NHI Bill: DoH response to public submissions, with Minister & Deputy; CCOD 2022/23 Annual Performance Plan

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29 March 2022
Chairperson: Dr K Jacobs (ANC)
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Meeting Summary


NHI: Tracking the bill through Parliament

CCOD Annual Performance Plan

The Department of Health responded to some of the criticisms against the National Health Insurance (NHI) Bill, including concerns about the proposed governance arrangements for the NHI Fund, which will purchase healthcare services from accredited public and private sector providers. The Department’s Deputy Director-General for the NHI fell back on the Constitution in defending the Bill, saying it accords the Health Minister executive responsibility for health. The Minister should therefore have the power to make key appointments to the NHI Fund, just as the Minister does for statutory bodies such as the Council for Medical Schemes and the Health Professions Council. He emphasised government’s intention to prohibit medical schemes from offering services provided by the NHI.

Committee members indicated that the governance proposals are the most problematic element of the NHI Bill as it seems not to provide adequate checks and balances for the exercise of power. Another concern was the management of illegal and undocumented migrants who would want to access NHI services. Members asked about financing, sorting out current quality challenges first, and the potential skills drain.

The Compensation Commissioner for Occupational Diseases in his briefing on the CCOD Annual Performance Plan and Budget for 2022/23 indicated that the CCOD does not have a backlog. However, there are unclaimed benefits of R1 billion for approximately 84 000 mine workers. He noted that 48% of the claims were finalised in the last six years. CCOD obtained an unqualified audit in 2019/20 which is the first unqualified audit report since 2002. CCOD is working with stakeholders to digitise the files which will be the single largest comprehensive database for occupational lung diseases and workers' claims.

Meeting report

The Chairperson opened the meeting by conveying the Committee's sadness on hearing of the passing of its Committee Member, Mr M Sokatsha (ANC) in a motor vehicle accident on Friday, 25 March. A short tribute video was played. 

The Chairperson said the Committee was devasted by the untimely passing. He said Mr Sokatsha made a meaningful and outstanding contribution to the Committee as the Committee, and its mandate, was very close to Mr Sokatsha's heart. He prioritised the work of the Committee, showed commitment and leaves an indelible mark on the Committee which will remain as his legacy. The Committee will forever be indebted to Mr Sokatsha. Before joining national Parliament, Mr Sokatsha served in the Northern Cape legislature and served as an MEC in the province. He also served as the first democratically-elected Mayor of Richmond in 1994. During the 80s, he was a youth activist and later, trade unionist for SADTU. 

The Committee extended its condolences to Mr Sokatsha's family and friends and stood with them in prayer during this difficult time.

A minute of silence was held. 

The Chairperson said the Committee would visit the family home on Thursday in Richmond, Northern Cape. Seven Members of the Committee could attend the funeral on Saturday - the logistics would be discussed. 

Minister of Health overview
Dr Joe Phaahla thanked the Committee for the time to respond to matters raised by stakeholders at the parliamentary public hearings on the NHI Bill.

In his opening remarks, he stated that access to free quality healthcare has been an integral part of ensuring equity. Access to healthcare is a constitutional right that is enshrined in the Constitution.

Dr Phaahla highlighted that a key question has been the reason South Africa needs the National Health Insurance (NHI). The importance of the NHI is fundamental because health is regarded by the national government as a non-tradeable commodity but a public good that requires collective investment to ensure its accessibility.

The inequality in South Africa which was caused by various social ills gave more reason for the NHI to address the imbalance in the accessibility to public healthcare as the majority of the country's population relies on it.

National Health Insurance Bill: Department of Health response
Deputy Director-General: NHI, Dr Nicholas Crisp, reminded the Committee that the NHI was about the fundamental human right to universal access to healthcare. The current healthcare system is failing everyone as many poor people are denied care when they need it, while many privileged people are given treatments that they do not need. Even wealthy people who insure their health with private medical schemes end up paying for costs not covered by those schemes.

He reiterated that South Africa needs a health system that ensures that all people have access to the health services they need, when and where they need them, without financial hardship.

