The Parties to this Health Charter earnestly and sincerely desire to facilitate and effect transformation of the health sector in the following key areas:

1. Access to health services
2. Equity in health services
3. Quality of health services
4. Black Economic Empowerment

They acknowledge that it is essential to ensure the sustainability and efficiency of the health sector in order to achieve the transformation goals for each of these areas.

They further acknowledge the urgent need to effect transformation of the national health system in a co-operative, constructive and mutually beneficial relationship in such a manner as to reflect the diversity and meet the various health care needs of the total population of South Africa.

THEREFORE the Parties -

1. That there is a legacy of apartheid in terms of which access to and distribution of health care and ownership of health care establishments was grossly inequitable and disadvantaged the vast majority of South Africans on the basis of their race, gender and economic status;
2. That there is an urgent and compelling need to effect transformation throughout the South African health sector in order to remedy the wrongs of the past;
3. That the government of the Republic of South Africa is mandated in section 7(2) of the Constitution to respect, protect, promote and fulfil the rights in the Bill of Rights;
4. That the government of the Republic of South Africa is mandated in section 27 of the Constitution to take reasonable legislative and other measures, within its available resources, to achieve the progressive realisation of the rights of access to health care services, including reproductive health care, sufficient food and water, and social security, including appropriate social assistance where people are unable to support themselves and their dependants;
5. That the rights in the Bill of Rights may be limited only in terms of section 36 of the Constitution;
6. Generally that the powers and functions, roles and responsibilities of the national, provincial and local spheres of government and of the legislature, the executive and the judiciary are as set out in the Constitution and that such powers and functions, roles and responsibilities may not lawfully be fettered or restricted by any other law, agreement or transaction;
7. That the government in 2004 passed the National Health Act No 61 of 2003 into law which is intended inter alia to remedy the inequities of the past in the distribution of health care and to create a national health system that is patient centred and for the good of all;
8. That it is the constitutional role and function of the national government of the Republic of South Africa to exercise executive authority by -

1. implementing national legislation;
2. developing and implementing national policy;
3. co-ordinating the functions of state departments and administrations
4. preparing and initiating legislation
5. performing any other executive functions provided for in the Constitution or in national legislation;

1. That the national, provincial and municipal spheres of government have the power and the duty to deliver health services to the people of the Republic of South Africa;
2. That within the context of paragraphs 1 to 6 of this Preamble, when read together with the Constitution and the laws made by the Government of the Republic of South Africa, the private health sector has an important and meaningful role to play in –

1. working with the Government of the Republic of South Africa in a spirit of constructive, mutual co-operation and respect in order to fulfil the government’s constitutional mandates;
2. contributing to the health and wellbeing of the people of South Africa through the provision of products and services in accordance with internationally recognised or legally prescribed norms and standards, as the case may be, with the object of promoting, maintaining, preserving or restoring human health and wellbeing;
3. ensuring that while it makes sufficient profits from its business activities to remain financially sustainable in the long term, the products and services it delivers provide value for money to consumers;
4. conducting its business in a manner that it is ethical, honest, and fair and that satisfies the needs of consumers of health products and services,
5. ensuring the safety of consumers and the adequate protection of both people and the environment in the use of products and services that may be dangerous to health or life;
6. respecting and observing the right of consumers to information and to be protected against dishonest or misleading advertising and labelling;
7. accepting and respecting the power of consumers to choose from a range of products and services offered at competitive prices with the assurance of externally recognised and accepted standards of quality;
8. recognising the right of consumers to fair compensation for misrepresentations by providers of goods and services, for the failure of goods and services to adequately address the health needs of consumers and the failure to comply with externally recognised and accepted standards of safety, quality and efficacy;
9. ensuring that the rights of patients reflected in the Patient Charter as published by the National Department of Health are observed;
10. upholding the rights of providers of health care products and services to human dignity, a safe working environment that is not detrimental to their wellbeing and to psychological and bodily integrity;

1. for the public and private health sectors to constructively engage in dialogue and discussion on health matters;
2. for the interests and views of the private sector to be taken into consideration by the government when introducing legislative and other reform;
3. for the rational and equitable distribution of health services in the Republic of South Africa;
4. to achieve the most effective, economic and efficient utilisation of resources within the health sector, including human resources, so as to adequately address the health needs of the greatest possible number of people in South Africa;
5. to establish a rational and consistent framework for public-private initiatives within the South African health sector within the parameters set by the Public Finance Management Act No 1 of 1999 and the regulations thereto. In this regard the Parties acknowledge that PPIs –

