National Health Insurance (NHI) Bill: clause 7 to 22 deliberations

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23 August 2022
Chairperson: Dr K Jacobs (ANC)
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Meeting Summary

Video (Part 1)

Video (Part 2)

NHI: Tracking the Bill through Parliament

In this hybrid meeting, the Committee continued with clause-by-clause deliberations on the Bill, from Clause 7 to Clause 22. Committee members expressed their party position on the clauses.

The African National Congress (ANC) generally supported the NHI Bill in its entirety with a few minor amendments. The ANC unequivocally supported the functions of the NHI Fund (Clause 10), on the basis that it is intended to support the progressive realisation of the right of access to quality healthcare services for the population. It said that the NHI Fund must be allowed sufficient flexibility and leeway within the set legislative and regulatory parameters to enable its performance and achievement of set performance targets that supports the progression towards achievement of universal health coverage.

In response to concerns of fraud and corruption, ANC members expressed certainty that the establishment of the internal investigating unit provided for in Clause 20(2)(e) would address these concerns. Also that Clause 11(1)(k) is critical to ensuring that the Fund has the internal capacity to effectively address corruption, fraud, unethical conduct or abuse.

The Democratic Alliance (DA) raised a range of concerns where the Bill lacked clarity, where there was a lack of transparency in the roles and functions of the NHI Fund, and especially concerns on the cost implications of the NHI Fund and its oversight.

When addressing the lack of transparency in the roles and functions of the NHI Fund, a DA Member stated that the whole concept of the NHI Fund and its Board will be very answerable to the public, because it is not something that is going to affect part of the country but it will affect every single resident in the entire country.

The DA anticipated that the remuneration and reimbursement costs (Clause 18) would be astronomical and that such funding could have rather been used to improve hospital services and healthcare.

In terms of the powers of the Fund (Clause 11) and the functions and powers of the Board (Clause 15), the DA called for oversight by Parliament, so that there is transparency in the operations of the Fund and efficient oversight of its Board. The DA opposed several clauses that gave too much powers to the Minister. A DA Member explained that the degree of concentrated power that is put into the hands of political appointees is unprecedented and represents a major threat.

The Economic Freedom Fighters (EFF) rejected the NHI Bill in its entirety in its present form. An EFF Member said that it is worrisome that there are no explicit measurements of protection against fraud for the NHI Fund. It stated that the present state of the public health facilities does not meet the defined set of standards for quality healthcare, and it will not be met, whether the NHI Fund is implemented or not. There is non-adherence to Batho Pele principles and a general lack of service delivery culture by some health professionals, local clinics and hospitals.

The Freedom Front Plus (FF+) expressed concern whether South Africa can afford the implementation of the NHI Fund, as it is still not clear what the total cost of the NHI Fund would be when it is up and running in 2026. No one in government was able to give any indication of the financial implication of the NHI on taxpayers. An FF+ Member said that the main concern of the general public is that the NHI Fund will simply follow in the footsteps of Eskom, Transnet and other state-owned enterprises.

The FF+ made reference to the concerns that the Financial and Fiscal Commission (FFC) had raised to this Committee in October 2019. According to the FFC there are progress, budget and policy hurdles that must be overcome before the NHI Fund can come into operation.

The Inkatha Freedom Party (IFP) said that it is critical for the public to know what healthcare services are envisioned in the NHI Fund, and that this cannot be contained in a regulation that would only be published at a later stage. People on the ground should know what healthcare they can access at healthcare centres.

Meeting report

Chairperson's opening remarks
The Chairperson reminded Members that this was a virtual meeting that was deemed to be in a precinct of Parliament, and therefore constitutes a meeting of a National Assembly Committee for official purposes. In addition to the rules of virtual sittings, the rules of the National Assembly including the rules of debate apply. Members enjoy the same powers and privileges that apply in a sitting of the National Assembly. Members should equally note that anything said in the virtual platform is deemed to have been said to the House and may be ruled upon. All Members who have logged in shall be considered to have been present and are requested to mute their microphones and only unmute when recognised to speak. When recognised to speak, Members should unmute their microphone and connect their video. Members use the raised hand icon when requesting to speak. When using the virtual system, Members are urged to desist from unnecessary points of order or interjections.

The Committee last met was on 8 June 2022 when it had clause by clause deliberations on the National Health Insurance (NHI) Bill and processed up to the end of Clause 6. In this meeting, the Committee will continue from Clause 7. As usual, the Chairperson will read through the entire clause, the Committee will then have a short discussion on the clause and proceed in that manner. The Chairperson would like that the Committee progress until the end of Clause 18 by the close of tomorrow’s meeting. This will be determined by how well the Committee deliberates and how expedient it is in discussions.

National Health Insurance (NHI) Bill: clause by clause deliberations

Clause 7: Healthcare services coverage

Ms M Clarke (DA) referred to Clause 7(2)(d) and stated that it compels users of the Fund to access healthcare services at a primary healthcare level as the entry into health systems. They are also compelled to adhere to the referral pathways as prescribed and will forfeit healthcare service purchased by the Fund if they fail to these prescribed pathways. It may be argued that these referral pathways are also an unnecessary and a burdensome provision, which may lead to users being unreasonably excluded from being covered by the Fund. She gave an example and asked what would happen to a pregnant woman who decides to skip the general practitioner, the primary care provider, and go straight to her regular gynaecologist or obstetrician.

She referred to Clause 7(2)(f) that affords the Minister of Health the powers to designate certain central hospitals as national government components. The administration, management, budgeting and governance of central hospitals will be the competence of national government. The management of these hospitals will be semi-autonomous as the national government will have certain decision-making powers, including control over financial management, human resource management, minor infrastructure, technology, planning and full revenue retention.

Clause 7(4) sets out circumstances in which funding for treatment may be refused. It states that “Treatment must not be funded if a healthcare service provider demonstrates that - (a) no medical necessity exists for the healthcare service in question; (b) no cost-effective intervention exists for the healthcare service as determined by a health technology assessment; or (c) the healthcare product or treatment is not included in the Formulary, except in circumstances where a complementary list has been approved by the Minister”. Ms Clarke stated that it may be necessary that the element of reasonableness be included in the circumstances where the funding of treatment may be refused. She proposed that the provision could be formulated in the following manner “Treatment must not be funded if a healthcare service provider reasonably demonstrates that...”, this would ensure that the funding for treatment is not refused on unreasonable grounds. Although it may be argued that the element of reasonableness is implicit in the execution of the legislation, it is imperative that this element be included from the inception of the Bill. Failure to do so may lead to unnecessary litigation.

She said that another point on which clarity must be sought is where the Bill will allow for users of the Fund to approach more than one primary healthcare service provider in instances where they would like a second opinion. If the Fund does not make provision for users to be covered for further opinions from the healthcare service providers, it may undeservedly impact on those users' right to access healthcare.

Ms M Hlengwa (IFP) asked for clarity on how one would know that all people on the ground are registered so that they can access the healthcare they need. This Committee should assure the people on the ground of the steps that they would need to take so they are all registered users of the accredited healthcare.

Mr N Xaba (ANC) referred to Clause 7(1) and said that the ANC supported this clause. In terms of the National Health Act, the Minister has the overall responsibility of ensuring that healthcare services are provided in an accessible and equitable manner. The Benefits Advisory Committee is integral to ensure that the NHI Fund purchases services based on the population health needs, and an integral part of this responsibility resides with the Minister, hence the ANC supported this clause. He further stated that the ANC supported Clause 7(2)(d) and Clause 7(2)(f).

Ms H Ismail (DA) said that Clause 7(1) does not contain criteria to guide the Benefits Advisory Committee on making its determination; this means that it can determine a package of benefits itself with no reference to the reality of the type of healthcare needs of society, or what good clinical practice or appropriate treatment would mean. Clarity is needed on what would allow the Benefits Advisory Committee to make these decisions and determinations.

Clause 7(2)(f) centralises the provision of healthcare by placing the management of all central hospitals under the Department of Health. It is very well known that provinces are the first point of service delivery to communities, as such provinces actually need more funds rather than less funds. Ms Ismail said that this seems to say that less funds will be provided to provinces to effect the service delivery needed where necessary.

She referred to Clause 7(4) and said that it is very important that there must be an element of reasonableness when deciding on the circumstances where funding of treatment may be refused. This clause is not very specific. She suggested that this clause should include some sort of reasonableness, so that this can ensure that the funding of treatment is not refused on unreasonable grounds, because there seems to be a lot of restrictions, or to avoid facing a scenario where people are stopped from getting effective healthcare.

On Clause 7(1), she does not understand why it states that the Minister should be consulted by the Fund for the purchase of healthcare services. She would suggest or assume that this be in the guidelines of the National Health Act. The referral pathways seem to be very restrictive. She asked how these referral pathways are going to be reconsidered to allow more freedom of choice, because the wording of the Bill in terms of how it is outlined seems very restrictive.

Ms A Gela (ANC) fully supported Clause 7(1) and Mr Xaba’s remarks on it, especially “the Fund, in consultation with the Minister”, because the Minister is the person who’s responsible to lead the Department of Health. This is relevant because the Minister is the person who the President assigned with the task to overlook everything happening in that Department, and the Minister is the one that accounts to the President. She fully supported that Clause 7(1) remains as it is.

She referred to Clause 7(2)(a) and said that the ANC supported this clause. Users have to access health services in line with the user registration requirements and obligations, and support planning and decision making, as well as appropriate resource allocation.

Mr T Munyai (ANC) said he would send the formal document to the Committee Secretariat, so that the ANC comments are clearly covered for those that are consolidating the report. He is in agreement with what has been raised by Mr Xaba and Ms Gela, including “in consultation with the Minister”. The ANC supported Clause 7(2)(c) aimed at ensuring that users are treated by appropriately skilled and qualified persons. This is also consistent with the professional, ethical codes of practice and their scope of practice. This also provides an opportunity for users to seek second or third opinions in the interest of addressing their health needs.

Dr S Thembekwayo (EFF) referred to Clause 7(2)(d) and asked how one would verify and confirm registration of all South Africans as users, irrespective of their social class. There was a problem with the referral pathways, particularly for those that will find it problematic to access these referral pathways. She asked if there was a better way that communities in the rural areas could be included as they would find it very problematic to adhere to the referral pathways as is known.

Clause 7(2)(f)(ii) states that “the administration, management, budgeting and governance of central hospitals must be made a competence of national government” and it should include the provincial and district clinics or hospitals. The clause omitted health technology assessments which is not taken into consideration and it is known that technology can pose a problem in the South African health sector. The EFF does not support this clause.

Ms E Wilson (DA) said that she has a lot of problems with Clause 7. The entire clause hinges on the Benefits Advisory Committee and what they declare is available, what is allowed, what is not allowed and what we can manage; and there is absolutely no idea what the starting point of that is. There is no indication if it is for maternity or primary healthcare as there is no indication of what the clause refers to, which makes commenting on this clause very difficult. The second problem with Clause 7 which the Office of Health Standards Compliance (OHSC) has made very clear, is that very few facilities will meet the standards required in the NHI Bill, particularly in the rural areas. If the facilities cannot meet the standards, then it cannot be registered as an NHI service provider; and if those facilities are not registered, she questioned where people go to access those benefits discussed in this clause. Clause 7(2)(a) states that “a user must receive the healthcare services that he or she is entitled to...”, it is hard enough for people in rural areas to access their local facilities. She asked what healthcare services are people entitled to according to the Benefits Advisory Committee. She asked if there was a starting point on this. What would happen if people went to their local healthcare facility (whether registered or unregistered) and are in need of services beyond what the Benefits Advisory Committee has put in place at that facility. She questioned if this meant that people would have to pay for all other services, because it is not clear and the clause leaves people in the dark.

Ms Wilson noted Clause 7(2)(b) “should a user be unable to access the healthcare service provider or health establishment with whom or at which the user is registered...” and Clause 7(2)(c) “should a healthcare service provider or health establishment contemplated in paragraph (a) or (b) not be able to provide the necessary healthcare services, the healthcare service provider or health establishment in question must transfer the user concerned to another appropriate healthcare service provider or health establishment...”. One should be careful of the word “must”. She made an example of Limpopo, because that is where she is from and she does the majority of her oversight. It is very hard to find a bed for anybody in any hospital in Limpopo at the moment; the health facilities are a disaster. In such an instance, the clause states the user “must” then be transferred to another facility to get help. She questioned how far away the user would be transferred, if there were any limitations on the transfer and who would pay for the user to be transferred to another facility. If the service provider is paying for users to be transferred then she would hope that there is a hell of a lot of money in this proposed NHI Fund because half of that Fund would go to transferring people to accredited facilities or where they can get help. The entire Clause 7 is so grey, there are no specifics from which to work on. She cautioned that if Clause 7 is continued with, then it would be shooting oneself in the foot.

