REPORT OF THE PORTFOLIO COMMITTEE ON HEALTH ON THE ANNUAL PERFOMANCE PLAN FOR 2013/14 – 2015/16 AND BUDGET VOTE 16 OF THE DEPARTMENT OF HEALTH AND ITS ENTITIES, DATED 8 MAY 2013

1. INTRODUCTION

The Portfolio Committee on Health has a mandate to conduct oversight over the Department of Health and its entities (Council for Medical Schemes, Medical Research Council, National Health Laboratory Service, and the Compensation Commissioner for Occupational Diseases in Mines and Works and the Medical Bureau for Occupational Diseases).

The briefing on the budget vote and the Annual Performance Plan (APP) of the Department of Health took place on the 17 April 2013. The Committee also considered the Strategic Plans, APPs and budget of the entities that reports to the Department as follows:

· Council for Medical Schemes (CMS) : 20 March 2013

· Medical Research Council (MRC): 16 April 2013

· National Health Laboratory Service (NHLS): 16 April 2013 and

· The Compensation Commissioner for Occupational Diseases in Mines and Works (CCOD) and the Medical Bureau for Occupational Diseases (MBOD): 24 April 2013

Dr Yogan Pillay, the Deputy Director-General led the delegation. The delegation included: Ms Nobayeni Dladla – Acting Director-General, Ms Nthari Matsau – Deputy Director-General, Ms Tiny Rennie – Head Corporate Services, Mr Ian van der Merwe – Chief Financial Officer (CFO), Ms Jeanette Hunter – Deputy Director-General: Primary Health Care, Ms Milani Wolmarans – Policy Coordination and Integrated Planning, Mr Moremi Nkosi – Acting Deputy Director-General: Health Regulation and Compliance, Ms Mihlati Mushwana – Director: Public Entities Governance and Mr Joe Kgatla – Parliamentary Liaison Officer in the Office of the Minister.

2. OVERVIEW OF THE DEPARTMENT OF HEALTH (DOH) ANNUAL PERFORMANCE PLAN FOR 2013/14 – 2015/16

The Medium Term Expenditure Framework priorities of the Department of Health are derived from:

• The 10 Point Plan for 2009-2014;
• Millennium Development Goals 2000-2015;
• Health Goals from the National Development Plan (NDP) 2030; and
• The Health Sector Negotiated Service Delivery Agreement (NSDA) - Government’s outcome-based approach to service delivery. The Health sector is responsible for the achievement of Outcome 2 which is “A long and healthy life for all South Africans”.

The focus of the health sector over the planning cycle is on the four outputs entailed in the Minister’s Performance Agreement with the President of the Republic, and elaborated on in the NSDA for 2010-2014. These are:

- Output 1: Increasing Life Expectancy;

- Output 2: Decreasing Maternal and Child Mortality;

- Output 3: Combating HIV and AIDS and decrease the burden of disease from Tuberculosis (TB);

- Output 4: Strengthening Health System Effectiveness.

3. IMPLEMENTATION OF THE HEALTH SECTOR’S RESPONSE DURING 2013/14 – 2015/16 WILL BE AS FOLLOWS:

3.1 IMPROVE LIFE EXPECTANCY

Improving Life Expectancy by implementing the following key strategies:

· Expansion of the Antiretroviral (ARV) coverage;

· Reduce new HIV infections;

· Reduce burden of Tuberculosis;

· Reduce Maternal Mortality;

· Reduce Infant, Child and Youth morbidity and mortality; and

· Improve collaboration and reduce burden of Communicable and Non – Communicable diseases.

3.2 IMPROVE HEALTH SYSTEMS EFFECTIVENESS

Improved health system’s effectiveness by implementing the following key areas:

· Improve quality of health services;

· Re-engineering of Primary Health Care;

· Functional District Health System;

· Preparation for the implementation of the National Health Insurance (NHI);

· Improve health workforce planning, management and development;

· Efficient management of health technology; and

· Accelerate delivery of health infrastructure.

3.3 REDUCE NEW HIV INFECTIONS

Key interventions include:

· Conduct at least 600 000 Medical Male Circumcisions during 2013/14. This will increase to 1 000 000 during 2015/16;

· Test at least 98% of all TB patients for HIV by 2015/16;

· Increase contraceptive prevalence from 32.5% during 2011/12 to at least 38% during 2015/16;

· Expanded Prevention of Mother-to-Child Transmission (PMTCT) Programme for pregnant women.

