Impact of medico-legal claims on provincial health budgets and mitigation measures: AGSA & DoH briefing (with Deputy Minister)

Meeting report

The Chairperson indicated that the Committee would first attend to an in-house matter and then receive a briefing from the AG.

Mr Lubabalo Nodada, Committee Secretary, said he received apologies from Mr Carrim, Mr Du Toit, MEC Mvoko, the HOD of the EC DoH and the Minister of the DoH.

The Chairperson mentioned that the Deputy Minister (DM) of the DoH would be joining the meeting at 10:30.

Mr D Ryder (DA, Gauteng) acknowledged Mr Paul Malema, who is the Chairperson of the Finance Committee in Gauteng.

The Chairperson acknowledged all of the political officials represented in the Committee. Thereafter, she handed over to the AG.

Mr Andries Sekgetho, Business Executive, AGSA, indicated that the issue of medico-legal claims has been top of mind for the AG due to the nature of their implications and impact on the management of already scarce resources.

The information that was to be presented formed part of the previous years’ audit outcomes, he said. Some follow-up work was done on the medical legal claims during the recent audit process, however, full details of this would only be elaborated on once the audits had been finalised and tabled to the Committee. Besides that, the presentation would still provide Members with a picture of the key points on the management of the medico-legal claims.

Briefing by the AGSA on the medico-legal claims

Mr Sekgetho and Ms Thabelo Musisinyani (Acting Business Leader at AGSA) took the Committee through the AG’s presentation on its audit of the medico-legal claims.

Ms Musisinyani told Members that the National Development Plan (NDP) set a target for the government to reduce the contingent liability of medico-legal cases by 80% (under R18 billion) in 2024 from the baseline of R70 billion in 2018. However, the AG, during its audit, noted that the total amount of medico-legal claims stood at R77 billion in March of this year, with the highest being in the Eastern Cape (EC), which stood at above R30 billion.

The DoH appointed a service provider to develop and implement a case management system (CMS) to assist with the management of medico-legal claims. Furthermore, the department also undertook the process of developing a policy and legal framework to manage medico-legal claims.

Mr Sekgetho said that NDoH did not meet the targets relating to medico-legal claims set for the 2021-22 reporting period, which was an indication that the measures put in place to resolve medico-legal claims were working at a slow pace or not being implemented.

One such measure that has not been implemented efficiently is the migration from a manual records management system to an electronic one. This has contributed to the high number of medico-legal cases as several patient safety records have been lost, resulting in the department being unable to challenge some claims made against it.

The AG recommended that the Committee closely monitor the spending of the department and its provincial departments on procurement and infrastructure development and continuously provide advice on how best to implement internal controls that will prevent both fruitless and wasteful expenditure.

The Chairperson requested the Deputy Minister (DM) of the DoH provide Members with an overview of the presentation.

Opening remarks by the DM of the DoH

Dr Sibongiseni Dhlomo, DM, DoH, said that he hoped that the media houses would send encouraging comments to the DoH after hearing the AG commend the plan it has put in place.

The Department, he pointed out, was well aware that the provision of healthcare services is a basic human right, as enshrined in Section 27 (1) of the Constitution, and is striving to fulfil this right. In the past ten to fifteen years the DoH has witnessed an alarming increase in medical malpractice litigation, which has a serious negative impact on service delivery in both the public and private health sectors; threatening the government’s vision of achieving a long and healthy life for all South Africans. 

This also posed a threat to the future availability of certain specialists within the health profession. The legal profession has been seen to target the health sector after the Road Accident Fund (RAF) almost collapsed. Some of these claims are justified, but others have been found to have been fraudulent. Hence, the President’s proclamation to allow the Special Investigating Unit (SIU) to investigate the medico-legal claims.

There were declarations and strategies put in place to guide the department on how to attend to medical legal claims after the medical legal summit held in 2015. Certain provinces have already created multidisciplinary teams that are focusing on these matters as they arise.

The presentation will indicate a provision of future medical treatment, what steps are currently being taken by the department, and how it plans to expand the process. Some of the slides in the presentation overlapped with much that was said by the AG.

Much work has been done on the forensic investigations, however, finalisation of the report will only be done once the SIU report has been released, he highlighted.

Briefing by the DoH on the impact of medico-legal claims on provincial budgets

Dr Sandile Buthelezi, Director-General, DoH, took the Committee through the impact of medico-legal claims on provincial budgets.

