Health Budgetary Review and Recommendations Report

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24 October 2018
Chairperson: Ms M Dunjwa (ANC)
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Meeting Summary

2018 Budget Review & Recommendations Reports – BRRR

After lengthy deliberation and numerous amendments to its draft BRR report, the Committee adopted the final document. Chief among the issues discussed were the following:

Stronger, more action-oriented and consequent management driven recommendations should henceforth be the rule of thumb when the Committee dealt with the Department’s various annual performance failures. Recycling the same recommendation year after year must be a thing of the past. 

Members questioned if challenges experienced by the Office of the Health Ombud (OHO) in carrying out its mandate in 2017/18 be laid at the doorstep of the Portfolio Committee. What had been the role and responsibility of the National Department of Health, as well as National Treasury (NT) in the OHO’s woes?   

Members raised the “incoherence” of the policy regarding the training of students in foreign countries and the disastrous role played by Provincial Departments in the matter. Reported incidents of students coming back from countries such as Russia and China with unaccredited qualifications were mentioned. This had resulted in returning students being unable to practice medicine locally.

The discussion also touched on the affordability of Medical Schemes and what role the Department could play in addressing public concerns around the issue. A member was not sure how the Committee could “dictate’ to privately owned schemes like Discovery and others regarding the cost of medical schemes. The counter-argument was that it was the stated vision of COGTA’s Council for Medical Schemes (CMS) to ensure affordability of medical schemes. How could the entity have this vision without a realisation that an intervention in the private sector was inevitable?

Meeting report

Opening remarks
The Chairperson welcomed members and tabled the agenda for the day. She announced apologies submitted by 3 absent Members.

Health Budgetary Review and Recommendations Report (BRRR)

The Chairperson led the Committee on a page by page scrutiny of the draft BRR document and invited Members to give input.

The majority of proposals and suggestions for amendments to the report came from Mr A Mahlalela (ANC). What follows is a list of his substantive proposals and the responses elicited by each. 

1.  On Page two, Mr Mahlalela said the Annual Progress Report of the South African Health Products Regulatory Authority (SAHPRA) was given the wrong financial year. The report could only be for 2018/19, not 2017/18 as given, as the entity was then not in existence.

2. On page three Mr Mahlalela said the way Operation Phakisa was captured was a bit incorrect. The initiative was not part of the pilot stage of the National Health Insurance (NHI), but was designed for the roll out of the NHI as a whole.
The Committee Content Advisor explained that the sentence had been lifted from an earlier speech by the Minister of Health.

The Chairperson ruled that this should be confirmed and suggested that the issue be revisited later during the meeting.  
3. On page five, Mr Mahlalela said the document should correctly show that five entities got unqualified audits with findings – not three entities as stated. In addition, the explanation for the regression in audit performance of two entities, namely the South African Medical Research Council (SAMRC) and the Council for Medical Schemes (CMS), did not tally with the one given in the report of the  Auditor General of South Africa (AGSA), and therefore should be corrected.

The Chairperson concurred.

4. On page six Mr Mahlalela pointed out that the main contributor to irregular expenditure was not the Office of Health Standards Compliance (OHSC), (at R2,9 million) as stated in the document. The main contributor was actually the National Health Laboratory Services (NHLS) at R597 million.

The Chairperson instructed that this be rectified.

5. On page seven, under the heading dealing with the Financial and Fiscal Commission report, Mr Mahlalela suggested that the Committee’s BRR report should include the FFC’s own observation on the subject of Compensation of Employees (COE). The FFC had observed that COE should remain a “key focus area for oversight”, and this must be captured both under the heading on page seven and later under the Committee’s own “observations” heading in the BRRR.

The Chairperson agreed.

6. On page 19, under the heading dealing with the Office of the Health Ombud (OHO), Mr Mahlalela raised three related issues for correction. First, it was incorrect for the report to state that in 2017/18, the OHO found it “difficult to almost impossible” to operate, “partly due to non-appropriated funds by Parliament”. He admitted that he was not present when the Committee dealt with the matter, but this should have been challenged as quite untrue. In effect, the Committee was being accused of having caused the non-performance of the OHO. The fault actually lay with the OHSC, which had been allocated the funding in question and under whose budgetary responsibility the OHO was placed.

