Department of Health Annual Report 2021/22; with Minister

Meeting report

The Chairperson welcomed everyone to the meeting.

The attendance and apologies were noted.

The Chairperson reminded Members about the rules for virtual meetings.

The Chairperson highlighted that Members should switch on their videos when they speak and raise their hands on the virtual platform if they want to make a point of order.

Dr Sandile Buthelezi, Director-General, DoH, greeted the Committee and introduced the team.

Dr Joe Phaahla, Minister of Health, informed the Committee that the Deputy Minister was outside the country on official business and was unlikely to join the meeting.

Introductory Remarks by Minister
The Minister said that COVID-19 occupied the financial year under review: there was the tail end of the first COVID-19 wave and two full peaks later: delta and omicron.

As a result, there was a lot of rearrangement in the Department. Health budgets were redirected. Health Managers were reassigned to COVID-19 activities. A vaccination programme was implemented. No systems were available prior to this very different challenge.

There was instability in the Ministry due to the Digital Vibes saga. The former minister took leave and resigned. The DG was suspended for four months and later reinstated. At the same time, the CFO, who was with the Department for ten years, left.

There were many ups and downs in terms of preparation for the vaccinations: procurement, distribution, sites, and signing contracts with suppliers and service providers. The Department had started with a target of 500 vaccination sites and ended up with around 3000.

There was an unprecedented collaboration between the public and private sectors. A strength of the vaccination programme was because of this. The Department was able to bring in private sites and medical aid schemes. There were hard negotiations with private service providers to ensure that they could also provide sites for vaccination; not only for their members but the general public as well. Every effort was made to rapidly scale up vaccination sites to improve access to vaccines. Eligibility was implemented in phases to accommodate the vaccine supply and the changing knowledge of the vulnerability.

As a result, there were complex and groundbreaking repayment and reimbursement models that needed to be agreed upon.

The Department achieved a qualified opinion. The qualification relates to a limitation finding in accrued departmental revenue relating to the recoupment of the covid-19 vaccine. The AGSA was unable to obtain sufficient appropriate audit evidence for accrued departmental revenue. The systems of internal control implemented by the Department were not always adequate for the recording of some transactions and events relating to the recoupment process of the Covid-19 vaccine programme. The AGSA could not confirm accrued departmental revenue by alternative means. Consequently, the AGSA was unable to determine whether any adjustment was necessary to accrue departmental revenue stated at R2 billion. The reconciled income received for insured medical aid members was R500m up to the end of March 2022 and R824m so far 2022/23 FY (R1,3bn so far).

Department of Health 2021/22 Annual Report

Dr Buthelezi and Mr Andre Venter, Acting Chief Financial Officer, DoH, gave the presentation.

Several targets were not achieved for the 2021/22 financial year, such as:

Unqualified Audit opinion
A Policy and legal framework gazette to manage medico-legal claims in South Africa
40 million persons vaccinated against Covid-19
2100 PHC facilities qualify as Ideal Clinics

Out of 37 total targets, 23 were achieved. 14 were not.

With regards to the Case Management System for managing medico-legal claims, the Department is engaging with the remaining Provinces & Service Provider to fast-track integration of provincial systems and the National Case Management System. The performance of the Ideal Clinic initiative will improve when provinces integrate COVID-19 activities into the Primary Healthcare (PHC) services because Provincial and District teams will not be divided between the two.

All conditional grants were underspent and rollovers were requested. The major contributor to underspending in all conditional grants is the Health Facility Revitalisation Grant (HFRG) due to poor performance of the contractors and the effect of the Covid-19 pandemic. All provinces spent within the acceptable norm with the exception of Eastern Cape, Free State, Gauteng and Limpopo that are underspending due to delays in the delivery of medical equipment. Underspending provinces also requested roll-over funds.

For the past ten years, the Department sustained unqualified audit opinions. However, the department was qualified due to Accrued Departmental Revenue in 2021/22 audits. The qualification area relates to a limitation finding in accrued departmental revenue relating to the recoupment of the covid-19 vaccine. The systems implemented by management were not always adequate to ensure all transactions and events were accurately recorded in the financial statements. Irregular expenditure amounted to R61.4 million. The AGSA identified eight cases of possible irregular expenditure and the Department was required to record the amount in the Annual Financial Statements as cases under consideration.

The Department implemented a system to ensure that all the transactions and amounts are recorded and available in the accounting records. The Department had adequate systems of internal control for the recording of all transactions and events. The accounting records were available and were provided to the audit team. The Department reconciled the transactions and events to the financial statements and the only issue was that there was a difference of opinion between the NDOH team and the audit team on what the appropriate treatment was in respect of claims that were subsequently rejected by medical aid funds.  However, full details for these transactions were and are available and the amounts are fully quantified and auditable.

(See presentation)

Concluding remarks
The Minister said the Department went through a difficult period as the custodians of saving lives during Covid-19. It had to compromise a number of other functions and services to roll out the vaccine programme.  This was compounded by the relocation of their headquarters. Despite these setbacks, stability will continue and the country is now in the endemic phase. There are red flags here and there and the virus will remain for some time, but not as bad. The Department will be able to get back to all of its services and functions and focus on improvement. The administrative issues are behind it both at a political and managerial level. The CFO and other senior managers have now been appointed as well. The office has stabilised now that everybody has moved into the new building. The strikes of the unions over the safety of the building are also behind it. The Department is looking forward to a much more stable environment.