Dr Crisp indicated that the Bill outlines the roles of the Minister, National Department of Health, National Health Insurance Fund (NHIF) and its substructures. There is a detailed outline of the role of Provinces in the consequential amendments to the National Health Act contained in Schedule 1 on Repeal and Amendment of Legislation that will be effected by the NHI Bill. The intention of the amendments in Schedule 1 of the Bill is clear that the provincial health departments remain important to the oversight and stewardship of the whole health system.

Some stakeholders motivated that Clause 39(2)(a) places many requirements on healthcare providers leading to an over-regulation burden as they are required to have certification by the Office of Health Standards Compliance (OHSC) and accreditation and contracting by the NHI Fund. Dr Crisp indicated that there is room for improvement in both the public and private health sectors with a need for quality investment throughout the system. Therefore, to build a strong and reliable public health system, the Department is looking at several parallel health system reforms and strengthening initiatives by using the six health systems building blocks described by the World Health Organization Framework which includes leadership, financing, medical products and consumables, information technology, human resources for health, and service delivery.

Dr Crisp said that the investment in public health sector quality improvement will continue through several integrated components to develop and improve the quality of services including the capacity of the health system to deliver service to communities.

All these improvements will take time hence the need for a staggered approach to accreditation to prevent collapsing of services while developing the quality. He added that the aim is to progressively build capacity and quality in both public and private sectors.

Dr Crisp told the Committee that the interventions in the NHI Pilot districts were focused on health system strengthening through a Ward-based Primary Healthcare Outreach Team (WBPHCOT), the Integrated School Health Programme (ISHP), and General Practitioner (GP) contracting, the Centralised Chronic Medicine Dispensing and Distribution (CCMDD) system, and other initiatives. These programmes have been under evaluation by the Department to assess the progress made in implementing them in the pilot districts.

On the NHI source of funding and affordability, Dr Crisp said that the NHI intends to build a single pool of funds which will be done in different phases. The NHI Bill indicates that the principal funding source will be from taxes which means that it will be provided for in a Money Bill published annually.

As articulated in the 2017 White Paper on NHI, once it is fully implemented, NHI coverage will also include medical benefits currently reimbursed through the Compensation Fund for Occupational Diseases and Injury Act (COIDA), Compensation Commissioner for Occupational Diseases in Mines and Works Act (ODMWA), and the Road Accident Fund (RAF).

Dr Crisp said that the bulk of the required finances to run the NHI are already in the system. This was because Clause 49 provides for the four main sources of funding including general tax revenue, reallocated funding for medical scheme tax credits paid to medical schemes towards the funding of the NHI, payroll tax, and a surcharge on personal income tax. This would mean in exchange for health benefits provided for free at the point of care, there will be contributions via the tax collection mechanism which include normal tax collection methods.

Dr Crisp highlighted that the NHI will not be a medical scheme as it will not be buying services on a fee-for-service basis or require the complex preauthorization process. Therefore, the method of capitation payments and diagnosis-related groups (DRG) payments for primary healthcare services will be easier to administer as there will be one system and provider for the interaction thus creating incentives for efficiency. At a hospital level, payment would be determined through a system of case-mix activity adjusted payments.

Dr Crisp flagged the importance of an affordable health system that is efficient with optimal interventions and treatments. The current health system is inefficient and is characterized by fraud, corruption, and medico-legal claims in both public and private sectors.

On human resources, the Department has responded to the concerns raised by stakeholders. The complex interactions between training, registration compliance and employment can substantially be improved. There is already a framework in place – National Human Resources for Health Strategy – which envisions South Africa’s investment in the health workforce to ensure quality universal health coverage and a long and healthy life for all people.

Dr Crisp emphasized that the NHI will be gradually phased in using a progressive and programmatic approach based on financial resource availability.

The Department of Health is of the view that the provisions of the Bill are based on bringing to realisation the provisions in the Bill of Rights outlined in the Constitution: "the state should take reasonable legislative and other measures within its available resources to achieve the right to healthcare services for all". Therefore, the stance of the Department of Health is that there is no validity to the argument that the Bill falls short of constitutional muster.

