Department of Health COVID-19 Special Adjustments Budget; with Deputy Minister


08 July 2020

Chairperson: Dr S Dhlomo (NA, ANC) and Ms M Gillion (ANC, Western Cape)


DoH Presentation 

Meeting Summary


Video: Department of Health on Adjusted Budget & Revised Annual Performance Plan

The Department of Health (DoH) gave a joint virtual briefing to the Portfolio and Select Committees on the Special Adjustments Budget in light of COVID-19, with emphasis on the reprioritisation of health care related to the pandemic, earmarked fund priorities, and the COVID-19 component allocation to the HIV Grant. The Minister of Finance allocated R21.5bn to the DoH after the President’s announcement of a R20bn healthcare relief fund. DoH envisaged that the country will reach its peak of infections between July and September. DoH presented a summary budget of R37.6bn to National Treasury but it was allocated less than requested. The need for funds is much higher than the funds allocated, and the provincial departments will have to reprioritise their needs even further. R2.6bn of the original budget was reprioritised towards combating COVID-19 and DoH received an additional once-off COVID-19 allocation from National Treasury of R2.9bn.

Members’ concerns centred around the shortage of healthcare workers and ICU beds given the increase in COVID-19 infections in the community and healthcare workers, and the need for adequate personal protective equipment (PPE) to ensure that healthcare employees are protected. There was also the concern about accountability and transparency of provinces in spending their allocated budgets and if the DoH is assisting them to prevent mishandling and misallocation of funds. Members asked about the remuneration and nature of the work done by the Cuban Medical Brigade assisting South Africa in combating COVID-19. They asked when the COVID-19 peak would be over; about air and taxi travel and ventilation; alcohol-related trauma cases filling hospital wards; the psycho-social needs of healthcare and community workers; and the stigma attached to COVID-19 and the reluctance to go to quarantine and isolation sites. The focus of the DoH is to keep the hospital beds open and available for seriously affected patients, and to limit the surge of alcohol-related accidents to the emergency rooms.

Meeting report

Deputy Minister opening remarks
Dr Joe Phaahla, Deputy Minister of Health, thanked the Committees for the opportunity to engage on the COVID-19 Special Adjustments Budget. He expressed the Department's condolences for the Members and MECs who have succumbed to the disease during these troubling times. The DoH preliminary costed plan with its budgetary implications was submitted to National Treasury on 17 April 2020. On 21 April President Ramaphosa announced a relief fund of R20bn for the healthcare sector.

Department of Health (DoH) COVID-19 Special Adjustments Budget
Dr Sandile Buthelezi, DoH Director-General, stated that the delegation will brief the Committees on how the department plans to utilise the relief fund in response to COVID-19, considering the increased demand for laboratory services, hospital services and human resources.

Mr Ian van der Merwe, DoH CFO, said that the DoH presented two costed COVID-19 scenarios to National Treasury in April 2020. The optimistic scenario in combating the COVID-19 pandemic was R14bn in the initial stages of engagements. The pessimistic scenario amounted to R26bn. These scenarios did not include other critical costed COVID-19 elements and necessities identified at a later stage. The costing model was recalibrated in May 2020 and opted for a middle ground scenario. DoH envisaged that the country will reach its peak of infections between July and September. DoH presented a summary budget of R37.6bn to National Treasury. The need for funds is much higher than the funds that have been allocated by Treasury, and the provincial departments will have to reprioritise their needs even further.

Breakdown of the DoH Special Adjustments for 2020/21
The original baseline budget first published in the February 2020 Estimates of National Expenditure was R55.5bn. The new baseline budget is R58.4bn.

Of the R58.4bn, R5.5bn is earmarked for COVID-19. The R5.5bn is made up of R2.6bn that DoH reprioritised from its original budget and R2.91bn is a once-off COVID-19 allocation from  Treasury.

The additional once-off COVID-19 allocation of R2.91bn is ring fenced for the Cuban Brigade (R283.1m), general funding (R2.53bn) and National Institute for Communicable Diseases (NICD) (R96.7m).

The normal adjustments budget will still take place during September, which would allow the DoH to further reprioritise its funds if needed.

Direct and Indirect Conditional Grants
The following areas are expected to be fully or partially funded through the new COVID-19 component under the direct HIV Grant: PPE, contracting of private critical care beds, laboratory tests by National Health Laboratory Services (NHLS), thermometers for community health workers, and Cuban Medical Brigade.

The reprioritised budget for COVID-19 from direct conditional grants was R1.9bn: National Tertiary Services Grant (R297m), the HIV, TB, Community Outreach Services (COS), Malaria and HPV Grant (R604m), Health Facility Revitalisation Grant (R1.06bn), and National Health Insurance Grant (R22m). The reprioritised budget of indirect conditional grants was R538m.