Discussion
Ms A Gela (ANC) said that the Department received a qualified audit opinion because of various reasons. The Minister previously came to the Committee and briefed them on what was happening in the Department. Today the CFO highlighted why the audit opinion was qualified. There was a particular focus on underspending and irregular expenditure. What steps have the leadership taken to rectify these issues? What consequence management steps have been taken regarding the irregular expenditure? When things are not run correctly somebody needs to be blamed and in this instance, it is the Minister. However, she understands that he has a team that works for him. His team is failing him. It is high time that the Minister acts regarding this. She knows that at one point they only had an acting CFO and things were happening in the Department. She welcomed the new CFO that was appointed. Maybe now the irregular expenditure will end and the report at the end of the next financial year will be better. What steps are being taken to improve data? How is the Department addressing the 16.9% vacancy rate, since the target is 10%? How are officials being held responsible for not achieving the targets? The NHI is a good move and it is something that the country looks forward to having. It will address the issues that the Department is facing and other countries have implemented it. The Committee has begun to discuss it and not all South Africans want it to be implemented. How is the Department implementing lessons identified in the NHI evaluation report?

What is the progress of the rollout of the Health Patient Registration System (HPRS)? Is it linked to the Department of Home Affairs? The issue outlined under programme three is frustrating.  They should not blame its lack of implementation on Covid. It is because of the laziness of some officials who are tasked with the implementation of the programmes. What is being done to improve the performance of programme three? Programme three is related to the core function of the Department, such as TB, HIV and AIDS. These issues are very large in the country. There is still a target to be met that was set in 1990. This area is lacking and not a good reflection of the Department. It needs to be improved and it needs to be addressed soon.

What is the update on the mental health strategy framework and how is the Department addressing the high level of teenage pregnancy in the country? What is the plan? Does the Department have a plan in place to potentially deal with the outbreaks of other diseases, such as monkeypox and the new strain of Ebola? What is the Department doing in the fight against GBV? GBV is also a pandemic and happens every day across the country. What is the Department’s role in this crisis? On the low amount of ideal clinics, what is the plan to improve the standard? The idea of evaluating clinics and determining them as ideal or not is working and it is a good idea. What is the plan to improve the number of ideal clinics?  She understood the issues that the Department has gone through and it had a Minister that had to leave. She supported the Minister and she looked forward to seeing these issues being addressed. There are also achievements of the Department. She has confidence in the Minister that he will take the country’s healthcare system forward.

Ms H Ismail (DA) said that the Auditor-General’s report found that the Department regressed in the financial year and received a qualified opinion. The AG further highlighted that the financial statements contained material misstatements that could have been prevented if an adequate review had been done before submissions to audit. The AG also said there was no accountability in the Department regarding consequence management. The presentation did touch on a few things they were going to be doing, but ultimately, what consequence management is going to be implemented by the Department to address the issues of the AG? The Committee needs constructive replies and timelines that will actually address these issues. Besides the consequences from the SIU report of the Digital Vibes scandal, there are no real consequences for transgressors and clearly set out rules and responsibilities. This is where the Department is severely lacking. Could the Minister provide a full report on any investigations on the several cases of irregular expenditure and financial misconduct? If nothing has been done, what will be done to change things? They need more constructive replies concerning this. The irregular expenditure is very high and it is very concerning. They should not blame it on Covid. There is a Department to run. When Covid or any other pandemic comes, there cannot be a stall in the provision of healthcare to the country. They need constructive steps forward from the Department, highlighting what the causes of irregular expenditure are and what they are going to do to prevent this. Somebody needs to take responsibility for work that is not done in the Department. What are they going to do to address the accruals, which are a huge issue in the health sector? The AG said that there were material findings on performance information and that the data reported by the Department is not of standard and may not be reliable or accurate. How is the Department going to effectively address this issue and by when will this be fully resolved? Just telling the Committee that they are going to address it doesn’t mean anything. They need constructive responses. Officials need to be held to account when targets are not achieved and there needs to be consequence management.

The target for provincial departments has been removed. The North West department was put under administration. There have been so many issues raised concerning service delivery provided by other provinces. This is a very important target. How are provinces going to improve their performance? There are multiple catastrophes with the Gauteng health department. She does not understand how this target can be removed because the Committee needs these answers. How are officials held responsible when targets are not achieved and what consequence management measures are in place? How is the Department going to reduce medico-legal claims going forward? They also need reports on individuals that make fraudulent claims. Have the officials who assisted with these claims been charged? If not, why not? There is a high vacancy rate in not only the Department but also its entities. These need to be filled so that there are effective services. Can they provide a report on the restructuring process? Can this also include medical interns and community service doctors the Department hired? How many are still waiting to enter the system and how is this issue going to be resolved in the future? The FFC has identified that the amount of ideal clinics has dropped. This is very concerning as clinics are the first points of entry in the healthcare sector. Sometimes a clinic is deemed as ideal, but when Members do oversight there, they see that the clinic is short-staffed, there is a shortage of space, and they are affected by loadshedding. She does not understand how these numbers are achieved when one looks at the reality on the ground. What is the update on the appeal process of the two appellants in the Tembisa Hospital investigation report? What is the progress in implementing the Health Ombudsman’s recommendations with regard to Tembisa Hospital? She has asked the Minister about the Nelson Mandela-Fidel Castro collaboration programme and he told her that the matter is being dealt with by the SIU. The provincial department told her that it had been taken over by other doctors and that there is an internal provincial investigation. Can the Minister provide a guideline as to what is happening? There were major allegations of corruption and files that had suddenly gone missing.