3.4 EXPAND THE ARV COVERAGE

Key interventions include:

· Initiate at least 500 000 new clients on ARV’s per annum; and

· Initiate at least 85% of all TB and HIV co-infected patients on ARV’s with up to 97% by 2015/16.

3.5 EXPAND PMTCT PROGRAMME FOR HIV POSITIVE PREGNANT WOMEN

Key interventions include:

· Increase HIV+ pregnant women initiated on ARVs from 80.4% in 2011/12 to at least 97% in 2015/16; and

· Reduce the proportion of HIV+ babies born to HIV+ mothers from 4% in 2011/12 to at least 2% by 2015/16.

3.6 REDUCE MATERNAL MORTALITY

Key interventions include:

· Increase the proportion of antenatal clients attending a health facility before 20 weeks from 40.2% in 2011/12 to at least 68% in 2015/16;

· Increase the proportion of deliveries taking place in health facilities under the supervision of trained personnel in a public health facility from 89.3% in 2011/12 to at least 97% in 2015/16; and

· Increase the percentage of mothers and babies who receive post-natal care within six days of delivery from 56.9% in 2011/12 to at least 84% in 2015/16.

3.7 REDUCE INFANT, CHILD AND YOUTH MORBIDITY AND MORTALITY

Key interventions include:

· Maintain the percentage of children fully immunized under 1 year of age at minimum 90% throughout they MTEF period;

· Maintain the measles immunization coverage rate at 90% throughout the MTEF period;

· Expand the implementation of the Integrated School Health Programme as follows:

ü Seventy percent (9 666 of 13 809) of quantile 1 and 2 schools to benefit from the Integrated School Health Programme (ISHP) during 2013/14, with up to 95% schools benefiting during 2015/16; and

ü Nine thousand and sixty six schools translate to 297 000 grade 1 learners and 80 200 grade 8 learners benefitting from the ISHP during 2013/14.

3.8 REDUCE THE BURDEN OF TUBERCULOSIS (TB)

Key interventions will include:

· Increase the TB cure rate from 73.1% in 2011/12 to the World Health Organization (WHO) target of 85% by 2015/16;

· Reduce the TB treatment defaulter rate from 6.8% in 2011/12 to less than 5% by 2015/16; and

· Reduce turnaround time of TB test results by increasing the number of tests conducted using the GeneXpert. Estimated 800 000 tests to be conducted using GeneXpert during 2013/14, increasing to 1 million by 2015/16.

3.9 IMPROVE COLLABORATION BETWEEN TB AND HIV PROGRAMMES TO REDUCE THE CO-INFECTION BURDEN

Key interventions will include:

· Increase the percentage of TB patients tested for HIV from 82.9% in 2011/12 to at least 98% in 2015/16; and

· Increase the number of HIV positive patients that receive Isoniazid Preventative Therapy (IPT) from 360 168 patients in 2011/12 to at least 525 000 in 2015/16.

3.10 STRENGTHEN MANAGEMENT OF NON-COMMUNICABLE DISEASES

Key interventions include:

· Conduct public education campaign on salt reductions in line with published regulations;

· Expanding the chronic care model to 15 districts by 2015/16;

· Revision to the regulations of warning labels on alcohol products;

· Development and implement the Health Promotion strategy;

· Develop regulations for graphic health warnings on tobacco products; and

· Establishment of the National Health Commission to develop and implement an intersectoral approach for the prevention of NCDs.

3.11 REDUCE THE BURDEN OF DISEASES FROM COMMUNICABLE DISEASES

Key interventions include:

· Establish a National Public Health Institute to reform and strengthen the capacity of National Institute of Communicable Diseases (NICD) over the MTEF;

· Improve access to cataract surgery to at least 1500 operations per million population in all nine provinces;

· Increase the cervical cancer screening coverage from 55% in 2011/12 to at least 60% by 2015/16; and

· Decrease the incidence of malaria from 0.58 cases per 1000 population in 2011/12 to at least 0.45 per 1000 population at risk in 2014/15, in keeping with the target to eliminate malaria by 2018.

