Department of Health: Budget and Strategic Plan 2008/09 & Briefing on Tobacco Products Control Amendment Bill

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11 March 2008
Chairperson: Mr L Ngculu (ANC)
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Meeting Summary

An informal briefing was held on the Tobacco Products Control Amendment Bill. The Chair emphasised the importance of following proper procedure when processing a Bill. The formal briefing would be held the following week when questions could be answered.

The Department of Health tabled its budget and strategic plan for 2009/09. It was noted that the budget had been reformulated as a result of the restructuring of the Department, and now had to take into account the addition of two extra programmes. A new Programme had been added to deal with international relations. The National Health Systems priorities were fully outlined and explained. The correlation of each to the budget structure was explained. There had been attempts to improve monitoring. Some highlights of the last year were outlined, including the fact that South Africa had been declared polio-free, completion of policies, planning for the health facility improvements, and multilateral activities. The budget was presented, and indicated that for the 2008/09 year there would be restructuring and therefore the budget would now be divided across 6 programmes. There were conditional grant increases.  Members asked questions around the expenditure for tuberculosis, training figures for data capturers,  expressed concerns around the capturing of information by the PERSAL system, requested information on the vacancy rates and asked about the contracts of the Cuban doctors. Members further interrogated the plans to increase the numbers of trained nurses and doctors and to retain them. They commented that there appeared to be a number of discrepancies in figures provided in different parts of the presentation, as also disjuncture between the National Strategic Plan and the budget, and the fact that certain priorities were being raised again although they had been dealt with in the previous year. Further details were requested on the cost of the public sector strike, the slow rate of progress towards Millennium Development Goals, the challenges of the internship programme, roll overs, tracking of TB patients, the amounts budgeted for recapitalisation of nursing colleges, and the National Health Insurance and Medicines Control Council progress.

Meeting report

Department of Health (DOH) Strategic Plan and Budget 2008/09: Briefing
Mr Thami Mseleku, Director General, Department of Health, said that there had been confusion with regard to the tabling of the Strategic Plan. The confusion had resulted from the Department’s interpretation of provisions of the Public Finance Management Act (PFMA), which dealt with when the tabling should occur. This Strategic Plan represented a five-year trajectory, which was in line with Government’s mandate.

For the financial year 2008/09, the budget had been reformulated due to restructuring taking place within the Department. The restructuring entailed the expansion of the pool of senior managers. Currently the Department consisted of three branches; Strategic Health Programmes, Health Service Delivery and Human Resources in Health. In an effort to expand the capacity of the Department it was moving toward the establishment of six branches, which would influence the structure of the budget. Mr Mseleku referred to Slide 13 of the presentation document, which outlined the six budget programmes.

With regard to Programme (vi), which dealt with International Relations, Mr Mseleku explained that this area had become important because of the level of investment taking place in South Africa. The Department had previously not dealt with this issue. With regard to Health Product Regulation, he said that the Department was looking to amend the Medicines and Related Substances Control Amendment Act (Act 90 of 1997).

The Department was currently filling the Deputy Director General posts for these six programmes.

Mr Mseleku then outlined the National Health System Priorities for 2008/09, as:

(i)Strengthening Management and Communication- to ensure that managers actually managed their staff.
(ii)Implementation of Programmes to combat Communicable and Non Communicable Diseases,  especially AIDS, tuberculosis, malaria and also diabetes and hypertension.
(iii)Public Health facility improvement through development and implementation of the Health Facilities Improvement Plan. This focus area had emanated from discussions held at different platforms on the provision of essential services to the poor. The Department was looking at 28 hospitals and clinics to determine the current state of the institution and how to turn each around.
(iv)Implementation of an Integrated National Health Information System, with focus on the Occupation Specific Dispensation (OSD). PERSAL, the existing public service human resource system, had a number of limitations, including its inaccurate records of nurses, and failure to record staff qualifications and work experience. A Patient Information system was also already being implemented.
(v)Health Financing, including the design of the National Health Insurance System and reducing the rate of tariff increases in the private health care sector. Mr Mseleku said that the Department would provide the Committee with an informal copy of the amendment to the Medical Schemes legislation prior to tabling it.
(vi)Further reduction in the prices of Pharmaceutical Products. The Department was looking at international benchmarks in this regard.
(vii)Strengthening the provision of Human Resources for Health. This included the Department looking at the supply chain and the role of nursing colleges
(viii)Strengthening International Health Relations, where the important focus area was post conflict reconstruction. The aim was to provide leadership in international health relationships.