Mr P Van Staden (FF+) said that after the Committee’s meetings with the AG and the various entities, there are clearly serious issues. There have been over 15 000 medico-legal claims launched against the Department to the value of R125 billion. This amount is understandable considering the terrible state of the public healthcare system. Will the Department provide a comprehensive report on the medico-legal claims against them? If not, why not? It is of the utmost importance that this report details what each of the claims detail and the reasons behind these claims. The money spent on paying out medico-legal claims could rather have been spent on upgrading infrastructure, building new hospitals or filling critical vacant positions. It is clear that the budget for the OHSC is not enough. Their report stated that they require more funding and that their number of staff is not enough. In 2019, they had 44 inspectors and now they only have 42 to perform inspections at hospitals and clinics across the country. This is very worrying.

What measures will be put into place to ensure that the OHSC can fulfil its obligations? This issue also extends to the Health Ombudsman. The UK office consists of 450 staff members. In South Africa, there are only three investigators and one manager. The Health Ombudsman’s office also needs several million rands to be able to perform its duties.  What measures will be put in place to ensure that the Health Ombudsman can perform its duties? He thought that the irregular expenditure amount for this Department was R1.3 billion, yet this presentation said it was R61.4 million. Can this be clarified? What measures are currently in place to get rid of corruption, mismanagement and maladministration in this Department? It is clear that the measures that are currently in place are not sufficient. Better plans must be put into place to get rid of these issues. How will these new plans be implemented and by when? Who is taking responsibility for these problems in the Department?

The Council for Medical Schemes did not do enough to intervene in the Medipos situation which had serious consequences for its members. Will the Department intervene in this matter and what measures will be put in place to ensure that the South African Post Office will be able to pay the medical aid funds in the future, as the R700 million remains a big problem for this state institution? Can they get a report on all medical aid funds at risk of collapsing? Maladministration and disruption have destroyed the once-effective public healthcare system. It cannot be turned around with the NHI. The public healthcare system must first be restored completely before the NHI Bill can even be considered or deliberated on. The Health Ombudsman said that the Department would not be able to implement the NHI. In the UK, the NHS waiting list is at seven million. It was also reported that new data from the NHS shows that seven million people are waiting to start routine hospital treatment at the end of August. This is up from 6.8 million in July this year. Even in a first-world country, this system is a huge problem. What is happening in the hospitals now is a shining example of how the hospitals will operate under the NHI. The Department should withdraw this Bill at once and it should only come under review again once all the shortcomings of state hospitals have been addressed. Will the Department provide the Committee with workable plans and solutions to solve the crisis of the backlog of medical procedures? He asked the Minister and Director-General about the issue of cancelled operations and he thanked the DG for getting back to him. Can the Minister give them an update regarding this matter and how long will it take to be solved?

Dr S Thembekwayo (EFF) pointed out the AG's remark said that the Department could not provide evidence of most of the amounts and disclosures recorded in the financial statements, and it was, therefore, unable to conclude or express an opinion on the credibility of the financial statements. The Department could not produce credible or reliable financial statements. It had material misstatements in specific areas in the financial statements which could not be corrected before they were published. The CMS, NHLS and SAPHRA struggled to align performance reports with predetermined objectives committed to in the Annual Performance Plan. They could not report reliably on whether they achieved their performance targets. What is the Department’s urgent intervention to ensure such struggles are not experienced? The Department also received a qualified with findings audit opinion, as it too struggled to report credible and reliable financial statements and had material misstatements. If the DoH cannot produce reliable financial statements, what consequence management is in place to root out these problems? What has been done to those that have failed to adhere to producing credible and reliable financial statements? The AG further noted that three people occupied the CFO position during the financial year. What happened here? Did this have dire financial implications? Why did it happen?

There seems to be no accountability in the Department regarding consequence management and this trend is running through several entities like SAPHRA and CMS. What are the concrete consequence management measures in place in the Department and why is it not effective? Have any investigations been done into the several instances of irregular expenditure and financial misconduct? The AG reported that no such investigations took place. Why not? The AG and some Members have mentioned that the NHI fund purchasing goods and services is not adequately addressed to ensure accurate reporting. Will the Department refine the process to ensure that deficiencies are corrected? The AG also supports possible amendments to NHI. The first is that the Department needs to track the number of hearings they attended to ensure that all input given about the NHI is considered when finalising the Bill. The input given by non-ANC Members is not taken into consideration. What about public submissions? Are they thrown into the dust as well? Can the Minister account extensively on this matter?

Ms N Chirwa (EFF) spoke to CMS about the Medical Aid Schemes Act and the fact that the Act limits it to regulating medical aids, yet it is also regulating insurance and low-cost benefit plans. What is the position of DoH on this? Why has there not been a transfer of the regulation of medical insurance into the right entity? SAPHRA approved Pfizer and part of this was that the information that Pfizer submitted proved its safety. However, there was a leaked document of over 1000 patients who faced adverse effects because of the Pfizer vaccine. This information was not known to SAPHRA prior to being linked. This, however, did not raise safety issues with SAPHRA and they did not investigate. It is problematic that the approval was done with incomplete information, and yet incomplete information was used to deny the approval of other vaccines. Pfizer has now applied for the dilution of the Covid vaccine to be used in children. Will this vaccine be given to children, despite the misleading information and adverse effects? When does the government practice its autonomy and prioritise the safety of its citizens and its children? Especially when one considers the 6000 reported cases of adverse effects, which won’t be investigated, knowing the capacity and the laziness of the Department and its entities.

