Standing Committee on Appropriations and Portfolio Committee on Health

Transcription

1 Standing Committee on Appropriations and Portfolio Committee on Health National Department of Health 22 March 2017

2 Content Alignment between the National Health budget processes and Provincial Health budget processes (challenges and measures to strengthen alignment) Ensuring alignment in health information systems (including revenue and billing, patient, pharmaceutical application, network infrastructure, etc) between the province and other national ICT systems for effective coordination in the health sector Ensuring critical functions such as procurement, human resources and financial management are appropriately devolved to designated levels for service delivery efficiencies and better performance Ensuring the effective management of personnel expenditure in the health sector Alignment of national and provincial health infrastructure priorities and improving infrastructure budget expenditure (challenges and opportunities for improvements; and Any other matter that may assist the hearings in ensuring improved alignment and coordination in the health sector for improved delivery 2

3 Alignment between the National Health budget processes and Provincial Health budget processes (challenges and measures to strengthen alignment) 3

4 Alignment between National and Provincial Budget processes National Department of Health (NDoH) meet with Provincial Department of Health (PDOH s) on more than 4 occasions in the build-up towards their respective budget speeches by Members of Executive Council (MEC s) In depth discussions take place as a Health Sector that is initiated by NDoH, with National Treasury (NT), Provincial Treasury (PT s) and PDoH s: Bilateral between NDoH and NT (10 August 2016) serve as a foundation for discussions to follow Health Functional Group meeting (23 August 2016) involves the Chief Financial Officers (CFO s) of PDoH s, which advance the discussions and serve as preparation in the build up to the Health 10x10 budget meeting Health 10x10 Budget Committee (30 August 2016) consist of NT, NDoH, PT s, and PDoH s 4

5 Alignment between National and Provincial Budget processes Budget Benchmark (24 January 13 February 2017) is an interaction between NDoH and individual PDoH s on the Medium-Term Expenditure Framework (MTEF) provisional allocations to ensure the following: readiness to implement national and provincial priorities (concurrent function) better understanding of the total business of the department within the public health sector strengthening alignment between planning and budgeting processes protection of Non-Negotiables (NN s) budget allocations highlight potential budget challenges and measures to alleviate them 5

6 Budget Benchmark Analysis: Source Documents 2017 MTEF Guidelines National Treasury (CPIX 6.2% min) Health Sector 2017 MTEF estimates of expenditure database and EPRE narratives NDoH 2 nd draft Annual Performance Plan (APP) 2017/ /20 PDoH 2 nd draft APP 2016/ / MTEF Conditional Grants (CG s) Frameworks 2016/17 In-Year-Monitoring (IYM), NN s and CG s expenditure reports 2016/17 Financial Management Improvement Plans 6

7 Source of Funding for Health Sector (Total Provincial Health budgets) SOURCES OF FUNDING Adjusted Budget 2016/ / / /20 Medium-term estimates Equitable Share 79% 79% 78% 78% Conditional Grants 21% 21% 22% 22% Total 100% 100% 100% 100% (Total Provincial share vs other Provincial Departments budgets) 2016/ / / /20 Health share in total Equitable Allocation 31% 31% 31% 31% Health share in total Conditional Grants Allocation 38% 40% 40% 41% 7

8 Equitable Share stake per Province 8 below 27% above 27%, below 30% above 30%

9 Conditional Grant stake per Province 9 x below 27% above 27%, below 30% above 30%

10 BUDGET BENCHMARK ANALYSIS FOCUS AREA Problem Statement: Healthcare costs unsustainable without reform OECD Health spending has risen faster than economic growth and will become unaffordable without reform Determine 2017/18 FY budget implementation readiness Analysis based on Chap 6: NHI White Paper Prog 2 [DHS] = 46% Prog 4 [PHS] = 18% Prog 5 [CHS] = 20% Prog 3 [EMS] = 4% 10

11 Health Sector Allocation 2017/18 per Program Programme % increase % portion of increase Budget share 1. Administration -3% -1% 3% 2. District Health Services 8% 56% 46% 3. Emergency Medical Services 6% 4% 4% 4. Provincial Hospital Services 6% 18% 18% 5. Central Hospital Services 6% 19% 20% 6. Health Sciences and Training 5% 2% 3% 7. Health Care Support Services 3% 1% 1% 8. Health Facilities Management 2% 2% 5% Sector 6.6% 100% 100% Notes: Data as available in January 2017 Latest budget = R177.2bn (February 2017) Share in Sector increase of R10.9b Share in Sector budget of R176.3b