Some of the above-mentioned priorities related to the apex priorities mentioned by the President. Each priority did feed into the budget structure.

Mr Mseleku dealt with the budget programmes and indicated the key areas for each of the programmes (see presentation for details of each programme).

Mr Mseleku noted that there had been discussions regarding the challenges facing service delivery in the provinces. In an attempt to improve monitoring the Office of Standards was introduced. The Department had started discussions with the Portfolio Committee on the implementation of the turn-around strategy for improving Audit Outcomes. It aimed to achieve unqualified audit certificates throughout the cycle.

Mr Mseleku then dealt with some highlights. He noted that South Africa had been declared polio free. The policy on African Traditional Medicine had been completed although the legislation would not be introduced during 2008. The final report had been completed and work was being done with the Presidential Task Team to polish it so that it could be published for comment. In regard to the health facility improvement plan, Mr Mseleku said that the Department had selected institutions with challenges and those who were performing optimally in order to cross transfer and look at lessons  to be learned. He noted that the Department was facilitating various multilateral activities taking place in South Africa such as CODEX (the food safety regulations), Red Cross and COPT (Conference of Parties on Tobacco). This year South Africa would be taking over the Chair on SADC (Southern African Development Community) Health.

Mr Gerrit Muller, Chief Financial Officer, Department of Health, then tabled a brief presentation on the budget for the forthcoming years. He noted in particular that the conditional grant funding would increase, and set out the figures for each grant across the Medium Term Expenditure Framework (MTEF) cycle. He reiterated that as a result of the new organogram there would be six programmes. He then set out and explained, over the last five years, the budget and expenditure across the programmes (see attached presentation, slides 28 onwards). 

Ms M Matsemela (ANC) asked if the Department predicted unavoidable expenditure arising in Programmes 1, 2 and 3. She also asked how this could be avoided.

Mr Mseleku said that unforeseeable expenditure could not be predicted. He referred to the outbreak of Extensively Drug Resistant (XDR) tuberculosis that had found the hospitals without sufficient capacity to deal with the extent of the infection. This was impossible to foresee. If it had been possible to foresee such events, the Department would have provided for them in the budget.

Ms M Madumise (ANC) referred to the training of data capturers and said that last year the Department had said that they had just over 2000 data capturers. She asked if the figure of 1110 data capturers referred to in this presentation was a new figure, or if it included those earmarked last year.

Mr Yogan Pillay, Chief Director, Strategic Planning, Department of Health, explained that 1000 data capturers would be added every year for three years. The Department had spent the last year trying to figure out unit standards in registering the course and this process had taken longer than expected. The idea was that the capturers would be absorbed into the system as soon as they were trained. 72 had been hired for the TB programme.

Mr M Waters (DA) expressed concern that PERSAL did not reflect every single nurse in the employ of the Department, since the system was supposed to reflect all public servants.

Mr Mseleku said that PERSAL did not capture all the information needed for OSD. OSD did not just require a record of heads, but of training and experience of staff. PERSAL had not been able to do this. All the employees were on the system but it was difficult to keep track since some employees were temporary and it was therefore difficult to keep the information updated.

Mr Waters wanted more information on the vacancy rates referred to in the presentation.

Mr Mseleku responded that he did not have this information at the meeting and undertook to provide these figures in writing. He also said that a vacancy referred to a funded post, and should not be confused with the number of posts required.

