Medium Term Budget Policy Statement: Department briefing

Meeting report

HEALTH PORTFOLIO COMMITTEE
2 November 2004
MEDIUM TERM BUDGET POLICY STATEMENT: DEPARTMENT BRIEFING

Chairperson: Mr L Ngculu (ANC)

Documents handed out:
Medium Term Budget Policy Statement

SUMMARY
The Department briefed the Committee on the Medium Term Budget Policy Statement (MTBPS) as it related to the health sector. Although specific mention was made of the public health sector throughout the Statement, no real allocations had been made to it. Officials also provided the Committee with financial details and the amounts that had been rolled over from the previous financial year.

Members were concerned that municipalities would receive a larger role in the provision of primary health care in a situation where many were not functioning properly or were on the verge of bankruptcy. They were also concerned that funds were still not being spent but had been rolled over to the next financial year, and that medical equipment was procured overseas at high cost and not manufactured in South Africa. Finally, Members questioned whether sufficient resources had been set aside for the implementation of the National Health Act.

MINUTES

Department briefing
The Department briefed the Committee on the Medium Term Budget Policy Statement (MTBPS). The Department delegation comprised of Dr K Chetty, Dr Y Pillay and Mr F Muller. Dr Chetty highlighted those portions of the Statement that impacted upon the health sector. Although specific mention had been made of the public health sector throughout the Statement, no real allocations had been made to it. Dr Chetty noted that the strengthening Rand and the large allocations to the equitable shares of provinces were opportunities of which to take advantage. Ensuring that provincial Health Departments received a fair share of the additional equitable share allocations, and public sector access to infrastructure development initiatives, were some of their challenges. Mr Muller provided the Committee with financial details and the specific amounts that had rolled been over from the previous financial year.

Discussion
Ms P Tshwete (ANC) noted her approval that the payment of contract workers was being addressed. She asked whether the salaries payable to contract workers would be standardised.

Dr Chetty said she would forward a policy document on community health workers to the Committee. She emphasised that community health workers would not be paid salaries by the state as they were not regarded as being part of the public sector. Community workers would however receive payment through a stipend of R1 000. Payment would be made by NGO's receiving funding from the Department.

Ms S Rajbally (MF) asked whether allocations had been made to all municipalities or only to specific ones. She said that many municipalities were under-funded and were on the brink of bankruptcy. Ms Rajbally also asked why the Department had the need to roll over unspent funds. She said that she could not fathom why funds remained unspent given the dire state of affairs in the delivery of primary health care.

Dr Chetty noted that allocations were made to the provinces. She said that the Department was aware that some rural municipalities lacked the capacity to provide municipal health services. Dr Chetty said that discussions were taking place over the issue. Dr Pillay noted that R9 million had been allocated to provinces to assist municipalities to fund primary health care in non-metros. Dr Chetty said that rational reasons existed for the roll over of funds that had taken place. Mr Muller explained that it was financially imprudent to make a transfer to an entity if the funds were not to be used. It would be best to hang on to the funds until it was needed, hence the surplus funds that needed to be rolled over.

The Chair asked whether the Department was in a position to spend the rolled over funds at present.

Mr Muller answered that some of the rolled over funds had already been committed for expenditure. He said that rollovers were to a certain extent a consequence of the accounting methods that were being used by the Department.

Ms R Mashigo (ANC) asked for clarity on the accountability of Non Governmental Organisations (NGO's) that had received funding from both national and provincial Departments.

The Chair asked whether the Department was confident that the allocations that had been made were sufficient for it to perform its functions. He noted that even though allocations had increased there were no improvements in the quality of health care. The Chair emphasised that the implementation of the National Health Act would have its own set of challenges. This was especially so considering that the bulk of the responsibilities for primary health care would be in the hands of the provinces.

Dr Chetty said that mechanisms were in place to deal with the challenge of implementation of the National Health Act. She said that additional funding had been set aside for it.

Mr R Coetzee (DA) asked what the provinces had done on poverty relief. He also asked why the Department had needed to transfer funds to its communication unit.