NDoH earmarked funds for COVID-19 priorities:
The 640m NDoH reprioritisation approved by Treasury as made up by the reprioritised indirect grants (R538m) and the R101m NDoH voted funds was earmarked as follows: improving COVID-19 communication to the public (R50m), ICT capabilities (R38.4m), buffer stock (R205m), port health services (R75.5m), Cuban Medical Brigade at national level (R41.9m); R200m for completion of infrastructure component of KwaZulu-Natal field hospital; R29m shifted to COVID-19 component under the HIV Grant.

Provincial Allocation of HIV Grant: Covid – 19 Component

The new COVID-19 component placed under the HIV Grant is R3.45bn. This is comprised of R604.7m reprioritised from within the HIV Grant, R29m reprioritised from indirect grants, and R2.81bn of the new allocation from National Treasury.

The reprioritized funds (R604.7 million) are divided according to the same provincial allocation; the Cuban Brigade is allocated (R283.1 million) based on the number of cadres allocated per province; two variables were used for the balance of the allocation (R2.53 billion): Uninsured Population 70% and Transmission Rate 30% according to active cases as at 18 June 2020.

Way forward:
DoH is awaiting the tabling of each province's Special Adjustments Budget. The provincial departments revised budgets for the remaining R15 billion from the Supplementary Budget proposal of R21.5bn for COVID‐19 health care spending will be collated. The provincial health departments will submit their 2020/21 revised business plans. The individual allocations to provinces will then be provided to the Committees.

Ms A Gela (ANC) thanked DoH for the presentation. The ANC moves to support the budget as allocated. She noted the recent oversight visits to hospitals in Gauteng province. Concerns were raised during these visits which included the shortage of staff due to COVID-19 infections. DoH has employed temporary backup staff who can assist if the situation faced by hospitals worsens. PPE needs to be addressed to ensure healthcare employees are protected. Hospitals have a shortage of ICU beds which is crucial. She said DoH is working positively to respond to the COVID-19 pandemic. She asked for clarity about the reprioritisation of the R604m within the HIV Grant. Will that amount be allocated to COVID-19? DoH was requested to share a breakdown of the provincial allocations with the Committees.

Ms E Wilson (DA) noted that a large part of the R21.5bn relief package would be transferred to the provincial health departments which have to submit business plans on what they what they use the funds. There have been challenges over the last few months with poor planning and mismanagement in the provincial departments. There cannot be any improper expenditure – given the COVID-19 pandemic. Have the provinces been given protocols on how to create their business plans? There is a severe shortage of emergency personnel and in some places one ambulance is required to cover 21 000 sq kms. What is the DoH strategy for dealing with the staff shortage? There can be no misallocation of funds during this crisis.

Mr M Sokatsha (ANC) emphasised that the ANC supports the Special Adjustments Budget to allow DoH to carry on with the work it is doing. Given the history of spending by provinces, will the provinces be able to spend the grants allocated or will the unspent amount be surrendered to National Treasury?

Ms S Gwarube (DA) said that the President announced a relief fund of R20bn for the provinces to fund their health response to COVID-19. The Minister of Finance came to Parliament and stated that a substantial portion of the relief fund refers to funds already allocated and not “new funds”. Provinces would have to reprioritise their current health budgets to adapt to their COVID-19 needs, as it is a repurposing of existing grants to the provinces. The provinces had assumed reprioritising their health budget but that they would also receive an equitable share of the relief fund to augment their response to the pandemic. She asked for the amount of funds sent to the provinces from National Treasury and NDoH. How much money is purely for use by provinces for their COVID-19 response? If the provinces are not funded equitably and properly, South Africa will not be able to fight the pandemic. In addition to provincial inadequate funding, they are also expected to part-fund the Cuban Medical Brigade. This requires revision between NDoH and Treasury.

Ms H Ismail (DA) said South Africa has a longstanding relationship with Cuba and the Cuban Medical Brigade is welcomed. It is the expectation of South Africans that the Cuban Medical Brigade should support us free of charge, yet they have been remunerated. Can DoH clarify this matter given the reasonable expectation from our people? The World Health Organisation (WHO) said that there is a gross shortage of condoms and other HIV protective measures. How is South Africa affected? We want our communities to be taken care of.

Mr T Munyai (ANC) said that it is important not to misrepresent the Minister of Health about the Special Adjustments Budget as he is not present at the meeting. The political dynamics at play will not work. He stated his distaste for people who do not understand the benefits of having Cuban doctors and the contribution Cuba made to the liberation of this country. Why are the budgets the same for different provinces who are not yet affected by COVID-19?

