Presentations by the Director-General: Health Department and Health MEC for the Western Cape

Meeting report

HEALTH PORTFOLIO COMMITTEE
20 April 1998
PRESENTATIONS BY THE DIRECTOR-GENERAL: HEALTH DEPARTMENT AND HEALTH MEC FOR THE WESTERN CAPE

Document handed out: (See appendix)
Presentation by the Director-General: Health
Report on 1997/1998 Health Budget vote

Presentation by the Director-General: Department Of Health

Health Status of South Africans
Director-General, Dr Olive Shisana, presented an overview of the Department of Health’s progress in delivering its mandate. Dr Shisana noted that for planning purposes, the population figure of 43 million has been used instead of the census figure of 37.9 million. She reported that although mortality rates have been declining, deaths related to tuberculosis infection are particularly high; the World Health Organization (WHO) is currently assisting the Department with this problem. Malaria and cholera were reported to be successfully contained and the use of DDT is slowly being phased out and other environmentally-friendly substances being introduced.

Resource Allocation
The Department has shifted its resource allocation and is committed to the primary health care approach. This shift is supported by WHO and the target for completion of the programme is the year 2005. The National Department of Health plans to give conditional grants for central hospital services to the following provinces: Western Cape: R938 000, KwaZulu/Natal: R396 000, Free State: R232 000, Gauteng: R1 455 000. R53 million is to be allocated to provinces without tertiary institutions to enable them to start building up small specialist institutions. The most important reform of the budget process is the Medium Term Expenditure Framework which provides for three-year rolling budgets.

Institutional Changes
During 1997 the Department created four new directorates, including a directorate to assist 14 SADC countries to formulate health policies and programmes. Restructuring within the Department has resulted in greater representivity of staff.

Legislation
The Medicines and Related Substances Control Amendment Act, the Pharmacy Amendment Act and the Medical, Dental and Supplementary Health Professions Amendments Act were signed into law in December 1997. In addition, the following pieces of legislation are slated for the third session of Parliament: Sterilization Bill, National Health Bill, Medical Schemes Bill, Tobacco Control Amendment Bill, Mental Health Care Bill.

Implementation of Policies and Programmes
Dr. Shisana reported that although the clinic building programme was making good progress, many clinics that have been built are not yet in use. To alleviate this problem, residential units for staff in rural areas are being built.

The Department of Finance has allocated R100 million of the 1998/1999 budget for hospital rehabilitation; R300 million is projected for 1999/2000 and R500 million for 2000/2005.

The AIDS epidemic was reported to be growing rapidly, with a national HIV prevalence rate of 16%. The Department’s AIDS Plan focuses on prevention through behavioral modification.

The problems of mismanagement within the Primary School Nutrition Programme are reported to have been rectified and a new system is now in place.

In the area of Human Resource Development, it was noted that as a result of successful negotiations with employee organizations, health services are now designated as "Essential Services", which will prevent future health care worker strikes.

Questions posed by committee members
It was asked what research is currently being carried out on HIV/AIDS. It was reported that both local and international research continues. Further, new products which slow the progression of AIDS are now available, albeit expensive. The Medicines Control Council is currently deliberating on whether or not to allow clinical trials of Virodene to begin. In answer to a question it was stated that expensive drugs were not being made available to the general public. The Department indicated, however, that some pharmaceutical companies were considering a price reduction for these drugs.

Presentation by Peter Marais, Health MEC: Western Cape
The budget allocation for primary health care was reportedly increased from R818 million to R834 million, while the budget allocation for academic health services was reduced from R1221 million to R1072 million. In addition, to facilitate restructuring, special allowance was made for voluntary severance packages. Difficulties to be faced in the next year include a deficit of R181 million.

Substantial re-orientation of primary health care was completed, including the integration of TB and HIV/AIDS programmes and the opening of 11 new facilities. It was also reported that rural community hospitals were upgraded. The cost per patient per day was reported as follows: R733 in academic hospitals, R431 in regional hospitals, and R213 in district hospitals.

Mr Marais then fielded questions posed by the committee:
Concern was raised about the closing of Valkenberg. It was reported that acute patients at Valkenberg will be sent to hospitals, such as Groote Schuur, for intensive treatment; chronic patients will be transferred to other psychiatric institutions; and the question of forensic patients will have to be addressed by the Department of Justice. It was indicated that the worldwide trend is to depopulate mental institutions and to instead, where possible, make use of group homes.

It was asked whether closure of Somerset Hospital was wise. It was answered that there had not been any final decision on the matter and it may be decided to retain obstetrics, casualty, and HIV/AIDS.

A question was posed regarding the staff applying for severance packages. Mr. Marais explained that staff are encouraged to go to the regional hospitals in an effort to staff these hospitals with highly-skilled staff.

Efforts are also being made to make use of private doctors in rural areas to treat indigent patients (in return for granting use of hospital facilities to these doctors).

He also mentioned the problem of TB patients discontinuing their medication so that they could continue to receive a disability grant and this confounds the problem of the TB epidemic.

The afternoon session (Report on '97/98 Budget vote) was not minuted.

Appendix

1997/98 Progress overview: presented by Director-General: Health
PRESENTATION TO THE PORTFOLIO COMMITTEE ON HEALTH
BY DIRECTOR-GENERAL: HEALTH DEPARTMENT
DATE: 20 APRIL 1998

1. INTRODUCTION
This report aims to present the overview to the progress being made by the Department of Health with delivering on its mandate. The report does not substitute the annual report, which covers a much wider spectrum than presented here. The chief directors will present details to brief you more fully.

We will first present the Health Status of South Africans, then discuss the resource allocation, institutional changes, legislation and implementation of policies and programmes.

2. HEALTH STATUS OF SOUTH AFRICANS
2.1 Demographic Profile
Preliminary estimates of the October 1996 census show that there are 37.9 million people in South Africa, 48% or 18.2 million are males, 52% or 19.7 million are females. The distribution of the population by gender and province are shown in the Table 1.

Fifty five percent (55%) of South Africa's population reside in urban areas. Gauteng and the Western Cape are the most urbanised provinces with 96.4% and 89.9% (respectively) of its population living in urban areas. Most of the other provinces have large rural populations ranging from 88.1% in the Northern Province to 28.3% in the Northern Cape (CSS, 1996).

The age profile of the population groups reflects substantial differences both within and between population groups. The age distribution of the white population reflects that of an industrialised country where, compared to the other age groups, there are proportionally fewer infants, pre-school and children of school-going age. The age profile of the African population reflects that of a developing country where there are proportionally more infants, pre-school and children of school-going age.

Table 1: Preliminary estimates of the population by gender and province.
[Ed. note: The table has not been included]
Source: Census '96: Preliminary Estimates of the size of the population of South Africa

The Department of Health has identified women and children as a special group as they bear the brunt of ill health and disease, poverty and neglect.

2.2 Mortality
South Africa is a society in transition and a developing country but it has also highly developed areas. This is reflected in its disease and death profiles. Mortality due to diseases of poverty [Upper respiratory infections (URI), perinatal morbidity, diarrhoeal diseases] co-exist with diseases of lifestyle such as cardio-vascular diseases, cerebrovascular diseases, diabetes and neoplasms.

Mortality rates have been declining and now nearly twenty five percent (24.5 %) of all deaths are due to chronic diseases. Of particular importance in the rural areas are the following causes of mortality (Table 2).

Table 2: Causes of mortality by age
Children under five years: diarrhoeal diseases, respiratory infections and nutritional deficiencies.
Children aged 5-14 years: trauma and injuries related to motor vehicle accidents, pedestrian injuries and domestic causes
Young adults: tuberculosis, trauma and pregnancy - related causes of death
Adults over 50 years: cervical and digestive cancers, cerebral -vascular disease and pneumonia

Source: South African Health Review 1996

It is the goal of the Department of Health to improve the quality of maternal services countrywide and hence the maternal health status by the year 2000.

Maternal mortality data which are critical for improved clinical management of pregnant women, planning and provision of services for maternal health have been lacking. Strategies developed to overcome this problem includes the Confidential Inquiry on Maternal Deaths and a National community-based survey (Demographic and Health Survey).

2.3 Morbidity
2.3.1 Immunisation
We have completed the mass immunisation campaigns to eliminate polio and administered12,6 million doses of oral polio vaccine (OPV) during the first rounds of the three campaigns in '95, '96 and '97 to children under 5 years. We have accelerated the case based surveillance for acute flaccid paralysis (AFP) and 55 cases were found during 1997.

Only 1130 cases of measles have been reported for 1997 to date, making it the year with the lowest number of cases since 1990. Though the data for 1997 is not yet complete as late notifications for 1997 are still being received, it is unlikely that the figure will rise substantially. The decrease in the number of cases is more than likely a reflection of the success of the immunisation campaigns.

Figure 2: Total measles cases & deaths, 1990-1997
Figure 3: Distribution of measles cases in age groups, 1990-1997
Source: Directorates: Health Systems Research & Epidemiology and Communicable Diseases Control
[Ed. note: The figures have not been included]

We completed mass immunisation campaigns to reduce measles and within 2 years 14 million children under the age of 15 years received an extra dose of measles vaccine. The measles elimination strategy was introduced in the provinces and we participate in a joint effort to eliminate measles in the Southern African Region.

2.3.2 Tuberculosis
It is estimated that 160 000 people suffer from TB and 10 000 die each year from this preventable cause of death.

Table 3: Number of notified cases of TB (all forms) 1996 and 1997

1997
Total RSA: 60 279
Western Cape: 14 448
Eastern Cape: 9 367
Northern Cape: 2 362
Free State: 5 960
KwaZulu-Natal: 10 075
Mpumalanga: 1 917
Northern Province: 332
Gauteng: 9 058
North West: 6 733

1996
Total RSA: 65 216
Western Cape: 20 980
Eastern Cape: 4 072
Northern Cape: 4 632
Free State: 7 856
KwaZulu-Natal: 8 666
Mpumalanga: 2 863
Northern Province: 2 016
Gauteng: 12 125
North West: 1 916

Source: Notifications received at the national Department of Health as on 10/12/97
Epidemiological Comments Vol.23 no.2 Table 7.
* The data from the notifications is captured from a passive type of surveillance and consequently, its reliability is affected by under reporting.

Two follow-up reviews of our TB Control Programme have been conducted and the recommendations of the WHO review team are being implemented to address problems identified. The Directly Observed Treatment Short-course (DOTS) strategy, which is the only globally recognised strategy for effective TB control is in a process of being implemented throughout the country. In order to effectively implement the DOTS strategy Demonstration and Training Districts (DTD) have been established in all provinces during 1997. The goal for 1998 is to extend the DTDs to 8-10 per province during 1998, achieving 85% sputum smear conversion rates among new smear positive TB patients. This will be facilitated by the significant improvements in the extension and upgrading of the TB laboratory services which have been achieved during 1997. As a result bacteriological coverage rates of Pulmonary TB patients have increased from 81 % in 1996 to 87% in 1997, and the turn around time for sputum smear results have decreased considerably throughout the country, facilitating earlier and more effective treatment of infectious TB cases.

2.3.3 Malaria
There was an outbreak of cholera in the Mpumalanga province that was successfully contained. Malaria was successfully controlled in the north eastern part of South Africa and the number of cases was reduced by about a third of the number of cases that was reported the previous year. Outbreak Response Teams were established in all the provinces to respond rapidly to outbreaks of communicable diseases.

2.3.4 Other Diseases
Outbreak Response Teams were formed in all provinces. In response to the cholera epidemic in Mozambique, awareness and health education programmes, early warning systems and stocks of essential supplies have been strengthened.

Guidelines for the management of rabies were published and widely distributed.
About 130 cases of leprosy are still found every year. The Department continues to work closely with the Leprosy Mission and Dermatology Departments at Medical Schools to find, manage, treat and prevent disability due to leprosy.

3. RESOURCE ALLOCATION
The Department's commitment to the Primary Health Care (PHC) approach, which is supported by such international organisations as the World Health Organisation, has resulted in a shift of resources from tertiary care to primary health care. This shift is projected to result in the health system being able to finance more primary health care visits by the year 2005. For example, in the eight provinces (excluding Northern Province) expenditure on PHC increased from 24,4% of total health spending during 1995/96 to 38,7% and 40,6 during 96/97 and 1997198 respectively.

The breakdown of the national budget during 1997/98 is as follows:
Table 4: Amount voted according to programmes in the national Department

Programme Amount (R'000)
Administration 45 271
Aim : To conduct the overall management of the Department

Policy and Planning 130 831
Aim : To develop strategic and operations health policy and plan the allocation of health resources.

Regulation, services and programmes 166 997
Aim To regulate certain health matters, establish programmes and render certain services.

Auxiliary and associated services 15 230
Aim: To render auxiliary services and services associated or assigned to the Department

Total amount voted 358 329

The Department of Health's total allocation, over above the R358 329 000 due to allocations by the Department of State Expenditure, has made the following funds available for 1997198:

Table 5
Carry Over Funds: 165 458
Poverty Relief - Special Allocation by Cabinet 15 000
Improvement of Conditions of Service 10 535
Total amount 190 993
TOTAL ALLOCATION 1997/98 549 322

Expenditure up to 31 March 1998 is R513,3307 which indicates that 93% of the budget was spent.

The 1998/99 total health budget allocated is R22.8 billion (1997/98 R22.5 billion).

3.1 Conditional Grants 1998199
This year, conditional grants are to be given to provincial health administrations by National Department of Health.
[Ed. note: The table has not been included]

Excluded from this grant is conditional grants for the Primary School Nutrition Programme, which amounts to P525 million.

3.2 Developing the Medium Term Expenditure Framework
The Medium Term Expenditure Framework (MTEF) is the most important reform of the budget process that this government has introduced. It sets out three year rolling budgets which reflect government's priorities. This will help us to plan better as we can project our expenditure over three years.