Mr P van Staden (FF+) agreed and said it was important to touch on the pilot projects that have been conducted across the country. According to the Genesis Analytics evaluation report “Evaluation of Phase 1 implementation of interventions in the National Health Insurance (NHI) pilot districts in South Africa NDOH10 / 2017-2018”, page 12 states that the 10 NHI Pilot districts were made up of one district in every province, except KwaZulu-Natal (KZN), which had two districts. The KZN province also included a third district which was funded through the provincial government. According to this report, these NHI pilot districts were intended to become sites for innovation and testing throughout the implementation of NHI phase 1. The interesting thing is on page 14 of the report, where the following worrying remarks were made: “However, the interventions also faced a number of challenges, and, to varying degrees, these factors hindered their success: inadequate planning, lack of resources, inconsistent communication, a lack of coordination where necessary and insufficient mechanisms to monitor progress to ensure course correction.” The intervention challenges related to the Ward-Based Primary Healthcare Outreach Teams (WBPHCOTs), Integrated School Health Programme (ISHP), General Practitioner (GP) Contracting, Ideal Clinic Realisation and Maintenance (ICRM), District Clinical Specialist Teams (DCSTs), Centralised Chronic Medicine Dispensing and Distribution (CCMDD), Health Patient Registration System (HPRS), Stock Visibility System (SVS), Infrastructure and Human Resources for Health.

Mr van Staden said that with all the above-mentioned problems experienced in phase 1 of the interventions over NHI Pilot districts during 2012/13 to 2016/17, he does not see how phase 2 in 2017/18 now into 2021/2022 and phase 3 from 2022/23 forward until 2026 will be any different or successful in the current context of a struggling public healthcare sector, which is worrying.

In light of the NHI pilot evaluation report, the South African public and taxpayer has no form of guarantee from government that the NHI will be a success, and that healthcare will not completely collapse in the public and private healthcare sectors. Based on the report findings, it does not seem the NHI will be a success in South Africa. He suggested that the Committee should pay attention to the report, because the findings are worrying.

Ms X Havard (ANC) said that the ANC supported Clause 7(2)(e) as it is consistent with ensuring that healthcare services are provided through appropriately accredited healthcare providers, at an appropriate level, efficiently and based on value for money.

Mr Xaba said that the ANC supported Clause 7 fully. He supported the remarks made by Ms Gela, Mr Munyai and Ms Havard. He agreed that the Minister is relevant because the Minister accounts to the Cabinet, the Minister is given a stewardship to look into the Department of Health, so the Fund should be in consultation with the Minister.

The ANC supported Clause 7(2)(b); it allows users to access healthcare services even when they are outside their areas of residence; users will not be deprived of accessing healthcare services even when they are well away from home. The clause is further supported by the ANC because it promotes a patient-centric environment and it is in line with the Bill of Rights.

He heard the Members views on Clause 7(4), for which he would provide clarity. The ANC proposed that Clause 7(4) should be amended to read “Treatment must not be funded if the Benefits Advisory Committee determines that...”, so that there is order and understanding. Clause 7(4)(a), (b) and (c) must be retained, because healthcare services to be covered by the NHI must be evidence-based, clinically necessary, cost-effective and value-based, which is in line with practicing an ethos of good governance.

Mr van Staden acknowledged what Mr Xaba had said about Clause 7(2)(b), but he is concerned about the report on the NHI pilot projects, specifically on this matter. The report stated that the health patient registration system was a problem due to poor connectivity at some facilities, challenges with hardware, lack of human resources and lack of capacity. He questioned how this problem would be dissolved before people can register. There are many reports from the time of the previous and the current Minister that the registration process was a big success. However, in his view the registration system was only a copy and paste from the Home Affairs system and that this area is a problem and it needs to be looked into. He recalled that Ms Hlengwa had also asked a question about the registration of users. Registration is a big problem which needs to be highlighted because this clause in the Bill is going to cause a problem.

Ms Hlengwa stressed that her concern is with registration because before a person accesses healthcare that person must be a user, and before the person becomes a user that person must register. She asked how this Committee would ensure that all people on the ground are registered so that they can access healthcare.

Mr Xaba said that perhaps the Members do not understand that the Committee has moved ahead with regard to the rights of users which was addressed in Clause 6. The Committee is now dealing with Clause 7. He asked that the Chairperson guide the Committee.

Ms Clarke agreed with Mr van Staden’s remarks. She had spent her entire recess doing oversight at different hospitals and she had observed that many of the hospitals do not even have internet and they do not have phones. This is going to be a huge issue if it is not sorted out. She requested a legal opinion on the Committee deliberating on the NHI Bill, because there is an outstanding Constitutional Court hearing where the Department of Health is appealing the outcome of a case declaring sections unconstitutional which featured heavily in fundamental aspects of the NHI Bill. If the Constitutional Court is to confirm the unconstitutionality of those provisions, the NHI Bill may require significant amendments if not be changed in its entirety. She asked that the legal team provide the Committee with feedback on that case and the appeal.

Ms Wilson referred to Clause 7(2)(f) which states “in order to ensure the seamless provision of healthcare services at the hospital level -”, Clause 7(2)(f)(i) “the Minister must, by regulation, designate central hospitals as national government components in accordance with section 7(5) of the Public Service Act, 1994 (Proclamation No. 103 of 1994)”; Clause 7(2)(f)(ii) “the administration, management, budgeting and governance of central hospitals must be made a competence of national government”; Clause 7(2)(f)(iii) “the management of central hospitals must be semi-autonomous with certain decision-making powers, including control over financial management, human resource management, minor infrastructure, technology, planning and full revenue retention delegated by the national government; and...”; Clause 7(2)(f)(iv) “central hospitals must establish cost centres responsible for managing business activities and determine the cost drivers at the level where the activities are directed and controlled.” Clause 7(2)(f) is between a rock and a hard place. She asked that the legal team explain what exactly is meant by this clause when two subclauses say that central hospitals “must” be part of national government, but in another subclause, it says it must be semi-autonomous. She asked for clarity.

The Chairperson said that he cannot keep on taking hands. He also had a few points to raise, but he would first take a few hands.

Dr Thembekwayo agreed with the Chairperson, the Members need to contribute and move on, instead of the Chairperson allowing the same Member to make repeated types of contributions. She asked that the Chairperson rule on this matter.

Mr Xaba agreed but Members should raise their views and comments while being specific to the clause at hand. He disagreed with the legal team providing input while the Members are deliberating on the clauses, because other issues will be raised that are not relevant to the clause at hand. He suggested that the Committee confine itself to Clause 7 and be guided by the Chairperson.

The Chairperson thanked the Members for their input on Clause 7. He referred to Clause 7(2)(d) and Clause 7(2)(f) and said that one should surely understand that the primary entry of service would be at the primary healthcare level. He reminded the Committee of the Alma-Ata Declaration of 1978, where the World Health Organisation (WHO) stated that there should be health for all. The ANC supported Clause 7(2)(d) and Clause 7(2)(f) as is, because both clauses speak to the actual services and where they ought to be delivered. It is also an important provision for ensuring rational, fair and effective use of available healthcare resources. He emphasised that primary healthcare should be the initial entry point, and specialists therefore cannot be the primary point of entry as this will obviously drive up the cost and the scope is also limited in terms of their specialised discipline. A primary healthcare system with doctors and nurses are needed, so that people with any kind of complaint can initially present themselves to access healthcare services.

Clause 7(2)(f) speaks to central hospitals and Members should understand why it is put in the manner that it is put. The ANC supported Clause 7(2)(f) because it ensures that services offered at central hospitals are made available nationally and not only confined to provincial jurisdictions. It will also make access to tertiary and quaternary services more equitable, including as training platforms for healthcare professionals and centres of research, innovation and excellence. Section 41 of the National Health Act provides that the Minister of Health is to determine the roles, functions and range of healthcare services that may be provided by these central hospitals. In the case of emergency services, it can be accessed at the nearest point to ensure equitable, efficient and effective access to needed services.

He referred to Ms Clarke's point on the outstanding Constitutional Court application. He is not aware of it but the Committee should also work on what is currently before it and focus on its role. The NHI Bill is placed before Parliament and this Committee as a collective is supposed to be taking the legislative part of the process forward. The Committee needs to continue as it is doing today.

Ms Sueanne Isaac, Parliamentary Legal Advisor of the Constitutional and Legal Services Office (CLSO) said that she is also not aware of any litigation. CLSO does deal with litigation on behalf of Parliament. She suggested that if Ms Clarke has details on the case, she provide it to the legal team. It would be unusual for a Bill to be challenged in the Constitutional Court, because it has not been finalised by Parliament, but if there is such a case then the legal team can be made aware of this and then advise the Committee.

Ms Clarke said that perhaps she was not clear in what she had stated. It is the Gauteng High Court’s ruling, in terms of Section 36 to 40 of the National Health Act, relating to the “certificate of need” that the Constitutional Court found unconstitutional. She asked what effect that would have on this Bill in terms of legality.

The Chairperson referred to Ms Clarke’s remarks and said that is completely different to what she had initially stated. There is no application before the court at this point and definitely not in the Constitutional Court with regards to the NHI Bill. A Bill cannot be contested, because it is the Committee’s work to complete this Bill process. It can be challenged thereafter, but currently it cannot be challenged because it is work that the Committee ought to complete. Ms Clarke had referred to something that is completely different. The Members have all read the judgment on the “certificate of need”. He asked if the Members could leave it at that for now.

Ms Clarke said that all she wanted was clarity. She noticed that Dr Crisp was shaking his head sanctimoniously about this. She had asked for clarity because she is not a legal person.

Ms Wilson said that she wanted to offer sympathies to the chairperson of the South African Medical Association (SAMA) who was brutally stabbed. She wanted him to understand that what happened to him was atrocious, unjustified and the Committee’s thoughts are with him as they pray that he has a speedy recovery.

The Chairperson thanked Ms Wilson for reminding the Committee. He had put out a statement on behalf of the Committee as to the stabbing of the SAMA chairperson.

The Chairperson reminded Members that whatever proposals or submissions they had made would need to be submitted in a written format and sent to the Committee Secretariat; he urged Members to submit their submissions timeously.

Mr Xaba said that the ANC supported Clause 7(5), as it is consistent with the Promotion of Administrative Justice Act (PAJA) and it is in line with Batho Pele principles, that is the element of openness and transparency. The ANC supported Clause 7(6) on the basis that it is also consistent with PAJA and is in line with Batho Pele principles on the element of redress.

Dr Thembekwayo referred to the Chairpersons remark about written submissions, she asked if this meant that whatever Members have suggested and discussed in this meeting would not be taken into consideration. She asked if it would only be the written submissions that are considered, and if the Committee Secretary was not taking notes of the oral submissions.  

Ms Clarke said that the DA objects to Clause 7 as it is and it would like to see the amendments that they have raised. She does have her submissions in writing. However, there were a lot of submissions made in the previous deliberations and Members were not informed that they would need to put that in writing.

The Chairperson said that it is part of the process that if Members would like to propose any amendments, then it should be put in writing.

Clause 8: Cost coverage
Mr Xaba said that the ANC supports the aspects of Clause 8(2) with proposed amendments; the clause states that anyone who procures services not in line with the NHI Act will be personally liable for the payment of such services. He proposed that the amendment of Clause 8(2) must read as follows “A person or user, as the case may be, must pay for healthcare services rendered directly, through a complementary medical insurance scheme, if that person or user— (a) is not entitled to healthcare services purchased by the Fund in terms of the provisions of this Act”

Mr Munyai said that the ANC supported Clause 8(1) and that it should not be amended, this clause states that the users of the NHI Fund will access healthcare services as prescribed, the Fund will be purchasing services from appropriately accredited and contracted providers on behalf of the population. The ANC also support the services being provided free when the users have a need and their households must be shielded from out-of-pocket payment, this will ensure equitable access to healthcare and limits the risk of catastrophic health expenditure. The ANC is not in support of Clause 8(2)(b) and propose that it be deleted, the clause violates the provision for referral, the reason for the proposed deletion is to avoid a situation where there will be a mechanism that will allow “jumping of the queue” by those that have the means at the expense of the poor, thus denying the needed healthcare services to the poor.

Ms Clarke said that in terms of cost coverage, it is very unclear how this would be done. She asked how the accreditation would be determined. She referred to Clause 8(2)(c) that states “...seeks services that are not deemed medically necessary by the Benefits Advisory Committee”, she asked what services are going to be stipulated within that criteria. The South African public must know what services they are going to be getting in terms of this Bill and what out-of-pocket expenditure they will have to make in terms of having a supplementary medical aid as well.

Ms Wilson referred to Dr Crisp and said that he recently spent R30 million to employ administrators of the NHI, which she is still trying to get her head around because the NHI has not even been passed yet, it is still in the form of the Bill and still in a clause-by-clause form. She hoped that he had told his administrators to be prepared because this also refers back to Clause 7, particularly Clause 7(4) and Clause 7(5), as to what services people can get and what they cannot get or if it was deemed that they need the medical care or not. She told Dr Crisp that he should accept that he will receive millions of queries from users such as “why was I not helped?” or “why was this deemed not necessary?”, given the current state of the health ombudsman’s office and the rest of the health sector; she thinks that this is going to be a nightmare.