He indicated that after the approval of the Medico-Legal Declaration, a Litigation Strategy was developed. The aims and objectives of the strategy are to provide efficient and effective medico-litigation management through short-term, medium-term and long-term solutions, as stipulated in the Medico-Legal Summit Declaration. Solutions were recommended in three areas: medical, administrative and legal. 

The medical solution sought to implement measures that would reduce the incidences of negligence, medical malpractice, unethical behaviour and adverse events. Administratively the department sought to improve its record management of medical documents, and communication with patients as well as members of the public. Legally, the department looked into how it could resolve as many cases as possible through mediation.

For the 2020-2021 Financial Year, the Department had 1256 cases of medico-legal claims, with the highest number, 329, coming from KwaZulu-Natal (KZN). Despite KZN attaining the highest number of cases, the EC recorded the highest monetary value in cases, amounting to R3.75 billion out of a total of R9.1 billion.

The number of cases the Department received in 2021-2022 increased to 1415, with the EC overtaking KZN as the province with the highest number (391 versus 229). Once more the value of the EC’s cases were the highest, standing at R5.9 billion out of R13.7 billion. However, the number of cases saw a significant drop in 2022-2023 to 1043, worth a total of R10.1 billion, with the EC still contributing the highest number of cases (257).

(See Presentation)

Discussion 

Mr Ryder mentioned that he had three questions to pose. One, he noted that the medical care facilities in Gauteng had become notorious for the decline and decay in their infrastructure. This was concerning to him, especially as the Gauteng DoH would not be able to invest in their refurbishment due to money being spent on medico-legal claims. He asked both the AG and DoH what they projected medical claims in Gauteng to be going forward. Due to the infrastructure challenges, he presumed that there would be an increase in claims.

Two, he asked what the AG’s recommendations were on infrastructure spending and maintenance; and whether there were issues arising from this. In addition to this, he asked what the department’s plans were to improve infrastructure development so that the claims could be reduced. While he did not believe that all legal claims stemmed from poor infrastructure, he did think that it contributed to highly skilled professionals declining to work in the public health sector. 

Certain media reports have claimed that the benefits from the claims are not actually reaching the intended recipients, with one attorney pocketing the benefits of a victim, he pointed out. He asked the AG how prevalent the problem was, and if it had any recommendations on how to improve the process and change the format of the payouts.

Dr Bandile Masuku (An ANC Member of the Gauteng Provincial Legislature) noted that certain departments, such as the Department of Justice (DoJ) and the Office of Health Standards Compliance, were not part of the meeting and they would have been helpful in responding to some of the issues raised by the Committee.

All funds allocated to the provincial DoHs had to be properly managed by the officials to ensure improved health outcomes for all citizens in the country, he felt.

He recommended that all medical schools form part of these discussions and that a course be introduced on patient safety.

He strongly felt that the government needed to improve its record management. To this, he requested for the AG, going forward, to make recommendations for government departments to place more focus on improving their record management through, mainly, a migration to an electronic database.

He also recommended that the health system migrate towards a system where a patient is given a single medical card they can use to access public facilities across the country.

A key aspect of the National Health Insurance (NHI) Bill was the provision for the department to place greater emphasis on improving its mediation processes, although he did not hear any reference made to this by the AG during its presentation; neither did it touch on some of the successes made thus far through mediation. One of the suggestions made to improve these efforts was that a special court be appointed to act as a mediator between the department and clients.

Also during the discussions on the Bill, reference was made to the issue of foreign nationals lodging medical claims, and the effect this has had on the finances of the DoH.

He then asked the AG to provide details on how many cases were found to have been duplicated, fraudulent and how many of the files had been destroyed.

He was unsure of the feasibility of the Department’s suggestion that the SIU be conferred powers to conduct investigations on medical claims, particularly as it has not been capacitated to do so.

In his final input, he asked why no data had been provided on the status of the Western Cape (WC)’s legal claims.

Mr Mmoloki Cwaile (An ANC Member of the North West Legislature) stated that the department should move with speed to implement the 2015 Summit Resolutions on mitigating medical litigation challenges.

Measures need to be put in place to strengthen primary healthcare and ensure general practitioners, non-governmental organisations and many other role players become the point of entry into the health system; and that they enter it earlier than necessary, he stressed.

The Fourth, Fifth and Sixth Parliaments, he pointed out, have all raised serious concerns about the role of the State Attorney. There was a need to implement the State Attorney Amendment Act of 2014 so as to facilitate the transformation of the state litigation services. Parliament, he thought, has tried to make sure that state legal services are redesigned.