3.3 Evaluating Provincial Expenditure/budgets Patterns.
The National Department of Health is constitutionally mandated to monitor and evaluate provincial expenditure/budget patterns. However, provinces were allocated block grants for the first time in 1997/98. In its monitoring function, the Department undertook the following activities:
- A report on an assessment of provincial health expenditures examining appropriation accounts and budget books; and
- The coordination and compilation of health budgets versus actual expenditures to compare health spending patterns against allocations

4. INSTITUTIONAL CHANGES
During 1997 the Department went through a further phase of restructuring. Four new directorates were created. The Directorate: Maternal, Child and Women's Health was divided in to two Directorates. One of them deals with Maternal and Women's Health and was renamed Reproductive Health while the other deals with Child and Youth Health. A new Directorate for Health Promotion as well as one for Corporate Communication. A Directorate: SADC was also created. The number of posts in the Department was reduced by 13 posts to 1260.

During 1997 various Chief Directorates also restructured" in the sense that Directorates were moved from one Chief Directorate to another. This was done in order to relieve the burden on Chief Directorates where the workload was too heavy.

The Department of Health continued in its quest to become representative. In 199533.8% of staff were African and 58.7% were white. By 199638.8% were African correspondingly 53.7% were white The statistics for 1997 stand at 54.4% for Africans and 45.6% whites. In 1995 Coloureds constituted 5.2% and in 1996 2.1 % of the total staff establishment. An effort was made to recruit more Coloureds and as a result thereof the percentage for 1997 has increased to 5.4%

5. LEGISLATION
In 1997, the Department was responsible for the passage of several pieces of legislation. In addition, regulations were passed under various Acts administered by the Department.

The Regulations regarding the Artificial Insemination of Persons, and Related Matters, were amended to make it possible for unmarried women to be also artificially inseminated. This was required to bring the regulations in line with the provisions in the Constitution.

The Medicines and Related Substances Control Amendment Act, the Pharmacy
Amendment Act and the Medical, Dental and Supplementary Health Professions
Amendments Act were signed into law by the President in December 1997.

Several pieces of legislation are in the pipeline. These are:
Sterilization Bill
National Health Bill
Medical Schemes Bill
Tobacco Control Amendment Bill
Mental Health Care Bill

6. IMPLEMENTATION OF POLICIES AND PROGRAMMES
6.1 Clinic Building Programme
During the 1997198 financial year the following further progress was made:
260 RDP new clinics were built, an average of 5 new clinics each week (so far 567 clinics were built); 444 new residential units for staff at clinics and rural hospitals were completed, an average of more than 8 units each week; 36 clinic upgrading projects were completed; and106 mobile clinics were purchased.

All of this was on top of the substantial progress already made in this programme in 1996197. If one assumes an average of 10,000 people getting better access to health care with each new clinic built, and 5,000 people getting better access to health care with each new mobile clinic purchased then more than 3 million people will have benefited from this programme in 1997/98. Most of these people are in rural areas, informal settlements or townships where people have for years had very poor access to primary health care.

The disturbing development is that of the 567 clinics built since 1994,121 remained unopened. 23 will soon be opened, leaving 98 unopened. 71 of these 98 were built in KwaZulu-Natal. The reasons for delay in opening these clinics are lack of funds or problems in recruiting people to rural areas.

6.2 Health Facilities Audit and Hospital Rehabilitation and Reconstruction Programme
As reported last year, the National Health Facilities Audit of all public sector hospitals and major health centres that was completed in 1996 has been extremely valuable, but spending of R15,5 million on doing this audit had not been authorised and had been reported to the Auditor-General. Happily, this issue has also been resolved and the expenditure has also now been fully authorised.

Several provinces have bought the Health Facility Audit software package from the CSIR and are continuing to keep the audit up to date. In one province the Works Department is already extending the audit to cover all buildings for which they are responsible and it is likely that other provinces will follow suit.

Discussions with the Department of Finance on funds to start to address the needs identified in the National Health Facilities Audit have yielded very positive results. As announced by the Minister of Finance, R100 million has been provided in the 1998/99 budget to start with the planning of a coordinated Hospital Rehabilitation and Reconstruction Programme, and further amounts of R300 million and R500 million have been provided for in the MTEF for the following two financial years. As indicated previously, the programme will include upgrading old hospitals that are well situated, building some new hospitals and converting other hospitals to Community Health Centres or visa versa, in order to ensure that South Africa has in place an affordable network of hospitals suitable for the 21st century.

6.3 HIV/AIDS/STD
The AIDS epidemic continues to grow at a rapid pace in South Africa. The most recent HIV prevalence survey conducted among pregnant women attending public health clinics indicated that the national prevalence rate is at 16% with provincial rates varying between 3% and 27%. Cabinet recognized the seriousness of the epidemic by establishing an Inter-Ministerial Committee responsible for coordinating the newly developed Government's AIDS Plan of which the Department of Health's AIDS Plan is a component.

The Department's AIDS Plan is based on five key strategies:
Life skills programme for youth; mass communication strategies; improved sexually transmitted diseases management; access to barrier methods; appropriate care and support

The implementation of these strategies has been strengthened by generating an expanded response which involves other role players in society more actively in the fight against AIDS.

During 1997/98 the Department has implemented the following activities:
More than 9000 secondary school teachers were trained through a collaborative initiative between the Departments of Health and Education in anticipation of implementing the Life Skills programme in 1998. In addition, a curriculum was developed for primary schools.

To improve the management of sexually transmitted diseases using the syndromic approach, 775 health care personnel were trained and STD drugs purchased and distributed to the provinces.

We procured for distribution 149 million male condoms and 1,2 million female condoms, the latter according to a carefully developed introductory strategy as it is a new method of dual protection against pregnancy and STDs including HIV. We have also commissioned research to establish what happens to the condoms, once they are purchased.

We launched an integrated TB/HIV strategy to address both epidemics.

We intensified the mass communication strategy through the "Beyond Awareness" campaign by promoting the frequency of AIDS messages on radio and in print, publicizing the National Help Line, distributing information at events on public awareness days such as Wold AIDS Day and Wold TB Day.

We developed guidelines for workplace policies and programmes on HIV/AIDS.

We funded 193 NGOs to the amount of R 1151 334 to support the implementation of the identified strategies.

We developed and distributed to all government departments a poster containing AIDS prevention messages for display in public areas.

6.4 Primary School Nutrition Programme
The total provincial budget for the Primary School Nutrition Programme (PSNP) was R496 million. The PSNP reached 14239 schools and served 4584685 children, based on the February 1998 statistics.

The recommendation from an independent Evaluation Report of the PSNP confirms the Department's strategies to improve the PSNP are on target.

It is common knowledge that this programme was plagued with financial irregularities and mismanagement. We have now developed financial guidelines for funding of community based nutrition projects which were approved by the Department of State Expenditure. We have strengthened the financial management of the PSNP by developing procedures and manuals for suppliers, financial management training of governing bodies in schools, as well as conducting skills training in project management and financial management and developing financial and management systems.

To facilitate the implementation of the Integrated Nutrition Programme (INP), pilot projects have been initiated which strengthens linkages with other sectors, are development oriented and sustainable.

During 1997/98, 16 community based nutrition pilot projects were initiated in four provinces.

We developed an integrated community based training curriculum for development workers and trained 16 trainers in one province on a pilot basis.

Two provinces are participating in developing a Nutrition Education Programme for incorporation into the Life Skills component of the Primary School Curriculum.

6.5 Health Promotion
The Directorate is in the process of visiting all provinces to assist with the establishment of provincial health promoting schools networks. Workshops will be held in all provinces to establish guidelines for the development of policy. This will culminate in a Health Promoting Schools Conference towards the latter half of 1998.

6.6 National Programme of Action for Children in SA (N PA):
The Department of Health has been the principal of the NPA since its inception in 1996. While the NPA is an intersectoral programme inclusive of government and NGO participation, it was seen as a health programme only. Through negotiation at cabinet level the coordination of the NPA will now take place in the Office of the Deputy President as the new principal as from April 1998. It is envisaged that this move will strengthen the Programme intersectorally.

The Chairperson of the NPA Steering Committee was appointed to the Executive Committee of UNICEF to represent South Africa in discussion and international decisions regarding chiIdren's issues.

We accepted the international strategy on Integrated Management of Childhood Illnesses (IMCI) to improve the quality of care for children and provide support and technical assistance to the provinces.

We commenced the development of policy guidelines for Youth and Adolescent Health.

We developed in conjunction with other departments the first Country Report for the United Nations on the Convention on the Rights of the Child (CRC) which was ratified in 1995.

6.7 Access to safe water and sanitation
The following projects were completed to improve accessibility to portable water, toilet facilities and safe management of water:

48 water related projects were undertaken
11 refuse sites improved
138 human waste disposal facilities improved. These were in rural schools and clinics

In ensuring that uniformity is achieved in providing Port Health Services, the standard operating procedures for all ports of entry for health matters was produced in collaboration with Provinces.

6.8 District Health System
The Department of Health, in co-operation with the Department of Constitutional Development, should as far as possible, ensure that municipal boundaries meet service delivery needs. We also need to finalise health district boundaries as soon as the demarcation of municipal boundaries is complete. The two Departments should also jointly ensure :

that municipal health services are fully integrated into the national health system; the establishment of at least three well functioning health districts per province; and the development of management capacity at district level, especially financial and budgeting capacity. Of the 63 district managers appointed to date, all have completed management training in core management aspects.

6.9 Access to Reproductive Health Care
Regulations related to the Choice on Termination of Pregnancy Act, 1996 (Act no.92 of 1996) were gazetted on 31 January 1997. The regulations specify criteria for designation of facilities for surgical termination of pregnancy, the minimum content of counselling of women, and the form for notification of termination of pregnancy. A Termination of Pregnancy Forum has been constituted to look into the operational and monitoring aspects of the Act. Up to 31 December 1997 a total of 26 401 TOPs were performed thus preventing unnecessary maternal deaths. The majority of women were 18 years of age and above. Gauteng performed the largest number of terminations and the North West province the least.

The Choice on Termination of Pregnancy Act, 1996 (Act No 92 of 1996) was implemented on 1 February 1997. To prepare health workers for the introduction of this act a number of Value Clarification Workshops were held. Health workers were also trained in the use of the Manual Vacuum Aspirator and the management of incomplete abortions.

We facilitated the adoption of guidelines for a training curriculum on the termination of pregnancy for nurses.

We facilitated the training of 28 advanced midwives. Four provinces have implemented training of advanced midwives.

We developed guidelines for the management of survivors of rape.

We hosted a Fetal Alcohol Syndrome workshop to promote the curb of alcohol abuse in women of reproductive age.

6.10 Human Resource Development
The development of human resources for health for South Africa is an integral component required for effective and efficient delivery of health services. However, there is a marked maldistribution which accentuates the shortage of certain types of skilled health personnel in many areas. The successful application and implementation of a comprehensive Primary Health Care (PHC) policy of the Department of Health, would require that health professionals are adequately prepared and appropriately trained in the PHC approach, given that previously, the major focus of professional training was along the biomedical model approach. To this end the Department has embarked upon providing provinces with assistance in capacity building programmes. This is what has been achieved:

Health personnel were oriented towards PHC by November, 1997 in joint national and provincial capacity building programmes with SAMS and Goldfields

46 Oliver Tambo Fellows completed the management programme in 1997 and in 1998, 25 enrolled.

National School of Public Health started at MEDUNSA in October, 1997 and the first batch of 50 students to commence a MPH degree programmes in June 1998 are
expected.

Development of a Constitution for a Proposed Health Sector Bargaining Chamber based on a Cabinet decision is in process

Successful negotiation with Employee organisations at the CCMA resulting in all Public Health Services being designated as Essential Services

Data collected from 9 provinces, resulted in a survey of personnel and health human resource training facilities. All provinces were visited and inputs were received. Data is currently being collated and information are being verified. A final report is to be compiled by the end of April 1998.

A new programme designed to make health services more caring and more client-oriented, called BATHO PELE, was introduced.

7. CONCLUSION
It is clear from this report that:
(1) The Department has increased its absorption capacity compared to previous years.
(2) The delivery programme is on track and the needs of disadvantaged South Africans are being met.
(3) The Department has transformed significantly in its composition, in ability to manage and has also transformed the South African health service towards a national health system.
(4) The challenges facing us are HIVIAIDS and TB. These require our resolve to control these epidemics.

1997/98 Health Budget Vote: report
THE NATIONAL ASSEMBLY PORTFOLIO COMMITTEE ON HEALTH
REPORT ON THE 1997/1998 HEALTH BUDGET VOTE

Table of Contents
Introduction
National Social Policy Framework
Health System Reform Priorities
Budget Analysis
Central Issues
Health care and the Constitution
National Department of Health
Provincial Budgets
Unauthorised Expenditure
National Policy Overview
Overview
HIV/AIDS
District Health Services
Drug Policy
Human Resource Development
Hospital Planning and Restructuring
Nutrition
Tuberculosis and Other communicable Diseases
Organisational changes in the National Department
Budget Reprioritisation
Social Health Insurance
Medical Schemes Act
Essential National Health Research
Information Systems
National Legislative Process
Challenges Facing the Provinces
Recommendations and Comments

References
Appendix A: Summary of national DOH Budgets
Appendix B: Reasons given for Under Expenditure
Appendix C: DOH Responses to Recommendations

Foreword
The budget process provides us with the unique Opportunity to systematically engage with our respective departments to determine what they have achieved during the previous fiscal year, how they spent their money, what they plan to do in the coming year.

The Committee convened five days of public hearings which included presentations from the Director General of Health, all of the Chief Directorates in the National Department Health, 7 Provincial MECs for Health, Senior Representatives from Provincial Health Departments, and MPLs serving on Health Standing Committees in the provinces.

It is necessarily a time of reflection to take stock of the progress made in meeting the tremendous needs of our people. The Health Committee takes this responsibility very seriously.