12 Key priorities highlighted- Programme 2 Earmarked budget for Ideal Clinic vs Target Outputs Protection of the NN s HIV/Aids 90/90/90 program and TB Contracting of Health care specialists Roll-out of WISN program - PHC NHI implementation PHC reengineering earmarked allocation against targets PHC comprehensive registers NHI grant phase-out budget in 2016/17 to allow creation of NHI fund 12

13 Key priorities highlighted other Programmes Procurement and implementation of monitoring system for EMS fleet Procurement of Ambulance fleet Protection of NN s Decomplexing of Hospitals (joint staff establishments) NHLS electronic gate keeping implementation Management of the Cuban Programme Roll-out of WISN program Impact of Medico-Legal cases on service delivery 13

14 Health Sector Nominal Budget growth 2017/18 (target weighted avg = 8.5%) Allocation to Provinces amounts to R176,3billion Sector increased by 6.6% or R10.9b from 2016/17 Adjustment budget All Provinces received allocation increases, except Northern Cape % increase per Province Sector increase 6.6% 7,1% 7,1% 6,9% 10,9% 8,9% Target increase 8.5% 6,6% -3,5% 6,2% 4,3% 5,9% EC FS GP KZN LP MP NC NW WC Sector 14 red orange green below sector above sector, below target above target

15 Distribution of Health Sector Allocation per Province Mid-year population estimates, 2016 Insured Population (2014 NT) % of Population Estimate EC FS GP KZN LP MP NC NW WC Total

16 Distribution of Health Sector Allocation per province Provincial Distribution: Budget allocated to provinces as per population figures Kwa-Zulu Natal (22%) and GP (23%) received 45% of the Sector budget Northern Cape lowest portion at 2%, with a -3.5% reduction y-o-y Highest increase received by Mpumalanga at 10.9%, and North West at 8.9% 16

17 Distribution of Health Sector Allocation per Econ Classification Incl: Agencies, Consultants and Contractors 17

18 Health Sector Allocation per Econ Classification Personnel 8.5% Goods and services 8.8% Transfers 6.2% Capital Assets 8.0% Total 8.5% 18

19 Health Sector 2017/18 Shortfall per Econ Classification Classification Target increase per annum 2016/17 Nominal 2017/18 Nominal 2018/19 Nominal 2019/20 Personnel 8.5% Goods and services 8.8% Transfers 6.2% Capital Assets 8.0% Total 8.5% Shortfall - accumulative Net shortfall

20 Provincial Personnel Summary PROVINCIAL DATA Province and Occupations Posts Break- Down Number of Posts Number of Posts Filled Number of Posts Filled Additional to the Establishment Number of vacant posts Vacancy Rate (Includes Frozen Posts) Eastern Cape Free State Gauteng KZN Limpopo Mpumalanga North West Northern Cape Western Cape Grand Total

21 Health Sector CoE Allocation overview CoE received an increase of 7.3% or R7.6b for a total Allocation of R111.8b On average, earnings of public servants are projected to grow by 8.5% per annum over the next 3 years (NT guideline) The Health Sector CoE will grow average at 6.6% over the MTEF, (shortfall of 1.9%, against 8.5%) Only Mpumalanga maintain the public servants earnings growth over the MTEF at an average of 8.6% Below 6% growth for LP, NC and WC 21

22 Distribution of Health Sector Allocation CoE overview Budget % increment over next 3 years: % increase over MTEF Province 2016/ /18 17/18 18/19 19/20 Shortfall EASTERN CAPE % 4.5% 7.9% FREE STATE % 6.1% 7.5% GAUTENG % 7.2% 6.5% KWAZULU-NATAL % 6.9% 5.4% LIMPOPO % 5.8% 5.8% MPUMALANGA % 8.9% 7.4% NORTHERN CAPE % 5.3% 5.6% NORTH WEST % 6.0% 6.8% WESTERN CAPE % 5.9% 3.3% Sector % 6.4% 6.1% * Shortfall is for 2017/18 FY 22

23 Distribution of Health Professionals Staff Category Public Private Total Split Audiologists % Biokineticists % Environmental assistants % Environmental health practitioners % EMS practitioners % Nutritionists/Dieticians % Occupational Therapists % Optometrists % Medical Orthotist/Prosthetist % Pharmacists % Physiotherapists % Podiatrists % Psychologists % Clinical Psychologists % 23

24 Goods and Services 24

25 Health Sector Goods and Service Budget overview G & S received an increase of 5.2% to an Allocation of R50.2b Increase is below projected inflation of 6.2%, and medical price index at 8.8% Allocation expected to increase over MTEF at average of 6.9% Shortfall in CoE to be subsidised by G&S, therefore no real increase Pressure on NN items will occur due to shortfalls 25