3.12 IMPROVE QUALITY OF HEALTH SERVICES

Key interventions include:

· Improve complaint resolution by ensuring that at least 85% of all resolved complaints have a turnaround time within 25 days;

· Develop and implement standardized protocol for conducting patient satisfaction surveys;

· Increase the number of districts supported by Facility Improvement teams to 20;

· Ensure gap assessment are conducted at all health facilities by 2015/16 (30% facilities to be assessed during 2013/14); and

· Fully establish the Office of Health Standards Compliance by 2015/16.

3.13 RE-ENGINEERING OF PRIMARY HEALTH CARE

Key interventions include:

· Increase the number of municipal ward based primary health care teams to 750 in 2013/14, 1000 in 2014/15 and 1500 in 2015/16;

· Improve access to primary health care services with an increased utilization rate of at least three visits by 2015/16;

· Expand the number of districts with the full complement of members of the District Clinical Specialist teams to at least 20 districts in 2013/14, up to 25 during 2015/16;

· Improve access and quality of PHC supervision focusing on two areas which are:

ü Develop and implement a manual for capacity building for PHC supervisors and facility managers; and

ü Increase the monthly supervisor visit rate from 66.6% in 2011/12 to at least 85% in 2015/16.

· Implementation of the Integrated School Health Programme.

3.14 IMPROVE HEALTH WORKFORCE PLANNING, MANAGEMENT AND DEVELOPMENT

Key interventions include:

· Development and implementation of norms and standards for health workforce planning;

· Increase the number of medical students registered at South African Universities by at least 10% every year over the MTEF. This will increase the number of new students from 1 800 in 2012/13 to at least 2 395 in 2015/16; and

· Increase the number of hospital managers trained as per the training programme developed by the Academy for Leadership and Management in Health – 105 during 2013/14, 100 during 2014/15 and 100 during 2015/16.

3.15 FUNCTIONAL DISTRICT HEALTH SYSTEM

Key interventions include:

· Develop and implement an Intersectoral Framework for addressing the social determinants of health;

· A district quarterly review guideline will be developed during 2013/14 to institutionalise district quarterly reviews;

· Strengthen the disease outbreak response by establishing trained disease outbreak teams in 20 districts by 2013/14. This intervention will be implemented in all 52 districts by 2015/16 financial year; and

· Revise the District Health System Strategy which is inclusive of a District Health Authority.

3.16 PREPARATION FOR THE IMPLEMENTATION OF THE NATIONAL HEALTH

INSURANCE (NHI)

Key interventions include:

· Preparation of the legal framework for the establishment of the NHI:

ü During 2013/14 the White Paper on NHI will be finalized and gazetted;

ü In 2014/15 the NHI Bill will be tabled in Parliament; and

ü The implementation of regulations will be in 2015/16.

· A conceptual framework for the creating of the NHI fund will be developed in 2013 with the first phase of implementation in 2014/15;

· The increase Revenue collection in central hospitals will be held as follows, four in 2013/14, seven in 2014/15 and ten in 2015/16; and

· The contracting of General Practitioners (GPs) and other health service providers will be conducted as follows, 600 GPs in 2013/14 to work in 533 in NHI pilot districts.

3.17 EFFICIENT MANAGEMENT OF HEALTH CARE TECHNOLOGY

Key interventions include:

• Continue with the implementation of the Health Technology Strategy;
• Publish Essential Equipment lists for all levels of care in 2013/14; and
• Finalisation of the standards for the use and maintenance of Health Care Technology.

3.18 ACCELERATE THE DELIVERY OF HEALTH INFRASTRUCTURE

Key interventions include:

• Accelerate the delivery of health infrastructure through the following key activities during 2013/14:

ü Issue request for proposals (RFP), procure and sign agreement for Chris Hani Baragwanath;

ü Request for quotations (RFQ) and RFP for Limpopo Academic Hospital ;

ü Completed feasibility studies for Dr George Mukhari, Nelson Mandela Academic Hospitals and King Edward VIII projects.

• Five of the seven planned tertiary hospitals (Nelson Mandela in the Eastern Cape, Chris Hani Baragwanath and Dr George Mukhari in Gauteng, Limpopo Academic in Limpopo and King Edward VIII in KwaZulu Natal) would have commenced with construction by 2015/16.