At present, the State Attorney is not necessarily effectively playing its role and it is not coordinating and managing the litigations in which the state is involved. Many of the provincial DoHs, municipalities and other departments are able to procure legal services on their own without the assistance of the State Attorney, he indicated.

Parliament, the DoJ, the courts and independent constitutional bodies like the Public Service Commission, have pointed out the challenges faced by the State Attorney, which include poor performance, corruption and the collusion between its officials and litigants to sue the DoH. He advised the DoH to engage the DoJ to address these concerns.

He welcomed the department’s announcement that it was working on migrating towards an online records management system. However, this would not resolve the issue of records being managed by junior officials in the department. Section 13 (5) of the National Archives and Records Service of South Africa Act outlines that staff at the senior management level be delegated the responsibility of ensuring sound records management practices are implemented and maintained.

He agreed that governance at public healthcare facilities would first have to be corrected before the number of litigations dropped.

Mr Ryder cautioned Members not to take on the role of the Select and Portfolio Committees on Health.

The Chairperson agreed with Mr Ryder’s suggestion, and she added that the Committee highlighted in the previous meeting the need to engage the South African Local Government Association and the National Treasury to follow up on the money appropriated.

Moreover, more discussions need to take place with the relevant committees on health so that there could be greater oversight of the DoH’s budget. The high number of medico-legal claims was a concern for the Committee, she said, as each payout took away funds that could be used to improve the health outcomes of the country.

Deputy Minister Dhlomo requested that all MECs present in the meeting provide responses to the questions asked.

Ms Nomantu Nkomo-Ralehoko (Gauteng MEC for Health and Wellness) said that the Gauteng DoH has implemented measures to decrease the number of litigations made against it, which has resulted in the total value of claims dropping from R29 billion to below R16 billion. One such measure was the deployment of officials to conduct regular hospital inspections. Through this measure, the Gauteng DoH has been able to pick up the files of patients who have been affected by medical negligence and make follow-ups on each case.

The Department, she continued, is on a drive to hire additional doctors, to make sure that the patient-to-doctor ratio is reduced. In addition, it has improved the training of midwifery nurses, with a number of them employed in specific hospitals where cases of mother or child mortality are higher, such as Baragwanath.

It has also established centres of excellence in specific hospitals, like Baragwanath, Steve Biko, Dr George, and Nelson Mandela Children Fund, all of whom have assisted the Rahima Moosa Hospital with some of its medical cases.

An agreement has been reached that will see the department capacitate its infrastructure unit so that minor cases of maintenance are dealt with immediately by hospitals. All the theatres in the thirty-seven hospitals are currently operational.

She appealed for the National Council of Provinces and Parliament to conduct oversight visits at all Gauteng hospitals to see the progress that has been made by the department in improving their conditions.

Ms Nomakhosazana Meth (Eastern Cape MEC for Health) pointed out that the DoH was underfunded, with the Eastern Cape (EC) DoH budgeting R28 billion for the year. Of that amount, R19 billion has been allocated to the compensation of employees, leaving the department with R9 billion – the R19 billion was not enough as the department has a high number of vacancies.

Due to accruals and payables, the EC budget deficit was R4.8 billion, leaving it with R4.2 billion. R1.2 billion of that is an overdraft from the Revenue Fund. With salary increases on the way, the department has projected that it will be overdrawn by R1.2 billion. This meant that the department would only have R1.8 billion to use for service delivery.

Being a rural province with a difficult topography, the EC only has one ambulance per 20 000 people – equating to 447 ambulances – which was less than the national target of one ambulance per 10 000 people. She encouraged the Department of Transport to improve the state of roads in the province because their poor state has also contributed to the high number of medical negligence cases.

In addition, she called for all relevant stakeholders to work together in addressing all the challenges related to the health sector.

She appealed for Parliament to expedite the processing of the State Liabilities Amendment Bill as its implementation would make the criteria for medical legal claims clearer.

The Chairperson agreed that all stakeholders had to be involved in resolving the challenges faced by the DoH.

Mr Stuart Chambers (Director: Legal Services at the KwaZulu-Natal DoH) appealed for the Committee to assist in resolving the challenges faced by the DoH.

The Chairperson said that the rate of child and mother mortality has been a concern of the Committee for some time.