26 Distribution of Health Sector Goods and Services Budget overview Budget % increment over next 3 years: % increase over MTEF Province Shortfall EASTERN CAPE % 12% 8% FREE STATE % 13% 4% GAUTENG % 11% 6% KWAZULU-NATAL % 7% 5% LIMPOPO % 13% 3% MPUMALANGA % 13% 5% NORTHERN CAPE % 7% 8% NORTH WEST % 10% 7% WESTERN CAPE % 4% 10% G & S Total % 9.5% 6.0% * Shortfall is for 2017/18 FY 26

27 Distribution of Health Sector Goods and Services Budget overview Budget % increment over next 3 years: % increase over MTEF Province Shortfall EASTERN CAPE % 12% 8% FREE STATE % 13% 4% GAUTENG % 11% 6% KWAZULU-NATAL % 7% 5% LIMPOPO % 13% 3% MPUMALANGA % 13% 5% NORTHERN CAPE % 7% 8% NORTH WEST % 10% 7% WESTERN CAPE % 4% 10% G & S Total % 9.5% 6.0% * Shortfall is for 2017/18 FY 27

28 Health Sector Conditional Grants per province 28

29 Health Sector Conditional Grants per province 29

30 Health Sector Conditional Grants distribution per province/per grant 30

31 Health Sector Non Negotiable Budget (Selected items) NN item 2016/ /18 17/18 18/19 19/20 Food supplies % 10% 4% Medical supplies % 8% 5% Medicines % 11% 6% Laboratory Services % 13% 4% Grand Total % 11% 5% 31

32 Interventions from NDoH Greater value for money and spending efficacy More use of Transversal Contracts Economies of scale and Efficiency gains Strengthening monitoring and evaluation with the key output to improve credibility of budget planning, implementation and reporting at district level: Introduced a Multi party District visit forum involving NDoH, PDoH, PDoH Districts, Hospital Facilities, NT and PT s GP (Tshwane, City of JHB, Sedibeng, Ekurhuleni and West Rand) LP (Capricorn, Mopani, Waterberg and Vhembe) MP (Enhlanzeni, Kangala and Gert Sibande,) has been visited Continuous follow-up meetings to access implementation of resolutions Visits to North West and Free State planned in 1 st half of 2017/18 FY 32

33 Interventions from NDoH Cost containment measures in all funding sources: Medical waste disposal, Medical equipment and Linen (PTI project) NHLS electronic gatekeeping Review the use of US$ currency in purchasing medicines from non-usa countries (eg India) Systematically eliminating the use of non-government facilities for official meetings/forums/workshop Limitation of travelling to only urgent matters Improved Audit outcomes: SAICA support programme Unqualified Audits for 2015/16 = 3 of 9 (WC, EC, GP) Interventions with SAICA in KZN, FS, MP and LP 2018/19 Target = 7 Unqualified Audits 33

34 Interventions from NDoH Quarterly gathering of the Health Sector CFO Forum To discuss common challenges facing the Health Sector To share solutions and best practices to challenges within PDoH s To provide strategic direction on the financial future of the Health Sector To account on Financial and Compliance performance of their Dept s Established a sub-forum for Supply Chain Management SCM Reforms discussions for implementation by provinces Solutions to common operational challenges Sharing of ideas to implement cost containment measures Provide information on compliance challenges and audit outcomes 34

35 Conclusion Health Sector budget is declining in real terms Misalignment between increase in Burden of Disease and Budget growth If current trend continues the Health Sector has to reduce its services More citizens become uninsured due to economic environment Consistent risk of possible Medico-Legal claims Intervention needed now to improve Health services in the Country 35

36 Ensuring alignment in health information systems (including revenue and billing, patient, pharmaceutical application, network infrastructure, etc) between the province and other national ICT systems for effective coordination in the health sector 36

37 Alignment and Integration of Health Information Systems 1. Enabled communication between different health information systems Resulted in Gazetting the Interoperability Norms and Standards for ehealth in South Africa 2. Performed a Landscape analysis for all PHC and Hospital Patient Information Systems (Public and Private Health Sectors) against the normative standards framework. resulted in a Specific Framework for acquiring Patient Information Systems (PHC only and Hospital to be completed July 2017) 37