Ms D Christians (DA, Northern Cape) stated her concern for the huge budget reductions for building infrastructure. Provinces have their own discretion to spend their reprioritised allocations. Is there a concern that the expenditure will be done correctly and according to the needs of the people in that province? The Committees recently did oversight at a quarantine and hospital site in Namaqualand. There were only five rooms, without beds or windows. What accountability and transparency measures are in place for the provinces in spending their reprioritised budget? How will NDoH hold the provinces responsible? What is the long-term impact of the shortage of HIV medication and how will it impact the country?

Ms S Luthuli (EFF, KZN) said that she the presentation is not clear on the details of the funding allocations to the provinces. Is the additional R2.9bn going to be enough for DoH to deal with COVID-19? The number of healthcare staff members infected with COVID-19 has increased. What support are the provinces given in providing mental health and trauma support for their healthcare workers? The CFO needs to be clearer on whether any corruption in the COVID-19 health response has been uncovered.

Mr M Bara (DA, Gauteng) welcomed the presentation. He replied to the concern by Mr Munyai about the misrepresentation of the Minister of Health by stating that Members are merely seeking clarity on crucial matters to do with the COVID-19 health response. No-one questions the presence of Cuban doctors in the country, and the Western Cape accepted its allocation of Cuban doctors. To what extent is the NDoH playing its part in assisting the provinces to ensure efficient reprioritisation of their budget allocations? What is it doing to ensure that the funds allocated are used for its determined purpose and not mishandled or misallocated? Ambulance operators are not certain if or how to assist COVID-19 patients. What is the DoH response to this?

Ms A Maleka (ANC, Mpumalanga) asked how long the Cuban Medical Brigade is scheduled to be operational in the country. He asked what the  additional R96m funds given to NICD will be spent on.

Mr M Nchabeleng (ANC, Limpopo) asked for clarity on the work done by the Cuban Medical Brigade. How many students are taken by the Western Cape Government to study medicine and be trained in collaboration with Cuba? We need more doctors after the COVID-19 pandemic is over. He said that the ANC supports the Special Adjustment Budget as presented to the Committees.

Dr S Dhlomo (ANC), Portfolio Committee Chairperson,  asked if DoH can provide information on when the country will be past its COVID-19 peak as there is information coming from various sources on this.

Ms M Gillion (ANC, Western Cape), Select Committee Chairperson, asked about the transport of patients as the emergency response system is inadequately addressed in the Special Adjustments Budget. Isolation is still a problem. Some people cannot go into isolation due to not having enough space to do so. However, there is still a stigma attached to COVID-19 positive patients having to go to quarantine sites. How far is DoH in rolling out the process of advising people about going to quarantine sites and working to reduce the stigma of being tested positive for COVID-19? She said the ANC fully support the DoH Special Adjustments Budget.

Deputy Minister Phaahla thanked the Members for raising their questions and concerns. He replied that a major challenge associated with the surge of the pandemic is the stigmatisation of COVID-19 patients. The DoH line of defence is that when people are infected, they are diagnosed, tested, treated if positive or quarantined, and contract tracing is conducted for people they came into contact with. The healthcare system must not get overburdened. If people do not take up the opportunity to isolate or self-quarantine in facilities paid for by the State, then DoH must investigate what the problem is. It is crucial to mobilise the leadership of communities to assist the provinces and healthcare professionals in combating the pandemic.

The Deputy Minister replied to the expectation of the non-remuneration of the Cuban Medical Brigade. The Cuban doctors are not compensated fully considering their level of skill and experience as per the South African scale of remuneration. They are compensated at a basic level. They must be remunerated for their labour to be able to support their own families. It is unreasonable to expect them to work without any form of remuneration given the challenging circumstances of the COVID-19 pandemic.

Dr Buthelezi replied about contracting with the private sector. NDoH is overseeing the process and the country-wide tariffs have been established. It is up to the provinces now to engage with the the private hospitals and SMMEs within each province. The Western Cape, Gauteng, and the Eastern Cape are under severe pressure due to COVID-19. One of the priorities is to ensure that no patient is left without a hospital bed if they need it, whether it is in the public or the private sector.

Dr Buthelezi replied that it was necessary to reprioritise the HIV Grant funds to make them available for the health response to combat the COVID-19 emergency. DoH is expecting another R200m within the next few weeks which will relieve pressure to ensure that services to HIV patients can be sustained. DoH has facilitated various programmes to address the psycho-social needs of healthcare and community workers and has collaborated with other institutions to provide counselling services. Caring for these workers’ mental health is a priority for DoH and the provincial health departments.

DoH worked very closely with the Heads of the provincial health departments to reprioritise their budgets. NDoH’s responsibility is to ensure that the business plans submitted by the provinces are in line with national guidelines and DoH priorities. DoH is working with the Department of Public Works and Infrastructure (DPWI) to ensure that the quarantine and isolation sites are up to standard and available to patients who have to use them, especially those individuals who cannot self-quarantine or isolate at home. The NICD is working hard to build up the capacity of the healthcare system to sufficiently diagnose, test, and quarantine patients who test positive for COVID-19.