Dr Buthelezi indicated that the department has been informed that the health facility revitalisation grant to the provinces would be reduced by R447 million due to the budget cuts. This has had an impact on the department’s ability to improve the infrastructural challenge. Despite this challenge, the department is currently working with the Council for Scientific and Industrial Research (CSIR) to implement electronic medical records, which it hopes to be done soon.

Plans are in place in the provinces to implement the essential steps in managing obstetric emergencies (ESMOE), which looks to overcome some of the challenges related to pregnancies. District clinical specialist teams, which consist of seven members, have been appointed in all districts to ensure that the clinical audits are done; to lead the morbidity and mortality meetings; and that training is done.

The teams are led by an obstetrician, paediatrician, family physician, and an anaesthetist, who are supported by an advanced midwife, advanced paediatric nurse, and primary healthcare nurse. If the teams are able to do what is required of them more attention would be paid to the upstream issues such as clinical governance, patient care and patient safety.

On whether action had been taken by the relevant regulatory bodies against fraudulent cases (this question was asked on the Zoom chatroom), he indicated that some of the cases have been referred to the Health Professional Council for South Africa. All the details of the cases could be provided to the Committee if required, he said.

Regarding the concerns on the State Liabilities Amendment Bill, he said the department was in communication with the DoJ on the status of the Bill and has been informed that the Bill has not yet followed the relevant legislative processes.

He acknowledged that other bodies should form part of the meetings going forward.

In response to the question of why no data had been provided on the status of the WC’s legal claims in the presentation, he confirmed that the department did provide the statistics in the presentation.

There has been a problem with the recruitment of specialised skills in terms of advanced midwives and doctors, as the department has been unable to receive applicants to work in certain areas of the country. Many of the doctors are only interested in working in Gauteng, Durban and the WC, with some trainee doctors delaying doing their community service if they are sent to rural areas, he highlighted.

Many incentives have been in place to address this issue, such as providing a rural and hospital allowance, commuted overtime and scarce skills allowance. Some highly skilled doctors are currently remunerated R3 million in the public sector, he added.

Deputy Minister Dhlomo encouraged the department officials to continue updating the AG on the progress of the work they have done to resolve these challenges.

Several provincial health departments have established multi-disciplinary teams to pick up problems as they arise and deal with them before they worsen, he pointed out.

He admitted that the department did not always budget for the medical legal claims and even if it did, the department was not sure how much it would have to budget. 

The previous day, he called the Chief Executive Officer of the Inkosi Albert Luthuli Hospital, which is one of the paperless hospitals in the country, to find out how many fraudulent medico-legal claims it has had. He was informed that the hospital has managed to resolve all fraudulent cases immediately due to its electronic data system. From this, he believed that with the adoption of this system across hospitals in the country, the number of fraudulent claims would decrease dramatically.

He agreed that health matters were cross-cutting, and required other departments to improve the infrastructure of the country.

The Chairperson thanked the Ministry’s commitment and availability to be held accountable by the Committee. She assured the department that the Committee would engage the sector committees to improve their oversight on the issues raised.

Mr Sekgetho mentioned that the AG conducted its audit in line with the Public Finance Management Act (PFMA) and looked into the department’s spending of the money allocated for infrastructure development. The mismanagement of the funds affected infrastructure development.

Recently, the AG has tried to consolidate all of the infrastructure challenges the country faces, which is a serious problem for a developmental state that relies heavily on infrastructure for growth. Some of the key outcomes from what the AG has picked up in its audit will be outlined in the tabling of the General Report on the PFMA 2022-2023.

One of the things the AG did during its audit was to validate whether the claims were paid to the intended beneficiaries. Here it looked at the basis on which the sector was making the payments, and it found that a number of them did not have the attached documents to accompany them. All the administrative issues, he believed, should be resolved so that data can be properly collected and can inform all decisions made.

He was pleased that the Committee noted the cross-cutting nature of the problems faced in the country.

The AG has escalated the need for more coordinated engagements in the sector to deal with medical legal claims with the executive authority of the DoH. All relevant stakeholders, such as the Committee, the DoH, and the provincial departments need to work together.

Ms Musisinyani said that the AG has learned about the importance of ensuring coordination between all roleplayers.

One of the AG’s focus has been the need for the investment in primary healthcare.

Deputy Minister Dhlomo mentioned that the department had noted some of the questions raised on the chat group on Zoom and would provide responses to them in writing.

Mr Nodada remarked that the Committee could not adopt its minutes because of a lack of quorum.

The meeting was adjourned