She is particularly concerned about Clause 8(2)(a), because the clause does not refer to a definition of who is or who is not entitled to healthcare, which might be a huge problem going forward. The failure to comply to referral pathways as stated in Clause 8(2)(b) is going to be a nightmare. She had raised the concern earlier about the facilities that are not going to be able to be accredited and particularly in rural areas, where people often have to catch transport and travel up to 2km or 3km to get help, which will make the referral pathways a huge problem. Clause 8(2)(c) which states “...seeks services that are not deemed medically necessary by the Benefits Advisory Committee” would be an opinion for a lot of people; she made an example that if she was sick and thought that she needed help but was told that she is not sick and does not need help, this is why she had told Dr Crisp to get his administrators prepared to receive such letters. Clause 8(2)(d) which states “...seeks treatment that is not included in the Formulary” does not provide clarity on what kind of treatment the users are entitled to and what they are not entitled to. There must be a starting point so that once the Bill is passed, then the Benefits Advisory Committee stipulates what services it provides to the users and where users have to pay for services beyond that.

Dr Thembekwayo said that Members raised concern about the referral pathways in Clause 7, which is referred to again in Clause 8(2)(b) where it speaks of users that fail to comply with referral pathways. This is a very restrictive type of clause in the NHI Bill, especially when it relates to Clause 8(2) that states “A person or user, as the case may be, must pay for healthcare services...”, the word “must” is a restrictive term. She believed that the entire Clause 8 must be deleted because it does not take the plight of poor communities into consideration.

Ms Hlengwa said that she will send a written submission on behalf of IFP. She referred to Clause 8 on the cost coverage, besides the cost, she is concerned because it is critical for the public to know what healthcare services are envisioned, and that this cannot be contained in a regulation that would only be published at a later stage. People on the ground should know what healthcare they can access at their healthcare centres. She recently heard of a case in KZN where someone with cancer had to move from Newcastle to Durban with a bus, when the person arrived in Durban the person was told that there are no machines and medicine at the facility and that person had to move back to Newcastle without having been helped. She explained that the public need to know in what way they will be treated when they go to a healthcare facility.

The Chairperson referred to Clause 8(2)(c) and said that the intention is to clear any ambiguity as to what is not medically necessary, so that people are aware of this to curtail complaints to the appeal tribunal. The ANC proposed amendments to Clause 8(2)(c) to read: “...seeks services that are deemed medically necessary by the Benefits Advisory Committee; or that services are not medically necessary to be promulgated in regulations by the Minister”. The ANC also proposed that Clause 8(2)(d) be amendment to read as follows “...seeks treatment that is not included in the comprehensive set of healthcare services as advised by the Benefits Advisory Committee.”, the rationale for this is that the Formulary is limited only to medicines as per the essential drug list and/or the essential medical list and does not include other clinical interventions. These submissions will also be submitted in writing to the Committee Secretary.

Ms Ismail said that it seems as though the deliberations are working backwards. This is because there are a lot of clauses in the Bill that are not specific on the requirements. It seems as if most of Members inputs are concerned around the lack of specification on what medical health services are decided by the Benefits Advisory Committee. She made an example of Members’ input on the referral pathways and said that there are no specifications on the criteria used when deciding exactly what would be the outcome. This is very important because 90% of the time, as stated before, the hospitals are not functioning as they should be. She and her colleagues had personally referred so many issues to the health ombudsman, but the Office of the Health Ombudsman is currently understaffed itself. So much monies are put into the NHI for things that she would not think is so necessary right now, the basics would first need to be in place. The majority of people, even at the public hearings have clearly stated that while everyone wants universal healthcare, the reality is that the present healthcare system is failing its people. The NHI Bill speaks of referral pathways to go to another hospital, but frankly, right now, most of the hospitals are not compliant to what they should be and most of the hospitals would not comply to NHI requirements. The Department would first need to ensure that all infrastructure of hospitals and clinics are adequately resourced to ensure a functioning healthcare system before moving on to the nitty gritty, or else so many communities will remain without healthcare services. She emphasised that the healthcare system is currently failing its people, which implies that the NHI would not get the necessary output that it would want to achieve.

Mr Xaba said that he supported the ANC’s proposed amendments to Clause 8 as stated by Mr Munyai and the Chairperson.

Clause 9: Establishment of Fund
Mr van Staden said that at this stage no thorough assessment that has been done to see how the NHI will affect the economy. When the Minister of Health had tabled the Bill in 2019, the stock market had already reacted negatively with a loss of R14 billion on that day. He recalled that the FF+ had submitted written questions to the Minister in the National Council of Provinces on 23 August 2019. The FF+ had asked if the Department had any concerns raised by National Treasury on the implementation of the NHI and if so, if the Department considered such concerns. The FF+ had asked details and if the Department had consulted with the Premiers of provinces on the NHI implementation. He read that the Minister responded as follows “The National Treasury have been part of a policy development that raised many concerns in the process, which was dealt with in the interdepartmental process”. The Minister also stated that “The concerns raised by Treasury relate to the following areas: The extensive nature of shifting provincial functions and funds to the national sphere needs adequate planning and time to implement; clarity on the location of its function listed in the National Health Act; provisions that contravene the Public Finance Management Act (PFMA) and Division of Revenue Act; the NHI Fund as a direct charge against the National Revenue Fund; the Bill should provide greater detail relating to the transitional phase until the full NHI implementation for medical schemes to understand what their complementary role will be in future, and if there are financial implications relating to the various policy proposals”.

The greatest threat to the success of the NHI is the government itself, over the past 26 years it has repeatedly shown that it is utterly unable to govern or manage this country, which is seen in the public hospitals as well. The NHI is just another way that the government plans to get its hands on more of taxpayers' money and it is hard to believe that the money will not eventually end up in the pocket of corrupt officials. The South African government has repeatedly shown that it cannot be trusted with taxpayers’ money. The FF+ foresees that the NHI will have an extremely negative impact on South Africa’s economy. It is concerning that the government wants to implement a system that is obviously not well thought through. This country cannot afford to sustain any more damage to its economy, it already has a struggling healthcare system.

Mr van Staden recalled that the previous Minister of Health had made a statement at the Hospital Association of South Africa (HASA) conference in August 2019, that the NHI will not take the same risk as various state entities which is not reassuring; such statements do not only mislead the public but it does not divulge the whole truth to South Africans. An explanation of how the government will ensure that the NHI does not suffer great financial losses and how government plans to manage this Fund to prevent corruption must be provided. It must be noted that during that same week it came to light that corruption had occurred within the South African Police Service (SAPS) medical aid, Polmed, where R15.7 million was unlawfully allocated to a board of trustees over a period of three years as the board of trustees had awarded themselves salary increases. The NHI will also have a board of trustees which will function in terms of the legislation of the PFMA, there exists a very real possibility that this board of trustees will follow in the footsteps of Polmed’s board of trustees. Neither the Minister or the previous Minister, nor the President can guarantee that corruption will not occur in the NHI. He reminded the Committee of the Digital Vibes scandal that occurred last year.

Mr Munyai said that the ANC unequivocally supported Clause 9, this clause establishes the NHI Fund as a national public entity as contemplated in Schedule 3A to the PFMA; this is a Schedule 3A entity that is an organisation created by government and mandated to fulfil economic or social responsibility on behalf of government, such entities rely on government funding or public money either by means of transfer by the National Revenue Fund or through statutory money; these entities have autonomy as designated by the PFMA, this implies that there is a stringent oversight to the Executive Authority and Parliament. Examples of such organisations are the Competition Commission South Africa, Brand South Africa, the Agricultural Research Council and the Commission for Conciliation, Mediation and Arbitration; so therefore, the state-owned entities are formed by the government for the purpose of engaging in commercial activities on behalf of government. The government usually takes either full or partial ownership of any state-owned enterprise (SOE). The SOEs represent the government in commercial endeavours, examples of such entities are Transnet, Eskom, Denel, the South African National Roads Agency (SANRAL), the Industrial Development Corporation of South Africa (IDC) as well as the South African Post Office. Clause 9 is supported because the ANC recognises health as the public good, the Fund will be fulfilling a specific social responsibility functioning on behalf of government.

Ms Clarke asked how the Committee could be guaranteed that the NHI Fund would be different to any SOE in this country. She referred to the conditions of Eskom and Transnet and so on. She does not see how the NHI Fund would be any different in terms of its management. The Minister would completely play the role of accountability, which should be shifted to Parliament so that there can be oversight. There has been no social or economic study done on this Bill as yet. There is no clarity on the funding model and the pilot projects have been a failure. The private medical fraternity contributes 8.7% of the Gross Domestic Product (GDP).

The current infrastructure and services that patients receive at state care hospitals is terrible. She has seen horror stories at hospitals that make her hair stand on end. The current infrastructure would never be able to cope with the likes of the NHI. She asked how corruption would be curbed within this NHI Bill. The ultimate framework implied by the NHI is that general taxes would be increased; South Africans would once again become poorer than what they are at the moment, South Africans are already battling with the cost of living for food costs, fuel costs, and taxes. Tax hikes are a huge concern. The DA would like to get some kind of supporting document and clarity as to how this NHI Bill would be funded, so that one can see if this Bill is actually going to make a difference in healthcare.

Ms Ismail said that while she acknowledged that the NHI Fund would be established as an autonomous public entity, as in Schedule 3A to the Public Finance Management Act, it is also noted that the NHI Fund is looking at billions of rands from the public purse. There is no clarity on the role of the Minister of Finance considering the amount of money that the NHI requires. The circumstances of the economy of the country have changed tremendously since the NHI Bill was originally initiated, so a new financial feasibility study is necessary, especially after the Covid-19 pandemic. The socio-economic circumstances of most South Africans are at a dire point.

She is concerned that the centralisation of the Fund would mean the centralisation of the functions of provinces. Healthcare provided through provinces is the second largest function, which the Fund will take away to a large extent, she worried that this would infringe on the constitutional mandate. She reiterated that the country already dealt with the Digital Vibes scandal and Members are already aware of the current state of the SOEs. The NHI Fund is definitely going to be another huge SOE and given the country’s experience with corruption, it is necessary to ensure that there will be external audits, government cannot be allowed to audit itself. She expressed concern about the lack of transparency and accountability on audits, because it concerns the taxpayers’ money.

Ms Wilson noted that the NHI Framework envisages the establishment of a single organisation to purchase all healthcare in South Africa. This creates a problem because it means that all revenue will be redirected to the NHI Fund, and therefore provincial government will not receive transfers from the national government to carry out their constitutional obligations with respect to healthcare and in effect the provincial departments merely become an agent of the NHI Fund. Control over financing implies control over service planning, spatial distribution, mix of health services, effective provincial health administrations. By going the route as envisaged by Clause 9, health services would cease to be a concurrent function between national and provincial government, this will nullify the constitutional arrangement of functions. She is concerned that this will nullify the constitutional mandates of provincial governments. She asked if this would change the constitutional mandates of provincial health governments.

Provincial health services would not receive financing for healthcare as revenue for further appropriation by provincial legislatures, instead the provincial health services would receive revenue in the form of health service reimbursements, much the way as the private health services receive them. Technically, this means that the national government appropriates the funds for the NHI Fund which then buys either the provincial or the private health services. This would result in huge constitutional issues as taking away the constitutionally mandated functions of provincial health departments would be problematic.

Mr Xaba said that he supported Mr Munyai’s submission on Clause 9 on behalf of the ANC. The NHI in itself is a one pool, one fund, to cover many services comprehensively and it is underpinned by ubuntu and social solidarity. The ANC would like to correct the assertion that the private sector contributed 8.7% to the GDP, which a Member had raised earlier. It is not correct; the private health sector expenditure is at 4% GDP. He recalled that a Member had also raised concern about the negative impact of the economy. He clarified that as a requirement, the Cabinet, through the Department of Planning, Monitoring and Evaluation (DPME) and the Department, conducted a socio-economic impact assessment, which has shown that the NHI will not have a negative impact on the economy. The ANC therefore supported the establishment of the NHI Fund.

Mr Munyai said that he had thought he would not respond to political statements, because it takes away the focus of the clause-by-clause deliberations. However, in terms of Clause 9, it is important to emphasise that Schedule 3A entities, which the NHI Fund will be, are organisations created by government and mandated to fulfil a specific economic and social responsibility on behalf of government. They rely on government funding and public money, either by means of transfer from the National Revenue Fund or through statutory money. By its nature there is a very strong, stringent oversight designated in the context of autonomy by the PFMA. The question of where the money would come from has already been clarified. The issue of the constitutional mandate will be covered by Clauses 31 and 32. The ANC would like to correct the assertion that the private health sector contributed 8.7% to the GDP, which is incorrect. The private health sector expenditure is at 4% of the GDP at the current moment. It is understood that the organisations whose share price fell was because those companies had made a commitment to their shareholders that the NHI Fund administration would be outsourced, that they would administer the NHI. The shareholders were unhappy that the Bill was presented to Parliament with provisions that indicated that administration would not be outsourced.

