the NHLS that directly affected patient care.

The Chairperson asked how these amendments would directly affect patient care.

Ms Lekker related the situation regarding DNA testing and the identification of deceased persons who were unidentifiable. She asked what would be the advisable procedure to identify such persons -- should it be done through private service providers or the NHLS?

Dr Pillay said that the front end of service delivery would remain the same. It would have the effect of a far more sustainable organisation than it currently was.

The Chairperson said that a follow-up meeting would be arranged and communicated.

The meeting was adjourned.