National Health Laboratory Service Amendment Bill: Western Cape submission

Community Development (WCPP)

28 August 2018
Chairperson: Ms L Botha (DA)
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Meeting Summary

National Laboratory Service Amendment [B15B-2017]National Health Laboratory Amendment Bill [B15A-2017]National Health Laboratory Amendment Bill [B15A-2017] 

The Standing Committee on Community Development of the Western Cape Provincial Legislature met to receive a presentation on the comments from the provincial Department of Health on the proposed National Health Laboratory Service Amendment Bill. A brief overview of the National Health Laboratory Service (NHLS) was given, as well as its objectives of service. The NHLS’s challenges and problems were mentioned, as well as the footprint of the Service within the Western Cape. The Committee went through all the comments given, and the proposed amendments, in detail.

The Members sought clarification on how the Board of the Service would be comprised, as well as how the provinces would be represented on it. The Committee also expressed concern about the cost implications that might arise as a result of the amended bill, and discussed the motivation for the proposed changes.

Meeting report

The National Health Laboratory Service (NHLS) was established in 2000 by an Act of Parliament, amalgamating the former South African Institute for Medical Research (SAIMR), the National Institute for Virology and National Centre of Occupational Health, as well as university and provincial pathology laboratories. The objectives of the NHLA were to:

  1. Provide cost-effective and efficient health laboratory services to:-
  1. All public sector health care providers;
  2. Any other government institution inside and outside of the Republic that may require such services;
  3. Any private health care provider that requested such services;
  1. Support health research; and
  2. Provide training for health science education.

The NHLS had achieved certain objectives, but its overall leadership and governance had created problems and challenges which had started to impact its service delivery. The proposed amendments to the NHLS Service Act, 2000 (as per the National Department of Health and NHLS) were 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 objects and the duties of the NHLS;
  • Strengthen the governance and funding mechanism of the NHLS;
  • Provide for matters connected therewith.

The NHLS’s footprint within the Western Cape consisted of 18 laboratories which service more than 600 health facilities. The central laboratories consist of Tygerberg Hospital, Groote Schuur Hospital and the Red Cross Children’s Hospital. The regional laboratories were based in Green Point, George, Paarl and Worcester. The district laboratories were based in Vredendal, Vredenburg, Karl Bremer, Mitchells Plain, Khayelitsha, Helderberg, Hermanus, Oudtshoorn, Mossel Bay, Knysna and Beaufort West. A Point-of-Care Testing (POCT) laboratory was located at New Somerset Hospital and at Pollsmoor Prison, where there was a GeneXpert laboratory.

Section 4 of the NHLS Act, 2000 (Act No. 37 of 2000)

This currently reads as: “The objects of the Service are to:

  1. Provide cost-effective and efficient health laboratory services to:
  1. All public sector health care providers;
  2. Any other government institution inside and outside of the Republic that may require such services;
  3. Any private healthcare provider that requests such services;
  1. Support health research;
  2. Provide training for health sciences education”.

It was proposed that section 4(a)(i) of the Bill be amended to provide as follows: “(i) all public sector health care providers that request such services”.

Section 15(1)

This currently reads as: “15(1) Public health sector service providers must purchase laboratory services from the Service. (2) Private health sector service providers may purchase laboratory services from the Service.”

It was proposed that section 15(1) be amended to replace “must” with “may”.

In this regard it was noted that the National Health Insurance Bill, 2018, which was advertised for comment on 21 June 2018 in Government Gazette (GG) 636, made provision for the procurement of health goods and services from both public and private service providers.

The proposal to have the ability to procure tests from laboratories other than the NHLS was not to undermine it, but to allow for the following:

  • Enable the Western Cape Government Health (WCGH) to send urgent tests to a laboratory in closest proximity. This would improve accessibility, turnaround time, and patient management in terms of diagnoses and initiating treatment. It would reduce the length of stay and improve patient outcomes. In addition there would be multi-level savings for the Department and patient.
  • Alignment with National Health Insurance principles; and
  • Discourage/prevent monopoly of services. This would protect the interests of consumers, prevent excess prices, allow for competition and improve quality of service.