The question about GBV is very important. If there are two similarities between the SAPS and the DoH, it’s that they will turn back people, especially GBV victims. Zenizole Vena was gang raped in the Eastern Cape. She went to a clinic and was turned away and told to go to the police station. The provincial department of health rebutted these allegations as they always do. This holds more water because it is a GBV victim and there is less sympathy and empathy. She has never seen the DoH speak on this issue. What has the Minister done about this particular case? It is one of the most gruesome things to have ever happened in the country. She died because she was turned away by both the clinic and the police station. There is an insistence that she was sent to the police station because she was stable, despite the fact that there are so many regulations and things that can be done to accommodate GBV victims. What has the Minister done about this particular case, and holistically? She knows it won’t be a ground-breaking response because the Department doesn’t have a history of prioritising GBV victims. What is going to happen to the healthcare facilities that do not reach the standards required by the NHI? There are parts in the Bill that stipulate that certain standards first have to be achieved by healthcare facilities before they have an agreement with the NHI. Even the bodies that are supposed to check on these standards do not have the capacity to do this work for the current healthcare facilities that exist. The era of President Ramaphosa is the era of strengthening the private sector. They’ve seen it with Eskom, SAA and other SOEs. The money that is supposed to better the healthcare system is being plunged into the private sector through a neo-colonial Bill such as the NHI.

The AG has reiterated that some entities and the DoH keep regressing. This means that the Department was run better under former Minister Zweli Mkhize than it has been under the current Minister. What is the reason for this, since the DoH can no longer blame Covid? There are fewer ideal clinics under this Minister than the previous one. There is more irregular expenditure and mismanagement of funds now. This is, in essence, corruption and theft. There is more corruption now than there was under the previous Minister who was removed because of corruption. Tembisa Hospital is an example of this. Elimination of corruption is not a priority of the Minister. They have never seen him do a drive to rid the Department of corrupt figures or put programmes into place to uproot corruption. There have been deaths of people who have spoken against corruption. These are crimes and have become worse now that Dr Phaahla is Minister. Access to quality healthcare has decreased for thousands of people. The current Minister is failing to improve the healthcare system and it’s worsening under his leadership. Is the Minister proud of these results? How does he feel about the fact that the DoH is worse under his leadership?

Ms M Clarke (DA) asked the Minister to have a meeting with the provinces to keep them accountable. The presentation showed that many of the provinces have qualified audits and it is high time that they are accountable to the Committee as well. The healthcare workers trained during Covid were made redundant in most hospitals. Considering the massive shortage of healthcare workers, why were they not absorbed into the system? She visited many hospitals on the ground and this is a core issue. When will the medico-legal claim framework be ready for dissemination to the public? How long will it take to implement and integrate a case management system across all provinces for medico-legal claims? Has this system been tested in terms of its efficiency and what will the Department do to regulate the system and stop legal representation from colluding with officials and patients? This is also a big problem. If they can eradicate fraud and corruption within the system, there would be fewer claims. How many investigations have been conducted on this practice and what were the outcomes? How successful have the service providers appointed to assist with medico-legal claims been? Services had been appointed, and out of the five providers, only two were successful with enormous costs to the taxpayer. What is the status quo regarding public hearings for the NHI Bill through the NCOP? How has the registration of medical aid schemes progressed in the NHI Bill, as this was stalled due to the POPI Act? What implications will it have for the NHI? For medical aid beneficiaries to register on the HPRA system, the Act must be amended. How long will this process take and what outcomes will this have for the NHI Bill?

What plans have the Department got in place to address the current slow uptake in terms of the Covid vaccine, as the government has only reached 50% of its target? In terms of the mental health targets, the outcomes state that improved monitoring and support for provincial and inter-social collaboration have been put in place. The magnitude of mental health issues is at a critical point. Patients have to wait for 72 hours, and then they are lucky if placed in a proper facility. Usually, they are placed all over hospitals and in general wards. This also provides a danger to patients within the hospitals because the medical staff within a general ward are not qualified to deal with mental health patients. Mental health patients just end up returning to the system because there are not sufficient substance abuse programmes and this is one of the largest causes of mental health issues. Does the DoH still intend to hit the 70% Covid vaccination rate? What was the impact of the Digital Vibes scandal on the vaccination rate? Would the Department be closer to its vaccination rate target had the scandal not happened? How does the Department measure the success of the Digital Vibes campaign? When will the ICT positions be filled, and what are the reasons for the vacancy? Has the Department done a risk assessment on the ICT systems and what were the outcomes? Has the Department done a survey study assessment on the ICT needs of hospitals and clinics in the country? Too many hospitals do not have sufficient ICT infrastructure or working phones, computers or internet. How widespread is this problem and what does the Department plan to do to fix this? How is the Department addressing widespread poor record-keeping in hospitals, especially with the sharing of critical facilities and medical practitioners? It is also noted that only 60% of the budget for health information monitoring and evaluation was spent. This is really concerning when many hospitals do not have any digital record-keeping systems. Given the qualified audit, how does the Department plan to address poor record-keeping practices? What is the proposed plan to address this issue? What is the reason behind the Department’s terrible consequence management? Which of the AG’s recommendations has been implemented, or is in the process of being implemented? What was the NHI budget allocation spent on, considering that there was an underspend of R188 million regarding these programmes? What has Cabinet discussed regarding the NHI in this current economic climate, considering that the Committee has seen no feasibility study? Will South Africa be able to afford NHI? When they looked at the financial model of NHI, it was a couple of years ago and now things are drastically different. South Africa is about to be greylisted. The OHSC and the Ombudsman admitted that they would not be able to ensure that all hospitals would comply with NHI standards. They do not have adequate funding or staff. How is this problem going to be addressed?

