Medical Research Council on its Annual Performance Plan; AGSA, FFC & Stats SA input

Meeting report

Health sector’s strategic plan: Briefing by Auditor General of South Africa (AGSA)

Ms Thabelo Musisinyani, Senior Manager: AGSA, said the Department’s annual performance plan (APP) was informed by the Medium-Term Strategic Framework (MTSF), as well as the National Development Plan (NDP). The Auditor-General’s interim review provided an early warning where concerns with regards to the measurability and relevance of planned indicators and targets were identified, but it did not entail the performance of detailed procedures where underlying systems and supporting documentation were inspected, to give assurance on the verifiability of indicators and targets.

She reported that the finalisation of the White Paper on National Health Insurance (NHI) into a policy document for comments, the funding modality for the budget allocation to the primary health care (PHC) facilities, the discussion paper on revenue retention models -- which would be presented at the health sector’s 10x10 with Treasury -- and the 1 500 000 enrolment of patients receiving medicines through the Central Chronic Medicine Dispensing and Distribution (CCMDD) system would all be included into the Department’s 2017/18 APP. Also, the Department would include the integrated system architecture for a national integrated patient-based information system, and the remedial plans would be developed and monitored for all districts that had mother-to-child transmission (MTCT) rates lower than 1.5% would be added as a target for the 2017/18 APP.

Improved access to sexual and reproductive health services, by ensuring that at least 75% of couples were accessing modern contraceptive methods by 2019/20, had not been included in the national department’s 2017/18 APP. However it was still listed as an APP target for provincial departments. The reduction of new HIV infections by implementing a combination of prevention interventions such as HIV counselling and testing, medical male circumcisions and condom distribution over the medium term, and ensuring that the Compensation Commissioner eliminated the backlog of audited annual financial statements by 2019/20 by appointing external actuarial and financial experts to support this process, had also not been included in the national department’s 2017/18 APP. However, the former had been included in the provincial departments’ APPs.

There were key changes to the 2017/18 APP. Programme 3 had an additional 11 indicators and targets, and Programme 5 had six indicators and targets. Health sector customised indicators (27 indicators) had been removed from Programme 3 and included in an annexure to the APP to track the performance of health services. Sector customised indicators that were removed from the national department in the 2017/18 APP included the diarrhoea case facility rate, the measles second dose coverage, male and female condom distribution, medical male circumcision performed and the tuberculosis client treatment success rate.

New indicators had been introduced for both these programmes. The new indicators for Programme 3 were: maternal, new-born, child, adolescent, women’s health and nutrition strategy from 2017/18 to 2021/22, a surveillance system for polio, measles and neonatal tetanus reviewed, an HIV strategic plan developed, and the number of facilities reviewed during provincial supervisory and support visits. For Programme 5, the new indicators included the number of tertiary hospitals with approved National Tertiary Services Grant (NTSG) business plans, a national policy for the management of nursing placement agencies developed, and a roadside testing programme implemented to monitor driving under the influence of alcohol.

The budgets for all of the programmes of the national department had been increased for the 2017/18 financial year. The administration programme had increased from R461 964 million to R512 800 million, and Primary Health Care Services programmes from R256 539 million to R264 300 million. Conditional grants allocated to provinces were mainly the Comprehensive HIV and AIDS Grant, the Health Facility and Revitalisation Grant, the National Tertiary Services Grant and the Health Professionals Training and Development Grant. The Comprehensive HIV and AIDS Grant had been allocated a bigger budget, making up 47% of the total grant, followed by the National Tertiary Services Grant with 31%, and the Revitalisation Grant, with a 15% budget allocation. The Health Professionals and Development Grant would receive only 7% of the total conditional grant.

Ms Musisinyani recommended that the Committee should establish a process to enable them to track the performance of the indicators that had been removed from the 2017/18 APP to ensure accountability for their performance continued.