Ms Wilson said that Members are there to ask the questions and raise concerns. The answers must come from the panel that is sitting before them; Members do not need Mr Munyai to answer the questions for them.

Ms Hlengwa said that the Committee should extensively evaluate government's provision in the Bill to strengthen independent oversight if the legal nature of the Fund cannot be changed.

Clause 10: Functions of the Fund
Ms Gela said that the ANC supported Clause 10(1)(d), because the Fund must enter into contracts with accredited providers to ensure that healthcare services that are purchased meet the norms and standard for the quality acceptable to users. The contracted healthcare provider must meet the healthcare needs of the population that they serve. This means that the disease burden in communities must be well understood and taken into account when planning for contracting with accredited providers.

Mr Munyai said that the ANC supported Clause 10(1)(e). Prioritising the timely reimbursement of healthcare services will ensure that the healthcare professionals such as doctors, nurses and other critical healthcare professionals do not immigrate as they will receive their remuneration on time and they will serve the users fairly and consistently to address their healthcare needs, this is in line with the PFMA which provides for payment within 30 days.

The ANC supported Clause 10(1)(g) to ensure the sustainability of the NHI Fund. It is important that the Fund retains the responsibility for fairly determining investment rates that are affordable and based on the budget envelope made available to meet the population health needs.

The ANC supported Clause 10(1)(a) and Clause (10)(1)(k). One of the pillars of strategic purchasing is the reimbursement of the providers based on the principle of value for money, this would ensure that the Fund helps to meet the population health needs in a way that is efficient, effective and leads to maximum health gain based on the available budget envelope.

The ANC supported Clause 10(1)(o). As the primary entity tasked with meeting the personal health needs of the population, the NHI Fund must proactively generate, gather and analyse the relevant data and information that will support its planning and decision-making processes towards effectively contributing to attaining national health policy objectives, and improve health outcomes.

The ANC supported Clause 10(1)(s), because the NHI Fund must ensure accredited and contracted providers as well as users adhere with the protocols, guidelines and processes that relates to compliance with the provisions of covered health services and how they should be accessed.

The ANC supported Clause 10(2) in that the NHI Fund must ensure every effort to put into place administrative and related processes that meet the high standard of professional ethics and ensure the efficient economic and effective use of the resources allocated to it. Additionally, the Fund must ensure that its services are provided impartially, fairly, equitably and without bias, with a strong focus on the vulnerable. The elements are all covered in Section 195 of the Constitution.

The ANC supported Clause 10(3); the Fund is established as an entity that directly falls under and responds to the Minister of Health as the Executive Authority responsible for the health sector and its performance. Therefore, the NHI Fund must ensure that its operations and activities supporting the execution of the mandate adequately recognise and take into account the health sector priorities and programmes as outlined and approved by the Minister of Health.

The ANC supported Clause 10(4), as the NHI Fund must ensure that its operation and activities support the execution of the mandate based on the healthcare sector priorities and programmes as outlined and approved by the Minister.

Ms Ismail said that she is concerned about Clause 10(1)(f) because it allows the NHI Fund to issue directives, whereas in terms of administrative law principles a regulatory body normally issues directives and the NHI Fund is not a regulatory body; she asked to be corrected if she is incorrect. On Clause 10(1)(e), there are so many things in writing that are unfortunately not implemented on the ground. It is very well known that healthcare service providers are not paid on time, she asked how the NHI Fund would ensure that these payments are done on time. Clause 10(1)(e) requires more detail on how the timely reimbursement of healthcare services would be achieved.

Clause 10(1)(g) means that the prices will be controlled and set by government, which is basically direct market manipulation and it would be better that a separate independent regulatory body be set up to determine prices in the medical industry.

She proposed that Clause 10(3) should be amended to say “The Fund performs its functions in accordance with health policies in accordance to the National Health Act.” rather than saying “ accordance with health policies approved by the Minister.”

Mr Xaba supported the submissions by Ms Gela and Mr Munyai on behalf of the ANC. He had head Ms Ismail's concerns about Clause 10(3); the ANC supported Clause 10(3) for the reason that the Fund is established as an entity that directly falls under and reports to the Minister of Health as the executive authority responsible for the health sector and its performance. Therefore, the NHI Fund must ensure that its operations and activities supporting the execution of the mandate adequately recognise and take into account the health sector priorities and programmes as outlined and approved by the Minister of Health.

The ANC supported Clause 10(1)(f). The ANC supported Clause 10(1)(a), for the principle of universal health coverage, which will be achieved through the implementation of the NHI Fund, this is in line with Section 27(2) and (3) of the Bill of Rights in the Constitution which says that the state must take reasonable measures to achieve the progressive realisation of the right to healthcare services, including reproductive healthcare and that no one may be refused emergency medical treatment. As outlined in the purpose of the Act, the Fund serving as a single purchaser and a single payer will ensure equitable, fair distribution and use of healthcare services and resources.

The ANC supported Clause 10(1)(j), because the implementation of the NHI Fund is founded on the pillar of improving the quality and accessibility of health for all South Africans. The ability of the Fund to appropriately monitor the performance of accredited and contracted providers, health establishments and suppliers will ensure that they do not cover over service of under service and will comply with the stipulated clinical protocols, guidelines, reimbursement tools, norms and standards, as well as ensure that no patient is subjected to out-of-pocket settlement payments of the covered services. The ANC supported Clause 10(1)(u), because the NHI Fund will be expected to operate within applicable legislative and regulatory prescripts as it is in the case with other existing organs of state as per the PFMA.

Mr van Staden suggested that the Committee should note the concerns raised by the Financial and Fiscal Commission (FFC) to this Committee in October 2019. According to the FFC, there are various progress, budget and policy issues. They stated that the rolling out of the NHI has been on the budget programme since the release of the 2011 green paper, thereafter two white papers have been released, followed by the NHI Bill in 2018. According to the FFC a new NHI grant was introduced in 2012 to finance 11 NHI pilots with an initial three-year allocation of R1 billion at that stage. It said the NHI grant “encountered teething underspending challenges resulting in allocation reductions and the introduction of an Indirect Health Insurance Grant”. It was explicitly stated that planning was problematic from the beginning. The NHI pilot grant was intended to test the feasibility of the new delivery models. The pilot has since produced mixed results and did not cover the private sector. The pilot had the following results: the health patient registration system was rolled out; the workload staffing need was not met due to post freezing; the target to refurbish 140 clinics infrastructure was not met; the stock visibility system was hampered due to connectivity problems and the contracting of private doctors proved to be expensive. The full NHI implementation is still years ahead but the Fund is scheduled to be operational by 2026. Several hurdles lie ahead and must be overcome before the NHI Fund can come into operation. The 2026 timeline is too short a target to complete all the necessary steps.

According to the FFC report, approximately nine activities remain outstanding in the progress of the NHI: establishment of an operational and administrative capacity; the development of health information systems; the function shifts and rearrangement of funding flows; costing; the healthcare benefit design; the provider payment mechanism design; the set-up of new delivery structures and committee; contracting and testing. The implementation plan is in need of rigorous planning and sequencing. The NHI grant has undergone numerous iterations since its inception in 2011 and it said the continuous repurposing of the NHI grant is worrying given the imminent introduction of the NHI Fund. The baseline allocations for NHI grants have been reduced drastically which inadvertently delays implementation. Despite the changes made to the medical tax credits, there are no proposals to integrate the multiple NHI funding streams to establish the Fund. The FFC stated that the NHI budget allocation continues on the same trajectory of piecemeal and incremental approach, thus the funding results in unrelated outputs. The constant iteration of NHI funding creates implementation uncertainties.

Certain NHI policy issues that are fundamental to the successful rollout of the NHI also came to light. The following details remain unclear: role of the provinces; flow of funds between the NHI Fund, provinces, districts and private providers; financing of health infrastructure; ownership structure of public health facilities; inter-governmental fiscal relations (IGFR) accountability arrangements; distributional equity of contracted service providers; implications for central procurements under contracted service providers; payroll rationalisation and function under limited delegations. The FFC report further stated that according to findings by the Health Market Enquiry, the Department has not been playing its regulatory role as required by law. The FFC is adamant that the recommendations made in the Health Market Enquiry should be aligned to the proposal made in the NHI Bill, and that the functions of the Supply Side Regulator for healthcare must overlap with some functions of the committee established in terms of the Bill, for instance the benefits pricing committee and the contracting unit for primary healthcare.

It was recommended that the national and provincial treasuries should develop a framework or criteria for determining serious financial strain with clear measurable financial and non-financial factors that can be monitored, reported and used to trigger automatic fiscal adjustment. National Treasury and the Department of Health should allocate part of the 2018/19 MTEF health infrastructure allocations to gradually set-off expenditure accruals which have arisen from unavoidable demands for which allocated budgets were depleted. National Treasury should ensure that the framework for health infrastructure conditional grants accommodate flexibility during periods of protracted fiscal constraint so that provinces can be allowed to re-orientate their package of available capital allocations towards maintenance.

Mr van Staden said that the FFC concluded that the health spending is consistently positive and exhausted but output and outcome performance show mixed results, and that Parliament should focus its oversight efforts on under-achieved performance targets where there has been 100% expenditure against the budget. The NHI grants should focus specifically on reforms that advances the implementation of the Bill. Further, the problems of intergovernmental relations and local government fiscal framework institutional arrangements must be resolved before large budgetary commitments are made to the NHI. It is the view of the FF+ that the Portfolio Committee on Health, the Minister of Health, the Minister of Finance and the President need to hear and pay attention to the concerns and recommendations put forward by the FFC. It seems that there is a communication gap between the Department, the FFC and National Treasury. In that same meeting in October 2019 FF+ pointed out that the Committee needed to review thoroughly the NHI problems before the public participation process commenced and before the Committee deliberated on the Bill clause-by-clause.

Ms Clarke said that when one reads Clause 10 Functions of the Fund, the Bill completely removes the choice of South Africans to choose where to get their healthcare. The Bill removes the autonomy of South African to choose their own healthcare. It is mandated that the National Department of Health (NDOH) is the sole provider of healthcare in the country, while all private healthcare providers will be contracted by the state. This means that there is absolutely no choice for people. She asked how the composition of the Benefits Advisory Committee would be done in respect of it making the relevant recommendations. She agreed with Ms Ismail, that 30-day payment in the current healthcare system is a major problem.

She was concerned that the current medical schemes subsidy would also be removed and redirected to the NHI. The removal of these subsidies would have immediate implications for lower income medical aids. Certain medical aids provide good healthcare under lower income medical aids and cover substantial benefits. She was also concerned about the Prescribed Minimum Benefits (PMBs) of medical aids in how PMBs would be managed within the NHI. The overall framework illustrates that one monopoly public structure would now purchase all needed healthcare goods and services in South Africa. It is suggested in various supporting documents that the NHI would make the services compete for contracts. She asked how this would function and how would competition be instilled within the NHI.

On the corporate governance model of NHI, she asked how the appointments of the Board and the Chief Executive Officer (CEO) would be made. She suggested that Parliament should have oversight on the appointments in the establishment of the Fund.

Mr Xaba requested the Chairperson to assist the Committee to focus on the clause at hand, which is Clause 10. The FFC recommendations and NHI pilots have no bearing on Clause 10.

The Chairperson replied that Members need to have a very fair process. Considering the number of points raised under Clause 10, he would like to give Members an opportunity to express themselves.

Ms Wilson said that one of the concerns is that the Fund is to purchase all needed healthcare for all residents in South Africa. The word “purchase” must be taken in its literal sense, in other words, the Fund will procure healthcare goods and services. It only established one mechanism by which the government will guarantee social protection to access to healthcare, which is the healthcare purchased by the Fund. She has an issue with the extent other forms of healthcare coverage may continue to exist. This legislative framework can go as far as to prohibit alternative forms of coverage through medical schemes and other social insurance arrangements, which is in direct contravention of Section 27 of the Bill of Rights. The NHI Bill states that a user of healthcare services purchased by the Fund is entitled, within the state’s available and appropriated resources “to purchase healthcare services that are not covered by the Fund through a complementary voluntary medical insurance scheme registered in terms of the Medical Schemes Act, any other private health insurance scheme or out of pocket payments, as the case may be”, which in addition to Clause 10 contravenes the constitutional mandate.

The word “purchasing” is seen as distinct from the function of healthcare provision, in this way health services, if public or private, would be seen as separate legal entities from the purchaser, which might have long term implications. The rationale behind the separation into purchasing and provision is to achieve efficiencies through the establishment of a dominant purchaser that will be able to engineer efficient arrangements with providers with strategic contracts. It is presently assumed that the combination of scale, together with purchasing power will induce these official contracts. Huge problems will arise when a single entity like the NHI Fund gets the right to contract-in suppliers, particularly when people who have been supplying the state's health structures year-after-year suddenly lose the right to supply or provide medical care, medical equipment and medical services.

the DA has a huge problem with where the money for this Fund is coming from, where it is going to be utilised and how it is going to be utilised. An example is that the Limpopo Department of Health has paid R516 million to Veritas Digital since its appointment in 15 June 2022. It anticipates paying an additional estimated R600 million for the completion of the project over the contract life span. The Department appointed a service provider to scan, archive and store all records from Limpopo’s hospitals and clinics for over a period of 60 months; apparently, they have already scanned 487 million pages from the 41 facilities in the province, but that is only 65% of inactive records and they have not yet begun to tackle the active records to date. They now estimate that another R280 million will be needed to complete the scanning of the outstanding inactive records and a further R320 million will be required for outstanding active medical records. In 60 months, the Department is going to spend R1 billion to scan records. If this is just for the Limpopo Department of Health and what the NHI Fund intends to take over, then she questioned how NHI would be funded. This is why Clause 10 of the NHI Bill causes huge concerns for the DA, because there is no clarity on where all of these billions would come from.

