Department of Health Budget Review

Meeting report

PORTFOLIO COMMITTEE ON HEALTH
3 MARCH 1999
DEPARTMENT OF HEALTH BUDGET REVIEW: JOINT REPORTS: Gauteng, Mpumalanga and the Western Cape Provincial Health Departments

Documents handed out:
Gauteng presentation
Mpumalanga presentation
Western Cape presentation
(Electronic copies of these documents available shortly)

SUMMARY
In this final of the three-day Budget hearings, representatives from Mpumalanga, Gauteng and Western Cape provincial health departments reported to the Portfolio Committee on the state of their budgets for 1998/1999.

Budget deficits and their causes were explained. Reasons included complaints of under-funding, infra-structural underdevelopment and the cost-ineffective use of resources. Successes in the 3 provinces in question have definitely been characterised by the need for the transformation of the health services regionally and locally. Many staff cutbacks and facility closures have been linked to implementing these transformation policies, in line with keeping to budget guidelines.

With all three provinces facing serious budget deficits, services will have to improve in certain pressing issue areas such as the care of AIDS-infected patients. Reports also focused on the proposed corrective measures by these departments. Commitment to reducing expenditure without compromising services was given by all three provinces.

MINUTES
Gauteng Province
The presentation of Gauteng Province was undertaken by Dr Mgijima. Although it is very clear that the province has successfully been able to reduce the budget, the public health system is an example of a body that is under-funded. Most increases in expenditure projected for the financial year were results of decisions made outside the control of the Provincial Health Department. This includes, for example, the effect of HIV/AIDS on inpatient and outpatient services. Cross-boundary flows are also a reality, where other provinces are needing to refer their patients to Gauteng due to a lack of specialist services in their own provinces. An increase in the assistance of NGOs in Aids-related cases, for example, can help to combat these negative externalities. Importantly, interdepartmental AIDS programs have been implemented. Steps to increase revenue generation are also currently being investigated.

Returning to the budget, the 1997/1998 budget projected a deficit of approx. R727 million is estimated. Real decreases were specifically attained in Stores and Professional Services. Although the department fared relatively well against the targets set for the year 1998/99, in certain cases, severe budget constraints limited the expansion of activities, such as the delivery of certain services Transfer payments have necessarily been made to local authorities in order to support the Primary Health Care service. The big spenders of the departments' budget was to Provincial (1998/99 - R 1 143.109 mill.) and Academic Health Services (1998/99 - R 2 380.552 mill).

Questions:
Why did the department fail to spend R12 million as part of the fund allocated to Gauteng. How important is the argument of quality to the Gauteng Health Dept.? Has anything been done about the case where condoms were stapled to pamphlets in the Jhb.\Soweto area?
The inability to spend R12 mill. was related to setting-up problems related in certain locations. Extended debates on where to establish and how to spend the funds were also detrimental to decision-making processes. Fortunately, with transformation, the focus is changing to quality, but has to be seen within the background of constraints and civil service backlogs. The signing of Performance Management Improvements of departmental staff will hopefully lead to an improvement of the quality problem.

Referring to the "condom-stapling" episode, investigations have taken place, but have not been finalised.

Is there a budget for the safety of staff, specifically when looking at the crime problems in Gauteng?
Security plans have recently been reviewed across all institutions, as publicised last week. The training of security personnel is being reinforced, and the use of metal detectors, for example, has been implemented.

We understand that unfunded mandates are a threat to the Gauteng Depts' budget. What are these unfunded mandates?
An example of an unfunded mandate is the fact that health service employees hold rights to increases. Another problem is that the department is paying for services which are not its own, but which belong to some other department.

Mpumalanga Province
Dr G. Sibeko mentioned the following points regarding their successes:
*the decentralisation of services, aided by the Primary Health Care principles
*an increase in immunisations
*a growth in antenatal visits
*an increase in free healthcare
*the implementation of AIDS programmes on ground-levels in the Province.