Mr T Munyai (ANC) said that the Minister is not corrupt, nor is his Department. He is pleased that the Minister was upfront and came before the Committee and explained what was going to happen with Covid-19. During the pandemic, they were saving the lives of South Africans. The Minister has not been in the position for very long. The Committee needs to support the Department. The Department is not like any other Department. It deals with healthcare. The Ministry has done a lot of intervention in the programmes, which needs to be supported. Running the Department is not like pressing the button of a lift, going from the first floor to the eighth floor. It is a serious responsibility. During the pandemic, the TB programme has been undermined because the Department was focusing on Covid. Now, the Department has focused on that programme and has performed 100%. He thanked the Minister and his team. The Committee needs to support the Ministry in their continued improvement. In all of the big programmes, there was 90% performance, and for some 100% performance. They must congratulate the Minister and continue to encourage him to work hard. The Auditor-General should have understood better and known that during the pandemic, the numbers are not the main concern. The main concern is saving lives. He is very proud of the Minister and his team.

Ms E Wilson (DA) accepted that the pandemic had an impact on the details in the 2021/22 annual report. However, they cannot go on blaming Covid. The AG report says over and over that there are no financial management controls and controls to prevent irregular expenditure. The reports from the last four years all say the same thing. This is the fifth year that the same failures have been pointed out in the DoH. This cannot be blamed on Covid. There are no measures in place to deal with corruption and financial mismanagement. There is R1.3 billion worth of irregular expenditure, up by 42% compared to the prior year. Regardless of what Mr Venter has shown them, a 42% increase is unacceptable. The Minister and the DG are accountable for this. There has been no improvement and it is very concerning. The performance of the provinces has also regressed. This cannot be blamed on Covid. Had measures and controls been in place, there wouldn’t be this kind of AG report. Medico-legal claims are at R125 billion. It exceeds the annual budget. If the Department did oversight in the health facilities like Members do all the time, it is not surprising. The healthcare system has absolutely collapsed. The clinics are appalling, the hospitals are worse and they are impacted by cadre deployment. When CEOs are in big trouble, they are simply transferred to another hospital instead of facing consequences and being fired for being “bloody incompetent.”

The Chairperson warned Ms Wilson about her choice of words.

Ms Wilson apologised and said that she gets very angry about this issue. There is no medical expertise and they cannot even attract medical expertise. Specialists and other doctors will not work in the public health sector.

Mr Munyai called a point of order about Ms Wilson’s language. She should withdraw the word “bloody.”

Ms Wilson withdrew it. The theatres are not equipped; if there is a theatre at all. There is no infrastructure or medicines. Doctors sew up cuts with dental floss. Yet, people wonder why they are sitting with medico-legal claims. It is because of the failure of the Department to deliver on its mandate. The Constitution is very clear on this. Section 9 says that they have to deliver quality healthcare and they do not. Yesterday a child was born with an umbilical cord wrapped around its neck outside the gates of a clinic in Burgersfort. The nurse was there and refused to open the clinic because 7 o’clock was their opening time and it wasn’t 7 o’clock yet. How have they gotten to this situation? Had that child died, there would have been yet another medico-legal claim. The person who helped the woman was not a nurse, but a woman who owned a stall on the side of the road. This is appalling and embarrassing. The AG was very clear that there has been no improvement in infrastructure or findings on timeframes and costing. Payments are made for goods and services not received. How? How are they paying for overpriced goods? It is little wonder that the health sector is such a mess. Up to 80% of financial reporting is not compliant, according to the AG. 90% of the provinces’ budgets for next year have already gone. How are they going to deliver the services? There is no money because of financial mismanagement and lack of controls. The OHSC is seriously underfunded and will only be able to inspect 22% of healthcare facilities next year. Yet, the government wants the NHI. They can’t have the NHI if the facilities are not compliant. Even the Health Ombudsman has said that the facilities are not compliant and the NHI is not feasible. There is serious underspending in programme three which is vital. There is understaffing in every single entity and department. R1 billion was spent on the NHI. The NHI has not been passed. What was this R1 billion spent on? The Bill will go to the Constitutional Court and the country does not have the facilities for NHI.

Ms Gela interrupted and said that she would like to correct Ms Wilson.

The Chairperson said that she could correct her afterwards.

Ms Wilson said that it was not Ms Gela’s place to correct her. The Minister can. She doesn’t answer to Ms Gela. The Department is no longer on life support. It is now totally comatose with very little chance of survival when there is this kind of abhorrent behaviour and mismanagement. The Minister needs to be held accountable for this. She hopes that he is going to do something about this and that he is going to come back to the Committee with something positive.

Ms Gela raised a point of order. She would like to correct Ms Wilson as the Minister was not a part of their meeting with the Ombudsman. The Ombud said that the NHI is a good and necessary initiative and must be supported by the Committee. To say that the Ombud does not support the NHI is a lie or a misquotation.

Ms Chirwa said that the Ombudsman did say that South Africa is not ready now to implement the NHI. People should not make excuses for the Minister or his failures. They must hold the Department accountable. The AG has been saying the same things year in and year out. He is complicit in what is going on. They need to do their jobs and hold the Minister accountable, instead of allowing him to hide behind other officials. He should come to the Committee and account and nobody should defend him. He is a grown man who should be able to speak for himself. They must not infantilise him, unless he is a child.

Ms Ismail recalled that she asked the Ombudsman about his view of the feasibility of the NHI. The response of the Ombudsman was frank and they can refer back to the PMG recording. He stated clearly that he does not feel that the country is ready for the NHI. He did say that universal healthcare is something that should be worked towards but he definitely said that it is not feasible right now.

Mr Munyai said that the Committee is not discussing the Ombudsman report. It is discussing the Department’s report. However, Members need to stop misrepresenting the Ombudsman. He said he worked in the UK for 15 years under the NHS. He supports the idea of universal healthcare because NHI will provide equity in the country. The rest is misrepresentation. The Committee needs to move forward now with the Minister’s report.