Discussion

Mr A Mahlalela (ANC) asked if there was a core relation between the expenditure and the budget, and what informed this relation, because it did not look as if the current budget would be able to achieve the targets. He asked the Auditor-General to comment on this matter, and whether the Auditor-General had considered these challenges when auditing the Department. He also asked why the national department had to be allocated with a yearly budget if the implementation of the plans lay with the provincial departments. Programme 3 was meant to be implemented by the national department, but the national department did not indicate its performance of the programme.

Dr W James (DA) said there were a lot of unfunded mandates within the healthcare sector, especially the public clinics which were managed by the provinces, but they ended up being funded by the ratepayers. He asked how the national department dealt with this issue, and what plans the Auditor-General had set in place to monitor this problem.

Mr Mahlalela asked why the Auditor-General’s review did not include the Department’s public entities as well.

Dr P Maesela (ANC) said the chain of reporting must be clear.

The Chairperson said the change in the organisation’s audit methodology must be coupled with personnel with the correct expertise to manage the change. The Auditor-General should also highlight the challenges and weaknesses of the national department, as this information was useful for when the Committee conducted its oversights. She added that technical skills were a vital component of the health sector because they assisted with allocating where improvements could be made and what scientific knowledge was needed to improve the health sector.

Ms Musisinyani replied that the Auditor-General (AG) did not evaluate whether there was correlation between the expenditure and the budget -- it only provided feedback on whether the budget was used for its purposes. When money was being allocated to provinces, the national department also transferred its indicators and targets to the provincial departments to ensure that the provincial departments helped the national department to achieve its national mandate. The AG did not conduct a review of the public entities, but if the Committee wished the AG to conduct an assessment of the public entities it could write a letter to the office of AGSA requesting such. The office of the AG had a unit which dealt with the appointment of technical staff to assist the AG with understanding the health sector during its auditing processes.

Dr James asked if the AG considered the fact that provincial departments may not always have the money needed to reach the national department’s mandate.

Mr Mahlalela asked why Parliament approved a budget that national department could not account for, since all its performances and targets were allocated to the provinces when they allocated budgets to them. The legislature could not hold provincial departments accountable without proper indicators.

Ms Musisinyani replied that the interim review that was done at the beginning of the year did not include public entities; public entities were reviewed only towards the end of the year.

Mr Mahlalela commented that the combined APPs of the national department and public entities was conducted in October, and not at the beginning of the year. He questioned if the exclusion of public entities in the interim review was related to a shortage of staff who were capable of conducting the review.

Briefing by the Financial and Fiscal Commission (FFC)

Mr Eddie Rakabe, Research Manager: FFC, said the inter-governmental framework issues affecting health care performance in South Africa related to the co-ordination of planning within and across provincial health departments and entities; decentralisation and funding to hospitals; alignment of health facility allocations to health needs, plans and priorities; and the skewed distribution of health facilities across provinces and within districts. The health sector and the economy were inextricably intertwined, as developed economies had healthier populations while developing economies’ populations were generally less healthy. Efficient fiscal systems were crucial for health financing and reinforcement of public health policies, and policy makers needed to strike a balance between promoting and financing health and growing the economy.

There were many layers of strategic plans within the health sector. The planning objectives and periods often overlapped strategic plans, and these were not always linked to the medium term strategic framework (MTSF) planning cycle. There was also a multiplicity of strategic plans, which hindered the assignment of APP delivery indicators to a specific strategic plan and made it difficult to assess alignments of annual delivery targets to budgets and long term goals. The Department’s APP was informed by the national development plan (NDP) 2030 and MTSF 2020. The NDP 2030 required that the Department reduce the burden of diseases to manageable levels, strengthen the national health system and address social determinates of health.

According to the World Bank, the life expectancy rate had increased in SA to just above 60 years; the infant mortality rate (per 1 000 live births) had decreased and the mortality rate under five (per 1 000) had also decreased. Treatment on communicable diseases (HIV/AIDS) was showing a positive effect on life expectancy, but non-communicable diseases, such as diabetes and arthritis, were on the rise. The implementation of the strategic plan for the prevention and control of non-communicable diseases needed to be prioritised.