4. EXPENDITURE TRENDS

• The Department’s expenditure grew from R19.2 billion in 2009/10 to R27.9 billion in 2012/13 at an average annual rate of 13.3%.
• Over the Medium Term period, expenditure is expected to grow to R36.7 billion, at an average annual rate of 9.4%.
• The increase in both periods is driven largely by transfers to provinces for the conditional grants, with the main increase being on the HIV and AIDS and the introduction of the NHI grant.

5. MEDIUM TERM ALLOCATION FOR 2013/14 – 2015/16

Table 1 : Health Budget for 2013/14 medium term

The Department receives R30.7 billion for 2013/14, up from R28.1 billion in the previous financial year, which is an increase in nominal terms of 9.4% and by 3.6% in real terms. The two largest programmes namely Programme 5: Hospitals, Tertiary Services and Human Resource Development and Programme 3: HIV and AIDS, TB, Maternal and Child Health receive almost 95% of the total budget. Less than half a per cent (0.4%) is allocated to Programme 4: Primary Health Care Services (R109.4 million) which receives less than the budget allocated to Programme 1: Administration (R411 million). In this budget, Programme 4: Primary Health Care is the only programme to decline in both nominal (13%) and real terms (17.6%). Programme 2: National Health Insurance, Health Planning and Systems Enablement increased the most in percentage terms both nominally (56.1%) and in real terms (47.8%).

In terms of economic classification, the bulk of the Health Budget (R28.2 billion or 92.0%) consists of transfers and subsidies to provinces and municipalities, and departmental agencies and accounts. This figure includes R193.6 million to non-profit institutions.

Current payments constitute a total value of R1.6 billion, which represent 5.3% of the total budget allocation. Most of the current expenditure is allocated to Goods and Services, taking up 67.2% of the total current payments. Expenditure items that receive the largest share of the goods and services budget are Contractors at R313 million up from R20.9 million, Consultants and professional services: Business and advisory services at R150.3 million, Medical Supplies at R140.8 million, and Travel and Subsistence at R111.7 million. Stationery and printing receive R46.6 million whilst Advertising dropped to R23.7 million from R56.3 million and Communication increased from R25.7 million to R27.6 million.

Unlike the previous financial year, when 100% of capital payments, amounting to R35.6 million was allocated to Machinery and Equipment, this year, R807 million is allocated to Buildings and other fixed structures and R18.7 million to Machinery and Equipment.

The following additional allocations have been made in the 2012/13 - 2014/15 financial years:

• The budget includes additional allocations of R800 million for 2015/16 for the scale up of the provision of antiretroviral treatment.
• Hundred million for 2014/15 and R384 million for 2015/16 partly offset the decrease in funding over the medium term from the US President’s Emergency Plan for AIDS Relief (PEPFAR). This programme has contributed roughly R4 billion per year towards the South African national HIV and AIDS and tuberculosis response.
• The amount is likely to decrease by 50% over the next five years.
• Ninety million, R100 million and R250 million for the Medical Research Council to strengthen its capabilities and infrastructure and to support partnership on high priority diseases such as HIV and AIDS, tuberculosis and malaria with development partners, such as Gates Foundation.
• R15 million, R30 million and R31.5 million to strengthen the National Institute of Communicable Diseases and address the decrease in PEPFAR funding support.
• R30.1 million, R30 million and R30.3 million most of which comes from internal reprioritization savings, for the infrastructure unit systems support programme, which provides capacity building support to the department and provinces.
• R15 million in 2015/2016 for the South African National AIDS Council for HIV and AIDS programmes.
• R22.1 million, R28.3 million and R41 million for improved conditions of service to cover high personnel costs.
• R6 million in 2013/2014 for emergency medical services during the 2014 African Nations Championship.
• The Department expects to reprioritize R19.6 million, R37 million and R51.8 million over the medium term in non-core goods and services items.
• Cabinet has approved reductions of R531 million over the medium term.
• The three health infrastructure grant will be reduced due to slow spending and weaknesses in performance.
• Reductions of R26 million (R11 million, R10 million and R5.2 million) over the MTEF period have been made to the National Health Insurance due to slow expenditure.
• The Department reviewed the staff establishment in 2010/11 to its human resources needs and the functions assigned in terms of the approved budget structure. The establishment is projected to increase moderately to strengthen skills and experience.