38 Patient Information Footprint per province Provinces Type Vendors Gauteng Eastern Cape PHC Hospital PHC Hospital Intersystems, Comptuassist, Athabasca, GoodX, Allegra, MedeMass, emd, Ibuso, Anglo American, Compugroup, AfA, Occupational Care SA, Discovery, Digidata Trifour, CSC, ER Corporate, Medemass, Intellovate, Management Sciences for Health, ER Group, SAP Intersystems, Medical Information Technology, Computassist, GoodX, Allegra, emd, Compugroup, Occupational Care SA, Discovery Trifour, Management Sciences for Health, SAP Western Cape PHC Computassist, GoodX, Western Cape DoH, Allegra, City of Cape Town, emd, Compugroup, Occupational Care SA, Discovery Hospital Trifour, Health Systems Technology, Hospitserve, SAP Northern Cape PHC Intersystems, Medical Information Technology, Computassist, GoodX, Allegra, Karabo IT, emd, Anglo American, Compugroup, Discovery Hospital Management Sciences for Health, SAP Limpopo PHC Intersystems, Medical Information Technology, Computassist, GoodX, Allegra, emd, Compugroup, Occupational Care SA, Discovery Hospital CSC, Management Sciences for Health, SAP Intersystems, Medical Information Technology, Computassist, GoodX, VP Health, Allegra, emd, Compugroup, Occupational Kwazulu-Natal PHC Care SA, Discovery Trifour, Telemedicine Africa, Medical Information Technology, Management Sciences for Health, VP Health, Intersystems, Hospital SAP Mpumalanga Free State PHC Hospital PHC Hospital Intersystems, Medical Information Technology, Computassist, GoodX, Faranani, Allegra, emd, Anglo American, Compugroup, Occupational Care SA, Discovery Trifour, Management Sciences for Health Intersystems, Medical Information Technology, Computassist, GoodX, Allegra, Karabo IT, emd, Anglo American, Compugroup, Discovery Trifour, Management Sciences for Health, Medical Information Technology, SAP Northwest Province PHC Hospital Intersystems, Medical Information Technology, Trifour, Athabasca, GoodX, Faranani, Pharmaceutical Advisory Services, Allegra, MedeMass, emd, Anglo American, Occupational Care SA, Discovery Trifour, Management Sciences for Health, Faranani, Medical Information Technology, SAP

39 Development of a HPRS for the creation of the Patient Registry National Patient Registry is a foundational building block for successful NHI Health Patient Registration System (HPRS) developed by NDOH together with CSIR The HPRS creates and allocates a Unique Patient Identification Number The HPRS is owned by the National Department of Health - In the current phase, each patient s demographic data is linked to this Unique Patients Identification number and stored on the system. The next phases of this programme will focus on linking the patients Health Records to the number. Additional Benefits of the HPRS include : Generate a Patient File Number Tracking of Patients from one facility to another. 39

40 HPRS - Ecosystem Implementation Status 11,502 computers purchased, distributed and installed PHC Facilities in 22 Health Districts 1,754 Primary Health Care facilities with HPRS installed. Administrative staff and facility managers trained. 5,227,632 Million People registered on the HPRS National Database (Patient Registry) 541 of the 678 facilities targeted has bulk filing cabinets installed Major infrastructure Problems are experienced in 108 PHC facilities and minor infra structure challenges in 29 PHC facilities 3,797,352 Standardized patient folders has been distributed to the 541 facilities 1876 clinical staff have been trained on the use of these folders 40

41 Momconnect MomConnect gives moms and caregivers information about immunisations, breast feeding; healthy diets for infants; PMTCT; danger signs. This information and knowledge impacts on their behaviour and helps reduce all the contributing factors to IMR Linked to Momconnect is Nurseconnect to provide messages to midwives and nurses providing antenatal care. As at 10 February 2017: Cumulatively women (since 2014) have received twice weekly messages about their pregnancy and about the health of their infants post delivery to year one 1187 spontaneous complaints have been received since 2014 and in the same period 8139 compliments have been received nurses have registered and receive twice weekly messages 41

42 B-WISE - Health at your finger tips B-wise is a young person s interactive cellphone health platform to empower adolescents and youth to make the right choices based on accurate information. Secondary target includes health care providers, parents, teachers and other partners working within the Adolescent and Youth Health space. It provides: Up-to-date health information An opportunity to connect with the NDoH on important health topics Free access on ordinary phones and feature phones using a range of network operators A chance to ask experts questions and receive feedback Progress to date: Unique Users: 54,339 New Registrations: 1,720 Questions or Comments: 242 Twitter Followers: 200 Total impressions*: 175,000 Facebook Likes: 600 Total impressions*: 190,000 *An impression is the number of times our posts are viewed 42