Mr Waters asked how the Department was dealing with the violation of the human rights of Cuban doctors.

Mr Mseleku said that if such violations had occurred, they were certainly not done in terms of the bilateral agreements between the countries. These claims were made by the minority of doctors who had failed to honour their commitments.

Mr Waters referred to the fact that 60% of nurses were over the age of 55. In a few years these nurses would be lost, which would result in a human resource crisis. He asked what plan the Department had to increase the number of student nurses and doctors.

Mr Mseleku disagreed that most of the nurses were older than 55. It was however a problem that many of the young nurses who had been trained were working overseas.

Mr Waters asked how many more positions nursing colleges would create. He asked why the Department could not bring in the private sector to assist with training.

Mr Mseleku said that the problem was not that the Department was not training sufficient doctors and nurses, but rather that they were leaving the country after their training. The introduction of community service addressed some of the problems but upon completion of that period, the doctors left in any event. There needed to be discussions with the other countries regarding compensation for the training of doctors who then went to work abroad.  This was not a phenomenon unique to South Africa, as there was generally a problem of developing countries training doctors for the developed world.

He added that nursing colleges were training more nurses than the country needed. This would ensure that there were sufficient nurses, even if some of them left the country. The private sector was arguing that since Government had increased the salaries of nurses, the private sector was being threatened. The Department did not agree with this. The private sector was increasing its patient fees so that this sector could afford to pay their nurses more. On the one hand this was positive, as it meant that Government was able to compete with the private sector with regard to salaries. On the other hand it was problematic that the private sector wished to address the problem by increasing health care fees.

The Chairperson asked for clarity on Slide 9, which dealt with the summary of the Department’s achievements on Strategic Health Programmes. He pointed out that the Department was saying nothing about Multi-Drug Resistant Tuberculosis (MDR) and Extensively Drug Resistant Tuberculosis (XDR). Secondly, he referred to the fact that there were 33 hospitals under construction. This appeared to contradict with Slide 20 which gave a figure of three new hospitals being completed and nine being accepted. The Chairperson asked for clarity to enable him to track progress. Thirdly, he said that the Department needed to address the incongruence between the National Strategic Plan and the budget. In addition he commented that the Department was saying different things in March 2008 to what it had said in March 2007. In addition, the issue of National Health Insurance was identified as being a challenge last year. This year the same issue was again raised.

Mr Mseleku responded that it would have been clearer if the Department had done a presentation on the Annual Report first because many of these issues raised by the Chairperson would be dealt with in the Annual Report 2007/08. He said that many of the challenges identified last year were continuing to be challenges in the current year. Perhaps the Department should have focused on setting it where it was last year and where it was at present, to clarify the progress. Also, in order to provide more clarity there would need to be a presentation on issues like OSD, for example. There was however a need to balance full discussions within given time frames. He however hoped that the Committee could sit with the Strategic Plan and the Budget so that they could delve deeper into issues like the revitalisation of hospitals. In terms of this discussion, one would have to differentiate between the establishment of a start-up hospital and the revitalisation of a hospital.

The Chairperson said that there was a new remuneration framework within the Department of Public Service and Administration (DPSA). There was a need for a briefing from this Department on this matter.

Ms S Kalyan (DA) asked if it was not a violation of human rights if the contract in respect of foreigners forbade a person getting married.

The Chairperson suggested that the Department should not dwell on this issue; since they did not have access to the contracts, which involved the intricacies of treaties with other Governments.

Ms Kalyan asked what the cost to the Department was of the public sector strike. She asked how this was dealt with in the budget.

Ms Kalyan asked for details why the progress toward the Millennium Development Goals (MDG) had been slower than anticipated.

Mr Mseleku said that the Department was far ahead with regard to these goals, and had therefore put its own targets on the processes. There were issues like HIV/AIDS and maternal and child death, which presented challenges, although these were systemic. There were also accounting problems, as the Department were using different sources of information to measure where it was in relation to their goals. These challenges were at an informational level. The Department had published a document in July this year which outlined the achievements and challenges regarding the health-related MDGs.