6. INFRASTRUCTURE SPENDING

· “To give effect to Cabinet approved reductions of R531 million over the medium term, the department will reduce spending on the three conditional grants related to health infrastructure, due to slow spending and weaknesses in performance.”

· “Reductions of R26 million over the MTEF have been made to the national health insurance (NHI) grant due to slow spending.”

• The three health infrastructure grant (Hospital Revitalisation, Health Infrastructure and Nursing Colleges and school grants) have been consolidated into a single direct grant, called the Health Facility Revitalisation Grant with three windows.
• It is envisioned that the new configuration will allow more flexibility to shift funds in between and ensure timely delivery of health infrastructure.
• Spending on infrastructure increased from R3.2 billion in 2009/2010 to R5.8 billion in 2012/2013, and is expected to increase to R.5 billion over the medium term.
• The Health Facility Revitalisation Grant has been allocated R14.9 billion over the MTEF period (R5.1 billion, R4.7 billion and R5 billion).
• The new indirect schedule 6A grant has been established called National Health grant. This grant will have two components, one for National Health Insurance (NHI) and one for Health Facility Revitalisation grant.
• The new National Health Grant contains a Health Facility Revitalisation component. This grant has been allocated R4.2 billion over the MTEF period (R897 million, R1.7 billion and R1.7 billion) and is a grant in kind to the provinces.

7. CONSIDERATION OF THE ANNUAL PERFRORMANCE PLANS OF ENTITIES

List of Entities reporting to the Committee:

· Council for Medical Schemes (CMS);

· Medical Research Council (MRC);

· National Health Laboratory Service (NHLS); and

· Compensation Commissioner for Occupational Diseases (CCOD).

8. COUNCIL FOR MEDICAL SCHEMES’ ANNUAL PERFORMANCE PLAN

The CMS, is the national medical schemes regulatory authority and a public entity responsible for regulating the medical schemes industry to protect the interests of members, promoting fair and equitable access to private health financing.

The vision of the CMS is to be “a fair custodian of equitable access to medical schemes in order to support the improvement of universal access to healthcare.” The Council’s mission is to regulate the medical schemes industry in a fair and transparent manner.

8.1 CMS Strategic Goals

· Access to good quality medical scheme cover is maximized;

· To make sure that medical schemes are properly governed, are responsive to the environment, and beneficiaries are informed and protected;

· CMS should be responsive to the needs of the environment by being an effective and efficient organization;

· CMS provides influential strategic advice and support for the development and implementation of strategic health policy, including support to the National Health Insurance development process.

The Council noted that membership has grown faster than the employment growth. The difference in scheme risk has worsened over the past two years, leaving more than a million beneficiaries vulnerable. Some schemes have challenged the “payment in full provisions” in the regulations. Discovery has refused to accept Transmed members, in spite of a ruling by the Registrar and Council. The matter will be heard by the appeal board soon. GEMS have appealed the decisions by the Registrar, Council and the appeal board, and have taken the decision to the High court for revision.

8.2 Budget

The CMS’ budget increased by approximately 11.8% from R98.4 million in 2012/13 to R110.1 million in 2013/14. Income from levies increased by approximately 11.4% from R92.6 million to R103.2 million.

The levy amount increased by 9.85% from R24.39 (2012/13) to R26.79 (2013/14). Current expenses increase by approximately 6.7% from R92.6 million to R103.2 million.

The CMS expenses are as follows:

8.3 Expenses

· Council Members Fees increased 61.1% from R930 986 to R1.5 million;

· Research and Monitoring increase by 165.6% from R288 890 to R767 297;

· Legal services increased 38.4% from R4.8 million to R6.7 million, whilst Legal Fees increased by 42.9% from R4.2 million to R6 million;

· Financial Supervision increases 37.1% from R498 197 to R683 302;

· Stakeholder relations increased by 29.9% from R2.1 million to R2.8 million;

· Complaints and adjudication decreased by 29.8% from R184 500 to R129 500;

· Benefit management decreased by 25.4% from R316 410 to R235 788;

· Accreditation increased by 29.4% from R575 819 to R745 500;

· A new line item is cellphone contracts which total R30 000;

· Council Committees increased 8% from R1.775 million to R1.917 million;

· Investigation costs declined 37.1 per cent from R795 000 to R500 000;

· Software licence subscription increased 85.28% from R484 900 to R898 400;

· Rental fees increased by 13.7% from R5.2 million to R5.9 million;

· Operational Projects is a new line item with a R1.1 million allocation; and

· Spending on telephone and fax remains constant at R584 220.