Although the Fund will still be accountable to Parliament, the Department still believes that the Minister of Health is the constitutionally recognised Executive Authority responsible for health in South Africa. Therefore, the Minister should retain the power to appoint key resources required to realise the objectives of the NHI Fund outlined in the Bill.

Dr Crisp said that a continuation of the current parallel system with medical schemes with the same benefits as the NHI would negate the whole purpose of creating a unitary health and financing system.

It was better to have a structure and scope of services to be covered by the NHI Fund which will be based on levels of care with a broad indication of the type of service to be covered at each level than to explicitly state the package that will be covered by the NHI. This is because of the rapidly changing health technology including the epidemiology of diseases dealt with.

Ms M Clarke (DA) thanked the Department for the presentation. She wanted clarity on where the Bill seeks to address poor governance structures and management which may be the major cause for obstacles in meeting the NHI objectives.

She asked the reason medical specialists choose to work in the private sector.

Ms Clarke asked what Dr Crisp meant when he said that in the current health system, privileged people are given treatment they do not need. She asked if the NHI is attempting to remove access to some medication treatments if not viewed as essential.

She asked how the NHI planned to address skill shortages in the health sector including skills flight.

Ms Clarke asked how the Bill will be made appealing to private health practitioners as currently, it seems like the public health sector is not appealing to them.

She indicated that there is little mention of accountability, improvement, management and governance. She therefore asked if the NHI will be implemented without accountability in terms of measurement.

She asked how government was going to protect the NHI from corruption and theft. She added that to address fraud and corruption, the National Department of Health has recommended a Risk, Fraud and Prevention Unit. She asked if this Unit would serve as an oversight body.

There was concern that NHI treatments will be limited to basics as some treatments deemed unnecessary will not be covered. Therefore, she wanted clarity from the Department on how much would be covered.

Ms A Gela (ANC) welcomed the presentation and asked if the Department sees it as desirable not to detail the list of healthcare services covered by the NHI. Did the Department see fit to include the list in the Bill or would it be better to outline such details in the regulations?

Ms Gela asked for the Department’s position on clause 8(2)(b) contradicting clause 33 on the future role of the medical schemes.

Mr P Van Staden (FF+) said that the public health system cannot afford the NHI. Government cannot implement a system in which the country does not have the required infrastructure and structures to sustain it.

He said the submissions stated that the NHI pilot projects failed. Would the Department consider these errors by addressing the challenges to ensure the effective implementation of the NHI?

Further, the submissions asked if the Department did not see the need first to address the shortcomings of the health system such as the critical skill shortage before NHI implementation.

The Minister being responsible for the Fund finances was raised because this did not encourage accountability.

Mr Van Staden asked if sufficient planning was done for the NHI. He recommended restarting the process with a feasibility study and a pilot project to ensure a functional base for the NHI.

He asked if medical negligence litigation claims would not get worse under the NHI.

He asked if it was not appropriate for the Bill to be clearer on the package for mental healthcare services.

Mr Van Staden stated that the limitation of options for private practitioners could result in a brain drain of critical skills. How was DOH contemplating overcoming this?

National Treasury had indicated doubts that the NHI would be cost-effective. He asked how the Department contemplated that the NHI would work including ensuring enough funds to cover the cost estimate of the Fund.

He asked how the Department knew the funds in the system already support the NHI when there has been no updated financial feasibility study.

Ms X Havard (ANC) asked if there is a synergy between the NHI Bill and the recommendations of the 2019 Health Market Inquiry Final Findings and Recommendations Report.

Ms Havard said that some stakeholders argued for undocumented and illegal immigrants to have the same benefits as the users described in the Bill. She asked for the Department's view on these comments.

Mr E Siwela (ANC) asked if the Department planned to update the NHI plans because of the delays caused by COVID-19. He asked the Department to share some of the key lessons from the COVID-19 experience and how these will be leveraged to support the implementation of the NHI.

He asked for the Department’s view on illegal and undocumented immigrants access to the NHI.