Ms Kalyan asked what the impact of the two-year medical internship programme was, and why it was regarded as a challenge.

Mr Mseleku responded that the move from one year community service to two year internship had resulted in a lack of community service doctors during the transition year. This had presented a challenge since community service doctors had not only been placed in urban areas. Thus when these people left there were very often no doctors in the rural areas. The Department had addressed this by doing everything it could to get the doctors to stay during the transition year. It had succeeded in about 70% to 80% of the cases.

Ms R Mashigo (ANC) referred to the hospitals under construction, saying that it had been mentioned that the hospitals would be finished by March 2008. However Slide 24 indicated that they would be finished in March 2009. The problem was that this gave rise to roll-overs. She asked if these hospitals fell under the hospital revitalisation programme. She wanted more information on how much had been budgeted for this purpose.

Ms Kalyan asked if there were budget rollovers. If this was the case, she asked why this had come about.

Ms Matsemela asked if rollovers resulted from the Department’s failure to allocate monies correctly. She asked if there were any fundamental problems around spending.

Mr Muller explained that part of the reason for the rollovers was the fact that the Department was currently in the last year of the comprehensive plan to refurbish laboratories. An additional R20 million was required for use in these laboratories. The bulk of the rollovers went to conditional grants. It was not possible to roll over recurrent costs, since rollovers were meant to fund capital costs. Rollovers did not simply relate to the National Department but also to the conditional grants controlled by the Department.

Mr Mseleku added that with capital projects there would invariably be rollovers. For example, if the builder was supposed to finish the project in March and then billed the Department after 15 March, the Department could not pay because capital funds had already been committed. The Department would therefore use the rollover for this purpose. This also applied in the case of the procurement of imported goods. This was because the time taken to receive and pay for the goods often extended beyond the financial year. Again the Department would use the rollover. Sometimes the National Department held the money back for the province, because the process of rolling over was much faster at national level.

Ms Kalyan referred to the fact that the Department would be training 3600 health professionals in TB management and control. She asked how it had chosen the figure and asked for more detail on the training.

Ms Kalyan asked if Government had a track and trace system in place to deal with TB patients.

Mr Mseleku explained that there were numerous challenges with regard to tracing MDR patients. These challenges had nothing to do with systems, but rather had to do with the households. For example the patients often lived in informal settlements where there were no addresses. The only way of tracing a patient was often doing a physical trace. There tended to be constant movement of people in South Africa between rural and urban areas. The challenges were therefore due to the fact that there was a need for more tracing teams to actually go door to door to trace patients.

Ms Kalyan referred the provision of nutritional supplements to 500 000 eligible people. She asked who determined eligibility and how these people would access the supplements.

Ms Kalyan referred to slide 18, in which it was stated that a syphilis survey would be conducted in 2007. She asked how this would happen, since 2007 had already passed.

Ms Kalyan asked if R10 million would really be needed to formulate plans to capitalise nursing colleges. She felt that R10 million was a huge sum of money to be spent simply on formulating plans.

Mr Mseleku said that if one considered that there were nine provincial departments, as well as the National Department; one could deduce that only R1 million was being allocated to each province. This money would have to cover staffing and infrastructure. There was a need for thorough planning when considering what was to be spent on the recapitalisation. R10 million was actually very little to achieve such thorough planning.

Ms Matsemela asked how far the policies on National Health Insurance had gone.

Mr Mseleku said that it was not possible to say that the process was nearing its end, because of its complexity. There had been challenges, which included debates held with National Treasury. Also, there were challenges with the information systems in the context of the high level of unemployment in the country. However the Department would find ways in which to implement this system and would not simply say that it was not possible to implement it. One way of doing this was by phasing it in. Medical Aids should compete on the basis of benefits provided and not against risk, as was currently the case. The National Health Insurance policy aimed to achieve coverage for all, including the low income earners and those who had no income at all.