Taking over the presentation from G. Sibeko, Dr. Karim emphasised the fact that one has to keep in mind that Mpumalanga is a rural province. Looking at the backlogs, Mpumalanga has one of the highest infant mortality rates as well as a high rate of diseases such as measles and malaria. Combined with a lack of teaching facilities and the lowest number of hospital and psychiatric beds in a South African province, Mpumalanga does not feel as though it has experienced a fair distribution of infrastructural resources. More importantly, Dr. Karim pointed out that a favourable environment for health care services to improve needs to be supported by socio-economic improvements in the immediate environment. This can only be attained by establishing a close working relationship with other departments in order, for example, to supply water to certain regions.

Primary Health Care Plan
The Primary Health Care Plan has made great progress specifically due to the fact that there are backlogs in other policy areas. What the Primary Health Care Plan specifically has been able to do is to decentralise the management of health services, ensuring that the provision of health care services and clinics are accessible to all people. Services rendered include health promotion, maternal child and women's health, nutrition, oral health and environmental health. The need has also been identified to present the plan in the form of a Primary Health Care Handbook.

Rehabilitation
The successes of the rehabilitation programme can be measured by:
*2138 wheelchairs being distributed to children and adults with disabilities;
*the establishment of a fully equipped Audiology Centre in the Lowveld Region, which is a first for the province;
*an increase from 4 hospital based service delivery points to an extensive network of hospital, clinic and community outreach based service delivery points

District Health Services
The province has been divided into 16 health districts (interim). District Health Teams have also been appointed and are functioning.

Essential Drug Programme
This programme has been implemented. Workshops were presented to give clear insight into aspects of selecting and prescribing drugs rationally. A threat to this programme is sill the inefficiency in drug storage. Simultaneously, the province experiences a shortage of pharmacists.

Summarising the Budget
The projected over-expenditure for the 1998-1999 period is approx. R30m, not taking into consideration earmarked funds.
The Department of Finance will not let anyone overspend and subsequently force departments to compensate for over-expenditure by subtracting the amounts from the next budget. Being underfunded in terms of expenditure means that one just has to manage resources more effectively.
The provisional allocated budget for 1999-2000 is approximately R 1 068 366,691. In order for underfunding to be avoided, personnel savings will have to be made. Overtime, which is relatively high due to understaffing, will be reduced by the filling of certain vacancies. It is Dr. Karim's belief that it is cheaper to appoint more people than to pay overtime. Furthermore, it is important for a change in understanding to be brought about that doctors must learn to work shifts, instead of expecting overtime for working at certain hours of the day.
There is a great need to upgrade certain hospitals such as the Piet Retief hospital, and this should be included in future plans.

Western Cape
The challenge is that, while avoiding compromising services, the department needs to bring its budget down.

Common to health departments in all three provinces are large budget deficits for 1998/99. The present deficit in the Western Cape health dept. is R147m. The department is introducing a business plan which includes an R8m reduction in personnel expenditure. This requires the reduction of departmental personnel to less than 24 840. Credit to the department is that it already has reduced employees to less than this number.

Departmental personnel has decreased by 4800 employees, with Groote Schuur hospital losing 29,2% staff while Tygerberg and Red Cross lost 28% personnel respectively. Elements of the business plan are: negotiation strategy on reduction of staff, transfer opportunities and retirement packages accompanied by the non-filling of vacant posts. It should be noted that the department still faces a deficit after this process. Among the causes are increases in costs of control, increases in housing subsidies (R9m) and the increase of back-pay to general assistants (R4m).

Balancing expenditure cuts with service provision:
The department aims at improving services while cutting capital expenditure by prioritising on cost-effective use of its buildings and other resources. As a result there is already successful service prioritisation and rationalisation at academic Hospitals (Tygerberg and Groote Schuur) as well as psychiatric hospitals (See pp 8-11 of presentation). This process entails combining certain common projects and services to avoid duplication and wastage. Cost effectiveness has led to improved service provision. The patient recovery rates in hospitals have reached 70%, 80% in others, and at times 85% rate in certain hospitals although the rate is not higher than 70% for tuberculosis.

Equity:
The department has established relations with local authorities in an attempt to bring primary health to areas where it is needed. There is progress in the distribution of primary health services to those areas that did not have this access before. Although not all the areas have been covered, the department is pleased with its success in establishing 52 new clinics and upgrading 29 in these areas.

In conclusion, the department restated its commitment to its partnership initiatives between itself, society and the private sector in improving health conditions in the province.