Mr Siwela asked for the Department’s view on the comment by some stakeholders who indicated that the NHI was solving a non-existing problem.

Mr Siwela asked if the Department had a plan on how private health providers will be motivated to render services under the NHI.

Mr A Shaik Emam (NFP) indicated his support for the NHI, saying that the matter was long overdue. He asked if the private healthcare facilities had the option to opt out of the NHI. He asked if the Department was getting the buy-in of rural communities.

He asked if the NHI will have provisions to ensure that the older population are not denied access to healthcare because of their age.

Mr Shaik Emam asked if government employees would have the choice to use private health schemes.

He expressed his concern about the Minister being responsible for the Board appointments as this would affect the accountability of the NHI.

Ms E Wilson (DA) raised her concern that the Bill did not sufficiently mention emergency services. She asked how the NHI was planning to address this.

Mr T Munyai (ANC) asked if the Department had engaged National Treasury on the status of the NHI financing paper and when this will be published.

He asked about the Department’s position on the point raised that private medical schemes should also be allowed to offer the same services as will be offered by the NHI.

He asked for clarity on where the contracting units for primary healthcare will be located.

On public and private healthcare service provision, the Chairperson asked how the Department would ensure that the NHI is primarily braced for public health sector service provision.

He asked about the Department's view on the concern raised by some stakeholders about the Bill's misclassification of the South African Police Service.

The Chairperson asked about the Department's readiness for possible legal contestation of the Bill.

He also asked about the Department’s response to the concern of certain stakeholders about the Department's ability to successfully implement and sustain the NHI.

Health Ministry response
Dr Phaahla thanked the Committee for the questions. On poor management, the Minister said that indeed the management of facilities determines the success and failure of universal health coverage. In as much as there are excellently managed health facilities, there are those which are poorly managed. Hence the Department has initiated training to ensure management skills.

The reason specialists choose to be in private practice is that this was lucrative in terms of fee-for-service because of what the specialists can claim in the private sector compared to public service.

On risk mitigation of the Fund, he spoke about the importance of internal risk mitigation apart from independent risk mitigation.

On National Treasury and the affordability of the NHI, Minister Phaahla replied that the Department is confident that with the currently available resources in terms of the fiscus and some already-existing direct state contributions, the NHI has a good financial base.

On medico-legal claims, the Minister indicated that whether there is the NHI or not, the Department will still have to deal with the medico-legal claims.

On infrastructure, the Minister replied that the piloting was done to strengthen the provision of the public health system. He acknowledged that although there were some successes, this was not always the case because of infrastructure constraints. However, this provided key lessons in terms of areas that needed to be improved.

If the gap in the resources that are available between the private and public sectors is attended to, then the public health sector will be able to attract more skills which will eventually reduce skill shortages in the public health sector. He highlighted that this is the very essence of the NHI.

The Minister acknowledged that there is a serious issue of corruption. However, the Department was committed to working with stakeholders and Parliament to prevent corruption through strengthened oversight.

On a feasibility study, the Minister replied that the Department has an incremental focus starting with primary healthcare and building from that.

The Minister acknowledged that mental health services were left behind, and the Department is looking at this to increase the capacity in terms of adding mental health services.

The Department acknowledges that the current system could be improved for the better.

On the threat of a brain drain, the Minister replied that the Department is not ignoring this possibility. The fact of the matter is that the fee-for-service is not sustainable, and many other countries are moving towards a more structured health system to ensure universal health coverage.

The Department already has a buy-in from rural communities as many services are only available in the urban areas. The NHI seeks to ensure that rural communities also have access to these services.

The NHI will be phased in incrementally. In its initial phases, those in private health insurance may still retain some of their cover which is not yet be covered by the NHI. However, as the NHI covers more services, it would be cost-effective for individuals, including public servants, to use the NHI.

Emergency services will also be part of the NHI, and the Department acknowledges that current emergency services are fragmented.

On the security services, the Minister indicated that the view was that the army and the intelligence services have very specific roles hence there was a motivation why they were kept out of the NHI. In terms of the SAPS, the view was that even currently the medical aid looking after the SAPS is part of the publicly managed medical schemes which are already in operation.