Ms Havard said that the ANC supported Clause 10(1)(c) because the Fund will purchase healthcare services that takes the disease burden into account and targeted at meeting the needs of all age groups while leaving no one behind. A statement by the Benefits Advisory Committee states that this would also include rural communities and all vulnerable persons, including those living with disabilities, women, children and older persons.
- The ANC supported Clause 10(1)(f) as the Fund will put systems and process in place to ensure that accredited and contracted providers are paid appropriately and accurately using alternative reimbursement strategies and are paid on time.
- The ANC supported Clause 10(1)(h) because it promotes rational access to health services and ensures that the population has access to needed health services at the right level of care.
- The ANC supported Clause 10(1)(i) as the continuous monitoring of providers will ensure that the Fund only credits and contracts with providers and establishments that are compliant with all relevant and applicable legislative and regulatory prescripts.
- The ANC supported Clause 10(1)(n) as this provision is consistent with normal and procedural practices as related to public entities under the PFMA.
- The ANC supported Clause 10(1)(q) because the NHI Fund must link into the national health information system for the purpose of planning, decision making and equitable resource allocation.

Dr Thembekwayo said that the EFF proposed Clause 10(1)(h) be removed, since the funding of healthcare services has never been appropriate and consistent in its nature.
- Clause 10(1)(i) should also be removed, because no collate data have previously been intellectually utilised contextually by the Department.
- Clause 10(1)(j) on the profiling of accredited and contracted health providers including its establishment and suppliers was a failure and will forever be a failure. Maintenance of the national database and demographics of the epidemiological profiling of the population has also failed.
- Thus the EFF rejects Clause 10 in its entirety.
- In actual fact, the EFF rejects the NHI Bill in its entirety and in its present form.

Mr Xaba said that the ANC fully supported Clause 10(1)(h), (i) and (j) and objects to these being removed. The ANC supported Clause 10(1)(p), because the NHI Fund as a key health sector entity is expected to collaborate with government departments, statutory professional councils, other statutory bodies and organs of state as part of its overall execution of its functions, responsibilities and powers to achieve sustainable and affordable universal access to quality health services for the population.

Ms Wilson said that Clause 10 is a political appointment of the Minister to oversee this Fund and she does not think that this should be allowed.

Mr Xaba said that the ANC supported Clause 10(1)(r), because the NHI Fund is intended to support the progressive realisation of the right to access quality healthcare services of the population, in line with Section 27 of the Bill of Rights.
- The ANC supported Clause 10(1)(t) because the NHI Fund must be allowed sufficient flexibility and leeway within the set legislative and regulatory parameters to enable its performance and achievement of set performance targets that supports the progression towards achievement of universal health coverage.

The Chairperson noted that the ANC had an overall support of Clause 10 and its subclauses. He noted that Members had raised concern about corruption, he referred to Clause 10(2) which states that “The Fund must perform its functions in the most cost-effective and efficient manner possible and in accordance with the values and principles mentioned in section 195 of the Constitution...”

Clause 11: Powers of Fund
Mr Xaba said that the ANC supported Clause 11(1)(h), because these are internal control mechanisms of improving the performance of the NHI Fund. The appeals tribunal will be the external control mechanism to which providers, suppliers and users can submit their complaints against the Fund, in instances that they are unhappy with any decision that the Fund arrived at; this will be inconsistent with the provision of PAJA.
- The ANC supported Clause 11(1)(k) as critical to ensuring that the Fund has the internal capacity to effectively address matters of corruption, fraud, unethical or unprofessional conduct or abuse from users of the Fund. This will ensure that the Fund is adequately protected from fraudulent and unethical conduct which might weaken its sustainability and ability to achieve its objectives.

Mr Munyai agreed with Mr Xaba. The ANC supported Clause 11(1)(e), (f) and (g) as they are consistent with the standard operating practices and procedures of Schedule A entities, in proactively managing their financial and non-financial liabilities and assets. The Fund is expected to do this not in a surplus, profit-driven or commercial manner but rather in a manner that focuses on promoting access to the quality personal service through sustainable, equitable, effective and efficient mechanism, based on the objective of achieving universal health coverage.
- The ANC supported Clause 11(1)(o), as the Fund must continuously liaise with the Minister of Health on matters of national policy and priorities, including aspects pertaining to the introduction and review of the regulation in terms of the provision of the Act, enabling its creation and operations that would ensure regulatory coherence and promote alignment on matters pertaining to the health sector programmes and interventions.

Ms Clarke referred to Clause 11(1)(b) and (c) and said that there is no safeguard or control on how or why equipment, property and such can be purchased. She asked if the Fund can make purchases on their own accord and if this would not open up threats to tender corruption.
- On what basis would the steps in Clause 11(1)(e) be needed; if it is in reference towards payment of healthcare providers, and if this would not go directly against the PFMA and previous deliberations on payment terms?
- Clause 11(1)(f): would the Fund be directly responsible for medical and legal claims.
- Clause 11(1)(g): there is no oversight or control in place on who or how purchasing will be done.
- Clause 11(1)(h): should there not be an independent body investigating maladministration complaints against the Fund itself?
- Clause 11(1)(i)(i): what would happen to the providers who have been supplying hospitals for a long time and how would it be ensured that they continue as service providers.
- Clause 11(1)(i)(ii): the public hospitals have failed dismally to pay contractors, doctors and nurses on time. She asked what reassurance will there be that payments will be made timeously.
- Clause 11(1)(i)(iii): how the facilitation of efficient and equitable delivery of quality healthcare services would be done, considering many hospitals do not even have telephone lines and working computers. She has personally seen that many hospitals do not have IT equipment, Pelonomi Hospital in Bloemfontein is an example.
- Clause 11(i)(iv): how the Fund would manage the risk of underfunding.
- Clause 11(i)(vi): has no reference to what mechanisms would be put in place to prevent fraud; there are no checks and balances and the powers are centralised to the Minister. She again recommended that Parliament should have oversight, or that the Fund should account to Parliament to avoid any possible fraud.
- Clause 11(i)(vii): no plan is in place to reasonably ascertain how the Fund will function, what services will be purchased, who is entitled to healthcare etc.
- Clause 11(1)(j): there is no oversight on how these will be controlled and the powers remain with the Minister who can arbitrarily exercise his power.
- Clause 11(1)(k): has no mention of how the protection of the Fund will be done. The NHI Bill does not even reflect on how the NHI will be operate, it is impossible to deliberate on how fraud would be prevented when the Committee does not even know how it will work as yet. Nothing has been shown that the NHI will be any different from any other government SOE.
- Clause 11(2): who will become an accredited healthcare provider, if some institutions will be barred and if there would be a limit to certificates issued. This also raised constitutional issues.
- Clause 11(2)(a): what are the purchases referred to because there is no definitiveness or idea on what will be covered. She asked how patients would be aware of what is available.
- Clause 11(2)(b): the practicality of this clause is concerning. Members have seen hospitals around the country that do not have beds, sheets or medicine on a regular basis, therefore how would the NHI magically change this?
- Clause 11(2)(b) states that “take all reasonable measures to ensure that there may be no interruption to supply for the duration of the contract”. However, she gave instances of where doctors drive to other hospitals in the middle of the night to find supplies in order to provide healthcare. The Bill must have some accountability around issues like this.

Mr van Staden referred to Clause 11(1)(d), that states “ the prescribed manner and subject to national legislation, invest any money not immediately required for the conduct of its business and realise, alter or reinvest such investments or otherwise manage such funds or investments”. The main concern of the general public is that the NHI will simply follow in the footsteps of Eskom, Transnet and other SOEs. However, the Minister of Health holds the view that the NHI will not take the same risk as Eskom. That statement is a bit vague and disconcerting. Government cannot ensure that the NHI will not suffer great financial losses like the other SOEs and no clear answer can be provided on how the Minister and government plan to manage the NHI Fund to prevent looting and corruption from occurring in the NHI. The fact that corruption occurred within the SAPS medical aid, Polmed, means that the Minister cannot give any assurance that corruption will not take place within the NHI. He recalled that only thing that the previous Minister could say during the Committee meeting in August 2019, was that “corruption will be a major challenge”. It is clear that a corruption-free NHI Fund cannot be guaranteed and as a result the NHI will be looted.

On Clause 11(1)(g), the shortage of medicines at state hospitals and clinics is a matter of great concern and a serious problem that must be addressed before the NHI can be implemented. In a written question to the Minister of Health in October 2019, he had asked the Minister if any accounts for medicine in provincial hospitals and clinics were currently in arrears, for how long these accounts have been overdue and what amounts were outstanding. The Ministers response at that time was that there were provincial departments that had overdue accounts in the 2019/20 financial year. The Minister stated that clinics and hospitals order from suppliers. Although accounts are reflected at the provincial level, the Minister said that all provinces have accounts with suppliers that are over 30 days. The Minister then responded with the list of provinces and the very big amounts that were in arrears. The budget allocations for medicines in provinces were insufficient to meet the demand for the 2019/20 financial year, and provinces often have to first pay accruals from a previous financial year at the beginning of the next financial year. The Minister said that this causes a cash flow problem leading to delayed payment, and in some instances, there are administrative problems where invoices do not reach the provincial financial department.

Mr van Staden had asked the Minister a follow-up question if the supply of medicine to provincial state hospitals and clinics had been suspended by manufacturers, due to overdue amounts still owed and which provincial state hospitals and clinics were affected. The Minister replied that accounts were suspended by suppliers for North West and Eastern Cape provinces. On this matter, the Auditor-General also reported to the Committee that there is an overall lack of service delivery in state hospitals and clinics, due to mismanagement and maladministration, and the Department of Health’s vision and mission have been completely destroyed.

The current shortage of nursing staff makes for the NHI implementation impossible. According to the trade union, Solidarity, approximately 8500 fewer nurses entered the labour market since 2013, and the number of qualified nursing staff decreased by 40% since 2013. This information was included in a July 2019 report which implies that the shortage of nursing staff might be worse. This was due to excessive workload, long hours, working under difficult circumstances, lack of support and equipment and the lack of funds. The circumstances of this country’s hospitals and clinics are absolutely shocking. The security is so bad that nurses, doctors, students and patients are assaulted and even raped, on top of this, many patients die under the strained circumstances. Members have seen these circumstances when doing oversight. Even if someone is admitted to hospital with only a broken leg, a person cannot be sure that he or she will survive.

A non-governmental organisation, Health Systems Trust (HST), issued a report on 27 January 2020, indicating that compensation as a result of medical negligence amounted to a staggering R104.5 billion for all nine provinces at that stage. The HST head, Dr Themba Moeti, said in a statement, that the report provides a perspective of the great challenges faced with the implementation of the NHI.

Mr van Staden referred to a question sent to the previous Minister on 20 September 2019. The Minister was asked what he found to be the reasons for a shortage of doctors and nurses in state hospitals. The Minister replied that the primary reasons for the shortage is the fact that the public health sector budget has not been increasing in real terms for the past 10 years, which has impacted the number of staff that can be appointed. Further, the demand for health services in the country is increasing, while there is no additional funding to address the change. This results primarily from immigration into the country and the increasing burden of disease.

In February 2022, the current Minister of Health answered his question, that there was a shortage of about 13 000 vacant nurse posts in state hospitals. The South African healthcare services are in a terrible state. Government is making a big mistake if it thinks that the NHI Fund will be a magic wand that will solve all these problems. It is also disturbing to know that the Department underspent its budget by a billion rand in 2018/19. The FF+ is of the view that adopting and implementing the NHI will cause experienced medical professionals to leave this country. The government is still unable to provide clarity on how the NHI will be financed and what role medical aids will play under the NHI. Everything seems to indicate the government is aiming to get rid of medical aid funds and that will surely deliver another significant blow to South Africa’s already struggling economy. The small pool of taxpayers in this country will become overburdened with the NHI, given the already high taxes. Government's plan to use the NHI Fund to upgrade the dilapidated infrastructure at state hospitals will not work. NHI will be implemented as a means to obtain more funds from taxpayers. The shortcomings in the proposed Bill are setting alarm bells ringing, because the proposed Bill does not even specify which services will be covered by the NHI Fund. The fact that patients will not be able to see a specialist or a doctor at an NHI accredited primary healthcare facility, because the NHI Fund will not pay for it before a patient is registered, is extremely disconcerting. If government is presently failing to provide proper healthcare service to patients at state hospitals and clinics, it raises the question of what would happen in the future under the NHI. He reiterated that the NHI Fund is not guaranteed to be corruption free, which is a big concern for most South Africans.