Mr Muller said that the Department funded poverty relief projects in provinces. He pointed out that a balance was needed between fraud prevention and bureaucratic measures on the issue of poverty relief. Dr Chetty said that provinces were required to furnish national government with business plans on their poverty relief projects. She answered that funds had been transferred to the Department's communications unit due to increases in personnel costs.

Mr Sibusibonyana (ANC) felt that some of the rolled over funds should have been used to pay volunteers in rural areas.

Dr Chetty emphatically stated that it was policy not to pay volunteers for services that had been rendered. She said that it would set a precedent that would later become problematic.

Ms M Madumisa (ANC) was concerned about the human resource factor given the fact that local government was to take over the responsibility of health care from provinces. She asked why millions were being spent on the importation of expensive high-tech equipment. Would it not be cheaper to manufacture the equipment in South Africa?

Dr Chetty conceded that human resources were a continuous challenge in rural areas. It was a recurring obstacle hampering service delivery. Mr Muller noted that in SA engineers were trained to do maintenance on hi-tech equipment in hospitals. Dr Pillay added that the decision to shift the responsibility of health care from provinces to local government was taken to prevent the duplication of services. He noted that provinces would play a more managerial and supportive role, whereas local government would undertake actual service delivery. The aim was to have mobility of staff across spheres of government.

Dr A Luthuli (ANC) said that the allocations to local government were far too little.

Dr Pillay noted that there were no equitable share allocations specifically on health to local government.

Ms S Nxumalo (ANC) asked whether research had been done on non-killer diseases in SA.

Dr Chetty said that the Department and StatsSA had conducted joint research. The results would be forwarded to the social cluster and thereafter to Cabinet.

Ms B Ncgobo (ANC) asked whether the Department had carefully considered the need for the use of expensive imported equipment in the SA context.

Dr Chetty said that buying local equipment had been considered but noted that equipment purchases had many linked issues, such as availability, lifespan, breakages, etc.

Dr I Cachalia (ANC) pointed out that the MTBPS predicted that HIV-AIDS grants would decrease in the future. He asked how it would impact on AIDS and the provision of home-based care.

Dr Pillay said that grants and budgets had been set aside for HIV-AIDS. The grants were expected to increase on a yearly basis. He pointed out that as the epidemic increased expenditure at national level would stabilise whereas expenditure at provincial level would increase. Funds would be shifted to where it was needed.

Ms S Nijikelana (ANC) asked how the Department linked its budget with its cluster. She also asked what the Department's strategy was on inter-Departmental communication over health care indicators. It was additionally asked what percentage of the Department's allocation was used on preventative health measures as opposed to curative measures. She concluded by asking what strategy the Department had to reduce fragmentation.

Dr Chetty said that a great deal of work was being done to link the Department's budget with its cluster. Various task teams had been set up and bi-laterals had taken place. She noted that an inter-Departmental Committee had been set up comprising of the Departments of Transport, Social Development and Labour to keep abreast with health care indicators.

Ms M Manana (ANC) asked what was being done about shortages of personnel in health institutions. She also asked when it was foreseen that the rolled over funds would be spent.

Ms Njikelana asked what the overall strategy on district health information programmes was. She also asked for comment on the issue of corporate governance as it related to hospital boards and what was being done to encourage capacity building and training. It was further asked whether the Department's revitalisation strategy would cover hospital boards as well. Ms Njikelana additionally asked what the Department's strategy on the pharmacy policy was. She asked for elaboration on the monitoring of the Department's transfers to provinces.

Dr Pillay commented that the district health information system was a routine reporting system. Problems had however been identified over the quality of the data that had been received. The information obtained was used to strengthen the functioning of the system. Dr Chetty pointed out that transfers to provinces were monitored on a quarterly basis. Dr Pillay said that a three-year strategic plan was in place to guide the transfers to provinces. He noted that provinces and local governments were monitored by way of service level agreements. Dr Chetty stressed that corporate governance would become a great deal stricter. The setting up of boards and Committees would be the responsibility of provinces but the national Department would set guidelines. Dr Chetty was unable to comment on the pharmacy policy issue.

The Chair concluded by stating that the quality of health care was critical and that there needed to be a qualitative improvement in it. He however cautioned that it was not the intention of the National Health Act to force provinces to take over the responsibility for health care.

The meeting was adjourned.