Consolidated health spending would grow from R171 billion in 2016/17, to R217 billion in 2019/20. This was the third highest growth in spending after the debt servicing cost and higher education. Real growth in the health budget was lower, at 2%, given the weak economic environment. 2017 growth in spending was driven by the expanded provision of anti-retrovirals, and the establishment of the SA Health Products Regulatory Authority. Conditional grants constituted 20% of the consolidated health budget and health conditional grants grew at an average nominal rate of 6%. The overall budget of the Department amounted to R42.6 billion in 2017/18, with a large proportion (92%) of the budget allocated to transfers. The dominance of transfers implied that performance indicators should focus on oversight.

The Department’s budget would increase to R50.38 billion in 2019/20, representing a real annual average growth of 3.4% per annum compared to 2.9% for the period 2013/14 to 2016/17. The higher growth in the budget allocation was a result of funding the expansion of HIV/AIDS and tuberculosis (TB) treatment and prevention. The HIV/AIDS, TB, and maternal health and hospitals programmes consumed the bulk of the Department’s budget. Over the 2017 Medium-Term Expenditure Framework (MTEF), the proportion of the budget allocated to HIV/AIDS, TB and maternal health highlighted the priority attached to achieving the national health strategic goals. The increased priority attached to these funding areas was likely to have a positive impact on health outcomes, especially on mortality rates and life expectancy.

The 2017 health budget advanced health delivery objectives overall in various strategic plans. The 2017/18 budget contained 162 delivery performance indicators for which the provinces were mostly responsible. However, there was a need to reduce the number of indicators and align them to the overall strategic objectives rather than to departmental programmes. The bulk of conditional grants transfers were allocated to Gauteng and KwaZulu-Natal. The spending on health grants had been close to 100%. A significant proportion (44%) of the provincial budget was allocated to the district health service programme, which was responsible for addressing healthcare services identified within the various strategic plans. The provincial APPs’ performance indicators were service delivery oriented and more attuned to broader health strategic goals.

Discussion

Dr James said the national department’s budget reflected its moral commitment on HIV/AIDS. However, if HIV/AIDS were to burn out, then the Department could save up to R10 billion.

Dr S Thembekwayo (EFF) said the alignment of health facilities to health needs and plans should also include research into the best practices of conducting the health sector in a manner which helped stabilise the sector. One should also monitor programmes to inspect progress made and check how the budgets were used.

Mr Mahlalela asked what informed the multiple grant fund -- was it the planning programmes or matters relating to corruption? Was there an acceptable standard that one could use for an ideal situation of how budget allocations to provinces could be made, because the legislature could not hold the provincial departments accountable for implementation? He questioned the linkage between the MTFS and performance, and what the acceptable norm for a compensation of employees (COE) budget should be.

The Chairperson asked what factors were most related to COE budgets. Were they capacity related, or involved the lack of being able to solve issues when they arose.

Mr Rakabe replied that it would take another generation to eradicate HIV/AIDS, but improvements had been made in prevention. The FFC did not have a standard norm on how much needed to be spent, but there was a suggesting that five doctors should service at least 1 000 people. There was no ideal percentage on how much should be spent on COEs. There was an emphasis that administration costs, rather than technical staff, should be utilised to drive the mandate of the Department. It should be customary that a budget should be aligned with the indicators or targets. A major issue was that the institutional arrangement of government was deemed to be a problem as units did not work together, causing a lack of correlation between programmes within the same department. The other issue was that programmes were often under pressure to meet their individual targets, forgetting that the purpose was for the units to work together. Co-ordination between the national department and provincial departments was important, but co-ordination with the sector department was just as important as this was vital for concurrent performance indicators. The spill-over of patients who travelled to other provinces to receive better medical services had also created problems for the provincial departments, where they were forced to allocate money to individuals the province had not budgeted for. 