Dr Abe Nkomo
Chairperson
Portfolio Committee on Health

August 1997

1 INTRODUCTION
According to the Constitution the National Assembly "must provide for mechanisms to ensure that all executive organs of the state in the national sphere of government are accountable to it; and to maintain oversight of the exercise of national executive authority, including the implementation of legislation; and any organ of state."

Within the National Assembly, Portfolio Committees have been assigned the responsibility of monitoring and overseeing the activities of the government departments on behalf of the public. The budget hearings provide an opportunity for the national and provincial departments of Health to publicly account for their activities and expenditure of public funds during the past fiscal year.

Based on its Constitutional mandate, the Portfolio Committee on Health has set several objectives for these budget hearings:

· to critically review what major activities were undertaken during the past fiscal year to meet the health needs of the South African population;
· to examine how financial resources were spent on these activities;
· to learn about departmental priorities and plans for the coming fiscal year;
· to highlight any blockages, obstacles, and problems for delaying the realisation of the rights established in the Constitution; and
· to identify where the Portfolio Committee can assist in the process.

Health policy is recognised as one of the most important areas of government intervention internationally. Having access to good health services irrespective of wealth or income has become one of the most important features of democracies internationally. However, regarding health care differently from ordinary goods and services places enormous burdens on the government to ensure that services are provided in an affordable manner without compromising equity and efficiency and general principles of fairness. This is a difficult task as the pursuit of particular social goals often generate unintended consequences, or result in complaints that particular stakeholders are being unfairly treated. This conflict is not unique to South Africa. Nevertheless, attempts to resolve contradictions and conflicts within the South African health system need to be the object of continuous evaluation and re-evaluation.

As in 1996, the Committee held a series of budget hearings from both the national and provincial Departments of Health. All Chief Directorates of the national Department of Health were invited to make presentations on their operations and budget on 15 to 18 April, 1997. Every MEC (or a delegated official) and every provincial health portfolio committee from the nine provinces was asked to submit evidence concerning their priorities and budgets, on 21 to 24 April, 1997.

This report is generated from these hearings, and is used, along with additional technical analysis, to provide a basis for an annual evaluation of the budget by the Portfolio Committee.

2 NATIONAL SOCIAL POLICY FRAMEWORK
The achievement of a balanced and viable society requires that important social institutions and services function effectively and smoothly. It is also important that these institutions are not neglected financially to serve short-term needs. However, it is just as important to ensure that these functions are not tied down by inefficient bureaucracy and the wasteful utilisation of the country's scarce resources. Great care in policy development, management and sensitivity to the broader community is required to ensure that equity and efficiency goals are met as completely as current financial constraints permit.

With this in mind, the Committee is committed to a co-ordinated strategy in relation to all social services, as noted in last years report. The quasi federal nature of the budgeting system has complicated this possibility creating the possibility that historical inequities and inefficiencies could persist into the future on a regional basis. This despite some measure of equity in the allocation of the national budget emerging over time.

Recommendations and Comments
The Portfolio Committee repeats its call from last year for the prioritisation of an overall nation-building strategy which supports the goals of equity, social justice, development and economic advancement.

3 HEALTH SYSTEM REFORM PRIORITIES
The following represent the health system reform priorities identified by the Committee as requiring attention and monitoring.

· the introduction of mechanisms to achieve the equitable allocation of health services nationally in compliance with the requirements of the new Constitution;
· implementation of a primary health care strategy based on the principles of the Primary Health Care Approach;
· creation of an integrated health system, ensuring both public and private sectors best serve the public interest;
· the promotion of an equitable and accessible health system, and a system and health service that is accountable and transparent;
· the implementation of a District Health System;
· focus on a human resource development strategy, including a reorientation of health personnel;
· introduction of efficient and decentralised management systems in the public sector;
· the establishment of a health information system appropriate to the medium- and long-term needs of the country;
· identification of, and an appropriate system of funding for, health research that is relevant to the priorities for South Africa.

4 BUDGET ANALYSIS
4.1 Central Issues
The 1997/98 fiscal year reflects a break from the past in the manner in which provincial governments are funded. Whereas in the past provincial health departments received budgets that were negotiated centrally, a bloc grant is now allocated to provinces with provincial legislatures determining the allocations that will go to health. The Budget Council co-ordinates this process and is made up of the nine MECs of Finance, the Minister and Deputy Minister of Finance, and officials from the Departments of Finance and State Expenditure, and the Provincial Treasuries. The Budget Council recommends to Cabinet the shares that each province should receive after taking into account the national priorities and proposals of the FCC.

This change, which is entrenched in the Constitution, has significant implications for the manner in which the implementation of health policy is to be institutionalised in the future. In essence there is a shift away from centralised control of provincial budgets to a more decentralised approach. This decentralisation, if managed properly, should improve the efficiency of service planning and management. However, protecting inter-provincial equity in the distribution of health resources becomes an important policy concern that is not an automatic outcome of the new budgeting system.

Health Care and the Constitution
The introduction of South Africa's new Constitution obliges the state to ensure that the entire population has access to health care services including reproductive health care. It also states that no-one may be refused emergency medical treatment. As these rights cannot be satisfied immediately, the Constitution places an obligation on the state to "take reasonable legislative and other measures, within its available resources, to achieve the progressive realisation of each of these rights" This obligation applies irrespective of the political party in power.

Provinces are entitled to an equitable share of national revenues. This requirement is found in both the interim and final constitutions. However, Implementation of chapter 13 of the New Constitution, which deals with inter-governmental relations, was delayed until 1 April 1998. The 1997/98 budget has consequently been prepared in terms of the interim Constitution; i.e. the inter-provincial allocations remain inequitable. In future years a formula for achieving an equitable allocation of revenue inter-provincially is to be used.

The constitution" provides extensive scope for the implementation of health policy through legislation which impacts on both the public and private sectors. Effective means are provided within the public sector for national policy prerogatives to over-ride provincial and local government discretion (Sections 139 and 146 to 150). This is allowed in matters that cannot be regulated effectively through legislation enacted by individual provinces, or where "uniformity across the nation" is required through the establishment of "norms and standards, frameworks or national policies." In addition, provision is made for over-riding provincial discretion when there is a need to "promote equal opportunity or equal access to government services."

Thus, the objectives of health policy are in no way obstructed by the current constitutional environment or the proposed budgeting system. The mechanisms and tools for implementing national policy exist on an equitable basis, and are probably more efficient than existed in the past. However, action is required to interpret how best to use these mechanisms to implement policy.

In essence norms and standards relate to the "package" of services to be made available by the state in one form or another. These services create the basis for measuring equity, assessing service priorities, access, quality and entitlements. They also establish the official distinction between what can be regarded as essential and discretionary health services.

National Department of Health
4.3.1 The 1996/97 budget allocation
The national Department of Health was allocated R878 million in 1996/97 including all additional allocations received during the year. The voted allocation was R712 million. Expenditure up to March 1997 was R615 million which suggests that only 70 percent of the budget was spent, i.e. the national Department under-spent by 30 percent or R262 million. The national Department described this under-spend as a "saving".

Common reasons given for under expenditure (also see appendix B (vol.2) for detailed explanation):
· Time consuming tendering processes;
· Capacity building of staff;
· Rigid employment conditions;
· Inability to fill posts (including the problems created by the moratorium filling posts);
· Delays caused by consultation and planning processes.

Table 4.1: Breakdown of Department of Health's total allocation for 1996/97
Carry-over funds: 178,074,000
Donor funds: 218,202,000
Improvements in conditions of service: 25,209,000
Less: suspensions (transfers to provinces): (255,490,000)
Total budget for 1996/97: 877,694,000

Source: Department of Health, Presentation to the Portfolio Committee on Health by Director General, 15 April1997

A summary of the budget and expenditure of the national Department of Health is provided in appendix A (vol.2), table A1.

4.3.2 1997/98 budget
Table 4.2 shows the budget allocations to the four programmes of the national Department of Health for the 1996/97 and 97/98 fiscal years. The amounts relate to the comparable programmes between the two years and excludes the amounts that have now been devolved to the provinces. There is an overall 3.6 percent increase in nominal terms, which reflects a real reduction of around 4 to 5 percent.

Table 4.2: National Department of Health budget for the 1996/97 and 1997/98 fiscal years in nominal terms (excluding improvements in conditions of service)
[Ed. Note: Table not included]

4.4 Provincial Budgets
4.4.1 General comment
The 1997/98 fiscal year is the first in which bloc grants have been allocated to provinces. Provincial health departments consequently face the danger that the national co-ordination of health policy will become fragmented. Although provision is made in the Constitution to overcome this problem, it may take several years to fully take advantage of these provisions.

In addition to the above, provincial health departments will continue to face a changing fiscal scenario over the next few years. These will include:
· Provinces will receive greater powers to raise their own revenue.
· Provinces are likely to be given the power to borrow.
· Health administrations still have to work out how to introduce some system of revenue retention into the public hospital system.
· It is possible that consideration will be given to creating provincial bargaining chambers for negotiating improvements in conditions of service.
· The Department of Finance is attempting to institutionalise the development of medium-term budgeting.
· Overall provincial bloc grant allocations are likely to change over time as allocations converge on equity

Integrating all of the above into a coherent approach for funding public health care services is likely to be a difficult task in the short-term. However, given the difficulties involved, it is important for Parliament to monitor and keep track of progress made to build a new financing system for health care.

4.4.2 1997/98 budget
The derived total budget allocation to provincial health departments comes to R18, 9 billion for 1997/98, which is equivalent to a 4 percent real increase. The reasons are:
· the inclusion within the provincial budgets of amounts formerly allocated as transfers from the national Department of Health;
· the inclusion of bridging finance allocations which were formerly not part of the provincial budgets for Gauteng, Western Cape and Free State;
· significant improvements in conditions of service approved by the national bargaining chamber; and
· provincial decisions to correct the allocations in relation to actual expenditure where this had become distorted, i.e. Gauteng.

As a consequence of the above, the real increase does not necessarily indicate any improvement in the services delivered.

4.4.3 Structural changes
4.4.3a) General features
Redirecting public sector resources toward higher priorities is a central policy of government. However, it is often difficult to ascertain whether the required shifts in budget are following policy. In previous years the lack of budget standardisation and actual expenditure information hindered any such exercise. The new budget structure permits some assessment of these trends for the 1998/97 and 1997/98 budgets, with some reservations.

There appears to be a reprioritisation away from hospital services (-8 percent in real terms) and health sciences (-12 percent in real terms) in the budget, with a reprioritisation toward District Health Services expenditure (+11 percent in real terms). In 1997/98 the latter amounted to 43 percent of the total provincial budget, up from 40 percent in 1996/97. Academic hospital services show a surprising increase of 10 percent (21 percent of total). However, this is due to the correction in the Gauteng budget mentioned above.

4.4.3b) National and supra-regional services (also see tables in appendix A)
The budget does not provide exact information on supra-regional services, i.e. level 3 services, and teaching, research, training and academic functions. These serve catchment populations beyond the boundaries of the province in which they are situated. Total expenditure is estimated at roughly R2,4 billion (12 percent of the total provincial budget) with R758 million associated with teaching and R1, 6 billion with level 3, or subspecialist and unique services. (The equivalent total estimate for NITER and level 3 services provided by the Department of Health in 1996/97 was R2, 251 billion.) The fact that these services represent a substantial percentage of the total provincial health budget requires that some method be found to fund these services or to account for them in the allocation of provincial budgets. The concern, within the current fiscal federal environment, is that unless this is done, provinces providing these services will be unfairly treated in terms of provincial bloc grants, and/or that provinces themselves unilaterally decide to reduce expenditure on these services.

4.4.3c) Equity
Inter-provincial:
The ability of the public health system to achieve its objectives in relation to the provision of a just, fair and equitable health system appear compromised at present by the introduction of the new provincial budgeting system described above. This is due to the apparent disappearance of a clear and easy method for giving affect to equity through the budgeting system. If this were true, it would represent a major concern as the achievement of equity on a regional basis is a fundamental component of health policy.

The 1997/98 budget allocation still reveals substantial inequity on an inter-provincial basis, despite improvements over the past three years. When the 1994/95 and 1997/98 budgets are compared, national and supra-regional functions excluded, substantial real improvements have occurred in traditionally under-funded provinces. Eastern Cape, Mpumalanga, and Northern Province all show real increases above 20 percent. Traditionally over-funded Provinces show negative or moderate real growth. (See appendix A (vol.2) table A3).

When the budgets for the two periods are related to population increases by province all provinces indicate that they are worse off in 1997 in relation to 1994, i.e. a real decline of 5.7 percent. (See appendix A (vol.2) table A3).

The current relative equity position in 1997/98 shows that enormous disparities still exist. Gauteng is around 65 percent over the national average, with Western Cape at around 51 percent. Mpumalanga and Northern province are the worst off at 44 and 34 percent under respectively. In Mpumalanga there is no single regional or referral hospital with a full compliment of basic specialist services. Most patients requiring secondary care are currently referred to Gauteng at high cost.

Intra-provincial:
The development of a clear, coherent and transparent approach for funding health districts is a process currently under way co-ordinated by the national Department of Health. However, many problems remain unresolved. Some of these are:

1. There is no effective authority at the district level that can accept accountability for a budget financing all primary health care (PHC) services.
2. In the past, budget allocations and the tracking of actual expenditure have not taken place on a geographical basis. Consequently, neither the financial management system, nor the budgeting process identify appropriate cost centres for achieving such allocations.
3. Local government health subsidies, budgets, and actual expenditure are not centrally available, and nor are any national standard minimum reporting criteria set. This makes the task of generating routine consolidated district expenditure difficult and complex.
4. No minimum norms and standards of primary health care provision, linked to the budgeting process, have been defined. Consequently, it is not possible to set a uniform national standard of service, to which all provinces and local authorities must comply, irrespective of the revenue source.
5. At the district level no mechanism exists for dealing with cross-boundary flows. Once district budgets are allocated only for the populations within their demarcated boundaries, financial difficulties could result for the recipients of these flows.