Secondly, he moved that in a rewording of the issue, the report should clearly note that indeed the OHO was underfunded - not by Parliament but by the Department and National Treasury (NT).  Thirdly, under the same heading, the report should state that having the OHO as an independent entity while its budget was controlled by the OHSC, “did not make sense”.

Mr Mahlalela further suggested that the Committee should, under “Recommendations”, urge that this arrangement be reconsidered or reviewed.

The Chairperson agreed and said the issue should be reworded to reflect Mr Mahlalela’s input.

On page 27, under the heading “key successes”, Mr Mahlalela said on its own, increased funding was not a success. This must be backed up with a list of the specific projects to which funding was allocated. He therefore proposed that the Committee Content Advisor should go back to the entities and obtain the names of those projects.

The Chairperson asked that this information be made available before adjournment of the meeting.  

Committee observations and findings
Mr Mahlalela raised the subject of South African foreign-trained medical students and the lack of a centralised, standardised and coherent policy to deal with all aspects of the selection, funding, training, accreditation, placement and other administrative features of the programme. This should go beyond the well known Cuban to encompass other countries such as Russia and China.

Mr Mahlalela proposed that the Committee should have the above as an observation as well as a recommendation. 

Ms C Ncube-Ndaba (ANC), Dr P Maesela (ANC) and Ms E Wilson (DA) concurred with Mr Mahlalela.

Ms E Wilson (DA) added that in the case of the students who went to Russia and China, there had been no agreement between those countries and South Africa. The academic programmes were not recognised - neither by the Department of Higher Education nor the Department of Health. The Committee should propose the formulation and implementation of norms and standards regarding the whole issue. She further suggested that the Committee should seriously consider the migration of the whole programme to the Department of Higher Education, as this was the logical place to deal with academic norms and standards.

The Chairperson agreed with having the above as an observation but asked Members to hold off further debate on the subject until a more appropriate time and platform could be devoted to it.

Still on observations, Mr Mahlalela proposed that the issues raised by the AGSA and FCC reports be captured as observations as well as recommendations.

The Chairperson agreed.

Mr Mahlalela proposed that the recommendation calling on the Department “to improve on audit outcomes and move towards a clean audit” should be made stronger and should seek to highlight the failures which had led to AGSA’s findings. He said the Committee should move away with recycling the same recommendation year after year.

Ms Wilson agreed with Mr Mahlalela and further proposed that the new recommendation should urge that “ongoing outcomes are addressed or consequences for failure to improve are instituted”. She said the “biggest fall-down in the entire Department” was that there were no consequences for failure.

Ms Wilson said the Committee’s recommendations from now on should emphasise action and consequences.

Mr Maesela expressed support for the above proposals and said the lack of consequence management at the Department had become an “incentive not to change” and to take the necessary steps to deal with repeat offending.

Ms Ncube-Ndaba said it was “arrogance and ill-discipline” for the Director-General (DG) to have argued that the Committee should forget about a clean audit as long as the Conditional Grant was still in place.

Ms Ncube-Ndaba said without consequences for wrong doing, people would continue to “get away with murder”.

The Chairperson however pointed out that not a single member of the Committee had raised an objection to the DG’s comment when he said it “right in front of them”, and she argued that the present meeting, which was specifically aimed at considering a BRR report and its recommendations, was not the right forum to address the issue. She agreed with the proposals for more consequence management as a recommendation, but urged Members to take up the other matter with the DG another time. 

Mr Mahlalela proposed that on the recommendation dealing with the provincial audit outcomes, the report should recommend that the Department produce a detailed plan showing how all Provincial Departments would be moved from qualified audits to clean audits. The plan should contain clear time-lines for this process, including audited quarterly reports to track progress.