Ms Havard said that the ANC supported Clause 11(1)(g), the NHI Fund should have the capacity to commission or undertake research that should inform its programmes of action in key areas that impact its ability to make contributions towards facilitating universal access to healthcare services to be provided for the population.

Dr Thembekwayo said that the Committee is already in the process of clause-by-clause deliberations, yet the Committee already has so many questions that need a direct response from the Minister. She asked the Chairperson when Members could get responses from the Minister. When Members raise their questions, they do not need a response from other Members. She asked that Members refrain from responding to each other's questions, because each Member has their own views.

Mr Xaba interjected and said that the Chairperson had made it clear in his opening remarks that Members participation and presence in the precinct is the same as it would be in the National Assembly. So one Member cannot tell another what to say. He explained that when clarity is provided to any other party that it should be taken in the interest of the House participation rules.

Dr Thembekwayo said Clause 11 addresses information on the Fund, more specifically on procurement. If health personnel are part of those that deliver services and have contracts within the Department, as is the norm, she asked what the role of such a provision was because it will also end up with the health personnel being contracted to deliver services. She asked how ethics would be taken into consideration. It is worrisome that there are not explicit measurements of protection against fraud for the NHI Fund, so the previous mismanagement issues that were reported could still be repeated. She asked if the public should not be given insight into the financial statements or cash flow of the NHI Fund. The present state of public health facilities does not meet the defined set of standards for quality healthcare, and it will not be met, if the NHI Fund is implemented or not. There is non-adherence to Batho Pele principles and a general lack of service delivery culture by some health professionals, local clinics and hospitals.

Ms Wilson said that the whole organisation and powers of the Fund worries her, because it is very loosely framed around this Bill, with a lot of mention and reference made to the establishment of substructures of national government. The establishment of district health management officers (DHMOs) through amendments to the National Health Act, are established as national government components. These structures effectively strip away the powers of provinces to finance, plan and deal with district health services. Amendments to the National Health Act further stipulate that the DHMOs must establish contracting units which will receive funds determined by a formula from the NHI Fund to contract with primary care providers. These contracting units established as part of DHMOs, will be required to contract with the NHI Fund to receive funds from the NHI Fund. A government component can only be established if the prescribed feasibility study is conducted and its findings recommend the establishment of such a component. She stressed that there is no feasibility study and without such recommendations the Committee should not be deliberating on these clauses.

The NHI Fund and the proposed amendments to the National Health Act do not give a complete governance framework for the component. The Bill has no solid framework whatsoever; it essentially establishes a set of national structures that will be appointed by the Minister. No framework has been proposed that makes these proposed DHMOs accountable to the community that they will purchase services for. There is no clarification on what kind of public structure a so-called “contracting unit” is, and given that it will have substantial delegated powers to procure health services, this is concerning. The framework substantially undermines the constitutional power of provinces to plan, finance and run health finances. The constitutionality of this aspect of the framework is clearly in question. The centralisation is effectively an intrusion by national government into the legitimate tax revenue of provinces to carry out their constitutionally mandated functions, which includes health services and ambulance services. The reference to Schedule 4A to health services plainly requires that all aspects of health services are legitimately the domain of provincial governments, including raising and allocating funds, planning, organising and service delivery. These powers include all personal health services, hospitals, clinics and transport services; and a simple piece of plenary legislation cannot take precedence over the Constitution, which is exactly what is happening in the NHI Bill.

International models involve local autonomous structures that are accountable for performance to communities through local government frameworks. Moves that shift health systems towards decentralisation are technically sound, and yet the NHI Bill is trying to do the exact opposite by centralising the services which is headed for failure. There is no evidence whatsoever to suggest that the performance failures of the public health system have resulted from the purchaser-provider split; there is however, substantial evidence that the failures are attributable to government weaknesses and failure of institutionalised systems, which applies in eight out of nine provinces. Every Auditor-General report has shown the Committee that the Department has failed in terms of management, discipline, auditing etc. If those recurring problems had been rectified then the state would not need the NHI Bill. The degree of concentrated power put into the hands of the political appointees is unprecedented and represents a major threat.

The Chairperson interjected and asked if Ms Wilson could speak to Clause 11.

Ms Wilson replied that her remarks applied to every subclause under Clause 11 because it is a constitutional issue. Every clause is interlinked in one way or the other.

Mr Munyai interjected and said that with all due respect, Ms Wilson had not addressed anything under Clause 11. He asked that Members focus on the clause that is being deliberated.

Ms Wilson said that when reading the powers of the Fund in Clause 11, it is plain the intention of the political actors behind these proposals is to concentrate upwards of 8% of GDP in their hands, this in fact might be the primary impetus behind these proposals. It is not physically possible for the intended financial concentration to emerge at the intended levels. Over the period of 10 years the NHI has been unable to generate a financial feasibility assessment of this NHI framework, without that none of the subclauses in Clauses 10 or 11 are feasible, viable or constitutional.

Ms Gela said that the ANC is trying to correct the mistakes of the past. She was worried about Ms Wilson’s remarks. The ANC is trying to address "their apartheid era" so that black people could benefit equally to other people. Ms Wilson cannot compare the private sector to the public sector, there has not been a feasibility study on any public entity...

Ms Wilson interjected and said that Members are there to do a clause-by-clause deliberation on the Bill. She objected to Ms Gela talking about “me and my apartheid era” because she had fought vehemently against apartheid since she was a young girl. She asked that Ms Gela not throw her into that category, because she was deadly against it, it was abhorrent, it was a South African shame. She objects to people pointing fingers at her and saying she was part of such an abhorrent system, because she was not. She asked that Ms Gela please withdraw her statement.

Ms Gela said that there is nothing that she will apologise for, because black people are suffering because of the apartheid era. Ms Wilson was there as a leader when black people were oppressed by the whites. The ANC are trying to address all of the outstanding issues so people could benefit equally. There had been no feasibility study of any public entity, even if it were done, it would not be part of the Bill. She objected to the argument that the NHI Fund would be like other government entities. The NHI Fund is based on Clause 9 which clearly states that it is a Schedule 3A public entity. She asked that Members not mislead the people of South Africa. Ms Wilson was one of the people who was present at the public hearing sessions while people raised their frustrations and said that the NHI Fund should have been implemented “as of yesterday” ...

Ms Wilson interjected and asked that Ms Gela stop referring to her as “she”.

Ms Gela asked why Ms Wilson was frustrated.

The Chairperson asked that Ms Gela allow Ms Wilson to speak.

Ms Gela apologised to Ms Wilson if she was offended by being referred to as “she”. She continued with her comments on Clause 11 and said that she does not see anything wrong with the Minister doing a duty that is assigned to him. In addition to his functions listed in the Bill, the Minister should ensure that he monitors and ensures that everything is done accordingly. She explained that even during the apartheid era, when Verwoerd and de Klerk were leading, they were also part of the decision making. She knows that “they never supported the Bill and whatever comes to the poor”, “it seems as if they are sympathising with the poor but they are not, they are still oppressing the black people, so, hence they are against the NHI Bill”. That is why Ms Wilson had behaved in the manner that she did, because she knows that the NHI Bill is going to address all the problems that “they have created”.

Ms Wilson raised a point of order.

The Chairperson informed Ms Gela that three Members had raised a point of order. He asked Ms Gela that she please speak to the clause.

Ms Wilson said that Ms Gela was walking on very thin ground. She will not be told that she is sitting in this meeting because she wants to continue the apartheid regime and that the DA opposes anything that the ANC decides. The Members are there to fight for the rights of every person, regardless of what party any Committee member is affiliated to. Ms Gela is making this a political issue. She hoped that the meeting was being recorded because she will refer this to a higher level.

Ms Clarke said that Members should exercise respect and maturity in the meetings. What has been said is unacceptable because Members are there to make sure that they do the business of Parliament. She asked that Members stop accusing each other of issues that are untrue, because the reason they are all there is because they all want a better life for every South African.

Mr van Staden agreed with Ms Clarke’s comment.Aall Members are in Parliament and run for public office because they all want to make South Africa a better place. Members are in the meeting for hours to make the public health sector accessible to all people of South Africa. It is not mature for a Member to tell another Member that they are there to and that they have benefitted from apartheid. He has not benefitted from apartheid and he would like the best for all South Africans which is why he is there to make inputs, to get rid of the corruption in the public health sector, so that South Africa can have a good public health sector for all South Africans. It is a bit disturbing to hear such comments from Ms Gela. He asked that the Committee be allowed to continue their work.

Mr Munyai said that Ms Wilson had asked not to be referred to as “she”, in terms of the rules, but in turn she had called Ms Gela “she”. He reminded Members to stick to the protocol and the decorum of the House and that Members address each other as “honourable” Members. He agreed with the Chairperson that Ms Gela should speak to the clause at hand.

Mr Xaba said that both Ms Gela and Ms Wilson should respect the Chairperson and allow him to make a ruling, so one Member does not interject the other.

The Chairperson said that what had just happened is something that would be understood in the context of South Africa’s history. It is true that some have been injured and it is true that some have not been injured; some have benefitted and some have not benefitted in South Africa’s past history. It does make it difficult when Members have to come together to discuss certain topics and it is a painful experience for those who have had the bad experience. He made a ruling that Members should continue with what they are there for, and use other platforms such as the debates within the House to express the experiences that they are not happy with. This Bill has been brought before the Committee to see if there can be further advantage and benefits to all the people of South Africa in terms of the provision of quality healthcare services.

Ms Gela said that the ANC supported Clause 11(1)(d) that Schedule 3A entities are permitted to sell, lease or mortgage their properties. She apologised if she had offended Members.

The Chairperson said that he accepted Ms Gela’s apology.

Mr Xaba said that the argument that the health system is not ready to implement the NHI Fund is countered by Clause 39 on the conditions for accreditation. The ANC supported Clause 11(1)(a); all organs of state or state entities such as the planned NHI Fund should be allowed to implement policies and procedures to enable them to employ personnel using processes that comply at all times with relevant prescripts and labour laws. The ANC supported Clause 11(1)(b) as consistent with common law and business practices, which will enable the NHI Fund to build assets, moveable and immovable, that support the creation of liquidity to manage operations and meet its obligations for its legally established mandate.

Mr Munyai agreed with the input from Ms Gela and Mr Xaba. The ANC supported Clause 11(1)(n) that as a legally recognised entity the NHI Fund should be enabled to exercise its rights and obligation consistent with existing legislative and regulatory provisions applicable to such entities.

The Chairperson said that the ANC supported Clause 11(1)(i) because the NHI Fund is expected to consistently apply and rely on evidence-based principles in executing all aspects of its mandated functions and responsibilities, these provisions are also consistent with the principles outlined in Section 195 of the Constitution. This includes the promotion of the efficient, equitable, effective and value for money-based approach to achieving its mandated objectives. The ANC supported Clause 11(1)(i)(vi) to (viii) as it ensures that the Fund continuously takes national health policy and priorities into account as it relates to the programme of action driven by the Minister of Health.

The ANC supported Clause 11(1)(l) that the Fund must execute its functions, powers and responsibilities in a collaborative manner by engaging other public entities or organs of state to gather the necessary data and information to strengthen and improve its operations in aspects such as service delivery design, contracting of providers and even conducting benchmarking exercises on items such as reimbursement tariffs applicable to specific provider types.

The ANC supported Clause 11(2)(a) to (e) that ensures a number of issues are addressed. For example, it creates mechanisms that allow the Fund to exercise its strategic purchase function in effectively meeting the personal health needs of the population. It also ensures that the Fund puts into place protocols, procedures and processes that enable it to consistently meet the personal healthcare needs of the population under all circumstances through effective and reliable contracting systems with providers, health establishments and suppliers. The Fund must always operate within a framework that prioritises users by meeting the provisions outlined in relevant sections of this and other applicable Acts. It mandates and empowers the Fund to utilise its strategic purchaser capabilities to determine and utilise the lowest possible prices for goods and healthcare services required to provide services in the best interest of users.

The Chairperson asked if Members had any further input on Clause 11 before he proceeds to address the question raised by Dr Thembekwayo.

Mr Munyai referred to Dr Thembekwayo’s question and suggested that the Ministry and Department be invited to present after the Committee had completed its clause-by-clause deliberations, so Members can get a comprehensive response to the issues raised.

Ms Wilson disagreed with Mr Munyai’s suggestion. The Members have raised a lot of questions and the responses to those questions have a huge impact on their written submissions.

Ms Clarke agreed with Ms Wilsons. It is necessary that the Ministry respond to Members' questions before the Bill is referred back to the Committee with recommendations.

Mr Xaba agreed with Mr Munyai that the Ministry and Department respond to Members' questions at the end of the clause-by-clause deliberations.

Mr van Staden suggested that Members complete the clause-by-clause deliberation and then invite the Department to respond to all of the questions Members have raised. Thereafter the Minister be invited when the A-list of proposed Committee amendments to the Bill is before the Committee.