9. MEDICAL RESEARCH COUNCIL ANNUAL PERFOMANCE PLAN

The mission of the MRC is to generate knowledge for policy and practice to improve the health of the nation.

9.1 MRC highlights for 2012

• One of South Africa’s proudest achievements was that people are living 10% longer than 5 years ago due to AIDS treatment.
• The MRC also has proved that mother-to-child transmission of HIV has decreased to 2.7% in 2011. In 2011, only 2.7% of newborns acquired HIV from their mothers down from 25% ten years ago.

9.2 MRC goals

The MRC has four strategic goals that link with the 4 outputs of the Health Sector NSDA which contribute to outcome 2 which is “A long and healthy life for all South Africans”. The goals are as follows:

• Promote health and quality of life through research;
• Promote health and quality of life through public heath innovation, technology development and transfer;
• Collaborate sub-national, national, super national and global partners to improve health outcomes for South Africa and citizens of our collaborative partners; and
• Improve organisational performance as a health research organisation.

9.3 Challenges identified by the MRC

• Declining scientific stature of medical research;
• MRC not fulfilling custodianship role in medical research in South Africa; and
• MRC intramural units spend 90% of their budgets on salaries.

9.4 Activities implemented to revitalise the MRC

The following activities have been implemented to revitalise the MRC:

1. Prioritising in-house research to focus on the ten most common causes of death and disease in South Africa;
2. Increasing extramural funding to universities and medical schools in order to rebuild their health and research;
3. Creating new funding approaches for the development of new drugs, vaccines and diagnostic tests;
4. Improving the efficiency and effectiveness of the MRC’s administrative systems;
5. Improving peer-review and the quality of MRC research;
6. Improving the MRC’s laboratory and space utilisation; and
7. Improving research support functions like medical journals.

9.5 Budget

• The 2013/14 budget increased by 8% to R313 million, in 2014/15 and in 2015/16 increasing to R333 million and R350 million, respectively;
• The annual baseline allocation for 2013/14 is R90 million, R100 million 2014/15 and R250 million 2015/16. Flagship programmes are taking up 76% of the total budget.
• Transfers received from National Department increased from R296 840 million in 2012/13 to R416 460 million in 2013/14.
• Grants and contracts decreased from R311 000 to R277 750.

10. NATIONAL HEALTH LABORATORY SERVICE ANNUAL PERFOMANCE PLAN

The National Health Laboratory Service (NHLS) provides laboratory and diagnostic services to public health facilities in South Africa. Created by the National Health Laboratory Act (No. 37 of 2000) the NHLS also provides health science training and education, and supports health research. As the largest provider of diagnostic pathology services in South Africa, the NHLS services over 80 per cent of the population through its 265 laboratories countrywide.

The NHLS has identified 10 key strategic drivers over the next 5 years in its commitment to Government’s vision of “a long and healthy life for all”. These include:

1) Developing a new service delivery model that is more affordable for the public sector;

2) Determine a best-fit service delivery model;

3) Deliver a quality, customer focussed service;

4) Align resources, support services and infrastructural development for service delivery;

5) Become laboratory services “Employer of Choice”;

6) Prioritise innovation and research to be relevant, appropriate and leading edge;

7) Become the health information powerhouse;

8) Drive stakeholder collaboration;

9) Position NHLS as the “Provider of Choice” for National Health Insurance (NHI); and

10) Protect the community and environment.

The NHLS is also embarking on an NHI (National Health Insurance) readiness assessment in support of NHI. The NHLS has identified a number of challenges and returns including:

· Threat of new entrants to the pathology services market in the country, partnering with cost-cutting international companies.

· Optimising logistics to reduce costs, improving billing systems and maintaining skills and technical capacity.

· The NHLS should become a member of the technical committee to be established by the Minister to understand and influence policy formulation.