The Chairperson agreed and instructed that the relevant recommendations be rephrased to reflect Mr Mahlalela’s input. 

Ms Wilson asked for clarity on the recommendation “to increase funding for academic training to increase the pool of medical specialists”.

The Chairperson proposed a rephrasing of the sentence to read as follows: “to increase funding for the training of medical specialists, professional nurses and allied professionals within the sector.”

Members agreed.

Mr W Maphanga (ANC) proposed that on the recommendation dealing with the monitoring and training of Clinic Committees, the report should add Hospital Boards as well.

Mr Mahlalela proposed that the recommendation on assisting provincial departments to deal with accruals, the word “assist” should be dropped and sentence be replaced with the wording: “the National Department must allocate funds”.

The Chairperson agreed.

Mr Mahlalela asked for clarity on the absence in the report of AGSA’s recommendation that the Department should furnish a quarterly report on consequence management. He proposed that this be included in the BRR recommendations.

Regarding the recommendation on improving patient care and experience, Ms Wilson proposed that the words “and appropriate staffing professionals” be added to the sentence.

Mr Mahlalela agreed but also said “record keeping” should be added to the sentence as the Department was losing many cases on legal claims because of the poor maintenance of records. 

Ms Wilson said the sentence dealing with provincial Departments which were sending students to outside countries for medical training should be rephrased to read thus: “Engage Provincial Departments sending students to foreign countries for medical training and ensure that the students are appropriately supported when their studies are completed.”

Mr Mahlalela said the earlier discussion on a “coherent, centralised system” to manage the training of students in foreign countries should be inserted next to the above sentence. The intention was to say that while the Committee accepted that provinces were already involved in this matter, its view was that provinces should stop acting independently of the National Department and the process must be centrally coordinated and administered.

Further Recommendations

The Committee agreed with Mr Mahlalela proposal that the report recommend the appointment of the OHSC’s Board Chairperson by the end of the year.

The Committee agreed with the following proposals by Mr Mahlalela and Ms Wilson. Mr Mahlalela said the report should call for both a budgetary review of the OHO with a view to separate it from the OHSC. He added that the report should say that while the review was running its course, NT and the Department should ensure that the OHO received sufficient budgetary resources to effectively carry out its mandate.

Ms Wilson proposed the following wording: “Review the legislative framework and establish a budget for the office so as to ensure its autonomy and that it begins to discharge its mandate as a regulatory institution with appropriate staffing and detached facilities.”

The Committee accepted Ms Ncube-Ndaba’s proposal that the report should include the following recommendation: “Ensure improved transformation at career pathing and a recruitment plan at senior management level.”

Mr Mahlalela proposed that the Committee should raise the subject of affordability of Medical Aid Schemes and what role CMS could play in addressing public concerns around this issue.

Ms Wilson said she was not sure how the Committee could “dictate’ to privately owned schemes like Discovery and others regarding the cost of Medical Aid schemes.

Mr Mahlalela pointed out that it was the stated vision of CMS to ensure affordability of these schemes and how could they do so without intervening in the private sector? Otherwise, why exist in the first place?

Ms Wilson proposed as a recommendation that the companies running Medical Schemes be called to Parliament to explain why the schemes were so expensive.

Mr Mahlalela said his proposal was that the CMS must provide a detailed plan showing how Medical Aid Schemes would be made affordable.

The Chairperson agreed with Mr Mahlalela proposal.

 Mr Mahlalela also proposed as a final statement, that the Committee should declare that it expected the Department and all its entities to provide quarterly progress reports on all the recommendations made in the BRR report.

The Chairperson said her own proposal was that the report contain the following statement: “The Committee welcomes the long awaited Norms and Standards which will come into effect in February 2019.”

 Ms Ncube-Ndaba expressed her support for both Mr Mahlalela and the Chairperson’s proposals.

The Chairperson then asked the Committee to adopt the report.

 Dr Maesela moved for adoption with the amendments.

Mr T Nkonzo (ANC) seconded the motion.

The report was adopted with the amendments.

The meeting was adjourned.



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