Ms Clarke suggested that the Committee gets the recording to clear this issue up. Mr Munyai has not clarified exactly what the Ombud said. He did say that he supports the idea of universal healthcare. He was also brutally honest in saying that South Africa is not ready to implement the NHI at this stage. Ms Gela needs to apologise to Ms Wilson for lying.

The Chairperson said that misstatements had been made. Comments were made about the regression of entities. The AG’s report said that three of these entities had received clean audits and three have received unqualified with findings. Overall, the audit outcomes of the portfolio improved. The report also explains that the Department received a qualified audit partly because of the reimbursement of Covid-19 vaccine-related costs and other reasons. He is not defending or saying that everything isn’t true, but they need to be mindful of what they talk about.

The Department’s report said that 52 PHC facilities and 21 hospitals were constructed or revitalised and 120 other facilities were maintained or repaired. Which of these are new facilities? Surely they need to work towards building new facilities. He assumes that when they are revitalised, they are made to fulfil the requirements. The target for this programme is great, it is at over 99%. What does it really mean to say constructed or revitalised? Many of the DDGs within the NDOH are acting. When will these positions be filled? Nursing colleges and nurses are the base of the system. Nursing colleges need to be open and the presentation uses the words “accreditation received.” His question is about the opening and the roll-out and actually getting nurses into the system. They are now at the stage of interns and community service doctors having to be placed for next year. Can the Department give the Committee an indication so that it knows that there are no hiccups in this system? How far is the development of the new human resources for health policy and the restructuring process that goes along with it? There is a huge vacancy rate for the senior management services. It is around 25% on average. When will these posts be filled? Medico-legal claims are an issue that is very close to his heart. What is the plan to minimise medico-legal claims? When will a study be done to figure out the crux of this issue? These claims are a huge burden. The report says that the target to develop a policy on this issue has not been reached. The Department needs to do this very speedily.

The Chairperson said that he wrote down what the Ombudsman said. He said that it is an important implementation and that he is surprised that some Members are not supporting it. He said that nations would fail if they did not have ideas, and this was said in the context of the NHI.

Department response

The Minister admitted that there was a measured challenge concerning mental health services. They are not adequate. He was in Mamelodi with the new MEC and Premier. There was a small hospital which has been struggling for quite some time. However, a change in management has led to drastic improvements, such as expanding its mental health services. There is still pressure, both in acute services and chronic mental patients who do need long-term treatment. They just do not have enough beds. This is an area of both infrastructural and human resource investment which needs to be increased across the country. The needs for mental health services are prominent. There is pressure from the pandemic and other socio-economic issues, such as substance abuse, which is prominent among the youth. It has risen a lot. Many new acute treatments are mainly for young people who struggle with substance abuse, over and above other issues and mental illness. A lot needs to be done in this regard. They did give a report from the formal evaluation of the NHI.

The White Paper of the NHI, which is government policy, has made it very clear that even prior to the law being approved by Parliament, they need to prepare the ground for transformation into health coverage so that their services can actually improve. They are using pilot areas and the eleven districts to gain experience in how the NHI will work. Experience is also being provided through many programmes such as the ideal clinic and the health facilities revitalisation grant. The main issue when the Bill is passed is the reallocation of financial resources. The white paper has made it possible to lay the foundation and to create progress. It also makes it possible to provide a budget without changing the financial architecture. Once the Bill becomes an Act, there will be a fundamental change between the current architecture to a two-tier system of the public and private sectors. Primary healthcare and the public health system are the bedrock of NHI implementation. That is why when Cabinet approved that policy, they could start laying the foundation through these programmes. They are definitely using the lessons learnt from the various programmes.

They have already appointed the Health Ombudsman to investigate the gang rape case in the Eastern Cape. He has been tasked to find out the critical facts about what happened. There are a number of facilities which are not ready for the NHI. It is not expected that the facilities will automatically be ready. That is why the policy framework states that the NHI will be implemented in phases, such as the preparatory phase which will lay out the regulatory and legal framework. Once the policy is passed and becomes an Act, there will be a plan to ensure that certain facilities are improved. Once they can reallocate resources, including those which lie in the private sector, this can be speedily accelerated to make sure that many facilities are up to standard.

Attracting medical expertise is a challenge because of two issues. One is the urban-rural divide, which means that many highly qualified professionals prefer to work in urban areas. This is made worse by the two-tier system, unlike many other developed countries. The UK does not have this system, and although they may have their own challenges, they are able to retain their health professionals. Yesterday he was in Limpopo at the rural hospital where he worked for four years. It was good to see the integration of digital technology so that doctors can interface with specialists and knowledge can be shared. It is feasible, notwithstanding the challenges until the two-tier system is changed. It is feasible and improvement can be made even in the disadvantaged areas. He has been briefed on the incident at Burgersfort clinic and they are taking steps to ensure that things like that do not occur. Mr Van Staden requested details on all 15 000 medical claims. These claims are a contingent liability. When these claims are investigated, some of them are found to be fraudulent or invalid. The cause of medico-legal claims is a combination of services, shortage of skills and poor management supervision. The hospital in Mamelodi had challenges for many years but just through a change of management, vast improvements were made. With the collapse of the Road Accident Fund, legal firms have now gravitated towards medical claims as easy prey. This has led to very few obstetricians wanting to practice because of the increasing level of medical insurance. This is the same for gynaecologists and neurologists. This is why they are also looking at the legal framework. Even if they are able to improve on record-keeping, if the legal framework does not change, there will be problems.