The Department needs to build more capacity to ensure that the basic foundations of the NHI are set when the Bill gets passed.

Deputy Minister, Dr Sibongiseni Dhlomo, added that it was not a precondition to have the pilot programmes before the NHI rollout. However, it was an innovation that emerged from the Department. This was useful in having a benchmark on which the Department should improve.

Department response
Dr Aquina Thulare, Department Technical Advisor on NHI, replied to the question about NHI services offered to undocumented migrants and asylum seekers. The Department has noted all the international conventions, and especially what Section 27 of the Constitution requires as well as what the Refugees Act provides for refugees and Section 28 of the Bill of Rights. What is captured in the NHI Bill has taken into consideration all these issues. Therefore, undocumented migrants will have access to emergency medical services and also for any notifiable condition that might be of public concern. The Department is willing to have a situation considered where because of the strain on funding the health system, other means of augmenting the health budget should be looked at including looking at some mechanisms that come through the African Union aimed at migrants and the United Nations High Commissioner for Refugees (UNHCR).

On the comments about the conflict between clause 8(2)(b) and clause 33, the Department acknowledges that these clauses conflict. The Department is of a firm view that clause 33 will assist in achieving the purpose of the NHI.

On the location of contracting units for primary healthcare, Dr Thulare replied that contracting units for primary healthcare contained in clause 37 of the Bill are a function of the Fund because it is the unit with which the Fund will be contracting.

On the service to be provided to the elderly under the NHI, Dr Thulare replied that there will be a Benefits Advisory Committee that will look at the whole spectrum of conditions that will be covered under the NHI.

On what constitutes 'unnecessary treatment', Dr Crisp recommended that the Committee go through the Health Market Inquiry Report to see the list of unnecessary treatments. He noted that the current health system has an enormous number of treatments in duplication.

In the NHI Bill, there is a provision for the Health Technology Unit which the Department is already creating which will ultimately become an agency on its own. The health technology assessment will not look at if a particular intervention is expensive or not but will look at if an intervention has better outcomes.

Although South Africa is not the worst in terms of its human resource in health, there is however room for improvement. The skills imbalance is mainly because these skills are normally concentrated in the private sector.

Dr Crisp suggested that NHI benefits should not be listed in the Act as it would be difficult to change them rapidly. Choosing the specific package of care is difficult because of the complexity of the burden of disease in the country.

On whether the current problems in the health system should be addressed first before NHI implementation, Dr Crisp replied that if government is ready to increase the health budget, then it would be possible to address the current health system challenges before proceeding with the NHI. However, the reality is that things cannot be fixed first.

He added that the Department has learnt enormous lessons from the COVID-19 pandemic, especially in working together with various stakeholders in the health system.

Adherence to treatment protocols is a global standard and thus not unique to South Africa.

Director-General, Dr Sandile Buthelezi, requested the support of the Portfolio Committee for the NHI Bill to ensure equitable access to healthcare through the NHI.

Compensation Commissioner for Occupational Diseases (CCOD)
The Deputy Minister introduced Dr Barry Kistnasamy, Compensation Commissioner at the National Department of Health. Dr Kistnasamy indicated that the Compensation Commissioner for Occupational Diseases (CCOD) has over the last six years paid R1.16 billion which was 45% of the claims. He added that 48% of the claims were finalised in the last six years. CCOD obtained an unqualified audit for 2019/20 which is the first unqualified audit report since 2002. The 2020/21 audit was still being audited.

The CCOD is still awaiting the Minister of Finance's response as the Minister of Health had written to him about listing the Mines and Works Compensation Fund (MWCF) as a schedule 3 public entity.

The Deputy Compensation Commissioner presented the financial performance of the MWCF. She noted the decrease between 2018/19 of R305 million and 2019/20 of R114.5 million (and R107m for 2020/21 and R120m for 2021/22) was due to the levy rate that decreased significantly.