The Chairperson said the spill-over of patients in provinces was owing to the fact that some provinces had medical institutions that specialised in certain areas of medicine, and in order for patients to receive proper treatment they were forced to travel to another province to receive treatment. The spill-over was not necessarily the result of bad service or personnel.

Briefing by Statistics South Africa (Stats SA)

Dr Kefiloe Masiteng, Deputy Director-General: Population and Social Statistics, said the life expectancy statistics at birth for males and females indicated that between 2002 to 2016, females lived longer than males. The infant mortality rate had declined from 48.2% infant deaths per 1 000 live births in 2002, to 33.7% infant deaths per 1 000 live births in 2016. The crude death rate was down from 12.9% deaths per 1 000 people in 2002 to 9.7% deaths per 1 000 people in 2016.

Gauteng, the Western Cape and the Northern Cape were shown to have more individuals who were on medical aid than in the other provinces. 73.3% of whites had medical aid, followed by indian people (44.5%), coloureds (19.3%) and blacks (10.6%). The level of satisfaction with public facilities, as recorded in 2015, showed that the Western Cape had the highest percentage of individuals who were not satisfied with their public healthcare facilities.

The most common medical conditions amongst the elderly were high blood pressure, diabetes and arthritis, and all these three of these diseases were more common among females than males. During the period of the survey, it was found that 50% of females had high blood pressure, compared to 37.9% of males. 16.6% of females had diabetes, compared to the 4.4% of males, and 18% of females had arthritis, compared to 7.1% of males. Persons of 60 years and older who were covered by a medical aid or medical benefit scheme or other private healthcare insurance were mainly the white elderly and Indians/Asians. The majority of the elderly in the provinces, except for the Western Cape and Gauteng, made use of public clinics for their health care needs.

The leading causes of death in 2014 were headed by TB (8.3%), followed by diabetes mellitus (5.0%), other forms of heart disease (4.8%), HIV disease (4.8%), hypertensive disease (3.9%), intestinal infectious diseases (3.1%) and chronic lower respiratory diseases (2.7%). In 2015, the leading causes of death were TB (7.2%), diabetes mellitus (5.4%), HIV disease (4.8%), influenza and pneumonia (4.5%), chronic lower respiratory diseases (2.8%) and ischaemic heart diseases (2.7%). The top ten leading causes of death by gender for males consisted of 21.4% non-communicable diseases and 20.6% communicable diseases. For females, the causes of death consisted of 26.7% of non-communicable diseases and 21.4% of communicable diseases.

The non-communicable diseases were on the rise, particularly diabetes mellitus. The health coverage still reflected a historical imbalance, but some indicators showed that there had been an improvement in access to healthcare. There was a need for a preventative approach in health and a need for a dedicated morbidity survey to inform health plans.

Discussion

Dr Maesela said Stats SA had not mentioned the causes of the mortality rate, but poverty was also a major factor. He said the research was one-sided, because it had not considered the causes of the increase of diseases and mortality rates, and the latter had not been linked to socio-economic issues which may have driven them to increase. He asked what some of the reasons were for women dying sooner than men.

Dr James said life expectancy was increasing due to the access to HIV treatment, and indeed socio-economic factors played a role in the mortality rate. He would have liked to have had an indication of the number of individuals who were on health insurance, as opposed to medical aid, because there was a great difference between the two. The use of health insurance was on the rise, but National Treasury was yet to differentiate the difference between medical aid and health insurance.

Mr Mahlalela said the statistics indicated that women were dying more quickly than men, but the life expectancy of women was higher than that of men. There was also the assumption that the Western Cape provincial department had the most well-managed health facilities, but the public satisfaction survey indicated a different story – that it had the lowest public satisfaction rate. The statistics of the Medical Research Council (MRC) and Stats SA often differed. He asked whether the two organisations had been able to indicate which statistics the Department should make us of. What was the Department’s working relationship with the MRC like?