43 Pharmaceutical National Surveillance Centre National Surveillance Centre Supplier Monitoring Warehouse System Hospital System PHC system 1 2 Hospitals 3 Suppliers Primary Health Care 43

44 National Surveillance Centre National Surveillance Centre Supplier Monitoring Warehouse System Hospital System PHC system 1 2 Hospitals 3 Suppliers Primary Health Care 44

45 Stock Management Systems Supply Point Systems External and internal supply points (e.g. Contracted pharmaceutical suppliers & warehouses/depots) External: RSA Pharma Database Internal Warehouses: Intenda (SITA and National Treasury) 2. Hospital Systems RxSolution & other systems 3. Primary Health Care System Stock Visibility System (SVS) 45

46 Supplier Monitoring 46

47 Intenda WMS Expected advantages Fully integrated Seamless flow of actions from sourcing through to payment Tender pricing Master data management Product Demander Supplier API to Rx for electronic requisitions/buysite PO via EDI/Portal Advanced Shipping Note Real-time visibility Stock Budget Productivity MCC/Pharmacy Council compliant Batch/Expiry traceability 47

48 Hospital Dashboard Availability by Hospital Level: Nation Wide Central Hospitals Tertiary Hospitals Regional Hospitals Red 20% Red 20% Red 20% Amber 20% Green 60% Amber 20% Green 60% Amber 20% Green 60% 0% 79% 80% 89% 90% 100% 48

49 Monitor drug stockout 49 49

50 SVS - Monitor 50

51 SVS - Order 51

52 SVS - Receive 52

53 Routine for Performance Tracking District Health Information System Rationalisation of registers 53

54 Routine Health Information for Performance Tracking Different software suites aimed at capturing, validating, storing, analysing, and reporting statistical data related to health and service delivery Data is monthly, aggregated, anonymised data from individual health facilities Examples: included DHIS, Tier.Net, etr.net, edr.web National Health Act 74: Governance of Routine Health Information through is through National Health Information's Systems Committee of South Africa (NHISSA) representation of all 9 Provinces Allow for: Performance tracking of service delivery or trends for priority diseases or medical condition at District, Provincial and National Level Health service planning and prioritization at District, Provincial and National Level Data Quality is essential Rationalised and standardised paper based data collection tools in all PHC facilities in 8 Provinces = From 56 registers to 6 registers Phased in web. Based software for aggregation of data to eliminate human errors and to move to real time data 54

55 Interventions to improve data quality Internal Data Audit tools A Rapid Internal Data Audit (RIPDA) tool is being implemented to help Facility Managers to assess progress towards reducing discrepancies between source documents and the DHIS. The tool allows for self assessments by health facilities. A Data Quality Checklist has also been introduced as part of the review of the DHMIS SOPs. It provides a comprehensive list of presubmission data validation activities that Facility Managers must complete before they sign-off on their facility data. 55

56 Revenue Collection 56

57 ALIGNING BILLING AND FM SYSTEMS Develop National Core Standards and a functional framework for a HIS that accommodate Financial Modules that complies with the Accounting Principles (GRAP/ GAAP); NDOH to extend the scope of the CSIR to assess the current HIS compliance to Standard Accounting Principles; The provincial budget allocation has to focus on setting priorities for IT to resolve the budget impasse to improve system efficiencies and streamlining of the IT support structures; Contract Management: Managing strategic partnerships with its vendors; Renegotiate the development and maintenance cost via a Service Level Agreements; Monitor vendor performance: Payment to vendors based on efficiencies and performance; impose a penalty structure for non or poor performance; Billing, revenue collection and Debt management: Revenue collection should be at the point of sale (POS), rather than retrospective collection: Increase the department s financial Risk and improve revenue cycles; Government-owned SWITCHING mechanisms for electronic claim submissions, and receipt reconciliation by means of Electronic Data Interchange (EDI); Increase Electronic Payment Systems (EPS) by instituting digital payment mechanisms; Strengthen Financial institution/ Corporate relations to effect Easy-pay pay points initiatives for patient to pay their debt at any pay-point; 57

58 Progress Made 1. Central Data base- Funded Population Beneficiary Registry: National has appointed the Council for Medical Schemes (CMS) to develop a central repository that would host the personal and demographic information of the funded population; This would interface with SARS, DOHA etc. 2. Revenue Retention Model to Augment Provincial Budget; an incentive to be seen as a Revenue Stream For ICT Investment: National has developed a model to solicit Provinces to retain surplus revenue generated from own revenue (as sales of goods and services including rentals and any other revenue sources as identified by the provincial treasuries (PT)); - should be seen as an incentive to maximize revenue collection; 4. Coding-HIM; Standardization of health data components: Common Patient Identifier, Common Coding (Clinical (ICD-10), Procedural, Pharmaceutical) etc; Common Forms, Common definitions and terminologies: Visits, episodes, Occupancy Rate and Length of Stay (LOS) etc; Common formats; 58