Ms Havard agreed with Mr Munyai and Mr Xaba’s suggestion.

Ms Wilson asked who was keeping record of all Members' questions. She asked if the Committee Secretary could inform Members of the normal standard procedure when recording questions.

The Chairperson said that he would address the question. He asked that Members understand that the Committee is in the process of deliberating on a Bill on a clause-by-clause basis. This process could be done in one of two ways. The Committee could invite the Department and Ministry to answer the questions on what it had just discussed during the clause-by-clause deliberations or the Committee could invite the Department and Ministry after the clause-by-clause deliberations have been completed, to respond to everything that was discussed. In terms of the recording of questions, the deliberations are being audio and visually recorded, therefore it is recorded. The Committee also has its content advisors and researchers who are taking notes, as well as the Department, State Law Advisors and Parliamentary Legal Services. He reminded Members that it is their duty to ensure that their proposals, amendments, recommendations, revisions or objections to the Bill are submitted in writing to the Committee Secretary. He made a ruling that the Department and Minister would be invited to respond to the questions after the Committee had completed its deliberations.

Dr Thembekwayo said that she did not agree with the Chairperson's ruling, but if the majority agreed then she accepted it. She felt that all of the questions would amount to a thousand more questions at the end of the deliberations. She asked if the Minister would be able to respond to all of the questions that were raised after the deliberations.

The Chairperson said that the Department and Minister will address the Committee after the clause-by-clause deliberations on the Bill. He assured Members that he made every effort to ensure that it follows due processes.

Clause 12: Establishment of Board
Mr Munyai said that the ANC supported Clause 12. The Board of the Fund must be accountable to the Minister of Health, as the Executive Authority responsible for the Health Sector. The National Health Act places responsibility of the health sector on the Minister, this cannot be abdicated for any other entity. Parliament will exercise oversight over the NHI Fund, as per the norm, standard and practice for other health sector statutory entities. As per the norm with similar entities, the Board will account to Parliament. The Constitution does not need to be amended in this regard, and Members should respect that there is a unitary government in this context.

Ms Clarke said that the DA opposed this section in its entirety, on the basis that the power should not be centralised to the Minister and that the Fund should be accountable to Parliament.

Mr Xaba agreed with Mr Munyai that the ANC supported Clause 12, which states that the Board should account to the Minister. The Members should not confuse the role of Parliament, because Parliament does oversight. The Minister has stewardship and therefore the Board must account to the Minister.

Ms Wilson said that the entire Clause 12 in its current format needs to be chucked out. A Board that is appointed by and accountable to the Minister, can hide behind the Minister who makes every instruction. This would be nothing more than a body without a spine.

Dr Thembekwayo said that the EFF does not support Clause 12 in its entirety.

Clause 13: Constitution and composition of Board
Mr Xaba said that the ANC proposed an amendment to Clause 13(3) so that the ad hoc advisory panel must be appointed by Cabinet; the recommendations must be forwarded to the Minister for approval by Cabinet. The ANC supported Clause 13(7), because it ensures that the Minister as the appointing authority, is formally notified of a board members resignation timeously, which is very important. It allows the Minister to take necessary steps to address any vacancies that may arise to ensure the necessary skills mix is maintained.

Mr Munyai said that the ANC supported Clause 13(4). This is a standard practice once the nomination and appointment process have been finalised. It is important that the Minister informs the public about the composition of the Board as part of transparency and accountability.
- The ANC fully supported Clause 13(5). Clause 13(5)(a), (c) and (e) are standard board practices and must be retained, specifically for Clause 13(5)(d), because the expertise, skills and knowledge are essential to ensure optimal functioning of the Fund, without introducing bias and vested interest. They also supported the view that there would be one member of the board to represent the Minister, as it is the practice in other public entities.
- The ANC supported Clause 13(6) as this is a normal practice of a board in that the CEO automatically becomes a serving member of the board by the virtue of their position. The CEO’s ex offıcio role will benefit the Board in knowledge, expertise and experience of how the Fund functions.

Mr van Staden said that Clause 13 gave too much powers to the Minister. He proposed that Clause 13(1), (3), (3)(b), (8) and (9)(b) should be amended so that the appointments of the Board and ad hoc advisory panel, approval of recommendations, removal of Board Members and dissolution of the Board be the responsibility of Parliament instead of the Minister, so there can be efficient oversight of this Board.

Ms Clarke said that the DA opposed Clause 13(1), (2), (3) and (4) on the basis that the Minister should not have the power to appoint members of the Board. Time and time again, there have been instances where Ministers have destroyed SOEs by placing corrupt cadres on the board to do their bidding. The DA proposed that the Board appointments, including the chairperson of the Board, is done by Parliament. This is similar to what is done with the South African Broadcasting Corporation (SABC) appointments by Parliament. The appointment process should be open and transparent with public participation and voting by Parliament. She asked how the ad hoc advisory panel would be appointed, because there would need to be criteria by which they are appointed. For example, the panel would need to include professionals within the industry, doctors, legal professionals and Members of Parliament. She asked how the recommendations of the ad hoc advisory panel would be taken into account; she asked if the Minister would appoint on the basis of the recommendations or if there would merely be a guideline.

In Clause 13(5), the DA proposed that a Board member must not be employed by a political party or recently have been employed as such. In Clause 13(9)(b)(i), she proposed that perhaps there should be a slight restriction on some of the powers of the acting Board; such that the acting Board should only be given powers that are necessary for the effective running of the Fund during the course of those three months.

Ms Wilson said that national legislation should always be used to establish custom designed health authorities together with very clearly specified features in the principal legislation; which include: corporate government governance design, powers of supervisory and executive officers, nominations, appointments, and removal frameworks of supervisory boards and executive officers, the jurisdiction of the organisation, reporting lines, conflict resolution procedures, financing frameworks etc. Some of this is missing in Clause 13. She agreed with the DA’s proposal that the ad hoc advisory panel must be appointed by Parliament, with specialised criteria of how that panel should be made up and it must preferably include the Health Portfolio Committee members representing various parties. The appointment of Board members must be specific to criteria for the kind of technical skills required, because health is hugely technical, hugely broad-based and extremely wide. The Board should have the correct mix of expertise and representation of the entire health sector.

Ms Havard said that the ANC supported Clause 13(2). Publication through a gazette allows for a transparent and open process. The ANC supported Clause 13(8) as the appointing authority, the Minister, should be empowered to remove members that are non-compliant with the requirements of a competent Board member.

The Chairperson said that the ANC supported Clause 13(5). Clause 13(5)(a), (c) and (e) are standard board practices and must be retained. The expertise, skills and knowledge mentioned in Clause 13(5)(b) are essential to ensure optimal functioning of the Fund, without introducing biases and vested interests; this must be retained. Clause 13(5)(d) is also practiced in other public entities with the exception of the one member appointed to represent the Minister. The ANC supported Clause 13(9) as it provides for a structured and accountable process by which the Minister can dissolve the Board. It also enables the Minister to establish an acting Board for continuity in the oversight function of the Fund, and therefore prevents concerns of possible dissolution of the Board without due process being followed, as the Board is afforded an opportunity to state its case.

Clause 14: Chairperson and Deputy Chairperson
Mr Xaba said that the ANC supported Clause 14 that is normal practice with all entities reporting to the Minister of Health; therefore the same must apply and be implemented to the NHI Fund.

Mr Munyai agreed with Mr Xaba’s remarks on behalf of the ANC.

Ms Clarke said that the DA opposed Clause 14 and proposed that the Board chairperson must be appointed by Parliament. She wondered what the thinking was in Clause 14(2), that the Board must appoint the deputy chairperson; it does not make sense that the Minister appoints the chairperson and the Board appoints the deputy chairperson.

Ms Wilson agreed with Ms Clarke’s remarks. She referred to Clause 15(1) and said that the Board should not be accountable to the Minister; instead it is proposed that the NHI Board should be accountable to a committee or an ad hoc committee constituted by Parliament. On Clause 15(2) it states that the entire Board must meet at least four times a year. The Board should practically be meeting weekly if not on a monthly basis; this comes with a huge financial implication, which she doubts has been factored into any of these clauses. While she acknowledged the functions of the Board, she believed that some of what the Board is required to do will have some conflict where there is an overstepping of boundaries, particularly between the Board and possibly the Benefits Advisory Committee. If there is absolutely no structure, organogram or some kind of framework in place as to how those get dealt with then there will be severe conflict in this area. The DA cannot accept Clause 15 as it stands until such time Parliament has a degree of holding people to account, particularly in this instance.

The Chairperson informed Ms Wilson that the Committee was on Clause 14; her contributions referred to Clause 15.

Ms Wilson agreed that she was way ahead, but as long as the appointments are done through Parliament and not the Minister, her argument stands for Clause 14 as well.

Mr van Staden said that Clause 14(1) should be amended so Parliament appoints the Board chairperson and not the Minister.

Ms Havard agreed with Mr Xaba’s remarks.

Mr Munyai agreed with Mr Xaba’s remarks. He questioned why Members would propose to change the functions of the democratically elected Minister and asked if Members were aware that they would need to change the Constitution to do that. In other areas, the powers of the Premiers or the MECs are not challenged. Members should be consistent and not conveniently change the powers of the Minister on the basis of unknown fears that are beyond a unitary democratic state – this is not a federal government.

Clause 15: Functions and powers of Board
Mr Xaba said that the ANC supported Clause 15 in its entirety because the Board must remain accountable to the Minister and the remainder of its provisions are consistent with standard board practices. Clause 15(4) empowers the Board with the necessary powers to exercise fiduciary duties and applicable oversight on the functions and operations of the Fund.

Mr Munyai agreed with Mr Xaba as the ANC is in agreement with consistent standard practice.

Ms Clarke referred to Clause 15(1) and said that there should be some sort of oversight by Parliament, as well as for the Board's accounting authority and accounting to the Minister. Clause 15(3) should have some form of report that accounts to Parliament on any developments and budget etc. so that there is transparency in the Fund operations. She asked how price gouging would be prevented in Clause 15(3). In Clause 15(3)(e), she asked if there was any indication for what the financial projection would be for the employment of Fund employees.

Ms Wilson explained the reason the DA had suggested the Board should account to Parliament is because Parliament is a multi-party entity, whereas Ministers and Cabinet are predominantly appointed at a party-political level. She joked that Mr Munyai is obviously very concerned about the 2024 elections if he is worried that his Minister will not be there anymore. He should not panic and that the DA would merely like to see a wider representation.

Ms Havard agreed with Mr Xaba and Mr Munyai.

Mr van Staden said that Clause 15(1) should be amended so that the Board is accountable to Parliament and not to the Minister; there must be oversight by Parliament throughout Clause 15. Clause 15(2) is debateable; he does not think that it is adequate that the Board would only meet four times a year.

Mr Munyai thanked Ms Wilson for her great sense of humour. He agreed with Mr Xaba’s remarks. He has no fear for democracy; in 2024 the ANC will still remain the majority party.

Clause 16: Conduct and disclosure of interests
Ms Wilson said that Clause 16 contained standard procedure which is applied to most boards, her only concern is with the technicalities, the broad spectrum of the health sector and the kind of specialists and knowledge that it is going to be required on the Board, should the NHI Bill be passed. Clause 16(1) states: “A member of the Board may not engage in any paid employment that may conflict with the proper performance of his or her functions”. This clause would need a very clear definition on what would be in conflict of a Board members duties. She made an example that there might be a cardiologist on the Board who might have other interests in terms of their speciality. If it is not properly defined it could create a lot of problems.

Ms Havard said that the ANC supported Clause 16 in its entirety; the provisions are consistent with standard board practices implemented by the entities of the Fund’s nature.

Mr Xaba agreed with Ms Havard’s remarks.

Ms Clarke said that the DA supported most of Clause 16, with the suggestion that it should just be tightened up to include that a Board member may not have any interest that would conflict with the Board members duties, such as owning a company that contracts with the Department or is involved in tenders.

Mr Munyai agreed with Ms Havard and Mr Xaba because the clause is consistent with good governance and standard practice.

The Chairperson agreed with Ms Havard, Mr Xaba and Mr Munyai’s remarks.

Clause 17: Procedures
Mr Xaba said that the ANC supported Clause 17 as it is consistent with standard board practices implemented by entities of the Fund’s nature. The provision allows the Board to establish the Fund’s vision, mission and values as per the provisions of the Act. This includes delegating necessary functions to management and exercising accountability to the Minister, Parliament and other relevant stakeholders.

Ms Clarke said that she does agree that the Board must determine its own procedures, as long as these procedures are done in a transparent manner.

Ms Wilson said that she thinks that determining one's own procedures is iffy, but she is not talking against her colleague. She is concerned that if the Board determined its own procedures in consultation with the Minister and not in consultation with a committee set up by Parliament, then the Board cannot be held accountable for procedures that they have set up. She is concerned that Clause 17 lacks transparency and clarity as to the procedures, and who oversees the procedures.

Mr Munyai agreed that the ANC supported Clause 17.