1. must be developed in accordance with a clear framework that allows for a thorough investigation of the case for each PPI, a sound and cost effective implementation and sufficient public reporting mechanisms;
2. must contribute to the overall sustainability of the national health system;
3. must contribute to promoting equity of access to primary care;
4. must contribute to promoting equity of access to affordable health care and strengthened public hospital care;
5. must contribute to promoting equity in financing of health services;

1. to create for South Africa a health system that is coherent, efficient, cost-effective and quality driven and which optimises the utilisation of public and private sector resources within the health system for the benefit of the entire population;
2. for the public and private sectors to work together in a relationship of mutual co-operation, trust and respect in order to improve the scope, accessibility and quality of care at all levels of the health system;
3. to the undertakings and commitments reflected in this Charter with regard to each of the four areas of transformation;
4. to uphold and give effect to the principles and the spirit of this Charter in the course of their activities as stakeholders within the South African Health Sector; and
5. that the weighing of various factors shall be in terms of a balanced scorecard that incorporates all of the areas of transformation outlined in this Charter.

In this Charter, except where the context clearly indicates a contrary intention the following words and phrases have the meaning ascribed to them below:

"Affirmative means targeted procurement of commercial goods

Procurement or and services from persons disadvantaged by

(e) preferential procurement; and

1. investment in enterprises that are owned or managed by black people; (definition from BEE Act No 53 of 2003);

1. relevant health policy and the need for access to policy makers
2. range of health services required;
3. nature and type of health services required;
4. necessary human and other resources and infrastructure;
5. need for communication and information concerning health services;
6. other relevant factors specific to the particular community.

3. A specific challenge with regard to information in the context of access to health services is to make available-

1. information relating to health and health services options to all patients, providers and employers in order to promote informed decision-making;
2. information designed to address the particular needs of vulnerable groups, including people living in rural and under-serviced areas, and the illiterate;
3. information relating to the purchase of health insurance products (i.e. value for money, richness of benefits); and
4. information relating to quality of care (i.e. appropriateness, necessity, cost-effectiveness).

Improved "access" requires improved efficiency, since increases in efficiency should lead to increased access. The sustainability of the national health system is dependent upon its efficient use, management and generation of resources including financial, human, technological, scientific, clinical, managerial, infrastructural and resources in the area of materials and equipment and research and development.

Inefficiency in the national health system threatens its sustainability since it leads to maldistribution of resources, and negates or undermines policies and procedures designed to give effect to the distribution, allocation or utilisation of resources. Policies and procedures should be developed with an awareness of the need for sustainability of the national health system and with a view to the elimination of inefficiencies within the system that could arise for instance from wasteful duplication of resources, under-utilisation of resources and cost ineffective application of resources.

2.1.4 Human Resources

1. There is no common baseline of information involving certain key parameters with regard to human resources. A baseline is a fundamental step necessary to establish targets with regard to human resources within this Charter. There is currently inadequate benchmarking of salaries and conditions of service within the health professions or with regard to health care personnel generally.

1. A further challenge is to eliminate harassment from workplaces since it undermines access to health services by consumers and affects the availability of human resources to perform those services.

2.1.5 Financing

2.2.5 The general challenges with regard to equity in health services are –

1. The lack of availability of a minimum defined basic package of health services to which everyone can have access irrespective of their ability to pay;
2. Discrepancies in the quality of health services across different groupings within the socio-economic spectrum;
3. To eliminate stigmatisation of persons by the broader community, health personnel and health establishments on the basis of health conditions, reproductive decisions or treatment choices;
4. To eliminate unfair discrimination on the basis of sex, sexual orientation, gender, disability, health status, race, culture, religious beliefs and other prohibited grounds, from within health establishments, the health professions, health services and the broader communities they serve. Unfair discrimination consists of acts or omissions, policies, laws, rules, practices, conditions or situations which directly or indirectly impose burdens, obligations or disadvantage on, or withhold benefits, opportunities or advantages from persons on one or more legally prohibited grounds;

2.2.6 Human Resources

2. Harassment also impacts on equity in the national health system since it is unwanted conduct which is persistent or serious and demeans, humiliates or creates a hostile or intimidating environment or is calculated to induce submission by actual or threatened adverse consequences. Harassment is related to sex, gender or sexual orientation or a person’s membership or presumed membership of a group identified by one or more of the prohibited grounds or a characteristic associated with such group.