4.5 Unauthorised Expenditure
According to the Auditor General, unauthorised expenditure, in terms of sections 33(1) (c) (d) of the Exchequer Act 1975, totaling R58 million was incurred by the national Department of Health during various financial years. (See table 4.3).

In addition a performance audit of the national and provincial departments of Health was carried out by the Auditor General. It found as follows:

1. The audit was hampered by management information not being accurate, sufficient, reliable and comparable.
2. There was no procedure for prioritising the needs of communities with respect to ensuring that new clinics were accessible.
3. Measures for the procurement and distribution of medicines was inadequate and contributed to uneconomical purchases and frequent shortages.
4. There is a lack of preventative maintenance of facilities which resulted in a backlog in the maintenance of clinics. In addition, the lack of a maintenance and replacement policy for motor vehicles further contributed to clinics not being able to render an effective service.
5. There is a lack of policy procedures for Human Resource Management which resulted in staff shortages, inefficient training and ineffective utilisation of staff.
6. Due to a lack of information, the total cost of free health services could not be accurately calculated.

Table 4.3: Reasons for unauthorised expenditure according to the national Department of Health
[Ed. Note: Table not included]

Recommendations and Comments

Norms and Standards for provincial Health Services:
The Portfolio Committee would like to see the development of effective service norms and standards. This should include the type of service, its required level of funding and performance criteria. Without these, the public health service may become fragmented and differ significantly from province to province.

Budget process:
The following issues still need to be resolved within the budgeting system:
· no functional service norms and standards have as yet been determined;
· no effective means has yet been developed to protect those provinces with national and supraregional services;
· in many instances budget constraints are resulting in the arbitrary service cuts, rather than a careful restructuring of priorities;
· there is a lack of preventive maintenance of facilities;
· there is a lack of policy procedures for Human Resource Management;
· no procedures exist for prioritising the needs of communities with respect to ensuring that new clinics are accessible;
· budget audit and control procedures remain inadequate;
· as yet no formal mechanism exists for addressing the problem of cross-boundary patient flows for many health services;
· billing systems at public hospitals remain very weak, with much revenue lost.

A substantive policy process needs to be introduced to address the above. Given the importance of the above issues, the Portfolio Committee would like to receive substantive comment on how the above is to be addressed in future years.

5 NATIONAL POLICY REVIEW
5.1 Overview
From information obtained from the various departments of health it was clear that the transformation in the public health system and health policy is proceeding steadily. However, progress in dealing with HIV/AIDS appears to be slow and inadequate at present.

Overall health financing policy appears unclear at present, with the Portfolio Committee still largely uninformed about developments. Nevertheless, some information was forthcoming. Within this context it is recognised that mechanisms such as social health insurance and medical schemes' regulation could substantially alter the way in which the system functions in future.

From a health systems perspective various initiatives are proceeding at different paces. Health districts are being set up, but appear to be many years away from becoming viable independent entities. Hospital services are also in an uncertain state in many provinces. The hospital audit has revealed that the condition of the buildings themselves is insufficient at present. There also appears to be substantial budget pressure on the hospital sector, as well as evidence of poor management.

With regard to drug policy, various Bills are before Parliament, while other aspects of private sector regulation, including issues relating to Social Health Insurance, are expected to be before Parliament in 1997/98.

5.2 HIV/AIDS
5.2.1 Overview
AIDS continues to be problem of growing concern in South Africa. As such it has a place of prominence in the annual evaluations of the Health Portfolio Committee. The disease is exceedingly dangerous, as it takes many years for the impact to be visible. However, by then it is too late for many people to be saved. South Africa is in a position to predict the path of the disease with a fair degree of accuracy. Preventing these projections from actually materialising needs to be a key feature of South Africa's policy and a measure of performance. However, to date, projections have apparently matched observed data suggesting that the disease has not been arrested through government policy or interventions.

The annual national antenatal HIV seroprevalence surveys provide some indication of the spread of the disease regionally in South Africa, and year-on-year changes. While the epidemic is more advanced in some provinces, such as Kwazulu-Natal, Mpumalanga and Gauteng, it is well established in all provinces. It should also be noted that data from other studies indicate that there may be micro-epidemics (intra-provincial differences in HIV prevalence) within the provinces.

Table 5.2: Progression of HIV infection by province: 1994-1996
1994
Total South Africa: 7.6
Western Cape: 1.2
Eastern Cape: 4.5
Northern Cape: 1.8
Free State: 9.2
Kwazulu-Natal: 14.4
Mpumalanga: 12.2
Northern Province: 3.0
Gauteng: 6.4
North West: 6.7

1995
Total South Africa: 10.4
Western Cape:1.7
Eastern Cape: 6.0
Northern Cape: 5.3
Free State: 11.0
Kwazulu-Natal: 18.2
Mpumalanga: 16.2
Northern Province: 4.9
Gauteng: 12.0
North West: 8.3

1996
Total South Africa: 14.1
Western Cape: (under correction)
Eastern Cape: 8.1
Northern Cape: 6.5
Free State: 17.5
Kwazulu-Natal: 19.9
Mpumalanga: 15.8
Northern Province: 8.0
Gauteng: 15.5
North West: 25.1
Source: Epidemiological Comments, April 1997

The national antenatal seroprevalence surveys also demonstrate that the prevalence of HIV infection is highest in young women in the under 30 age group.

5.2.2 National Department Progress
According to the national Department of Health, the following activities were undertaken:
· a curriculum for life skills programme in secondary schools was developed by the Department of Health and Education to be implemented in 1997;

· a taxinet campaign involving 50 taxis per province which distributed condoms and information about HIV/AIDS was initiated;
· the Department procured 120 million male condoms and 90,000 female condoms;
· a project was initiated to strengthen counselling services for people living with HIV/AIDS;
· the Department funded Soul City to communicate AIDS messages through television, radio and to produce health education material; and
· as part of a mass communication strategy the Department funded an AIDS play Sarafina 2, which had to be cancelled due to procedural problems before it could be evaluated.

5.2.3 Provincial reports
Various Provinces reported increased activity with regard to HIV. However, few presented any evidence that the epidemic was being adequately contained. They also reported problems with their programmes. These included:
· Top-level political commitment to STD/HIV/AIDS is lacking. Little inter-departmental co-operation (or co-ordination) is occurring.
· Most doctors appear uninformed. This includes public and private sector doctors whether working in hospitals or as private practitioners.
· Counselling services remain inadequate. This includes problems with both availability and quality of counselling.
· Breaches of confidentiality occur frequently. This is especially a problem in public hospitals.
· Access to hospices for the terminally ill is inadequately distributed regionally.
· Inadequate care is available generally for people in the late stages of the disease.
· Non-availability of female condoms.
· Human rights are being violated at various levels.

Although provinces were proceeding with various programmes, including some education and media campaigns, progress is not substantial.

5.2.5 Conclusion
Although a degree of attention is given to preventing and treating HIV/AIDS, the impact is uncertain and unaudited. Given that the most important period for reducing the impact of the disease is now, rather than five years from now, the Portfolio Committee is concerned at the priority that is being given to the disease nationally by both government structures and employers (including government). In the reports submitted to Parliament from both the provincial and national Departments of Health the following was notable by its absence:
· no broad vision was provided indicating interventions, their specific target groups, and methods for evaluating the impact of interventions;
· there was no indication given as to how the actions of employers to effectively combat the disease could be co-ordinated;
· no indication was given as to how unfair discrimination is to be dealt with in relation to employee benefits, especially given its racial nature;
· no targets were provided showing how specific interventions are intended to impact on critical indicators such as HIV prevalence;
· a priority area for intervention, STDs at the workplace, was not even mentioned in any of the health department presentations;
· despite knowledge of localised pockets where the disease is more prevalent than elsewhere, no systematic approach has been identified showing how these groups will be discovered and targeted in future;
· STDs and HIV are not yet a priority policy objective in provincial health departments; and very limited co-ordination occurs between and with institutions outside of the departments of Health.

The tendency to report progress by providing lists of disconnected interventions is clearly insufficient and inappropriate where HIV/AIDS is concerned. Evidence of an integrated approach for dealing with the disease can only be verified through the provision of reports which themselves are reflective of such an approach.

It is also disturbing to note that the within the public sector, the quality of counselling is poor, there is a lack of continuity of care and support, and human rights are frequently violated. Although this was reported directly by only one province, it is likely that these deficiencies are more wide-spread.

The Committee is aware that the response from business and the private sector is generally ineffectual and often counterproductive. This includes insurance and employee benefit companies. The initial response has been to discriminate against HIV sufferers and groups at higher risk of contracting the disease. This is socially unacceptable and, apart from the harm caused to individuals, will worsen the epidemic as the fear of discrimination results in delays in people seeking treatment or counselling. The Committee takes this matter very seriously and would be happy to play a role in achieving the appropriate social response to the disease.

Recommendations and comments
· no broad vision was provided indicating interventions, their specific target groups, and methods for evaluating the impact of interventions;
· no plan for co-ordinating the actions of employers to effectively combat the disease was provided;
· no indication was given as to how unfair discrimination is to be dealt with in relation to employee benefits, especially given its racial nature;
· no targets were provided showing how specific interventions are intended to impact on critical indicators such as HIV prevalence;
· a priority area for intervention, STDs at the workplace, was not even mentioned in any of the health department presentations;
· despite knowledge of localised pockets where the disease is more prevalent than elsewhere, no systematic approach has been identified showing how these groups will be discovered and targeted in future;
· STDs and HIV are not yet a priority policy objective in provincial health departments;
· very limited co-ordination occurs between and with institutions outside of the various Health departments.
· the tendency to report progress by providing lists of disconnected interventions is clearly insufficient and inappropriate where HIV/AIDS is concerned;
· the high cost of HIV/AIDS drugs needs to be reviewed;
· inter-sectoral collaboration is still highly ineffective,
· collaboration with broader community;
· the issue of pre-employment and pre-benefit testing appears not to have been resolved in a manner that protects HIV positive sufferers from discrimination;
· NGOs appear not to be part of the national policy framework; and
· there are very few visible manifestations of the strategy, e.g. television and newspaper advertising, posters prominent and visible to communities at high risk, etc.

5.3 District Health Services
5.3.1 Overview
As indicated in the 1996 report, the development of South Africa's District Health System is an important part of the ANC Health Plan drawn up prior to the elections in 1994. This involves the development of a level of health delivery focused on primary health care services, including district and community hospitals. Central to this policy is the development of decentralised and financially accountable structures located closer to the communities they serve.

Problems between local authority structures and provincial governments remain important stumbling blocks in the achievement of effective District Health Services. In certain circumstances it appears that local government feels that it should not be subject to national or provincial policy guidelines. Obviously this is unacceptable, and reflects a divergence from the intentions behind decentralising the management and delivery of primary health care services. As yet no conditional grant system has been introduced to ensure that the spending of the provincial subsidy to local government occurs in a manner consistent with policy targets and objectives.

The Portfolio Committee is aware of various public/private mix initiatives at the District level in some provinces. However, it is not clear how well these initiatives are working.

5.3.2 National Department progress
The Department informed the Portfolio Committee that Cabinet had accepted the proposed District Health System policy. This implies that it will be possible to consolidate service delivery at a district level. Already 179 health districts have been demarcated. The objective for the current year will be to focus on the selection of governance options.

It was also indicated that the Minister of Health, after Cabinet approval, announced a policy on achieving universal access to primary health care, which provided every South African with a safety net for basic health services.

The Department of Health informed the Committee that during the 1996/97 fiscal year the following facilities were completed or procured with respect to the clinic building and upgrading programme:
· 102 new clinics were built;
· 26 clinics had residential units added;
· 30 clinics were upgraded;
· 104 mobile clinics were purchased; and
· 44 vehicles were converted to mobile clinics.

The Department also indicated that it had assessed the financial implications of achieving salary parity between local government and provincial district level employees at R960 million in 1996 prices. This issue remains one obstacle to achieving an integrated District Health System.

The development of methods for dealing with intra-provincial resource allocation were also piloted in two provinces during 1996 and 1997, with the approach extended to all provinces during 1997. Technical work on resource allocation mechanisms were due to be completed by August 1997.

The Department is also looking into the development of performance contracts between provinces and local government to ensure that national and provincial policy objectives would be achieved through the current local government subsidy system.

5.3.5 Conclusion and comments
Although much appears to be happening in terms of District development, it is not certain whether this is resulting in better service delivery on the ground. The Committee would like to see the development of a consistent reporting mechanism so that Parliament and the public can evaluate the performance of these services.

At this stage no uniform financing mechanism appears to be in place for Districts. This includes the development of a structured way of relating to revenue, expenditure and service delivery.

No performance monitoring of any substance has been introduced at the District level. Such monitoring, if in place, would include the following:
· Service activities and outputs;
· Actual expenditure;
· The nature and extent of management structures;
· Information on the effectiveness of management;
· The existence of medium-term strategic plans;
· Extent and nature of community involvement;
· The existence of performance monitoring systems.

With the introduction of free health care at the primary care level, the control of drug supply also assumes greater prominence. The existence of free services in all instances places a burden on the rational use of pharmaceuticals and their availability. It was not made clear during the hearings what actions are being taken to ensure that essential drugs are available at the District level, and are not wasted.

Recommendations and comments
· The continued fragmented nature of District Health Service management is unfortunate and the reasons for this need to be assessed on an ongoing basis;
· Issues such as salary disparities should not be allowed to delay the effective implementation of the District Health System in provinces such as Western Cape and Gauteng.
· The Portfolio Committee would like information on how any envisaged primary care package of services will be implemented in future.