59 3 Year Revenue Trend 2013/ / /2016 Province Revenue Target Actual Collected Variance Revenue Target Actual Collected Variance Revenue Target Actual Collected Variance EC R R R R R R R R R FS R R R R R R R R R GP R R R R R R 2 R R R KZN R R R R R R R R R LP R R R 851 R R R R R R MPU R R R R R R R R R NC R R R R R R R R R NW R R R R R R 918 R R R WC R R R R R R R R R Total R R R R R R R R R

60 3-Year Revenue Collection in Provinces R R R R R R /2014 Actual Collected /2015 Actual Collected /2016 Actual Collected 000 R R 0 60

61 Provincial ITC Billing Systems SystemsSystemsear Revenue Province System 1 System 2 System 3 Vendor Hospitals Functionality EC DELTA 9 Unicare Trend FS MEDITECH PADS GP PHIS(MEDICOM) PAAB (EL-OZI) MTSA Provincial ICT Provincial ICT 13 Hospitals of the 75 All 31 Hospitals All 37 Hospitals Patient Registration, Billing, Lab Results, (EDI 13). Patient Registration, Billing, ( EDI =7) Patient Registration, Billing, Clinical, (EDI = 13) KZN MEDITECH PROCLIN TRACKCARE MTSA Digidata Intersystem Only 11 of the 69 Hospitals Patient Registration, Billing, (EDI =1) LP PHIS(MEDICOM) SITA MPU PEIS Gijima All 37 Hospitals All 28 Hospitals Patient Registration, Billing Patient Registration, Billing NC NUTROOCLIN PAAB Mindmatter Faranani All Hospitals Patient Registration, Billing, EDI NW PAAB Faranani WC HIS HST All 22 Hospitals All 56 Hospitals Patient Registration, Billing, EDI, Pharmacy Patient Registration, Billing, Clinical, Pharmacy, EDI 61

62 Ensuring critical functions such as procurement, human resources and financial management are appropriately devolved to designated levels for service delivery efficiencies and better performance 62

63 Non-Negotiables Per Province 63

64 SUMMARY: EXP. HEALTH SECTOR Total original NN for 2016/17 was R36bn with an adjustment of 5.4% increasing the NN budget to R38bn. Major increase noted in Limpopo and Northern Cape by R682.8mil or 28.9% and R 149.3mil or 15.2% respectively. Overall NN expenditure as at 31 January 2017 was R32bn or 84.2% resulting in over expenditure of R1.6 mil or 4.2% at year end This over spending is mainly due to payment of accruals. Area of concern is on Children Vaccines, overspent by R726.2 or 63.6% The table below illustrates the overspending NN components as compared to the norm : Overspending items Amount overspent % overspent Overspending items Amount overspent % overspent Childrens Vaccines % Blood Supply % ARVs % Medicines % Security Services % 64

65 PER PROVINCE: EXP. HEALTH SECTOR NN Norm 83.33% SUMMARY PER PROVINCE Previous Appropriation Actuals ACTUAL % Projection Spent Year Main Adjusted to TO DATE - Over/ Actual 2016/ /17 Date March-17 Under 2015/16 Jan-17 Main ROVINCE 1 EASTERN CAPE % FREE STATE % GAUTENG % KWAZULU/NATAL % LIMPOPO % MPUMALANGA % NORTHERN CAPE % NORTH WEST % WESTERN CAPE % otal expenditure %

66 Eastern Cape Spent R3.6bn or 86.1% of the Revised budget The province anticipate to overspent by R470.4mil or 11.1% at year end. Children vaccines remains main area of concern as reported during the third quarter overspent by 276.9% against the revised budget Refer to the table below, areas of concern. Overspending items Amount overspent % overspent Overspending items Amount overspent % overspent Childrens Vaccines % Laundry Services % Medical Waste % Security Services % ARVs % Medicines % The province should re-prioritise within the allocated budget from non performing items to cater for overspending components 66

67 Free State Total budget sits at R1.9bn and spent R1.4bn or 74.8% below the norm. Underspent by R162.9mil or 8.49% Major contributors as area of concern: Underspending items are Security Services 47.6%, Infection Control 49.2%, Essential Equipment 51.6%, Medical Waste 64.9%, Medical Supplies 66%, Medical Gas 68%, Food Services 73.8%, NHLS 75%, Laundry Services 75%, Infrastructure 76.6% and ARVs 76.7%. Overspending items are Children Vaccines at % and Medicines 93.2%. Hence there is slightly improvement, the province is underspending on the total allocated budget. Implementation of Invoice tracking system will assist the province to comply with the prescripts to effect payments within a prescribed period. 67