Ms Havard agreed with Mr Xaba and Mr Munyai’s remarks.

The Chairperson said that he supported Clause 17 as stipulated by Mr Xaba.

Clause 18: Remuneration and reimbursement
Ms Clarke said that there should be clarity on the payment structure of the Board. Perhaps the Department can give the Committee a cost estimate of the remuneration of the Board per annum. The expenses should be reasonable and necessary, not arbitrary.

The Chairperson said that the ANC supported Clause 18 as it is consistent with standard board practices implemented by entities of the Fund’s nature. It is also important that the Board is remunerated as per applicable Treasury prescripts and in compliance with the PFMA.

Ms Wilson said that she has nothing against the remuneration and compensation of Board members being in line with the provisions of the PFMA. This is again determined by the Minister which she suggested should be amended to a committee set up by Parliament. Her biggest concern is that these members are highly trained, highly qualified personnel that come with a significant cost. She explained that instead of probably meeting once every quarter, that the Board would most likely meet weekly or monthly for a very long time. Even if the Board is in line with the PFMA, its cost is going to be astronomical. She asked how this cost is built into the budget. That money could have been used to improve hospital services instead of paying a board.

Mr van Staden said that it is still not clear what the total cost of the NHI Fund would be when it is up and running in 2026, and if South Africa can afford the implementation of the NHI Fund. Economists had predicted that the NHI Fund would cost the government R256 billion in the 2025/26 financial year at 2010 prices. Therefore it is a grave concern that the economy will not be able to fund the NHI Fund in the future. Neither the Minister of Health, government nor the Department were able to give any indication of the financial implications of the NHI Board on taxpayers. No indication of any sort could be provided on how the remuneration of the 11 NHI Board members, CEO, chairperson, deputy chairperson, technical committee, Benefits Advisory Committee, Healthcare Benefits Pricing Committee and Stakeholder Advisory Committee will be funded or how large the remuneration package will be per annum, what sorts of benefits it will include and how much it will cost the taxpayer to have these people serving on these.

The number of members who will serve on the technical committee, Benefits Advisory Committee and the Stakeholder Advisory Committee is still not known. Chapters 4, 5, 6 and 7 of the Bill merely stipulate that 16 to 24 members will serve on the Healthcare Benefits Pricing Committee. It remains unclear how many members in total will serve on all of these committees and at what cost to the taxpayer per annum.

Mr Xaba agreed with the Chairperson that the ANC supported Clause 18. The Board members will be paid according to applicable Treasury prescripts, which is fundamental. The detail of it is another matter, it is not the detail that has been discussed but the clauses provide the context.

Mr Munyai questioned why someone would speak about the cost when speaking about equal quality healthcare for all South Africans. He agreed with the Chairperson and Mr Xaba because the ANC’s support of Clause 18 is consistent with the PFMA and the applicable Treasury prescripts.

Ms Havard agreed with the Chairperson because Clause 18 is consistent with standard board practices and it is in line with the PFMA.

Ms Clarke said that it must be noted that the concern about all these committees and its cost, is that if the cost on the committees could be cut then that funding could be used to improve healthcare, which is a big concern for the DA.

Clause 19: Appointment
Mr Munyai said that the ANC supported Clause 19 in its entirety, based on the reason that the CEO of the Fund must be appointed through a process that is initiated by the Board; however, the Minister must have final oversight and approval over the CEO appointment. This is similar to the President that operates within other existing health sector entities. This provision does not indicate any overreach of the Minister of Health over the activities and operations of the Board, instead it is reflective of the need for the Minister to retain oversight over the key entities and their functions as it pertains to the priorities and objectives of the health sector, particularly around enabling the achievement of universal health coverage. Therefore, the relationship between the Minister and the oversight role processes is unavoidable, precedent and consistent with practice; it has been done before and it has been done successfully and therefore the ANC supported Clause 19 unequivocally.

Ms Wilson referred to a word that Mr Munyai used, which is “precedent”. Sometimes precedents do not work and need to be changed. In her opinion, Clause 19 lacks a tremendous amount of transparency. Clause 19(1) states: “A Chief Executive Officer must be appointed on the basis of his or her experience and technical competence as the administrative head of the Fund in accordance with a transparent and competitive process.” There is a lot of detail seriously missing in Clause 19(1). She asked what was meant by “on the basis of his or her experience and technical competence”. These criteria would need to be stated very clearly. she proposed that an ad hoc committee constituted by Parliament should oversee the process instead of the Minister. In Clause 19(2)(a) she proposed that the Board must conduct interviews of shortlisted candidates transparently, in other words that it should be public interviews. The whole concept of the NHI Fund and its Board will be very answerable to the public, because this is not something that is going to affect part of the country but will affect the entire country. It will affect every single resident in this country who has rights and are entitled to a say in exactly where government is taking their health in the future.

Mr Xaba said that there is no need to confuse the roles and responsibilities of institutions. Parliament performs oversight and it would not assist if Parliament was assigned to appoint the CEO. Clause 19 supports the exchange of information between the CEO and the Minister, and the CEO remains accountable to the Board. He agreed with Mr Munyai’s remarks as the ANC supported Clause 19.

Ms Clarke said that the DA understood standard practices where the CEO remains accountable to the Board, but one would just have to look at what is happening to the SOEs within government and what has transpired. So although the CEO remains accountable to the Board, the DA would also propose that Parliament has that oversight, particularly based on the history of SOEs. It is concerning that there is not one SOE that is run by government that has actually been run in an adequate manner in terms of financial viability. It would be important for the criteria of the appointments to be stipulated in Clause 19.

Ms Havard agreed with Mr Munyai and Mr Xaba’s remarks.

The Chairperson agreed with Mr Munyai and Mr Xaba’s remarks.

Clause 20: Responsibilities
Mr Munyai said that he was sure that his contribution would provide clarity and set the record straight because South Africans have been mobilised around misinformation about the NHI. The ANC supported Clause 20(1) as this is standard for the CEO position leading the activities of a Schedule 3A entity such as the NHI Fund. The ANC proposed that all of the provisions of this clause must be retained. The ANC supported Clause 20(3) as the establishment of the functional units within the Fund will enable it to perform its legislative mandate. The ANC supported Clause 20(5) because Section 56 of the PFMA provides the accounting authority to assign or delegate functions to the CEO and other Fund officials.

Mr Xaba agreed and said the ANC supported Clause 20(2) as the responsibility of the CEO, including setting strategy and structures allows for effective and efficient Fund functioning and operations. The establishment of an internal investigating unit, which include investigations of fraud, corruption and other criminal activities is critical to ensuring that the risks are identified and mediated early before it becomes a risk for the Fund. This is also standard practice for entities established for such a purpose. The discipline across the Fund should straddle across all areas of functionality of the Fund; and the CEO must be able to demonstrate this capability in the areas of management within the Fund as required by the PFMA. The role of the District Health Management Officers (DHMOs) is outlined in Clause 36, within the aim of facilitation, support and coordination of the provision of health services at the district level. The CEO must liaise with the DHMO as part of ensuring that the coverage of services takes into account the local context in the geographic area of the district.

The ANC supported Clause 20(5) as it adheres to the PFMA in that the CEO provides the performance information of the entity on behalf of the accounting authority to the Auditor-General, or these responsibilities can be delegated by the Board to the CEO. There are very detailed Treasury regulations that the Fund will be required to comply with.

Ms Wilson said that she had several concerns with Clause 20. In Clause 20(1), the CEO as the administrative head of the Fund is directly accountable to the Board, but it is more concerning that the CEO is responsible for the functions specifically designated by the Board. This would open the doors for a lot of problems and she does not think that the Board should be able to designate its own functions. Therefore she does not think that the Board should be designating the functions of the CEO; despite the standard practice, time and time again this has shown not to be appropriate. She disagreed with Clause 20(1)(d) that the CEO must report to the Board on a quarterly basis and to Parliament on an annual basis. There is no way that the CEO should report to Parliament only on an annual basis, because there is way too much at stake and way too much money involved. There is no point in Parliament getting reports after the horse has bolted, which is exactly what happened with Digital Vibes. The first time Parliament became aware of what happened with Digital Vibes is when it came up in the annual report. She emphasised that when dealing with this kind of money, such information should not be detected after the fact but detected before the horse has bolted.

Clause 20(2)(d) states that the responsibilities of the CEO include the “effective deployment and utilisation of staff to achieve maximum operational results”. This is standard practice; however, she referred to Dr Crisp who had just spent a fortune on employing NHI administrative staff. She questioned what the CEO’s function was in this regard. She asked if the CEO would get to decide or if the CEO gets told what the designation of the staff would be.

Clause 20(2)(e) states that the CEO is responsible for establishing an investigating unit within the national office of the Fund. She expressed concern that an organisation cannot employ persons within itself to investigate itself. Annual reports have proved time and time again that this fails abysmally. She emphasised that an organisation cannot investigate itself, instead there must be an independent party investigating this Fund on a regular basis. She has a severe problem with this and noted the example of the personal protective equipment (PPE) scandal, where millions were stolen out of the Department and no one had “exposed the rot” internally, until the Hawks were called in to investigate.

Clause 20(3) had no indication of timeframes by when the CEO should have established the units for the functioning of the Fund. Clause 20(3) must include timeframes by when each of the units should be established. She reiterated that the annual reports to Parliament are insufficient, and while the CEO accounts to the Board, the CEO should also regularly report back to Parliament. On Clause 20(5)(b), the CEO must work hand in hand with the OHSC and the Health Ombudsman, because these are the people that oversee access to quality healthcare services in line with the healthcare needs of the population.

Ms Clarke said that Clause 20(2)(e) would need to specify the criteria of the investigating unit. She agreed with Ms Wilson that the investigating unit should be an external unit for transparency. She asked if there was a regulation in the Bill that says the CEO must account to National Treasury.

The Chairperson said that the ANC supported Clause 20(4) noting that Section 38 of the PFMA prescribes the standard responsibility of accounting officers of public entities. It deals specifically with general responsibilities of the board as the accounting authority, including financial and internal risk management, internal audit, procurement and provisioning systems, capital project management, effective efficient and economical and transparent use of resources. The expectation is that the CEO would prevent unauthorised, irregular, fruitless and wasteful expenditure. Section 50 of the PFMA also speaks of the fiduciary duties of the accounting authority.

Ms Havard said that the ANC supported Clause 20(5) noting Section 56 of the PFMA provides for the accounting authority to assign all dedicated functions to the CEO and other Fund officials.

Mr Munyai said that he would not want Members to play to the political gallery, because he does not think that it is the responsibility of a Member to create a Board organogram as that would be subjective and irrelevant. Members have been singing about “corruption corruption”. Clause 20(2) clarifies this concern. The establishment of the internal investigating unit, includes the investigation of fraud and corruption and any other criminal activity. It includes early warning systems to mitigate serious corruption and fraud. The investigating unit will address the loudest song that has been sung through the country about corruption; it addresses the issues that Members and the public have been complaining about. It is also important that Clause 20(4) is supported, because it addresses good governance and anti-corruption. If these systems are put into place, then these provisions ensure that there is tight control of corruption, fraud and any maleficence.

Clause 21: Relationship of Chief Executive Officer with Minister, Director-General and Office of Health Standards Compliance
Ms Clarke referred to Clause 21(1) and proposed that the Fund CEO must meet with National Treasury at least four times per year.

Mr Munyai said that the ANC supported Clause 21(1) and (2) as important as it enables collaborative policy and priority alignment between the Minister, the Department, OHSC and the NHI Fund. This creates the mechanism necessary for sharing information and creates a platform that aligns health system planning, programme implementation and alignment of the requirements in areas such as provider accreditation and setting up norms and standards. Accountability for the performance of the NHI Fund must remain with the CEO, whose performance is assessed by the Board according to the plans submitted and approved by the Minister of Health on an annual basis.

Ms Wilson agreed with that the CEO must meet with National Treasury on a regular basis; given the amount of money that the NHI Fund is going to require.

Mr Xaba questioned why Members proposed that National Treasury should be included in Clause 21(1). He agreed with Mr Munyai’s remarks, as it supports a consultative process.

Ms Havard agreed with Mr Munyai and Mr Xaba’s remarks.

The Chairperson agreed with Mr Munyai’s remarks.

Clause 22: Staff at executive management level
The Chairperson said that the ANC supported Clause 22 as it provides a clear mechanism for strong and accountable management linked to the oversight function of the Board. This provision will also allow for clear and transparent processes to be implemented for the appointment or dismissals of the Fund’s executives, without creating a process that is unilaterally implemented by the CEO without the knowledge of the Board and to the detriment of the Fund’s stability and ability to achieve its mandate. The clause also enables the Board to effectively exercise its oversight function over the Fund.

Mr Xaba agreed, particularly because the provision clarifies that the Board may exercise its oversight function over the Fund.

Mr Munyai said that anyone who does not support Clause 22 is against strong and accountable management linked to the oversight of the Board; anyone who does not support this clause is against good governance. He supported Clause 22 because it provides for accountable management and the oversight functions of the Board.

The meeting was adjourned.


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