5.4 Drug Policy
5.4.1 Overview
The cost of drugs in South Africa have been increasing substantially over the past fifteen years. As a consequence, the ANC Health Plan completed prior to the elections in 1994 outlined specific objectives in relation to drug policy to prevent medical services from, becoming inaccessible to the broad majority of the population. The broad features of this strategy were as follows:
· A registration process to ensure the safety, high quality and efficacy of drugs;
· Encouraging the prescribing of medicines by generic name in both the public and private sectors;
· Encouraging the extension of the present system of generic substitution of branded products to the private sector, unless specified otherwise on the prescription;
· An Essential Drug List in the Public sector;
· Increased use of therapeutic protocols;
· The procurement of drugs by the public sector at the best possible prices for the country's public sector (parallel importation by the government will be an option to be used only if necessary, to drive down prices of locally based suppliers);
· Adequate and timeous distribution of drugs;
· The rational use of drugs;
· Ensuring that the income and reimbursements of health workers will not in any way depend on the type and quantity of medication prescribed;
· Promotion of the local drug industry;
· Capacity building to promote, enforce and monitor all aspects of the National Drug Policy, including drug information services and other educational aspects.

Progress has been made with respect to the above two Bills tabled in Parliament this year. However, the handling of pharmaceuticals within the public sector requires further progress. The Committee has, on various occasions, been made aware that the poor control of drugs is resulting in extensive theft. In addition, procurement and distribution remain highly inefficient. It is clear that major savings may be possible with improved drug management and adherence to proper protocols.

5.4.2 National Department progress
The Department informed the Committee that on February 1996, the Minister of Health announced a drug policy aimed at reducing the excessive cost of medicine in South Africa. An essential Drugs Programme is a central part of this policy. The primary health care essential drugs programme has now been implemented. In addition the Pharmacy Amendment Bill and the Medicines and Related Substances Control Amendment Bill are also to be passed during the 1997/98 session of Parliament. In essence, the passing of these Bills will place in law the bulk of the central tenets and mechanisms outlined in the ANC Health Plan.

5.4.3 Provincial comments
Some provinces indicated that they were improving the management at pharmaceutical depots (80 percent improvement in efficiency reported in East London). Other developments include the implementation of the Essential Drug List (EDL) in most provinces, and some improvements in COMED through contracting out distribution functions to private companies in some provinces.

5.4.4 Conclusions and comments
The effective management of inputs into the supply side of the health system is fundamental to ensuring the long-term sustainability of an affordable, equitable and accessible health system. This would apply both within the public and private sectors. Although legislation is being introduced to deal with the substantial drug cost increases in the private sector, it is unlikely that this will ultimately resolve the problems experienced. However, it is a first attempt to make drug costs a focal point of policy. Within the public sector, poor management of drugs results in direct losses, with additional losses occurring through poor prescribing habits This is also a problem in the private sector with financial incentives reinforcing inefficient drug utilisation). Within a sector, which is facing increased costs and imposing higher and higher burdens on society, this should not be allowed to continue.

5.5 Human Resource Development
5.5.1 Overview
Human resource development is of fundamental importance to the efficient and effective functioning of the health service. If training is inappropriate, or the absorption of new staffs weak, the entire system will be negatively affected. Historically poor linkages existed between human resource planning, the needs of the system, and the needs of the broader public. Much still needs to be done however to eliminate this deficiency.

National Department progress
Integrated human resources strategy:
The Department has also spent time developing its integrated human resource strategy in consultation and using inputs from 300 different stakeholders and key role-players. The result was a strategy based on the following:
a) Planning human resources;
b) Education and training;
c) Creating a caring ethos;
d) Changing the nature of management;
e) Capacity building; and
f) Affirmative action.

Vocational training:
The Ministry of Health supported the interim Medical and Dental Council's policy on vocational training. This policy aims to provide vocational training to medical students who have completed their initial degree. They are to be placed in public health sector facilities to obtain relevant experience under supervision. The department spent a significant amount of time planning for its implementation.

Community health workers:
On Community Health Workers the Department of Health indicated that research produced for the Department has shown that it would cost an estimated R1 billion to bring Community Health Workers (CHWs) into the public sector. Because of constraints on the health budget and other priorities, this policy could therefore not be considered at present. However, the Department of Health indicated that it supports the training and development of CHWs at the District level where such personnel can be utilised more appropriately.

Foreign doctors:
On foreign doctors, the Department of Health has prepared a draft policy which is currently under review for a final decision. Long-term solutions would include the following:
a) Non-financial incentives:
· continuing education programmes for all health personnel;
· introduction of telemedicine and telehealth to link up doctors in rural areas with academic training hospitals;
· utilisation of health personnel in rural areas to teach at academic hospitals in block sessions as a way to expose students to rural medicine and practice while also providing rural practitioners with a link up to their urban based peers.

b) Financial incentives:
· paying rural health personnel an allowance based on an inhospitability index;
· the provision of non-designated posts at rural hospitals so that the spouse of the health professional can be employed against such posts;
· the provision of an increased housing allowance;
· the provision of a boarding school allowance for the children of health professionals in areas where the existing school system is less than satisfactory.

The Department of Health mentioned that it is inundated with an increasing number of applications and telephone enquiries by foreign doctors to work in the South African public health sector. Given the shortage of doctors in the country, hospital superintendents have been making employment offers to individual foreign doctors. While some South African consulates abroad have encouraged doctors to make enquiries, confusion has been caused between national and provincial health authorities and the Department of Home Affairs. There is currently a moratorium on foreign doctors from being registered by the interim South African Medical and Dental Council (INMDCSA). Only six exemptions apply:
1) doctors who form part of government to government agreements;
2) doctors granted political asylum and refugee status by the Department of Home Affairs;
3) doctors married to South African citizens;
4) South African doctors who qualified outside South Africa
5) doctors previously registered with the INMDCSA; and
6) special registration in terms of criteria related to appointments in Medical Faculties.

The Department informed the Committee that the Minister of Health, in consultation with the Provincial MECS for Health, adopted a policy to recruit doctors using government-to- government agreements. Under this programme 209 doctors have come to South Africa. The existing agreements involve doctors from Cuba, Germany and Europe.

The Department of Health shares the view (with the Portfolio Committee) that the use of foreign doctors is only a short-term strategy. Active engagement has begun with the Deans of Faculties of Medicine to work out a sustainable intervention based on South African doctors.

Limited private practice:
On limited private practice the Department indicated that a policy decision was taken by the

MINMEC in November 1996 to abolish limited private practice according to the Department of Health. Steps are now underway to implement this decision in the Provinces.

5.5.3 Conclusion and comments
Although there has been movement in the area of developing and conceptualising a future human resource strategy for health services in South Africa, it is not yet clear how well this strategy is integrated into general planning within the health system.

Although the Committee supports the introduction of some form of community service for medical students after their intern year, it is important that this be handled sensitively. The introduction of such a period of service could hold many benefits for both the public health system and the clinicians involved. The Committee is therefore of the view that any envisaged community service serves the needs of both the community and the doctors.

The elimination of limited private practice has been agreed policy for some time now, and yet it appears that very little has been done to phase the system out and replace it with something more viable.

Despite acknowledging the fact that becoming reliant on foreign doctors may not be a viable long-term solution to the shortage of doctors in the public sector, the reality is that many foreign doctors are prepared to work in areas that South African doctors will not. The Portfolio Committee is concerned that the current system of government-to-government agreements represents a very inflexible arrangement that may prevent many good quality doctors from being able to practice in South Africa. It would consequently like to see a review, by the SAM DC, of the effectiveness of the current programme.

Recommendations and comments
· The Portfolio Committee is of the view that any envisaged community service, or additional training, for doctors serve the needs of both the community and the doctors.
· The elimination of limited private practice has been agreed policy for quite some time. However, there is still no clear indication when and how it is to be phased out, and what system of incentives will be introduced to replace it.
· There is a need to evaluate whether the current moratorium on foreign doctors being able to practice in South Africa in the absence of a formal government to government agreement is in the broader public interest. The Portfolio Committee would like to be assured that the current procedure is the most efficient in relation to its objectives.

5.6 Hospital Planning and Restructuring
5.6.1 Overview
The Committee notes from the budget analysis, reported above, that hospital services are not equitably distributed on an inter-provincial basis. Furthermore, it is clear from the provincial submissions that many public hospitals are inaccessible to needy communities on an intraprovincial basis. A further complication is that the hospital sector needs to re-assess the services provided according to level of care.

To adequately review the service structure of the public health system, health services need to begin to relate services to defined catchment populations in a scientific manner. In the past service planning was fairly ad hoc with spatial and service planning effected more by the preferences and biases of key bureaucrats and politicians. The Committee is of the view that, in future, political impetus needs to lie behind efforts to scientifically plan services.

5.6.2 National Department progress
The Committee was informed that, over the last year, a policy was adopted by the Minister and the nine Health MECS to classify hospitals into District, Regional, Central and Specialised hospitals. It was indicated that provinces have already classified most hospitals according to this new system in line with the policy.

An issue brought to the attention of the Portfolio Committee was the treatment of NITER and highly specialised services within the new budgeting system. As these services are only available in some provinces, there is concern that services that incorporate some national or supra-regional function may be cut down at the discretion of a single province. The mechanism for protecting these services is through the development of a conditional grant. The Committee was informed that a conditional grant structure was currently under consideration for national and supra-regional functions focused around Central hospitals.

The Department of Health also audited 108 health centres, 426 hospitals and 8 academic hospitals during 1995 and 1996. The audit found that one third of the public hospital stock was either in need of replacement or upgrading. The estimated cost of the required upgrading was put at between R6 to 8 billion (1996 prices). The Department of Health indicated that a plan to rehabilitate these hospitals was being developed. It was also noted that some hospitals may be closed or downgraded to health centres while various community health centres may need to be upgraded to become Regional hospitals.

With respect to revenue retention, the Department indicated that such must be made by Provincial Treasuries. Discussions on this matter are continuing with the Department of State Expenditure and the Provincial Treasuries.

5.6.3 Provincial reports
Provincial health departments were engaged in an extensive range of activities in relation to the transformation of the public hospital system. These included:
· repairs and upgrading - some using RDP funds;
· rationalisation of certain services;
· introduction of cost centres at various hospitals; service reprioritisation between levels of care;
· attempts to improve the depth of specialist services in provinces such as Mpumalanga and Northern Province;
· various provinces were experiencing problems in financing public hospitals, and/or being able to reprioritise services rationally given severe changes in budget;
· hospital management remains poor

5.6.4 Conclusions and comments
The Portfolio Committee noted that the following issues had not been adequately pursued during the 1996/97 fiscal year:
a) Development of hospital service and staff norms and standards - without these as objective planning benchmarks it also becomes very difficult to see how the capital backlogs are understood;
b) Little progress was made in implementing the hospital strategy project. Important aspects of this plan are:
· decentralising hospital management authority and accountability;
· creating a clear and coherent plan for implementing revenue retention by
hospital;
· implementing the recommended minimum data set for reporting the activities of hospitals;
· integration of planning norms into structuring hospital services;
· development of a cross-boundary billing system for level 1 and 2 hospital services;
· billing systems for medical scheme patients remain inefficient;
· point-of-service billing remains highly inefficient;

c) Development of a method of accounting for NITER and supra-regional services which is fully integrated into the budgeting system;
d) There is no inter-provincial co-ordination of hospital planning;
e) Information on the hospital system remains crude with very little available at the national level;
f) Information on how the national and provincial Departments of Health plan to deal with the capital backlog has not been provided;
g) Development of appropriate conditional grants related to hospital services

5.7 Nutrition
In the 1996/97 Portfolio Committee report it was noted that both support and criticism existed for the Primary School Nutrition Programme (PSNP). The Committee suggested the need to review the various nutrition programmes with a view to rationalising and integrating them along the lines recommended by the National Committee on Nutrition. The Committee was informed that this thinking has been adopted and is currently in the process of being. implemented. All the various programmes are being changed to an Integrated Nutrition Programme (INP) to operate at health facilities at the community level. The Primary School Nutrition Programme (PSNP), the National Nutrition and Social Development Programme (NNSDP) and the Protein Energy Malnutrition (PEM) scheme is being restructured into an Integrated Nutrition Programme (INP). The concept has been accepted by the provincial MECs for Health. The proposal is currently with the Department of Finance and the State Attorneys.

The Department informed the Portfolio Committee that the government, through the RDP funds allocated R500 million for the primary school nutrition programme in the 1996/97 fiscal year. By November 1996 the programme served about 4,7 million children in 12,873 schools nationally. The Department indicated that reports on the programme suggest that:
· school attendance has improved; there were decreased school drop outs;
· improvements in concentration and alertness levels; and
· children are less aggressive and irritable in class.

The Committee was also informed that the Department experienced the following problems:
· lack of adequately trained persons which puts a strain on implementation;
· poor financial controls (new financial controls have been completed and are now being considered by the State Attorney); and
· incorrect procurement procedures and weaknesses in contracts occur frequently.

Funds for the PSNP, NNSDP and PEM schemes were devolved to the provinces during the 1995/96 and 1996/97 financial years utilising an accepted poverty gap formula. The Department of health has also instituted comprehensive audits of the PSNP, NNSDP and the PEM in collaboration with the Commercial Branch of the South African Police Services.

5.8 Tuberculosis and Other Communicable Diseases
The Department of Health estimates that on average around 160,000 people a year are suffering from Tuberculosis (TB) and approximately 10,000 die. A review of the TB control programme has revealed many weaknesses. As a consequence a cheaper and more cost-effective programme is being introduced called the Directly Observed Treatment Short Course (DOTS). As a result of this initiative the cure rate of TB in the Western Cape increased from 63 to 74 percent in certain areas. All nine provinces indicated that they were implementing DOTS. Various mass immunisation campaigns were also carried out (Eastern Cape). However, most provinces still find TB to be an increasing problem. In addition, the increase in HIV is requiring co-ordination between HIV and TB strategies, which, unfortunately is not occurring.