Amendment of Section 5 – clause 4

This currently reads as: “(b) promote the training of its laboratory and associated personnel;”

It was unclear how this would affect training and outreach to health facilities -- for example, cervical smear collections, sample collection and bilateral agreements between universities and the NHLS, forensic pathology services and the NHLS. There may be possible cost implications for the WCGH if the NHLS promoted the training of only its own personnel. More clarification was needed with regard to the funding of teaching and training by the National Treasury. The question was whether the NHLS would be relieved of the mandate to provide training to health science education. It was proposed that Section 5(1)(b) remain unchanged.

Substitution of section 7 and 8

Provincial representation was not catered for in terms of the proposed new section 7, which would regulate the composition of the Board. It was noted that version B15-2017 had been amended to include three representatives of provincial departments, but in version B15B-2017, this had now been removed. The person representing the public health sector appeared to have replaced the provincial representative on the Board.

It was proposed that each province be represented on the NHLS Board. If this was not possible, there should be at least three representatives from the province. It was proposed that membership be determined on the basis of population size and the utilisation of laboratory services.

The new section 7(1)(b) proposed a new category for Board representation, namely the chief financial officer (CFO) of the Service, by virtue of their office. It was proposed that CFO not be appointed as a full Board member, but be invited to attend meetings when so indicated. Having both the chief executive officer and the chief financial officer of the NHLS as full Board members may influence the vote and may have governance implications.

It was further noted that in version B15B, the category for Board representation of one representative from organised labour had been reinserted. This representative may also, in terms of proposed section 9(1), be appointed by the Minister as the chairperson or vice-chairperson of the Board. Hence, the proposed section 9(1) provided:

“The Minister must appoint a chairperson and a vice-chairperson for the Board from amongst the members appointed in terms of section 7(1)(c), (d) or (e)”.

It was further proposed not to include a representative from organised labour as a full Board member, as it might impact and influence negotiation and consultation processes. A representative of organised labour could be invited when so indicated.

Substitution of section 20

A new clause 18(1) was also proposed to be inserted, which provided as follows:

“18(1) The Minister, in consultation with the Minister of Finance, must prescribe a financing mechanism for the Service in order to ensure that the Service is adequately and sustainably funded and thereby enabling the Service to achieve the objects of this Act”.

In version B15B-2017, it was proposed to delete section 20 and substitute it with section 18, as clause 18(3) had the following provision:

“The Service must charge such fees for services rendered that are not covered by the financing mechanism contemplated in subsection (1) as prescribed by the Minister, after consultation with the Minister of Finance”.

It was proposed that section 20 of the Act remain unchanged, or that the new clause 18(1) make provision for consultation with the National Health Council (NHC), the Provincial Members of the Executive Councils (MECs) of Health, and Provincial Treasury on laboratory financing mechanisms and/or fees charged. It was unclear why the provision for consultation with the NHC, which was included in B15-2017, had been removed in version B15B-2017.

Repeal of section 25

Clause 15 of version B15B-2017 proposed to repeal the entire section 25. This section regulated non-compliance by the NHLS with the Act, and the remedial steps which the Minister may take. Section 25 hence provided:

“25. Proceedings by Minister for non-compliance with the Act by Service:

(1) If at any time it appears to the Minister that the Service has failed to comply with any of the requirements of this Act, they may by written notice require the Service to remedy the default within a specified time.

(2) The Minister may apply to a High Court having jurisdiction for an order compelling the Service to remedy the default if the Service fails to comply with the terms of a notice referred to in subsection (1)”.

Section 25 should not be repealed. The power of the Minister to call for remedial steps when there was non-compliance, must stand.


Mr R Mackenzie (DA) asked if the WCGH had met with the National Department of Health (NDOH) to discuss these proposed amendments, and if there had been any feedback from the NDOH. He asked why section 7 had been removed in version B15B-2017. He asked if 12 members would be the maximum amount on the Board, and sought clarity on the provincial representatives that would be on the Board. Was it standard that the Minister elected the chairperson and vice-chairperson of the Board?

Ms D Gopie (ANC) referred to the amendment of section 5, clause 4, where it said that there may be possible cost implications for the Department, and asked if this should not be investigated so as not to leave this as a speculation.