The NHLS reports that it aims to “remodel” or restructure the organisation and is undergoing a comprehensive review via the Roadmap Project, which looks at governance, service model, financial and funding models, and human resources amongst other things. It cautions that “such processes inadvertently may result in increased short-term financial requirements, substantial infrastructural changes and staff establishment amendments- all outcomes that warrant careful consideration in carving out a long-term strategy.

10.1 Budget

The NHLS intends increasing average prices by 4% in the 2013/14 financial year. It sees overheads increasing by 9% and materials increasing by 5%. The budget increases 9.1% from R2.9 billion (2012/13) to R3.2 billion (2013/14). The number of tests planned to be done remains at just over 87 million, with the average selling price per test increasing 12% from R48.51 (2012/13) to R55.18 (2013/14). The forecast number of tests remains at the same level as the previous financial year as the National and Provincial Departments of Health implement initiatives to “manage down the current levels of NHLS service provision.”

NHLS reports a shortfall of R123 million for the NICD (National Institute for Communicable Diseases) and NIOH (National Institute for Occupational Health). The impact of the KwaZulu-Natal Department of Health – NHLS arbitration means that R1.5 billion is not expected to be recovered in the current financial year.

10.2 Strategic Objectives

The NHLS does not present its Annual Performance Plan in terms of programmes and sub-programmes. Instead, in order to achieve its strategic objectives, the NHLS has identified 4 perspectives as follows:

· Customer Perspective;

· Financial Perspective;

· Employee Perspective; and

· Internal Perspective.

10.3 Customer Perspective

The Customer Perspective has the highest weighting of the four perspectives at 40%. Three Strategic objectives have been identified under Customer Perspective, namely:

1. Improve Customer Satisfaction by obtaining 69.6% on the Customer Satisfaction Survey (CSI);

2. Improve total turnaround time (TAT) by obtaining between 85% and 90% TATs for TB microscopy, CD4, Viral Load, and HIV PCR testing, and 65% TAT for Cervical Smear; and

3. Improve Quality of Tests by using independent quality checks.

10.4 Financial Perspective

Financial perspective weighting is at 10%. Its strategic objectives include:

· Achieving budgeted turnover and spending overheads as well as materials within budget;

· Minimum cash collection of R4 786 million;

· Improve payment to creditors from 62 days average in 2010/11 to 40 days in 2013/14; and

· Improve collections from debtors from 154 days on average in 2010/11 to 45 days in 2013/14.

10.5 Employee Perspective

Employee perspective has a weighting of 30%. Strategic objectives include:

· Improving employee satisfaction from a score of 2.66 in 2010/11 to 2.80 in 2013/14;

· Maintaining low staff turnover rate at 10%;

· Maintain low vacancy rate at 5% down from 20% in 2010/11;

· Improve Employment Equity profile (which was at 88% in 2009/10) which is targeted at 60% for this financial year, the same as it was in the two previous financial years;

· Improve Broad Based Black Economic Empowerment (BBBEE) status and procurement (target 5); and

· Maintain high Registrar pass rate (60%).

10.6 Internal Perspective

Internal perspective has a weighting of 20%. Its two strategic objectives are:

· Achieve SANAS Laboratory accreditation target to 75% (currently 70%) for academic labs and 50% (currently 30%) for regional labs; and

· Improve translation of research into service by submitting three research reports to influence policy and three research reports translated into service.

11. COMPENSATION COMMISSIONER FOR OCCUPATIONAL DISEASES (CCOD) ANNUAL PERFOMANCE PLAN

The Compensation Commissioner for Occupational Diseases (CCOD) is established in terms of the Occupational Diseases in Mines and Works Act (No. 78 of 1973). It compensates miners and ex-miners (or their estate) for impairment of lungs or respiratory organs. In particular, the CCOD’s function includes:

· Administering the Mines and Works Compensation Fund to compensate ex-miners disabled by occupational lung disease;

· Determining and recovering levies from controlled mines and works;

· Awarding benefits to miners and ex-miners suffering from occupational lung related diseases; and

· Investing levies collected and interest earned from investments.

11.1 Vision

The CCOD and Medical Bureau for Occupational Diseases (MBOD) strives to deliver an accessible and effective occupational health system and services that ensure prevention, care and compensation for workers with occupational health diseases and injuries and their beneficiaries.