In addition to TB the Department dealt with Crimean-Congo Haemormagic Fever in Oudshoorn, Ebola Fever in Johannesburg and Malaria control in the North Eastern part of the country.

Currently the Department immunises children against Tuberculosis; diphtheria; whooping cough; tetanus; poliomyelitis; Hepatitis B; and measles.

The Department also indicated that:
· it has accelerated the mass immunisation campaigns to eliminate polio;
· introduced a campaign to reduce measles;
· the target to eradicate polio in children from the age of 0 to 4 have been set for 1998;
· 9 out 10 one year old children in South Africa have an immunisation card, and 7 out of 10 are fully immunised;
· new vaccine Hepatitis B was added to the vaccine schedule in April 1995.

Recommendations and comments
Tuberculosis remains a substantial health problem in South Africa. The Portfolio Committee would therefore like to be informed annually of progress achieved in dealing with this disease. This will require the provision of data indicating how incidence and prevalence is being reduced.

5.9 Organisational changes in the National Department of Health
In the 1996/97 Report the Portfolio Committee expressed concern that the organisational structure of the Department of Health was deficient with implications for efficient policy development and implementation. Certain of these concerns remain, despite indications from the national Department that various changes are under consideration.

According to the Department of health, during 1996 the restructuring initiated in 1995 was consolidated. Restructuring occurred only in the Food Control Directorate (to move all food control matters under a single component) and the Occupational Health Chief Directorate to realign it to provide comprehensive occupational health services.

Initially, in 1994, the Department of Health had 7,086 posts. By January 1995 this was reduced to 6,906. By January 1997 this was further reduced to 1,694 posts. Nearly half the posts went to Department of Welfare, with the majority of the remainder going to the provinces. A total of 132 posts were abolished, saving the Department around R4,3 million per annum.

The Department of Health is in the process of finalising the integration of functions, activities and newly appointed personnel of Academic Health Complexes into the Directorate: Human Resources Development. Both a short- and long-term strategy is envisaged.

Short-term:
a) option 1: To create a second directorate: Human Resource Development which will carry out the activities related to Academic Health complexes.
b) option 2: To continue with only one Directorate: Human Resource Development and form a new sub-directorate: Professional Development, for more effective co-ordination and planning of HRD activities at a national level.

Medium- to long-term: The strategy is to upgrade the Directorate: Human Resource Development to a Chief Directorate which will have four components:
a) Human resource policy and planning;
b) Human resource management and labour relations;
c) Human resource professional development; and
d) Human resource statistics and data co-ordination.

Although the Portfolio Committee is pleased with the reduction in inappropriate staff within the national Department, no major restructuring of the Department has occurred in the areas regarded as problematic. It is also concerned that an additional Chief Directorate will be created when there appears scope for reducing the number.

Recommendations and comments
Given the importance of the structure of the national Department to the effective co-ordination of Health policy, the Portfolio Committee would like an annual update on changes made, or the lack thereof.

5.10 Budget Reprioritisation
Last year the Committee raised the issue of the controversy surrounding the national Department of Health resource allocation formula introduced in 1995/96. The view was that the formula needs to be reviewed, especially in the light of the proposed new "fiscal federal" budgeting system. It also felt that the public health system should not abdicate responsibility for developing well researched criteria for setting minimum norms and standards which can be incorporated into future provincial funding mechanisms. The Committee remains concerned that the national Department of Health has not been able to propose concrete mechanisms in this regard. This leaves health policy at the discretion of provincial governments, with limited guidance from national policy. The medium-to long-term implications of this arrangement are unclear. It is possible that a natural convergence on equity in the public health service may occur in line with equitable allocations of provincial bloc grants. However, it appears generally consistent with international experience, that where no rational and explicit population-based planning occurs, services tend to concentrate in high-income areas, and converge toward highly specialised services. Human resource planning also becomes difficult as certain areas tend to swallow up all the available personnel.

The Committee also noted problems with the Reconstruction and Development (RDP) Fund process. These included implicit budget sacrifices of increasing magnitude each year; continuity of programme funding; and fragmentation in the capital budgets. It was felt that rather than enhancing reprioritisation, the RDP funding process was actually preventing this from occurring. The incorporation of many of the programmes into existing budgets is a clear improvement on the budgeting of the past few years.

It is the view of the Portfolio Committee that the public health system is facing a unique challenge. A new budget system exists, as does a new constitutional framework. Work needs to begin to interpret the requirements of the new system, as they apply to the health system, while still retaining the principles of decentralisation and community responsiveness.

5.11 Social Health Insurance
The National Health Insurance Committee issued a final report in March 1996. The Report indicated that a process would go forward to investigate the implementation of a mandatory hospital package for employed people. In the 1996 budget hearings, the national Department of Health indicated that several task groups were being put together to take the process forward. The Committee was made aware of the fact that various of the proposals were complex and of a longer-term nature.

During the hearings in 1997 no information was provided on the progress of the task groups or any further findings or possible implementation. However, the Department indicated that progress was being made but that the results could not be made public as yet. It was also indicated that a strong linkage was being made between the Medical Schemes Act and the anticipated Social Health Insurance system.

The Department of Health is in the process of finalising proposals for taking forward these and related issues. Two Departmental working groups have been preparing this work, which is expected to be completed in October 1997. This process includes the re-drafting of the Medical Schemes Act.

The Portfolio Committee would like to be kept informed of any new developments in the development of a Social Health Insurance fund as and when they occur.

Recommendations and comments
Strategies should be developed to educate, inform and make the public aware of the proposed Social Health Insurance options and how these will impact on the lives of ordinary citizens in South Africa.

This must include an evaluation of the consequences of doing nothing.

5.12 Medical Schemes Act
5.12.1 Overview
The Portfolio Committee was concerned last year that insufficient progress was being made with respect to health financing in the private sector. The Committee was of the view that cost increases were a cause of concern, as was the status of the Office of the Registrar of Medical Schemes. The Committee is also aware that private sector health financing is extremely complex and contentious. As a consequence, it would like to be briefed on a regular basis to ensure that it can adequately deal with the policy issues at the appropriate time.

The development of "managed care is also of concern. Many managed care companies are forming, and substantial vertical integration is occurring. The implications for this on the delivery and quality of private health care are not clear to the Committee.

5.12.2 National Department progress
The combined effect of cost increases and competitive pressure has rendered the private sector unstable and at risk of losing any ability to perform a useful social function. The policy response of the Department is to consider interventions in two areas. The first is in relation to the regulation of medical schemes, while the second to the introduction of a social health insurance fund. The intention of the regulation is to prevent arbitrary cost-shifting onto the state, while the second can be interpreted as ensuring that non-members of medical schemes fund or insure for their expected utilisation of public hospitals.

The regulation of private health care financing occurs through the Medical Schemes Act No. 72 of 1967. A Department of Health working group is apparently taking forward the recommendations of the Report of the Committee of Inquiry into a National Health Insurance System released in 1995 which was accepted as policy in February 1996.

The essence of the proposals are as follows as reported in the Department of Health White Paper:
a) Medical schemes may not exclude an individual on the basis of health risk. Contribution rates for the full package of benefits can be differentiated only on the basis of income and number of dependants.

b) Medical schemes are obliged to continue providing health benefits to continuation members (i.e. pensioners, widows, and widowers).

c) All medical schemes will be required to provide a set of prescribed minimum benefits to be defined in terms of conditions/diagnoses and related treatments/procedures. These benefits will have to be covered in full, irrespective of whether the service is obtained from the public or private sector provider system. The benefits so covered will relate to essential medical conditions and procedures. The intention is to prevent schemes from applying arbitrary financial limits which result in ineffective coverage for those who need it.

In combination, the above, as well as various other measures should prevent arbitrary cost-shifting onto state services. They will also force schemes to take more concrete action to contain medical cost increases.

An important element of the reform process according to the Department is to ensure that the regulatory authority, the Office of the Registrar of Medical Schemes, is able to effectively oversee the relevant Act. Central weaknesses in this particular authority have been noted on numerous occasions.

The Department of Health submitted documentation recommending that the Office become a statutory body, reporting to the Minister of Health and accountable to Parliament, which will be levy funded by medical schemes. By shifting the Office out of the public service it will be able to fund itself appropriately and attract the high level staff required to achieve its objectives. The Department is opposed to the transfer of the Office to the Financial Services Board as this will lead to further fragmentation of health financing policy.

Any attempt to protect a community rated environment has to include mandating medical scheme membership for people above a particular income group, or for companies above a minimum employment level. Without this, instability is generated through the voluntary nature of the market, making adverse selection more acute, and reinforcing calls by commercial schemes to permit the underwriting of individuals. It appears very likely that the mandatory environment will emerge through the requirement for non-members of medical schemes to join a public hospital insurance fund, rather than through regulation coming out of the Medical Schemes Act as was originally proposed.

With respect to managed care, the Department has initiated a Forum process in which information on the implications and problems being experienced within the market are being collated. The Forum has been divided into four major focus areas dealing with the following:
1. patient protection;
2. provider protection;
3. financial regulation; and
4. horizontal and vertical integration.

The Department will use this information as a starting point for developing appropriate interventions in this regard.

5.12.3 Conclusions and comments
The Portfolio Committee is pleased with the proposed strategy in relation to the Office of the Registrar and would like to lend its support to taking this forward. The Committee is concerned with the continued press coverage indicating that substantial fraud is occurring in many medical schemes. With this in mind, the appropriate strengthening of the oversight function appears appropriate.

Recommendations and comments
The Portfolio Committee is pleased with the Department's proposals with respect to the Office of the Registrar of Medical Schemes. However, the Committee would like to be informed about the proposed time-scales for improving the Office.

The Portfolio Committee is aware of the development of managed care and is concerned that patients may not be adequately protected in the current environment. It would consequently like the Department to brief the Committee on current developments and potential policy options.

5.13 Essential National Health Research
In the 1996/97 Report, the Portfolio Committee was worried that health Systems research is not receiving appropriate attention in terms of funding. It also expressed concern that the relevant directorates in the national Department of Health appeared to be making insufficient progress in moving forward. It is also of concern that institutions such as the Medical Research Council give little more than token funding to health systems research, reflecting that they are potentially out of tune with the new policy agenda in South Africa.

This year, the Committee notes that foreign Aid funding for research is often directed at foreign consultants and institutions rather than attempting to develop adequate local capacity, or which effectively crowd out local research capacity and institutions.

In addition foreign Aid organisations appear to be determining the policy agenda in sensitive areas of government policy. This holds dangers for the continuity of health policy in South Africa. This issue will be monitored by the Committee on an ongoing basis.

In response to the Portfolio Committee questions concerning a follow-up to the ENHR report the Department responded that the ENHR task team report, with its recommendations, was presented to the Minister in November 1995 and was further discussed at a workshop during February 1996.

Both the task team and the workshop participants agreed that the national priority setting process needs to include the participation of civil society with a special focus on co-ordinating the multi-disciplinary, inter-sectoral priority setting process, at the district and provincial levels. It was also recommended that the priority setting process should be goal/solution oriented. The workshop participants recommended that priority setting should be co-ordinated by a national body with task teams around specific health and developmental issues.

The national Department of Health took the process one step further by identifying 95 major stakeholders in health research in South Africa.

The first ENHR congress was held on 14 and 15 November 1996 in Pretoria with the aims of:
a) Identifying health research areas that address priority health problems;
b) Developing a process for consensus building; and
c) Facilitating the establishment of an ENHR Committee.

The Portfolio Committee remains dissatisfied with current progress in this area. The transformation of the health service cannot proceed effectively, or substantive progressive change sustained, unless research, policy development and implementation are fully integrated functions of government. The lack of progress in this area, especially in relation to the development of sustainable domestic institutions and appears to indicate that this issue is a low priority within the health policy framework.

Recommendations and comments
It is not clear that sufficient progress is being made in a range of areas linked to Health research. Many of the questions and concerns raised in last years report were not adequately answered by the Department of Health. The Committee is also concerned at the extent to which foreign donor organisations dominate both the content and terms of research activities. It is also concerned at the limited manner in which domestic institutions are developed versus foreign institutions.

5.14 Information Systems
In the 1996/97 Report it was highlighted that the national process with regard to the introduction of information systems appeared to be faltering, resulting in delays for the provincial departments. The Committee supports the introduction of computerised information systems, whether they be for stock control, financial management, patient management, and outcome evaluation. It is recognised that achieving and maintaining the quality of health care within a constrained budget is virtually impossible without adequate information.

The Department informed the Committee that it had devolved the development of information systems down to provinces to prevent further delays. However, it is still continuing with the development of a national health information system.

With respect to the introduction of minimum reporting criteria, the Department indicated that it is experiencing problems with implementation due to poor management at the provincial level. Most provinces have not developed effective reporting criteria, nor properly functioning information units. Information is often not being centralised provincially, suggesting that the provinces themselves are not yet geared toward making information-based policy and management decisions. At the national level, it is also difficult to monitor policy changes and impacts.

In response to a Portfolio Committee question concerning the speeding up of delivery in this area, the Department indicated that due to continuous delays, a provincial option for the procurement of the NHC/MIS software was taken. Gauteng, North West and Eastern Cape had hardware and equipment procured from the NHC/MIS funds at national level. Northern Province and Free State used funds for software and hardware for the NHC/MIS.

The situation with respect to information systems and information in general remains highly unsatisfactory. Parliament is presently unable to substantively evaluate policy processes and outputs based on the information currently provided to it. This must hold equally for the various departments of Health as well.

Recommendations and comments
The situation with respect to information systems and information in general within the public health sector remains highly unsatisfactory. Parliament is presently unable to substantively evaluate policy processes and outputs based on information currently provided to it. It would consequently like to be updated continuously on what information systems are being developed, and how these are to be used.