Ms Mosidi Nhlapo, Chief Survey Statistician: Stats SA, said that total deaths for men were higher than those for women. The level of public satisfaction had been taken directly from a survey, but the perception that the Western Cape had better managed health facilities may be different from the actual fact. The quality of certification of causes of deaths was still under scrutiny, and should not be trusted. Often doctors indicated that a patient may have died from tuberculosis, but once one conducted a thorough investigation one would find that the patient had other diseases like HIV, and that may have had an underlying effect on the death of a patient. The Stats SA did not have the legal right to go through patients’ medical files, so it recorded what was written on the death certificate. The SAMRC, on the other hand, did thorough investigations into other diseases a patient may have had, and they might record a different cause of death from the one Stats SA had, so there could be differences in the statistics.

Dr Masiteng said the SAMRC collect its data from Stats SA. The only difference was that Stats SA collected raw data, whereas the SAMRC put the data into perspective with other related data.

The Chairperson said it was unfortunate that the report did not indicate where the public satisfaction surveys had been done, as this would have given the Committee a better view of which areas needed its special attention. She requested that Stats SA provide the Committee with a list of the names of the hospitals and clinics that had been surveyed. She would have liked the report to have also indicated what the level of unemployment in the health sector was. Balanced research should always include a survey of both the health providers and receivers.

Dr Masiteng replied that the SAMRC and Stats SA had met on a number of occasions to discuss the challenges of data which did not correlate.

Mr Mahlalela said he still did not understand how the public satisfaction survey had been done, and asked for a list of the communities that had been surveyed. He wanted to know what indication the statistics gave South Africans about the healthcare situation in SA.

Dr James said a satisfaction survey must be treated as it was, but it could not be used as a means to develop a policy.

Briefing by South African Medical Research Council (SAMRC)

Prof Mike Sathekge, Board member: SAMRC, said the organisation was in ongoing consultation with the Department of Health to review the current SAMRC Act and its proposed amendments. A scientific advisory committee with suitable terms of reference to guide and advise on research strategy and policy would be created.

The MRC consisted of three standing committees: audit, risk and information technology (IT) committee; the human resource and remuneration committee; and the research and development committee. The board was comprised of a chairperson, 12 scientists, one legal expert, one Public Financial Management Act (PFMA) expert, and the president.

The current status of science in Africa was that it shared 12% of the global population yet it produced less than 1% of the world’s total science output. The increase in the annual growth rate of publications between 2003 and 2012 had been driven by health science research, and represented 45% of all science research in South Africa.

Prof Glenda Gray, President and Chief Executive Officer: SAMRC, said the organisation’s strategic response to the leading causes of death was to administer health research effectively and efficiently in SA and lead the generation of knowledge and facilitate its translation into policies and practices to improved health. The organisation would also support innovation and technology development to improve health and build capacity for the long-term sustainability of the country’s health research.

The organisation’s strategic objectives for the 2017/18 financial year were to ensure good governance, effective administration, and compliance with government regulations; to produce and disseminate new scientific findings and knowledge on health; provide leadership in the generation of new knowledge on health; facilitate the translation of SAMRC research findings into health policies and practices; and to provide funding for health research innovation and technology development. The organisation’s aim was to further enhance the long-term sustainability of health research in SA by providing funding for the next generation of health researchers, to provide funding for the conduct of health research, and to promote the organisation’s administrative efficiency to maximise the funds available for research.

Mr Nick Buick, Chief Financial Officer: SAMRC, said the organisation’s main sources of income were baseline and from contracts. The average growth rate was 11.5%, which was informed by an increase of 3.6% in grants and contracts; 34.5% in rentals; 2.9% in interest; and 56.0% in dividends. The budget strategy for the next three years would be to constrict the fiscal environment; to decrease the 2017/18 baseline allocation by R37 million; to maintain tight control of support costs; to maintain cash reserves at a minimum of R50 million; and to give priority to projects which leveraged funding at a rate of at least 1:1 when funds were available.