11.2 Mission

Enhancement of the health system to prevent occupational diseases and provide clinical services and compensation to workers and ex-workers in controlled mines and works.

11.3 Legislative Matters

Numerous deficiencies in the working of the CCOD have been documented. There was an Appeal Court judgement in favour of the CCOD with respect to the recovery of monies from owners of controlled mines and works for the deficit in the Mines and Works Compensation Fund. It allows for the Compensation Fund to levy owners accordingly, and also notes that separate books of accounts should be kept i.e. a Mines Account, a Works Account, a State Account and a Research Account.

Planned policy initiatives identified by the CCOD include:

· Amendments to the Occupational Diseases in Mines and Works Act, No. 73 of 1973 (ODIMWA);

· Expanding the coverage of mines and works beyond the current 246 controlled mines and works;

· Development of decentralised services for workers and ex-workers. An occupational health system and services is envisaged with the introduction of NHI and the re-engineering of Primary Health Care (PHC) System;

· Determining models of service delivery to ex-workers in labour sending areas within the wider SADC region; and

· Working with the Department of Labour and Treasury to align compensation systems.

11.4 Organisational Environment

The CCOD identified the following factors for its poor performance in the past financial year:

· 26% vacancy rate;

· Management deficiencies;

· Inadequate information technology system;

· Lack of inspections of controlled mines and works;

· Non-functioning Risk Committee;

· Inability to verify claims data; and

· Concerns about the valuation of the Fund and its sustainability.

11.5 Strategic objectives

Five strategic goals have been identified as follows:

1. Changes to the policy and legislative framework of the CCOD and MBOD.

2. Improve the governance of the CCOD and MBOD.

3. Optimise management and human and other resource capacity of the CCOD and MBOD.

4. Enhance service delivery to workers and ex-workers in controlled mines and works.

5. Ensure the sustainability of the Compensation Fund.

11.6 Budget

The budget increased 35.1% from R34.3 million (2012/13) to R52.8 million in the current financial year (2013/14). Highlighted is a decrease in compensation of ex-mine workers from R139.9 million to R102 million, whilst the compensation of tuberculosis (TB) increased from R5 million to R50 million. The Eastern Cape project continues to get R500 000 budget allocation.

It was indicated that about R255.9 million will be from tax revenue, R94.6 million from non-tax revenue with R197.1 million in surplus. Capital expenditure on infrastructure and computer equipment were allocated R5 million and R1.4 million, respectively. No budget allocation for land and buildings, as well as for leased motor vehicles.

12. COMMITTEE’S CONCERNS

Following the engagement between the Portfolio Committee on Health and the Department of Health and its entities, the Committee expressed the following concerns:

· The Committee was concerned about the high TB rates in South Africa.

· The Committee also raised concerns regarding the slow progress towards meeting the MDG target on maternal health and whether the Department’s budget is sufficient to meet these goals by 2015.

· The Committee was of the view that the Department of Public Works was not rendering a good service to the Department of Health in terms of building and maintenance of health infrastructure. For example the Northern Cape Mental Health Hospital which was not maintained and the delays in the construction of the Jabulani Hospital in Gauteng.

· The issue of the CCOD not producing an annual report was also a concern to the Committee and expressed the urgent need to address this going forward.

· The budget allocated to the MRC was also raised a serious concern as it is not enough to meet its obligation of leading research to inform the policy of the country especially where health is concerned.

13. RECOMMENDATIONS

The Committee recommends that the Minister of Health should ensure the following:

· The Department of Health should embark on strengthening the National TB Control Programme so as to decrease the burden of TB in the country.

· Accelerate efforts in meeting the MDG target on maternal health through proper implementation of strategies aimed at reducing maternal deaths.

· Ensure monitoring and management of contractual agreements with the Department of Public Works so as to improve services rendered.

· The Department should consider ways of increasing the MRC’s budget to meet the research demands so as to address the burden of disease in the country.

14. CONCLUSION

Having considered the Annual Performance Plans of the Department and its entities, the Committee will continue to closely monitor the performance of the entities and that of the Department of Health. The Committee commends the Department of Health and the MRC for the good work they have done in dramatically increasing life expectancy in South Africa.

Report to be considered