68 Gauteng Spent R8.4bn or 85.3% of the revised budget amount. Projected to overspent by R562.4mil or 5.7% of the total revised budget. The overspending items are caused by payment of accruals due to cash flow management challenges to effect payments especially towards year end. Underspent on Essential Equipment 52.2%, Medical Waste by 53.6%, NHLS 63.4%, Food Supplies 67.4% and Infection Control 70%. This is due to delays in payments of suppliers due to cash flow problems It is recommended that the province should craft a strategy or plan to deal with accruals and ensure improvement on cash flow management. 68

69 69 KwaZulu-Natal Total expenditure sits at R7.9bn or 91.5%. Overspent the revised budget by R703.5mil or 8.2%. Projected over expenditure at year end by R451.5mil Significant overspending on Children Vaccines sits at 129%, ARVs 104%, NHLS 93% and Medicines 89.4% against the revised budget. Children Vaccines overspending was due to payment of accruals amounting to R20mil and ARV s estimated to spend more by R312mil. Reprioritisation within the allocation and implementation of payment of accrual strategy recommended for the province to ensure the reduction of accruals at year end.

70 70 Limpopo Overall budget sits at R3bn with total expenditure of R2.5bn or 81.8%. Areas of concern in the province are as follows: Blood supply R123.4mil or 106% NHLS R332.3mil or 103.6% Medicines R541.4mil or 101% Infection Control R90.6mil or 100.8% Security Services R308.8mil or 99.5% Children Vaccines R167.4mil or 98.7% NDoH engaged the Province and Provincial Treasury through District- Centered Approach visitation in strengthening financial planning and budgeting.

71 71 Mpumalanga The province spent R2.1bn or 83.5%. Underspent on Children Vaccines 0.33%, Essential Equipment 46.5%, ARV s 67.2% and Blood Supply 73.8%. The province overspent on Medical Waste 116.7%, Medicine 103.8%, Medical Supplies 102.4%, NHLS 98.8% and Medical Gas 83.3% mainly due to payment of accruals. Overspending is due to accruals carry-through costs which impact on service delivery. NDoH is engaging with the province through the district-centred approach to address challenges faced by the department on financial and nonfinancial matters to ensure credible financial management.

72 72 Northern Cape Spent R672.7mil or 59.3% below the norm. Underspent by R272.4mil or 24% Projected to underspent the revised budget at year end by R212.9mil or 18.8%. Cash flow management remains a major challenge, results in an increase on commitments. Invoices not yet paid for NHLS R22.5mil and commitments made Blood supply R5.1mil, Medical Gas R5.1mil, Food Supplies R30.5mil, Security Services R25.1mil, Infrastructure R35mil andarv s R21.4mil. The province highlighted that spending will be reprioritised and also implementation of a plan/ strategy to deal with cash flow constraints. However, there is no improvement in spending due to cash flow. Cash flow management improvement plan/ strategy is recommended.

73 73 North West Spent R1.6bn or 88.2% within the norm Projected over expenditure at year end by R448.3mil or 24.7% Reported during the third quarter total accruals estimated at R364.5 million had a direct impact on the spending as most of the payments were related to non negotiable items. Overspending items are Children Vaccines sitting at 127.3%, Laundry Services 95.7%, ARVs 94.2%, Medical Waste 91.6%, Security Service 89.6% and Medical Gas 89.3%. Province stated that savings from non-core items will be identified to cater the shortfall during adjustment budget will engage with Provincial Treasury for additional funding, however the status quo still remains.

74 74 Western Cape The province spent R3.8bn or 77.3% below the norm. Underspent the budget by R294.1mil or 6.01% Underspent on Essential Equipment 60.6%, Laundry Services 62.2%, Medical Gas 65.3%, Infrastructure 67.1%, Medical waste 67.4%, NHLS 71.4% and Food Supplies 75.3% and Blood Supply 76.9%. Anticipate underspending at year end by R33.1mil or 0.67%. Overspent on Children Vaccines 96.4% and ARV s 94.8%. Month of May, the province stated that historically spending in the first quarter are always slow as reported in the second quarter, underspending still reflected the quarter under review.