2.2.7 Financing

These are challenges that the Parties to this Charter will address using the methods and strategies set out in Chapter three.

2.3.2 General challenges in the area of quality in health services include –

1. Failure within the national health system to focus on the patient in terms of his or her social and clinical needs, health service options and health service choices;
2. Failure to measure health outcomes;
3. The absence of a caring ethos within the health professions;
4. Poor or inadequate quality assurance and quality measurement programmes in health establishments;
5. Inefficient or ineffective utilisation of health services in order to achieve improved quality;
6. Inadequate feedback by mechanisms such as patient complaint systems into the planning and implementation of health services.

2.3.4 Human Resources

2.3.5 Financing

3. With regard to procurement, joint ventures, enterprise development and control, and other business activities, in the context of Broad Based Black Economic Empowerment it is necessary to be aware there are different varieties of BEE ventures.

1. Black companies i.e. companies that are more than 50% owned and controlled by black people;
2. Black empowered companies i.e. companies that are more than 25% owned by black people and where substantial participation in control is vested in black people;
3. Black influenced companies i.e. companies that are between 5 and 25% owned by black people and with participation in control by black people;
4. Black women-empowered enterprise i.e. companies that are more than 30% owned by black women, and where substantial participation in control is vested in black women;
5. Indirect ownership is where an empowerment shareholder represents a broad base of members such as employees (to the extent that the options have actually been exercised), collectives and/or communities, or where the benefits support a target group, for example black women, people living with disabilities and the youth. Shares are held directly and indirectly through, for example non-profit organisations, trusts and pension funds. At the same time, directors and management of the groups should predominantly comprise black people;

3. A key challenge in the context of broad based BEE is to ensure that it is implemented in all of the following areas -

1. Direct (BEE shareholding) and indirect ownership (employee or trust/community shareholding schemes);
2. management & control (by Black people);
3. Procurement (from BEE companies for example, Affirmative Procurement or Preferential Procurement);
4. Enterprise development;
5. Investment in joint ventures with BEE companies (in sustainable Department of Health or other accredited BEE programmes involving for instance, PPIs insofar as such programmes are proven to lead to, or contribute to broad-based BEE within the national health system);
6. Employment equity and skills development;
7. Corporate social investment.

3. A further major challenge in the context of BEE within the health sector is the lack of a common vision. Despite many players in the industry pledging allegiance to making the national health system robust and sustainable, overall health outcomes thus far do not give an indication that all are focusing on the same goal. The debate of quality versus profits still dominates discussions of transformation in many instances. It is therefore necessary to create a platform for the sharing of a common vision. Once there is a common vision impact indicators and measurable outcomes can be identified to evaluate the levels of participation of the Parties in working towards and contributing to the common vision.
4. There are a number of general challenges to BEE. These include the following –

1. Whether equity should simply be transferred to those who were previously excluded or should they be obliged to acquire it in the same way as non-historically disadvantaged individuals. If so how could this be adequately financed given the significant inequities that still exist?
2. How should transformation in this area be monitored?
3. Empowerment is necessary in real terms which enable Black people to take up positions, opportunities and interests that were previously denied them. For instance a few years back a few years back ownership of pharmacies was opened to non-pharmacists but it did not lead to any noticeable increase in ownership of pharmacies by black people.
4. Ownership of enterprises by health professionals raises some serious professional and ethical challenges. It is important that there are sufficient safeguards to ensure that with the rise in equity ownership by health professionals the challenges of unethical conduct and business practices based on perverse incentives are addressed.
5. A process of comprehensive transfer of ownership to, or acquisition of ownership by, black people throughout the value chain is required in the health sector. The object of this process is to give practical effect to the recognition that apartheid and other discriminatory laws and practices resulted in excessive concentrations of ownership and control in the hands of the minority within the health sector and the need to redress this imbalance. Within this process, the imbalance must be remedied with particular regard to black people and with the object of the opening up of the health sector to ownership by greater numbers of South Africans.

3. Human Resources

(a) This challenge is a challenge shared with institutions of higher learning. How far these institutions transform and whom they produce for this country is directly linked to the speed with which the health sector can be transformed.

Even though the skills development levy and affirmative action legislation are in place, there is little evidence to suggest that the health sector has made significant progress in addressing this issue.