Mr van der Merwe replied that the funds of the HIV Grant remain within that grant, but funds have simply been reprioritised towards COVID-19 activities – while there is still flexibility on how the grant is applied. DoH took note of the Members’ comments on the shortage of staff and ICU beds. The DoH request for funding was larger than the allocated budget it received. DoH had to make its case to the National Treasury on its budget allocation. The COVID‐19 healthcare relief fund as referred to by Ms Gwarube would have to be reclaimed by the provinces to be able to determine what the provincial equitable state allocations are. DoH provides grants to provinces according to their business plans submitted to National Treasury after their allocations were gazetted. The protocols and guidelines designed by DoH are provided to the provincial health departments to determine their needs according to their provincial number of COVID-19 infections. The provinces will receive additional funds on top of the funds they had to reprioritise. DoH does not foresee any under-expenditure on the building and infrastructure grant for the provinces because the provincial needs for improving and building infrastructure has increased due to COVID-19 and because of prior commitments and existing projects within the provinces. It is expected that the infrastructure grant will be spent on building field hospitals and quarantine sites.

Mr van der Merwe replied that there is a worldwide shortage for the supply of condoms, but the HIV Grant does include components to provide for HIV protective measures. The NHLS has not yet billed provinces for the testing conducted, but each test costs R400 and the NHLS have received grants from DoH. The provincial health departments made provision for the payment of tests in their allocated budgets.

Prof Glenda Gray, South African Medical Research Council (SAMRC) President and CEO, responded to the Chairperson's question on when South Africa can expect its COVID-19 peak and when the pandemic would be over. COVID-19 circulates for two to three seasons. COVID-19 is very contagious and scientists now believe that the disease is airborne, and ventilation becomes crucial. Masks should be used as much as possible and social distancing must be adhered to. Northern Hemisphere countries, such as the United States of America, have experienced more than one peak of infections. This can be attributed to the non-compliance of people in wearing masks and adhering to basic hygiene practices. COVID-19 is spread easier when people congregate in closed areas or within large crowds. It is harder to ventilate and protect people during the winter season because of the cold. Taxis keep their windows closed during the freezing weather and are often crowded.

The DoH stated that COVID-19 will be with us for a long time, unless a vaccine is created. As such, the focus of DoH is to keep the hospital beds open and available for seriously affected patients, and to limit the surge of alcohol-related accidents to the emergency rooms. The case fatality rate in South Africa is less than 2%, which is low compared to other countries. From the beginning of the pandemic until now, there has been a 25% reduction in the mortality rate within the private healthcare sector. It is crucial to ensure that there is no interruption in the oxygen supply for the country, and that elderly people and patients with co-morbidities are monitored closely. The Special Adjustments Budget is important because it allows DoH to allocate its resources to fight the COVID-19 pandemic.

Further questions
Chairperson Dhlomo stated the need for young people from disadvantaged backgrounds to be picked up by the provincial governments to study or be trained in healthcare in collaboration with Cuba. This will be beneficial in the long run to strengthen the healthcare system of South Africa.

Mr A Shaik Emam (NFP) asked for clarity on the statement that COVID-19 is airborne. How can the Department of Transport then state that it is safe to travel by air? What is DoH doing to move to a preventative system for combating COVID-19 rather than allowing people to get sick and overburdening the healthcare system? There needs to be a joint effort between DoH and other national departments to combat the pandemic. Why is DoH not going on a communication drive to inform our people of the dangers of the increase in alcohol-related trauma cases in fighting the disease?

Ms M Sukers (ACDP) emphasised the concern around community transmission. How will DoH upscale its community efforts to reach people who are living with co-morbidities to get their conditions under control? How will DoH reach people at a community level to inform them of COVID-19 related news?

Dr Buthelezi replied that the National Joint Operational and Intelligence Structure (NATJOINTS) is a technical committee that falls under the National Coronavirus Command Council (NCCC) where DoH engages with other national departments in their response to the COVID-19 pandemic, to ensure that no department is left behind. On alcohol and tobacco, DoH has advised the NCCC on the problems faced by the increased use of hospital beds for alcohol-related trauma incidents. People with co-morbidities experience exacerbated COVID-19 symptoms and DoH is ramping up its communication at a local level about this to increase public awareness about the pandemic.

Prof Gray replied that airplane itself is not the problem but the airports do pose a significant risk for people to contract COVID-19. DoH is more concerned about taxis because it is a heavily used medium of transport and they are often crowded. When the prohibition on alcohol was lifted, DoH noted an increase in gender-based violence and an increase in the number of hospital beds used for alcohol-related trauma incidents. These are serious concerns that need to be addressed.

Chairperson Dhlomo thanked DoH for its presentation and for engaging with the Members on their questions and concerns.

The meeting was adjourned.