Dr Buthelezi said that some of the main strategies for dealing with teenage pregnancy are biological or social. Biological means that they have introduced a number of interventions and new technologies and efforts to prevent it. Keeping girls in school is also important in combatting teenage pregnancy. Education is very critical because this issue is prevented when girls finish high school. Addressing gender-based violence is also important as most of the cases are a result of statutory rape. In this case, the criminal justice cluster would be involved. These are the documents that they are dealing with to try and actually address these issues. New strategies have been introduced to address HIV and TB. There is a TB catch-up plan launched by the Deputy President and the Minister, which will try to get TB back to where it was pre-Covid. There are a number of things that address HIV as well, such as SANAC, and they are building this into the new national strategic plan which they are on the verge of finishing. It will be launched on TB Day next year. It will learn from the past and use new technologies. One of the key issues is the overall financial management and how this can be improved. The AG said that the fruitless and wasteful expenditure they are dealing with is from previous years. For the 2021/22 financial year, no fruitless and wasteful expenditure was found. There have been some cases of consequence management. They have appointed the DDG for hospital services and human resources for health. A permanent CFO has also been appointed. There will be a number of further appointments, including within the NHI structure.

Ms Valerie Rennie, Head: Corporate Services, DoH, said that the update on the Tembisa Hospital appeal case is that they are waiting for the judgement. The Minister did appoint an appeal committee. This should be concluded soon as there is already a draft judgement. They are working in conjunction with the Department of Justice and that Department is the lead on the policy because they are the ones who published a paper on medico-legal claim reform. This might take a long time. In the interim, they are again working with the Department of Justice and National Treasury on the interim State Liability Amendment Bill. This is with the Portfolio Committee on Justice and was last discussed in 2018. They are reviving the Bill and are hopeful that it will move forward and be enacted before the end of next year. The Bill addresses periodic payments or start-up payments, future medical costs, and referrals. The Department focused on investigations into the top law firms that are litigating and that report has been handed over to the SIU. The President announced the proclamation on the medical-legal investigation and the SIU is taking over. The SIU has engaged with five provinces already. They are trying to ensure that all ICT positions are filled by the end of this financial year. There was a request to share these reports. Because these are classified cases of specific patients, they can share summary reports per province if this is allowed. They have rolled out the case management system in four provinces. The provinces are the ones who have to commit to use the system. Only the Free State is actually utilising this system. The other provinces have dual systems and still rely on a spreadsheet and manual systems. This is not more reliable than the electronic system. The Department engaged with them specifically yesterday and asked all the provinces to come on board. The main benefit of this system is that provinces will be able to see when there are duplications of cases and litigants. If some cases do not succeed in one province, they launch in another province. The system will tackle this problem. Once the state law reform is implemented, they will be able to deal with this issue where people have information they are not authorised to have. The reports of patients are confidential and people sell them to litigants. Five service providers were appointed and they had different roles. Two of the five were doing forensic investigation reports which they have now handed over to the SIU. The SIU appreciates this and they rely on these reports. Another two are working with the provinces and preparing documentation for court. The fifth is assisting the Department with the case management system. All five service providers are functional. Their contracts are coming to an end at the end of this financial year.

Mr Venter said they presented the DoH’s financial findings, not the entire sector’s. For the DoH, irregular expenditure is R359 million. The opening balance was R297 million and with the R61 million that is alluded to in the presentation, that is R359 million. R1.3 billion in irregular expenditure might be for the sector but that is not what was presented today. The R359 million also includes the R150 million for Digital Vibes. The remaining balance is R209 million which the Department is currently busy with. They will return to the Committee and present a report on consequence management and a plan for dealing with irregular expenditure. There are controls in place. The impression that has been created that there are no controls and that there is a free for all is not true for the national Department. During the audit, they did engage with the AG team. They asked them what controls they should put into place and could not answer. They will talk to the AG about how to present information so there is no confusion or false impressions. Accruals are a serious problem for the health sector. There is a constant decreasing budget from National Treasury given the fiscal climate in South Africa. This contributes to accruals. The Department and the National Health CFO Forum will address this matter with the provinces and see how they can convince National Treasury to increase budget allocations. The accruals emanate purely from these budget decreases. However, they cannot curb services. Health services need to be rendered.

Dr Nicholas Crisp, Deputy Director-General: National Health Insurance, DoH, said that the funds used for the NHI have been allocated by Parliament year after year, for many years, and are conditional grants that are used for strengthening various things in the health system. Much of this is related to the employment of general practitioners to work in difficult-to-reach areas, strengthening posts in oncology and mental health services, etc. Several of these grants are referred to as NHI money but this is what they are used for. The standards compliance issues will always be challenging and will remain challenging for some time. The Minister was very clear on how this works. The intention is to make sure that there are quality improvement programmes. When they identify matters in public and private hospitals and clinics which do not meet the OHSC standards, these facilities are required to improve. It does not mean that a service is not provided. It means they are not happy with the quality of the service being provided. Three of the NHI targets were not reached but the first two can’t be reached at the moment. The target requires that the Bill be passed. There were questions by the AG that the Department could not account for its attendance in the Portfolio Committee meetings. They did respond to the AG and the AG wants the minutes of all of the meetings. They have the minutes of Parliament and not of the Department and the AG felt that that was an unsatisfactory response. They are discussing with the AG how to respond to the matter of hearings they have attended. The second one was about the medical scheme members. This also relates to the challenge for which they have been qualified. Part of their challenge is not having direct access to membership information. This has been done during Covid using the switching mechanisms of the medical schemes and correlating that to the systems they use. In the future, an amendment will be proposed to the Medical Schemes Act during the time of the passage of the Bill. Until then, he does not envisage a separate amendment to the Act.