(b) Transformation of management echelons relates more to affirmative action legislation (Employment Equity Act No 55 of 1998). Despite the many years that this Act has been in place there is still paucity of representation at senior management level in the private sector. Not many black people have been promoted to management level. Lack of movement in this area is said to have led to a lot of job-hopping. The challenge is to ensure that genuine transformation takes place at this level?

(c) It is important that the process of transforming the workplace covers the total value chain. In identifying the appropriate levels at which changes must take place, the following broad categories are identified;

(i) Executive Management- this includes the board of directors, members of the Executive Committee (Exco) and persons earning more than R600 000 p.a.

(ii) Senior/Middle Management – includes persons that report to members of Exco and any person earning between R 400 000 and R 599 999 p.a.

(iii) Junior Management – includes supervisors and heads of section and any person that earns between R 200 000 and R 399 999 p. a.

(iv) Professional and skilled workers – includes persons who are not in management and are employed because they have special knowledge or particular skill.

(d) The question of the quality and orientation of leadership of company boards is a major issue of concern. The presence of black people in the local or even international boards of multinational companies does not necessarily guarantee the implementation of BEE and the other principles of this Charter. The challenge is how to empower Black people who sit in corporate governance provisions so that they are in a position to be able to influence or drive the implementation of the initiatives envisaged in the Charter.

4. Financing

1. Health care financing faces the challenge of geographical inequities in the provision of health care in South Africa, particularly looking at high and low density areas, rural and urban and making specific interventions to foster a more equitable approach. Currently health care financing is skewed to the urban and private sector.
2. There is very little development financing in the health sector. What financing is available is primarily finance to facilitate provision of health care services at the same returns that would be charged in the ordinary course of financing businesses. Often the cost of finance is so high that it is considered prohibitive. Investments in the health sector by Development Finance Institutions compete with other investments in their portfolio. Without development financing the cost of entry for black persons and black businesses in the health sector prevents the achievement of the objectives of this Charter.
3. Development Financing is considered to be "soft funding" in that financers are expecting lower returns and with the financing taking place over a longer duration, i.e. very similar to infrastructure financing.Low cost service providers are still heavily dependent on the finance provided at costs that are not sensitive to the special Healthcare need for low cost solutions. Townships, rural areas and poor provinces are considered very risky, and as a result, battle to attract appropriately structured funding solutions. Sometimes finance takes to long to be made available that people become discouraged. This kills the spirit of entrepreneurship. While there is a lot of talk around the need for low cost Healthcare services, financially there is very little that is being done to address such a need.
4. There is very little BEE in the Health Care sector except for a few recent transactions at equity level. The sector remains largely untransformed and the involvement of BEE is made more difficult by the concentration in the supply side and the funding side of the private sector.
5. The absence of low cost solutions is largely due to the high cost of providing health care on the supply side with high concentration of services and vertical integration. This can be seen by the limited growth in the private sector. Linked to the high costs are the current business practices and pricing models in the provider market.

The Parties hereby resolve and commit to move towards a coherent, unified health system offering financial protection for all the population in accessing a nationally affordable package of health care at the time of need and to improve access to health care services by -

1. Investigating the feasibility of the creation of a category of independent practitioners who will be contracted to the state in order to improve access to health care at the primary level;
2. Strengthening working relations between independent private practitioners and public services in the provision of primary health care;
3. Appropriately increasing the range of health services available to under serviced communities. The Parties commit to tailoring solutions which meet the needs of the particular community concerned;
4. The provision of information designed to address the particular needs of vulnerable groups, including people living in rural and under serviced areas and the illiterate;
5. Entering into public private initiatives in order to more efficiently utilise the available resources, reduce inequities and improve access to both provision and financing of health services for the benefit of all;
6. Not refusing anyone emergency medical treatment irrespective of whether or not they are able to pay.
7. Providing or sponsoring health profession education, training and development which includes -

1. Formal health training and education;
2. Continuing Professional Development education, sponsored programmes and events in relevant categories of health care personnel;
3. Management & Leadership programme provision or sponsorship;

1. Establishing a health sector education trust by contributing to provide financial support to students who wish to study in the health field.
2. Using existing funding mechanisms such as the skills development levy to more efficiently and effectively provide financial support to students who wish to study in the health field.
3. Embarking upon a sector marketing campaign and a career education campaign to introduce pupils and students to the careers and work opportunities within the national health system.
4. Exploring ways of marketing the health professions to attract home qualified South Africans.
5. Developing indicators within 6 months of the finalisation of the Charter to measure improved/increased access, in order to track the extent of progress made, and evaluate the sustainability and quality of such access.