Ms Matsemela said that the Department was constantly budgeting for the restructuring of the Medicines Control Council and asked how far its implementation had gone.

Mr Mseleku answered that the Department had appointed a committee to look at the Council independently. The process had been completed and the committee had submitted proposals. The Department was currently considering amendments resulting from recommendations made. These would be published for comment in April 2008 and would be tabled in May 2008. However the work of the Council had to continue as medicines had to be registered.

The Chairperson pointed out that the Department had the previous year indicated that the Traditional Health Practitioners Council had been established, whereas this year they were saying that it still had to be established.

The Chairperson noted that time was short. Some Members commented that it was important to interrogate the budget and Strategic Plan further and answer outstanding questions. It was decided that a special session would be arranged to continue with this in the following week.

Tobacco Products Control Amendment Bill: Department of Health Briefing
Mr Mseleku explained that the Department had tabled the Bill in Parliament the previous year. Parliament and the State Law Advisors had decided to split the Bill into a Section 75 and Section 76 Bill. The necessary process required before submission of a Bill to Parliament had therefore been completed prior to that process. All Parliament had done was to separate out the clauses into two separate bills. The text had remained the same.

On 27 February the Minister had reminded Parliament that the process had to be fast-tracked. Parliament then published the Bill on 29 February. He reiterated that the Department would merely be re-briefing the Committee on what it had presented at the time of the split.

The Chairperson said that this would be treated as an informal briefing, with a formal briefing to follow at a later stage. The memorandum of the 2008 Bill made provision for consultation to be done in accordance with procedures for a Section 76 Bill. In a meeting between the Deputy President, the Minister and Deputy Director General, there had been the view that splitting the Bill would lead to many complications. A letter had just been handed to the Chairperson, and this would be circulated to the Committee, giving advice on how the matter should proceed. The Committee would not take short-cuts. Even in fast-tracking a Bill, the Chairperson still insisted upon the completion of all procedures. This Committee did not want a repeat of what happened with the Termination of Pregnancy Bill, when it had been returned to the Committee because of the failure of another House to follow proper procedure. The Chairperson thus indicated that he would allow the informal briefing, but would at a later stage interrogate the meaning of ‘stakeholder consultation’ and Parliamentary consultation’ in terms of this Bill.

Mr Ramphelane Morewane, Chief Director of Primary Health Care, Department of Health, summarised the process briefly. The processing of the Section 75 Bill had been concluded on 23 February. The processing of the Section 76 Bill was now starting. The purpose of the Bill was to amend the Tobacco Products Control Act to comply with World Health Organisation treaty obligations, to close identified loopholes, and to strengthen the Act to better protect public health. The Bill would be adding new definitions, strengthening the section prohibiting advertising and sponsorship and provide for better labeling. Standards would be set for manufacturers and importers, sales would now be prohibited to those under 18 and vending machines would be re-located. He briefly summarised what was proposed under each of these broad topics.
Mr Waters asked if the anti-smoking lobby had been consulted. He asked to what extent the Department had consulted the tobacco companies

Ms Matsemela referred to the reference to electronic media and asked if the relevant Department had been consulted on this matter.

Ms Kalyan referred to the reasoning for the prohibition of the sale of cigarettes through post, electronic media or internet. Since it was stated that these media would promote the evasion of excise tax or duty payments, she felt that this matter had to be dealt with by the relevant Department. The issue of excise duties was not a health matter.

Mr Mseleku felt that, given the Chairperson’s comment that there had been some suggestions on how the Committee should proceed, he felt reluctant to answer the questions, but would prefer that they stand over to a formal briefing.

Ms Kalyan raised a point of order, saying that the Director General was referring to a letter but she had no knowledge what that letter said. She  requested the Chairperson to share the contents of this letter with the Members.

The Chairperson responded that he would circulate the letter the following week. Questions would be answered during the formal briefing in the following week. There were time constraints and he was unwilling to have the discussion under pressure.

The meeting was adjourned.


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