MWCF investments in 2021/22 are estimated at R5.1 billion with provisions of R3.6 billion, leaving the MWCF with a surplus of R5.2 billion. The MWCF expects an increased levy income from R120 million in 2021/22 to R130 million in 2024/25.

Dr Kistnasamy indicated that the focus areas in the CCOD Annual Performance Plan (APP) for 2022/23 were the submission of the amendments to the Occupational Diseases in Mines and Works Act, maintenance of the database of controlled mines and works, enhancing the claims management system, and submission of financial statements for the 2021/22 audit.

The 2020/21 expenditure indicated that 88% of the budget allocated to compensation of employees was spent, 126% was spent on goods and services, 100% on transfers, and 95% on capital with an overall spend of 99%.

The Medium-Term Expenditure Framework (MTEF) budget allocation for 2021/22 was R60.6 million, R63.2 million for 2022/23 and R68.4 million for 2023/24.

The Chairperson thanked the Commissioner for the progress that has been made including getting an unqualified audit.

Ms Clarke asked what the current vacancy rate was at CCOD and how these vacancies have negatively impacted its operations. She asked what the reasons for the vacancies were. Would the 2022/23 budget allocation be enough to fill the vacancies, especially for specialised personnel?

She asked what the current backlog of claims for pensioners was.

In 2021/22, the Risk Committee was reported to be functioning non-optimally, a challenge that has been reported in the 2022/23 APP. She asked what has been done to correct these deficiencies.

Ms Clarke asked if there was a plan to decentralise offices to the provinces due to the increased demands.

Ms Gela applauded the CCOD on the work done. On the two provinces with unclaimed funds, she wanted to check what the reason was for this.

She asked about the motivation of mine workers to get vaccinated against COVID-19 including what was being done to encourage vaccination uptake among mine workers.

Mr Munyai congratulated the CCOD for getting an unqualified audit and the progress it had made. He recommended a joint meeting of the Portfolio Committees of Labour, Health, Mineral Resources and Energy and Finance to deal with the challenges that affect the CCOD.

Ms Wilson appreciated that the CCOD has made good progress in addressing some of the challenges faced. She asked if illegal mining has an impact on the work of the CCOD.

On the CCOD legislative defects, the Chairperson asked about the amendments submitted to the Department of Health and when the Amendment Bill would be tabled.

On the challenges with the expansion of the electronic claims management system, when would this be advanced including the maintenance of the database covering the current workers?

The Deputy Minister indicated that the role of the Department of Health is limited to illegal miners as this tends to be handled by SAPS including the Department of Mineral Resources and Energy among others. It would however be appreciated to have a joint meeting of Portfolio Committees to discuss these concerns. He is already engaging with the Deputy Minister of the Department of Mineral Resources and Energy and the Minister of the Department of Employment and Labour, and they are finding synergy on these matters.

On Information Technology (IT), Dr Kistnasamy replied that the CCOD is working with stakeholders in digitising the files. This is the single largest comprehensive database for occupational lung diseases and workers' claims.

Dr Kistnasamy replied that currently, the vacancy rate is 23%. The director post, a level 13 post, is a seconded post that runs at about R1 million and the CCOD could not fill this post.

On the pensions backlog, he indicated that the CCOD does not have a pensions backlog. He clarified that there are however unclaimed benefits which are at R1 billion for approximately 84 000 mine workers. Most of the unpaid claims date back to before 2005 with 50% of them dating back to before 2000. It appears as though some of the ex mineworkers have unfortunately died as they cannot be reached.

On the report of the Risk Committee, he indicated that the CCOD has proposed that all mines in South Africa should be controlled.

On decentralising the CCOD offices, Dr Kistnasamy indicated that the CCOD is working with the provisional administrations. The Office of the Premier leads a programme where the CCOD meets monthly and it meets with the health department once every two weeks on programmes in the Eastern Cape. In decentralising the offices, the provincial departments of health will take the lead.

Dr Kistnasamy replied that over 70% of the mining industry is vaccinated against COVID-19 with some companies at 90%-95% vaccination coverage.

The Chairperson thanked the Department and CCOD for the presentations and adjourned the meeting.

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