Pfizer does not dilute vaccines. The adult doses are fractionated for children. That has not been implemented but it is done in many countries. The adult doses are much larger and need to be fractionated for use in children. A Pfizer vaccine is available for children but has not been procured and is not being used in South Africa. Children under the age of 12 are not being vaccinated. Insurance products are regulated outside the Medical Schemes Act, and some provisions for those insurance products to be provided on an exemption basis to cover general practitioner visits. They do not cover any other medical interventions. Even if they moved into the Medical Schemes Act environment and low-cost benefit options, there would not be any coverage at all in hospitals and for laboratory tests and x-rays. They may only be covered for one or two general practitioner consultations per year. This is something that the Department has discussed and the matter has been taken to court. They cannot discuss their position right now. The Medipos issue is related to many medical schemes. If the employer does not pay their portion to a medical scheme, it makes the medical scheme vulnerable which is what happened in the Medipos case. There are other medical schemes which are not viable.  This is an area where the CMS works quite hard and tries to engage with vulnerable medical schemes and get the members transferred to a different one. This is one of the challenges of having 76 medical schemes and so many different packages. It makes membership to those who do not have proper risk pools extremely vulnerable. This is something that they want to get rid of in the lead-up to the NHI. The Department is working to strengthen the capability of the OHSC but it would be nice if Members and Parliament would assist in increasing its budget when the budget vote comes up for discussion. The budget is a big challenge for the OHSC. This also relates to the Ombudsman. They have been working with their office to develop the Bill and the State Law Advisors have formally signed it off. It will be tabled in Parliament. The intention is to make the Ombud office a separate entity, not under the National Health Act and not as a sub-entity under the OHSC. They are also busy with the Ombud himself on the business case. There is a specialist working with them in the Department on this. A lot of proprietary work was done by the Ombud himself and his office so they hope to expedite this.

Ms Jeanette Hunter, Deputy Director-General: Primary Health Care, DoH, said that they are improving access to mental health services. They are increasing the number of primary healthcare facilities which can assist and stabilise mental health patients. This includes screening for people who may not be aware that they have a mental illness. They have trained and continue to train primary healthcare nurses to be able to do this. They continue to increase the number of hospitals with dedicated mental health units. Some units are very dilapidated and these are on the plans for structural improvements by the infrastructure programme. The programme of ideal clinics has unfortunately slipped. This is because, at the national level, there has been an attrition of the staff responsible for coordinating provinces. At a provincial level, the teams responsible for improving the conditions were organised into teams first doing the reporting and the prevention programme for Covid-19. Later these teams became responsible for the rollout of the vaccine. DoH is committed to this programme because it has shown that it brings better working conditions for the staff and better services for the patients.

Dr Buthelezi said that the placement of interns was delayed and they were given a timeframe. It was opened and people applied and it is expected that people will have their allocations by the end of this month. They met with the HODs in the last week of September and are very comfortable that they are not going to be in the same situation this year as the last few years. This is regarding the placement of interns. With regards to staffing, the provinces have told them that the staff who came in during Covid made a huge difference. They are trying to retain the staff and have even worked on the quantification and are trying to make another bid to Treasury to see if they will be able to bring in those issues. As for the nursing colleges, it is a large programme, not only on the accreditation but also because some provinces are struggling and they need to assure quality. This is starting to be addressed and there is an upcoming meeting that will involve himself and the Head to try and resolve the issue so that more colleges can be accredited. They can come back to the Committee with a proper presentation on this. They are particularly short on theatre, psychiatric, and neonatal nurses. They are working on increasing this and can come back and inform the Committee about this.

Ms Milani Wolmarans, Chief Director: Policy Coordination and Integrated Planning, DoH, said that the lack of data and performance information is mainly related to the reporting systems that they are using. This is currently the district health information system. The AG wants them to rather use a more transactional-based approach. They are working towards a patient-based information system where there will be an electronic patient record. One of the key areas they are currently busy with is scoping out primary healthcare patient information systems across the country. This will have to be implemented over time. It is a huge investment. They are dependent on working with other government departments like SA Connect. The NDoH has invested a lot in infrastructure and computers, label printers, and improved filing and appointment systems. This has been implemented in 3150 primary healthcare facilities. They have distributed 25 359 computers purchased through the grant for patient information systems. They are verifying the information registered on the health patient registration system with the Department of Home Affairs. It is not an automated direct verification. They are now moving into implementing biometric identity verification so that they can ensure that when they move into the primary healthcare patient information system, the information is recorded for the correct person. The technical work has been done and they will begin the implementation. They have started to purchase the first batch of biometric equipment. 300 primary healthcare facilities now have the functionality available to them to be able to get the history of the pathology results using the HPOS and the national laboratory system. The nurse will be able to see it in the consulting room. This will further improve the quality of care. Multiple interventions are being put into place but it is going to take a while to implement a fully-fledged digital system. It could take up to 15 years. Their target is five years but it depends on the availability of resources.

Dr Buthelezi said they do not agree with some of the issues outlined in the AG’s report. The AG said that the EVDS system is inaccurate, yet they have received international praise for this system. However, there is room for improvement in ensuring the data they use to measure their performance is properly verified. On the performance management desk, that is correct. They are starting to be strict. A week ago he issued that they are going to be doing half-annual reviews using the performance agreements to ensure that people are performing.

The Minister said that they are not oblivious to the challenges. They are committed and have identified the areas which have particular challenges. The first step to correct an issue is to identify and be upfront. They are confident that they will be able to deal with the causes of their qualified opinion. Some of the Members are very pessimistic and the many dedicated health workers would be disappointed and despondent to hear public representatives say that the system has collapsed. They are here to support them and will work around the clock to address their issues.

The Chairperson thanked the Department. Clearly, there are problems but he is feeling confident about the future. Sometimes people forget the past and where the Department was and what it took to get to this point.

The meeting was adjourned.