5.15 National Legislative Process
The following legislation has been put before Parliament in 1997:
· Medicines and Related Substances Control Bill;
· Pharmacy Amendment Bill;
· Medical, Dental and Health Service Professions Amendment Bill; and
· Medical, Dental and Supplementary Health Service Professions Amendment Bill.

The White Paper was also presented to the Portfolio Committee in April. The content of the White Paper is supported by the Portfolio Committee and represents the basis for the transformation of the Health System for the foreseeable future.

The Committee was concerned at frequent accusations made from various quarters that insufficient consultation went into the processes that resulted in the various Bills currently before Parliament. Although the Committee recognises the constraints involved in such highly politicised areas of policy, it would like to recommend that the Department make every attempt to make sure that adequate consultation occurs. The consultation process should not occur only once the Bills are before Parliament.

5.16 Challenges Facing the Provinces
Provinces face specific problems, many of which arise from the constraints and difficulties imposed by the rapid pace with which the public service has been restructured. This section highlights some of the recurring problems mentioned by provinces in their submissions.

· Problems still exist over the Financial Management System (FMS) and the Personnel and Salary System (PERSAL). There are problems with delayed or non-payment of accounts and salary errors. This is largely due to insufficiently trained staff.
· Poor linkages between Works departments and the Health sector continue.
· Tender Board processes cause extensive delays.
· There is a lack of capacity in financial management and control functions.
· Backlogs exist in critical professions.
· In certain provinces staff are demotivated and unable to carry out required workloads.
· District structures are still not in place.
· There are delays in transforming the District Surgeon system in certain provinces.

6 RECOMMENDATIONS AND COMMENTS
National Social Policy Framework:
The Portfolio Committee repeats its call from last year for the prioritisation of an overall nation-building strategy which supports the goals of equity, social justice, development and economic advancement.

National Norms and Standards for Provincial Health Services:
The Portfolio Committee would like to see the development of effective service norms and standards. This should include the type of service, its required level of funding and performance criteria. Without these, the public health service may become fragmented and differ significantly from province to province.

Budget process:
The following issues still need to be resolved within the budgeting system:
· no functional service norms and standards have as yet been determined;
· no effective means has yet been developed to protect those provinces with national and supra-regional services;
· in many instances budget constraints are resulting in the arbitrary service cuts, rather than a careful restructuring of priorities;
· there is a lack of preventive maintenance of facilities;
· there is a lack of policy procedures for Human Resource Management;
· no procedures exist for prioritising the needs of communities with respect to ensuring that new clinics are accessible;
· budget audit and control procedures remain inadequate;
· as yet no formal mechanism exists for addressing the problem of cross-boundary patient flows for many health services;
· billing systems at public hospitals remain very weak, with much revenue lost.

A substantive policy process needs to be introduced to address the above. Given the importance of the above issues, the Portfolio Committee would like to receive substantive comment on how the above is to be addressed in future years.

HIV/AIDS:
· no broad vision was provided indicating interventions, their specific target groups, and methods for evaluating the impact of interventions;
· no plan for co-ordinating the actions of employers to effectively combat the disease was provided;
· no indication was given as to how unfair discrimination is to be dealt with in relation to employee benefits, especially given its racial nature;
· no targets were provided showing how specific interventions are intended to impact on critical indicators such as HIV prevalence;
· a priority area for intervention, STDs at the workplace, was not even mentioned in any of the health department presentations;
· despite knowledge of localised pockets where the disease is more prevalent than elsewhere, no systematic approach has been identified showing how these groups will be discovered and targeted in future;
· STDs and HIV are not yet a priority policy objective in provincial health departments; very limited co-ordination occurs between and with institutions outside of the various Health departments.
· the tendency to report progress by providing lists of disconnected interventions is clearly insufficient and inappropriate where HIV/AIDS is concerned;
· the high cost of HIV/AIDS drugs needs to be reviewed;
· inter-sectoral collaboration is still highly ineffective,
· collaboration with broader community;
· the issue of pre-employment and pre-benefit testing appears not to have been resolved in a manner that protects HIV positive sufferers from discrimination;
· NGOs appear not to be part of the national policy framework; and
· there are very few visible manifestations of the strategy, e.g. television and newspaper advertising, posters prominent and visible to communities at high risk, etc.

District Health System:
· The continued fragmented nature of District Health Service management is unfortunate and the reasons for this need to be assessed on an ongoing basis;

· Issues such as salary disparities should not be allowed to delay the effective implementation of the District Health System in provinces such as Western Cape and Gauteng.
· The Portfolio Committee would like information on how any envisaged primary care package of services will be implemented in future

Human Resource Development:
· The Portfolio Committee is of the view that any envisaged community service, or additional training, for doctors serve the needs of both the community and the doctors.
· The elimination of limited private practice has been agreed policy for quite some time. However, there is still no clear indication when and how it is to be phased out, and what system of incentives will be introduced to replace it.
· There is a need to evaluate whether the current moratorium on foreign doctors being able to practice in South Africa in the absence of a formal government to government agreement is in the broader public interest. The Portfolio Committee would like to be assured that the current procedure is the most efficient in relation to its objectives.

Tuberculosis:
Tuberculosis remains a substantial health problem in South Africa. The Portfolio Committee would therefore like to be informed annually of progress achieved in dealing with this disease. This will require the provision of data indicating how incidence and prevalence is being reduced.

Restructuring of the Department of Health:
Given the importance of the structure of the national Department to the effective co-ordination of Health policy, the Portfolio Committee would like an annual update on changes made, or the lack thereof.

Social Health Insurance:
Strategies should be developed to educate, inform and make the public aware of the proposed Social Health Insurance options and how these will impact on the lives of ordinary citizens in South Africa. This must include indicating the consequences of doing nothing.

Medical Schemes and Managed Care:
The Portfolio Committee is pleased with the Department's proposals with respect to the Office of the Registrar of Medical Schemes. However, the Committee would like to be informed about the proposed time-scales for improving the Office.

The Portfolio Committee is aware of the development of managed care and is concerned that patients may not be adequately protected in the current environment. It would consequently like the Department to brief the Committee on current developments and potential policy options.

Essential National Health Research:
It is not clear that sufficient progress is being made in a range of areas linked to Health research. Many of the questions and concerns raised in last years report were not adequately answered by the Department of Health. The Committee is also concerned at the extent to which foreign donor organisations dominate both the content and terms of research activities. It is also concerned at the limited manner in which domestic institutions are developed versus foreign institutions.

Information Systems:
The situation with respect to information systems and information in general within the public health sector remains highly unsatisfactory. Parliament is presently unable to substantively evaluate policy processes and outputs based on information currently provided to it. It would consequently like to be updated continuously on what information systems are being developed, and how these are to be used.

REFERENCES
[Ed. Note: References not included.]

APPENDIX A: Summary of National Department of Health Budgets
[Ed. Note: Table of summary not included.]

APPENDIX B: Reasons Given for Under-Expenditure National programmes.
· Time consuming tendering process, which had a specific impact on the Nutrition programme;
· Capacity limitations due to restructuring the department, severance packages and vacancies on the staff establishment. The majority of vacancies were approved for advertising and advertised only in the fourth quarter of the 1996/97 fiscal year. Consequently, several planned operational initiatives could not be implemented.
· Structural reorganisation at the provincial level which delayed appointments, delayed implementation of projects.
· Within the programme HIV/AIDS several strategies were implemented late in the fiscal year due to a change in Directors (with a four month gap). Capacity building at the provincial level is essential prior to the devolution of functions currently performed at national level (scheduled for 1997/98).
· Within the programme Communicable disease control, R10 million was not transferred to the SA Vaccine Producers for the production of vaccines as the relationship between the Department of Health, SAlMR and SAVP needs to be sorted out. Of a further R9,2 million budgeted for SAVP, R4,4 million has been transferred to the National Control Laboratory but is not yet reflected in the financial reports.
· Within the programme Mental Health and Substance Abuse, eighty percent of under-expenditure (R8,2 million) is due to vacant posts that were advertised in February 1997.
· Within the programme Chronic Diseases, Disabilities and Geriatrics, 98 percent of the under-expenditure (R809, 425) is due to vacancies on the staff establishment.
· In the programme Maternal, Child and Women's Health and Human Genetics, the Directorate has been understaffed and had to re-advertise twice for specialist and Deputy Director posts Due to staff shortages, the Directorate was unable to implement several operational objectives.
· In the Nutrition programme, the consultative, planning and restructuring process to create an Integrated Nutrition Programme to facilitate household food security, has been prolonged. The proposal was accepted by the MECs and Heads of Health in the fourth quarter of the financial year and is currently with the Department of Finance and the State Attorneys. Consequently implementation has been delayed. The following problems have also been experienced with the Nutrition Programme:
- Standard Tender procedures are time-consuming. Of the budgeted R18, 9 million for Professional Services, which has to be obtained through the tender process, an amount of R13,5 million is in various stages of the tender process, but not shown as expenditure as yet.
- Personnel expenditure, due to the internal restructuring process and staff vacancies, of the budgeted R2, 7 million, only R1, 8 million was spent.
- An amount of R669, 000 for transfer to clear previous NNSDP advances is in the process of being finalised.
· in the National programmes Office, the under expenditure is due to an allocation of R880, 000 made by the Director General to the professional and special services standard item of which approximately 10 percent was used.

National services:
· No reasons provided.

Regulation and procurement:
· Delays in tender process;
· Equipment largely acquired from overseas;
· Suppliers not abiding by promised delivery dates; Vacant posts (significant percentage);
· Planned implementation of depot logistics management system in Mmabatho budgeted for, but awaiting approval of contract by State Tender Board;
· Delays in payment of contractor for depot system due to account being sent back for rectification;
· Roll-over funds eventually allocated by Department of State Expenditure fell short of what had actually been pledged Activities had to be suspended and the money was therefore not spent.

Health resource planning:
· Several posts were vacant for nearly the entire financial year due to no health economists being prepared to apply for posts on offer;
· Nine posts were abolished during the year;
· Rigid employment conditions prohibit experienced personnel from being able to accept employment within the public service;
· Due to the tender procedures, some of the programmes for capacity building could not take off the ground;
· Topographical factors have delayed the building of clinics, especially in high rainfall areas;
· Tendering procedures delayed the appointment of consultants to co-ordinate the clinic building programme.

Hospitals and academic health service complexes:
· Within the programme Hospital Development, the tender for the cost analyses is delayed.
· No other reasons given.

Operational and technical policy expenditure:
· Moratorium on filling posts
· Posts reduced and not anticipated in budget allocation
· Vacant posts

National health systems:
· No reasons given

Occupational health:
· No reasons given.

Health information, evaluation and research:
· Posts not filled - vacancy rate 49.21 percent
· National Health Care Management Information System provincial option resulted in time delays required for permission on provincial bodies/management to be sought. The tender proceedings were also lengthy (R16, 000,000 request for roll-over for Western Cape, Northern Cape, Kwazulu/Natal NHC/MIS).
· Rationalisation of activities to ensure that main objectives are achieved with linked staff.
· South African Demographic and Health Survey admission arrangements are not completed. Tender now advertised. (R4, 000,000 rolled over for District Health System). R20, 000,000 (of R30, 000,000) - earmarked to finalise 1996/97 objectives.

APPENDIX C: Department of Health Responses to Recommendations and Questions from the 1996/97 Report

HIV/AIDS:
PC: Far greater attention needs to be given to the implementation of the National AIDS Strategy

PC: Greater emphasis must be placed on the development of strong links between the national department and the provinces to ensure full implementation of the strategy

Reply: The provincial structures, namely the Provincial HIV/AIDS and STD Programmes and the AIDS Training and Information Centres (ATICCS) have adopted the key strategies and supporting objective of the National AIDS Plan and have restructured accordingly. The RDP business plan provides funds for capacity building in the provinces to facilitate implementation strategies. The Directorate holds quarterly meetings with all the provincial representatives and regular tele-conferences.

PC: The current location of the national programme should be reviewed if it is causing an implementation problem, in order to facilitate the inter-sectoral nature of the programme, as per the original NACOSA proposal

Reply: The Directorate has initiated collaborative working relationships with the public and private sector and civil society to expand the response to the epidemic:
· the RDP business plan provides seed funding to enable government departments to initiate and sustain HIV/AIDS and STD programmes. In the workplace and in the line function responsibility. Most government departments have submitted business plans to access these funds and the directorate is providing technical advice on implementation strategies.
· A workplace Forum has been established for both the public and private sector to address the impact of HIV/AIDS in the workplace.
· The Department has provided R19, 3 million to NGOs to implement various aspects of the National AIDS Plan. The range of services include community outreach, education, training, counselling, care networking, support, materials development and distribution. The RDP business plan provides funds to further mobilise, support, strengthen and monitor funded NGOs. The function of incorporating Provincial NGOs operating as AIDS Service Organisations in the implementation of the National AIDS Plan, as well as funding them, will be devolved to the provinces during 1997/98. The national Department of Health will retain responsibility for funding NGOs.

PC: Review the use and amount of resources for this programme

Reply: The HIV/AIDS budget was increased from R70 million in 1995/96 to R80 million in 1996/97 with R40 million from RDP funding. R25 million from the RDP fund was transferred directly to the provinces. In addition, the European Union provided R51 million over a three year period ending December 1997 for specified activities, complementing the National AIDS Plan. Implementation functions and the related funding will be devolved from the national to the provincial level during 1997/98.

PC: Target resources to those areas most in need, i.e. with the highest prevalence rates

Reply: NGOs in Kwazulu-Natal and Gauteng received the highest allocation for NGO/CBO funding (R3, 4 million to 38 NGOs/CBOs in Kwazulu-Natal and R3, 2 million to 28 NGOs/CBOs in Gauteng. NGOs must be brought into the implementation process immediately. (The Committee is of the view that NGO structures, particularly those instrumental in the development of the National Strategy through the NACOSA process, would greatly enhance the effectiveness of existing policy, and are the most effective means of building capacity within the communities.)