Professor Gray said that the organisation would be enhancing its institutional research capacity programme by working with the universities of Limpopo, Fort Hare, Venda, Zululand and Walter Sisulu. The organisation would also fund the next generation of scientists through its intern programme, and take up some clinicians. The funding streams currently under the organisation were the Strategic Health Innovation Partnerships Project; research projects; SAMRC and the Newton Fund Programme; the flagship programme and the Additional Award Scheme.

The president’s mid-term review was to lead by example through the transformation of science leadership by appointing a deputy director, funding post-doctoral fellowships and bringing the mentoring of senior black female scientists into the office of the president.

Discussion

Dr James said with the introduction of President Trump’s decision to cut health budgets, and as this could affect South Africa, how would the organisation manage these extreme cuts in the financial year? As part of their strategy for innovation, they should be working with the private sector to tackle issues of diseases. He asked what innovative measures the Council had put in place to beat diabetes.

Mr Mahlalela said the SAMRC should start working with, and comparing itself, with other African countries. With regard to human resources, what timeframe was the organisation envisaging that it would start reflecting the demographics of SA, and when would the new Act be tabled to Parliament?

Dr Maesela said the SAMRC should investigate the extent to which malnutrition had an effect on the deaths of children.

The Chairperson said science had the ability to change the social condition of communities, but for some reason science often appealed to richer people. Why was the organisation not trying to attract young and old black people into the field of science?

Ms C Ndaba (ANC) stressed that the SAMRC should be using the Chris Hani Baragwanath Hospital for research into malnutrition and its causes of death.

Professor Gray replied that the SAMRC worked with Stats SA to interrogate the data which they received from hospitals and the public. The only difference was that the Council articulated both the primary and secondary causes of death, hence their research was often delayed, because they had to wait for death certificates to be issued.

The government should invest in science, instead of waiting for the private sector to step up and invest. The Trump administration’s budget cut would affect the MRC, but this also meant that the MRC would have to diversify its portfolio and create funding through innovative ways. However, the organisation had been working with the Department of Science and Technology and the National Research Fund (NRF) to assist the organisation with addressing science-related issues. Both of these organisations provided the MRC with funding. In order to control TB, the organisation was funding diagnostic drugs and vaccine.

The CFO’s term ended at the end of July, and the contract would be extended. However, the post of deputy CFO would be created and a black deputy CFO would be appointed.

The amendment of the Act was not the responsibility of organisation, but of the national department. There was a long list of other acts which need to be tabled to Parliament before the SAMRC Act was tabled.

The organisation had also worked with other African countries in terms of research, or funding a science-related project, including Zimbabwe, Sudan, Nigeria and Ghana. Science was certainly not only for the rich, and the organisation did encourage young black people to get into the field of science.

Dr Anban Pillay, Deputy Director-General; Department of Health, referred to the amendments, and said normally an organisation would have to make a proposal to the Department on which amendments had to be made. The process was then taken to Cabinet, but the Department was yet to receive any amendments from the MRC. There was a whole list of acts which would be tabled to Parliament within the next few months.

Advocate Nkosinathi Bhuka, General Counsel,Legal and Compliance: SAMRC, said the Council had communicated to the Department the changes that could be made to the SAMRC Act without much contest. These changes referred to Acts which were outdated or those with errors. The organisation was in the process of consulting which areas were more likely to be contested if they were amended. The MRC had a robust regime which they used to engage with various stakeholders, although these engagements were often difficult, as funders often wanted to push their own agendas forward.

The Chairperson said transformation should always start at the grassroots level while the young professionals were still growing. Early childhood development was vital, as the young individuals would be capable of holding executive positions when given the opportunity. There were a number of black children who were scientists, but they had not yet developed their skills. The MRC should work towards reaching disadvantaged communities.

She asked the organisation to supply the Committee with a brief overview of the work it had been doing with other African countries. She said research results should be reader friendly, so that even the black children who did not understand science were able to understand the science jargon.

The meeting was adjourned.