The Parties hereby resolve and commit to improving equity in health services by –

1. Developing a minimum defined basic package of care that is available to all patients in both the public and the private sectors regardless of the ability to pay;
2. The elimination of inefficiencies from health service delivery;
3. Implementing a policy of zero tolerance of unfair discrimination by health care personnel which will be communicated to all health care personnel employed by them together with the nature of the disciplinary steps that will be taken;
4. To develop and implement a Human Capital programme that fairly plans for and meets the human resources requirements of South Africa over the next 15 years. Such programme will address the demographics and diversity of the people being trained and developed in the national health system;
5. Support existing initiatives to increase the number of black people and young women matriculating in higher grade science, mathematics and computer science;
6. Setting annual targets for recruiting, training and retention of health care personnel;
7. Setting out milestone leadership programmes with curricula that meet the needs of the Health organisations;
8. Eliminating harassment from workplaces through a policy of zero tolerance that is effectively and continuously communicated to staff and patients alike;
9. With regard to particular health service needs, considering whether a PPI would be an appropriate and feasible means by which the required improvements to access, equity, quality and efficiency within the national health system can be achieved;
10. Developing a code of practice on the ethical recruitment of health professionals;
11. Putting in place programmes that result in the broader representation of black persons in the workplace. It is the target at all levels in the chain that by 2010 the workplace will be 60% black across the value chain and will comprise 50% women. Further, it is the target that by 2014 the workplace will be 70% black across the value chain and shall comprise 60% women.

The Parties hereby resolve to improve quality in health services by -

1. Conducting regular and sustained training programmes for health care personnel on the rights of patients and the Batho Pele principles;
2. Implementing comprehensive Employee Assistance Programmes to support and assist the health care personnel employed by them;
3. Committing to the development of low cost health service and financing options that are accessible to middle and low income groups and that assure value for money in terms of health outcomes;
4. The implementation of benchmarked quality assurance programmes that include a quality monitoring system and the measurement of health outcomes;
5. The consideration of complaints by users of the national health system and the creation of mechanisms whereby such complaints are used to inform the planning and delivery of health services so as to be able to continually improve the quality of health care

The Parties commit themselves to the transformation objective of equity in ownership and more particularly broad based black economic empowerment employing the strategies outlined in terms of section 11 of the BEE Act and this Charter.

1. Each of the firms or businesses in the healthcare sector shall be at least 26% owned and/or controlled by or black people. This process should commence immediately.
2. Further, by 2010 at least each of the firms or businesses in the healthcare sector shall be 35% owned and/or controlled by black people.
3. Equity ownership by black people shall increase to 51% by 2014.
4. Regulations will be developed under the National Health Act that facilitate Broad-Based Black Economic Empowerment. Procurement policies and processes that are favourable to firms owned or controlled by black people will be implemented. The stakeholders in the healthcare sector also commit to supporting government on these initiatives. In this regard the following areas should be noted for special focus:

1. hospitality services and general procurement
2. Pharmaceutical products and medicines
3. medical equipment
4. professional services
5. IT systems
6. Distribution and wholesaling services

1. At least 60% of all procurement shall be from black owned firms or black persons by 2010. By 2014 this should increase to 80%.
2. The private sector commits to expenditure of a fixed proportion of their annual income on social responsibility projects which include new and existing providing funding and resources for new and existing community development projects.
3. Development finance must be derived from three sources, partially from DFIs, particularly where the risk profile excludes other sources, with the majority sourced from mainstream financial institutions and vendors themselves.
4. Development Financing must be used –

1. to fund small black owned businesses either entering into or wishing to expand their operations in the health sector. It is essential that existing risk and return profiles are modified with the financing over a longer duration;
2. to finance PPIs and other initiatives to promote the objectives of this Charter.

1. There must be a concerted team effort from both public and private sector to approach parastatal funding institutions to come up with ways of funding BEE transactions in the health sector as it is not affordable for current banking institutions to fund such transactions.

4. Implementation

Implementation of the Health Charter will be a process that allows for experimentation and discovery and must be flexible enough to allow for changes and adjustments to be made to strategies as new variables come to light and existing variables change.