Ms P Makeleni (ANC) asked how the provinces would be represented on the Board if it had a maximum of 12 members who needed to fit the specified roles. Could the provincial representatives be any stakeholder from a province, and not necessarily a government official? She asked for clarity on the proposed membership that would be determined on the basis of population size and utilisation of laboratory services. She explained that she understood that the chief financial officer (CFO) and chief executive officer (CEO) were generally executives on Boards, so if the CFO’s role would no longer be as an executive, would such person would be invited to attend the meetings to give input.

The Chairperson asked if the Department had completed a cost impact study per patient for the motivation to change sections 4(a)(i) and15(1) of Act 37 of 2000. She further asked what the cost implications for the Department would be.

Ms Nicolene van der Westhuizen, the Provincial Laboratory and Blood Coordinator, said that the Department had not physically met with the NDOH regarding this submission, but this input had been sent to the National Department as this was the third version of the Bill. The section that had been removed had been done by the national Portfolio Committee, and the reasoning behind it was unclear. The maximum number of Board members, as provided by the new amendment Bill, was set at 12. Currently there were 22 Board members.

Mr Mackenzie was in agreement with the reduction of Board members. He asked how all the provinces would be handled practically if there could be a minimum of three provincial representatives.

The Chairperson reminded the Committee that this was a submission of comments from the Western Cape’s Department, and commented that some of the questions posed were directed at the NDOH.

Ms Van der Westhuizen said that the NDOH and the Service were proposing the reduction of Board members. The Provincial Department was proposing that there be at least three provincial representatives/stakeholders if all nine could not be represented. The method in which the provinces had representation was not set. What had been proposed in this submission was merely an example of how this could be done.

Ms Amanda Torr, State Law Advisor: Department of the Premier, added that in the current Act there was a representative for each province. In the version that had been advertised, representation had been taken out completely. The Department was trying to ensure that representation would not be neglected with its suggestions.

Ms Van der Westhuizen continued that the suggested amendment provided that the Service provide training only to its own laboratory staff. Seeing that there was such a close working relationship between the Department of Health, the NHLS, and the universities which collaborated to train students in the sector, there might be a cost implication if this Bill was passed. There were bilateral agreements in place, but it was unknown what might happen later on.

Mr Mackenzie asked how much was currently being spent on training, and what was the value of the services being paid to the NHLS.

Ms Van der Westhuizen said that currently over R600 million per year was paid to the NHLS.

Dr Saadiq Kariem, Chief Director: Emergency Care and Specialised Services, said he agreed that the Board should be able to decide for itself who would have the role of chairperson and vice-chairperson amongst themselves, but it was the national Minister who had that decision to make.

Ms Torr explained that there was no legal imperative for that, and it was a matter of policy.

Ms Van der Westhuizen said that stakeholder representation did not necessarily have to be a person in the health professions; they could be from the DST, epidemiology and so on. What was being suggested here was that there be at least three representatives of health from different provinces, and that with other expertise there would be a representative from all the provinces.

Dr Kariem referred to the amendment of section 15(1), and said that the word “must” being replaced with “may” was to avoid creating monopolies. He was unsure of how this would be made sustainable, but was glad of the space for choice.

Ms Van der Westhuizen repeated that this was a proposal from the Provincial Department, which acknowledged that the NHLS was a parastatal and needed to be made sustainable. There were only 18 laboratories which had to service hundreds of health facilities. Changing it to say “may” opened up for other service providers to be utilised in cases that had urgent time-frame limits, for example. It was not to undermine the NHLS.

Ms Makeleni expressed concern that this amendment may open up opportunities for abuse from those who required these services, and suggested that there be an added provision to close the gap where manipulation could happen.

Ms Van der Westhuizen suggested that the National Health Insurance (NHI) had regulations that stipulated when and where the NHLS could not be used.

The Chairperson asked if the presenters had the draft regulations that would guide this Bill.

Ms Torr said this was a proposal from the National Department of Health, so the regulations would be set by the NDOH and not the by the province.

Dr Kariem said that regulations would have to be broad, and a decision to procure services from the NHLS or private laboratories would be made by the health practitioner, with guidance from the regulations.

Ms Van der Westhuizen said that at this stage, the cost implications of the Bill and the impact on the Department had not been investigated.

The Chairperson said that the Members would have this deliberation again after the public hearings, and would decide on the recommendations.

The meeting was adjourned.


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