District Health Services:

PC: A speedy resolution to the question of differing salaries and conditions of service between local government and the provincial service is required.

Reply: the Ministers of Health and Constitutional Development established A technical committee in 1996. A preliminary report has been submitted to the Minister of Health, which provided estimates of the finances involved and the need for parity in salaries, and conditions of service. Our estimates suggest that there are 247,705 health providers in the public sector (234,851 in the public service and 12,854 employed by municipalities). The cost of equalising salaries up to local government salaries in 1995 was estimated at R1, 4 billion and R960 million in 1996 (after salary increases were taken into account. However, this figure is being verified and the results should be available at the end of May 1997. The technical committee's preliminary proposals include the following:
a) depending on costs involved, a phased approach may be the only possible option;
b) ideally a single public service should be established so that the issue can be resolved once and for all. If parity is achieved without a long-term strategy this issue will reappear each time salary increases are negotiated.

PC: An appropriate formula for the intra-provincial district allocations needs to be developed

Reply: A committee with national and provincial representation has developed a framework for this work. Two international literature reviews have been completed:
a) resource allocation mechanisms;
b) health provincial management systems.

In addition, two provinces are being used as pilots to explore current financing of primary health care by both provinces and local authorities. Preliminary results will be presented to the national committee on 25 April 1997. It is hoped that the technical work on resource allocation mechanisms will be available by August 1997.

PC: A mechanism for the equitable use of local government's own revenue, in line with government policy and national norms and standards needs to be developed.

Reply: Mechanisms for the equitable use of local government's own revenue, in line with government policy and national norms and standards, have not been developed yet.

The possibility of performance contracts being attached to financial transfers from provinces to local authorities are being explored.

PC: Greater co-ordination at the national level is required for the management training and health information activities at district level

Reply: The monitoring and evaluation arm of the Department needs to strengthen its capacity to monitor the activities of local authority health departments (in terms of their constitutional obligation to ensure that norms and standards are being adhered to).

Drug Policy:

PC: There needs to be more co-ordination between drug policy and the regulation of the pharmaceutical industry and private sector regulation in general

Reply: Regulation of the Industry is, in fact, being pursued as part of the National Drug Policy. There is an attempt to achieve this in our Drug Policy document released in February 1996 and the White Paper tabled on 16 April 1997.

Human Resource Development:

PC: The development of a consistent and integrated human resource plan for the health system as a whole is viewed as requiring some urgency.

Reply: The Human Resource (HR) plan is based on the Human Resource strategy which is in the final draft stage and based on inputs from 300 different stakeholders and key role-players, including representatives from the national and provincial Human Resource Development (HRD) divisions, representatives from professional organisations and associations, SAMDI, academics, statutory councils, NGOs, employee organisations and CBOS. One of the recommendations of the 1994 Health Ministerial Committee was to set up a National Human Resource Development Consultative Forum where all these stakeholders meet regularly. Four meetings were held in 1996/97.

There are six pillars on which the HR plan is to be based:
a) Planning human resources;
b) Education and training;
c) Creating a caring ethos;
d) Changing the nature of management;
e) Capacity building; and
f) Affirmative action.

PC: Programmes for the education and framing of health personnel at ail levels should be oriented to the philosophy of the primary health care approach, and the re-orientation of existing personnel should be done in a co-ordinated manner.

Reply: The draft Human Resource Development policy pays particular emphasis to this matter. The policy proposes that Health Sciences curricula should be structured to reflect community needs more accurately and teaching should place greater emphasis on community-based programmes. The fundamentals of a community-based health sciences curriculum will include:
· PHC clinical skills;
· Social sciences;
· Health promotion;
· Basic management skills;
· Epidemiology;
· Ethics and a caring and compassionate ethos;
· Basic counselling skills; Basic research skills; and
· Androgogics.

To this end a PHC Task Force drafted proposals containing core elements for PHC-oriented curricula. This document is in the process of being finalised for presentation to the Director General. Various other training initiatives and programmes have also been initiated. (A detailed list is contained in the original Department of Health Report).

PC: There needs to be a speedy resolution to the question of the training and deployment of community health workers.

Reply: Research produced for the Department of Health has shown that it would cost the government an estimated R1 billion to bring Community Health Workers (CHWS) into the public sector. Because of constraints on the health budget and other priorities this policy cannot be implemented at present. However, the Department of Health supports the training and development of CHWs at the District level where such personnel can be utilised more appropriately.

PC: The use of foreign doctors should be regarded as a temporary solution and long-term solutions should be found to cope with the shortage.

Reply: The Department of Health has prepared a draft policy on foreign doctors which is currently under review for a final decision. Long-term solutions would include the following:
a) Non-financial incentives:
· continuing education programmes for all health personnel;
· introduction of telemedicine and telehealth to link up doctors in rural areas with academic training hospitals;
· utilisation of health personnel in rural areas to teach at academic hospitals in block sessions as a way to expose students to rural medicine and practice while also providing rural practitioners with a link up to their urban based peers.

b) Financial incentives:
· paying rural health personnel an allowance based on an inhospitability index;
· the provision of non-designated posts at rural hospitals so that the spouse of the health professional can be employed against such posts;
· the provision of an increased housing allowance;
· the provision of a boarding school allowance for the children of health professionals in areas where the existing school system is less than satisfactory.

The Department of Health is inundated with an increasing number of applications and telephone enquiries by foreign doctors to work in the South African public health sector. Given the shortage of doctors in the country, hospital superintendents have been making employment offers to individual foreign doctors. while some South African consulates abroad have encouraged doctors to make enquiries. This has caused considerable confusion between national and provincial health authorities and the Department of Home Affairs.

Currently, there is in effect a moratorium on foreign doctors from being registered by the interim South African Medical and Dental Council (INMDCSA). Only six exemptions apply:

1) doctors who form part of government to government agreements;
2) doctors granted political asylum and refugee status by the Department of Home Affairs;
3) doctors married to South African citizens;
4) South African doctors who qualified outside South Africa;
5) doctors previously registered with the INMDCSA; and
6) special registration in terms of criteria related to appointments in Medical Faculties.

The Department of Health shares the view (with the Portfolio Committee) that the use of foreign doctors is only a short term strategy. Active engagement has begun with the Deans of Faculties of Medicine to work out a sustainable intervention based on South African doctors.

PC: The abolition of limited private practice is fully supported and encouraged.

Reply: A policy decision was taken by the MINMEC in November 1996 to abolish limited private practice. Steps are now underway to implement this decision in the Provinces.

Hospital Planning and Restructuring:

PC: The development of a process to carry forward the comprehensive recommendations of the hospital strategy protect should occur as soon as possible.

Reply: Several policy proposals based on the major recommendations of the Hospital Strategy Project have been included in the White Paper on the Transformation of the Health System in South Africa.

PC: The introduction of revenue retention within public sector hospitals should be investigated for implementation within this financial year if possible.

Reply: Decisions on revenue retention within public sector hospitals must be made by Provincial Treasuries. Discussions on this matter are continuing with the Department of State Expenditure and the Provincial Treasuries. As a Department we strongly support revenue retention as indicated in the White Paper.

Nutrition:

PC: The existing Primary School Nutrition Programme and NNSDP be reviewed with a view to amalgamation into a larger and better targeted nutrition intervention in line with the recommendations of the National Committee on Nutrition.

Reply: The Primary School Nutrition Programme (PSNP), the National Nutrition and Social Development Programme (NNSDP) and the Protein Energy Malnutrition (PEM) scheme is being restructured into an Integrated Nutrition Programme (INP). The concept has been accepted by the provincial MECs for Health. The proposal is currently with the Department of Finance and the State Attorneys.

PC: Greater effort be placed on ensuring that the communities and groups most at risk are identified and targeted directly for assistance. In this instance, those provinces with greater numbers of people and communities in need of assistance could also receive more favourable treatment financially.

Reply: Funds for the PSNP, NNSDP and PEM schemes were devolved to the provinces during the 1995/96 and 1996/97 financial years utilising an accepted poverty gap formula.

PC: All cases of corruption should be urgently investigated and dealt with by the Department of Justice.

Reply: The Department of health has instituted comprehensive audits of the PSNP, NNSDP and the PEM in collaboration with the Commercial Branch of the South African Police Services.

Organisational Restructuring of the National Department of Health:

PC: Review the co-ordination of human resource development strategies within the Department.

Reply: The Department of Health is in the process of finalising the integration of functions, activities and newly appointed personnel of Academic Health Complexes into the Directorate: Human Resources Development. Both a short- and long-term strategy is envisaged.
· Short-term:
a) option 1: To create a second directorate: Human Resource Development which will carry out the activities related to Academic Health complexes.
b) option 2: To continue with only one Directorate: Human Resource Development and form a new sub-directorate: Professional Development, for more effective co-ordination and planning of HRD activities at a national level.
· Medium- to long-term: The strategy is to upgrade the Directorate: Human Resource Development to a Chief Directorate which will have four components:
a) Human resource policy and planning;
b) Human resource management and labour relations;
c) Human resource professional development; and
d) Human resource statistics and data co-ordination.

PC: Investigate a mechanisms to ensure that national priorities are reflected in the overall structure of the Department

Reply: None.

Budget Reprioritisation:

PC: The health formula should be subjected to an extensive technical review before it is used again.

Reply: None.

PC: The FFC process is regarded as an important one for the future and much attention should be focused on the creation of logical norms and standards which can be used as a basis for future provincial allocations.

Reply: None.

PC: The public health system, in conjunction with the FFC, needs to actively involve itself in developing financial mechanisms for ensuring that the public health system achieves its policy objectives.

Reply: None.

PC: The RDP process should be reviewed in relation the sources of finance for the fund, the nature of the allocations for projects or programmes (i.e. is the fund an appropriate source for recurrent funding), and the flexibility of the mechanism in relation to low priority projects.

Reply: None.

PC: Clear guidelines for the co-ordination of international donor funding should be developed, together with a mechanism for the funding of NGOs.

Reply. None.

Social Health Insurance:

PC: That the Portfolio Committee be kept regularly informed of the progress and any resulting documentation with regard to the process around mandatory insurance, the equalisation fund, and private sector regulation.

Reply: The Department of Health is in the process of finalising proposals for taking forward a these and related issues. Two Departmental working groups have been preparing this work, which is expected to be completed in October1997. This process includes the re-drafting of the Medical Schemes Act.

PC: That strategies be developed to increase public awareness of the substantive issues.

Reply: None.

Medical Schemes Regulation:

PC: Attention be focused on improving capacity and status of the Office of the Registrar to ensure proper oversight of the industry and the Medical Schemes Act to protect the public interest.

Reply: The Department has received recommendations from a task team investigating a new regulatory plan for Medical Schemes that consideration be given to establishing the Office as a levy funded statutory body. This will enable the Office to attract a critical mass of high level skills in law, accounting, statistics, policy and administration required to properly supervise the medical schemes industry. The Office would remain accountable to the national Department of Health and the Minister of health. The Department is opposed to the transfer of the Office to the Financial Services Board as this will lead to further fragmentation of health financing policy. In the interim, the Department has agreed (as noted above) to upgrade this Office to the level of a Directorate, and will be appointing the critical skills required to help the Registrar function effectively.

With respect to managed care, the Department has initiated a Forum process in which information on the implications and problems being experienced within the market are being collated. The Forum has been divided into four major focus areas dealing with the following:

1. patient protection;
2. provider protection;
3. financial regulation;
4. horizontal and vertical integration.

The Department will use this information as a starting point for developing appropriate interventions in this regard

Essential National Health Research:

PC: A follow-up to the ENHR report is regarded as very important and should be made available as soon as possible.

Reply: The ENHR task team report, with its recommendations, was presented to the Minister in November 1995 and was further discussed at a workshop during February 1996.

Both the task team and the workshop participants agreed that the national priority setting process needs to include the participation of civil society with a special focus on co-ordinating the multi-disciplinary, inter-sectoral priority setting process, at the district and provincial levels. It was also recommended that the priority setting process should be goal/solution oriented.

The workshop participants recommended that priority setting should be co-ordinated by a national body with task teams around specific health and developmental issues.

The national Department of health took the process of implementation of the EMHR strategy one step further, by identifying 95 major stakeholders in health research in South Africa.

Despite some concerns regarding the impact of prioritisation on funding, there was a general consensus that prioritisation of health research was a necessary step towards implementing the ENHR strategy.

The first ENHR congress was held on 15 and 15 November 1996 in Pretoria with the aims of:

a) Identifying health research areas that address priority health problems;
b) Developing a process for consensus building;
c) Facilitating the establishment of an ENHR Committee

Information Systems:

PC: The blockage in the national process be dealt with and the process expedited as soon as possible.

Reply: Due to continuous delays, a provincial option for the procurement of the NHC/MIS software was taken.

PC: Any application for funding the capital cost of computer information systems hardware at the provincial level be supported as a priority if it will enable effective and efficient decentralised management to occur.

Reply: Gauteng, North West and Eastern Cape had hardware and equipment procured from the NHC/MIS funds at national level. Northern Province and Free State used funds for software and hardware for the NHC/MIS.

Legislative process:

PC: That the Portfolio Committee receive the minutes of the MINMEC meetings to ensure that it can remain up to date on the decisions being made on national health policy.

Reply: This matter should be raised with the MECs and the Minister.

PC: The Committee would like to receive a white Paper prior to any draft legislation being presented to Parliament

Reply: The White Paper has been tabled on 16 April 1997 as requested by the Portfolio Committee.

PC: The Committee's response to the white Paper should form part of the consensus agreement underlying the content of the future Act

Reply: None.

PC: The Committee is in favour of the development of framework and enabling legislation to allow greater provincial freedom to legislate and would like to ensure that this occurs as speedily as possible.

Reply: None.