75 Savings linked to centralised tendering Estimated savings for 2015/16 Financial Year: No therapeutic class tendering adopted In the context of severe depreciation of local currency R 253 million saved through benchmarking and price negotiations Estimated savings for 2014/5 Financial Year: o R 1 Billion saved on ARV Tender through benchmarking and price negotiations o R 76 Million saved across other tenders through benchmarking and price negotiations o Maintained lowest ARV prices in the world and largest ART programme Estimated savings for tenders in 2014/5 Financial Year: Therapeutic class tendering (stimulation of competition & pooled vol.) o R 1.6 Billion per annum on solid dosage tender, 2 year contract = 3.2 Billion total saving o R 8.6 Billion per annum on antiretroviral tender, 3 year contract = 2.6 Billion total saving 75

76 76 Ensuring the effective management of personnel expenditure in the health sector: NDoH Personnel

77 Impact of vacancies on Service Delivery As the department has already concluded the planning process for the incoming financial targets on the Annual Performance Plan (APP), the NDoH set targets with the notion that the staff establishment will be fully capacitated in terms of Department HR Plan Emphasis was mainly on the attainability of set targets based on available resources, specifically the CoE budget Given the targets set in the NDoH Annual Performance Plan (APP), it is clear that the deliverables are over-committed The reduction in CoE will necessitate the Department to review the targets set in the APP based on the available resources, in line with the SMART principles In the interim, the department will commit to ensure optimal utilization of the available resources to attain strategic objectives 77

78 Middle Management SR 9-12 senior management SR SR 1-8 Middle Management SR 9-12 Senior Management SR SR 1-8 Percentage of Administrative Management and Technical posts National ADMINISTRATIVE TECHNICAL Grand PROGRAMME TOTAL % TOTAL % Total Ministry/DG/Office Support % Administration % NHI & COO % % HIV/AIDS, TB & MCWH % % Primary Health Care % % Hospitals Tertiary Services &HRD % % Health Regulations & Compliance % % 359 Management Grand Total % %

79 Alignment of national and provincial health infrastructure priorities and improving infrastructure budget expenditure (challenges and opportunities for improvements) 79

80 Alignment of Infrastructure between PDOH and NDOH Provinces develop User Asset Management Plans (U- AMP) and Infrastructure Project Management Plans (IPMP) as well as Annual Implementation Plans (AIP) that are submitted to NDOH for review and approval. These Provincial plans are funded from ES, HRFG NDOH also develop IPMP and AIP which is funded from In-Kind Grant 80

81 Monitoring Process Provinces are receiving budget from HFRG to appoint required skills to monitor and implement projects Built environment technical skills are procured through DBSA to assist NDOH to do monitoring and oversight on the projects that are on site Provinces conduct progress review meeting with the Implementing Agents NDOH also holds quarterly progress review meetings with provinces 81

82 In-kind Grant Performance 82

83 In-kind Budget Expenditure -as of 8 March

84 84

85 85

86 86

87 87

88 Health Facility Revitalisation Grant Performance 88

89 Health Facility Revitalisation Grant The expenditure reported above is up to the end of February All provinces performance is look better except in EC and GP province. 89

90 90

91 91

92 92

93 93

94 Any other matter that may assist the hearings in ensuring improved alignment and coordination in the health sector for improved delivery: Alignment of planning in the Health Sector 94

95 NATIONAL AND PROVINCIAL PRIORITIES FOR MTEF 2017/ /20 The priorities for the MTEF commencing 2017/18 year are derived from: Sustainable Development Goals 95

96 Sustainable Development Goal 3 NDP Goals 2030 NDP Priorities MTSF NDoH Strategic Goals

97 Sustainable Development Goal 3 NDP Goals 2030 NDP Priorities MTSF NDoH Strategic Goals

98 Sustainable Development Goal 3 NDP Goals 2030 NDP Priorities MTSF NDoH Strategic Goals

99 Legislation and Prescripts that regulate Health Sector planning Pubic Finance Management Act, 1999 Treasury Regulations Chapter 5 of 2007 Framework for Strategic Plans and Annual Performance Plans, 2010 National Health Act, 2003 Section 21(4) - the national health plans must comply with national health policy. Section 21(5) - The Director-General must integrate the health plans of the national department and provincial departments annually and submit the integrated health plans to the National Health Council. Section 33(1) - Each district and metropolitan health manager must within the national budget cycle develop a district health plan drawn up in accordance with national guidelines issued by the Director-General Section 23(2) - The National Health Council may determine the time frames, guidelines and the format for the preparation of national and provincial health plans. 99

100 100 ALIGNMENT BETWEEN DIFFERENT TYPES OF PLANS PRODUCED BY THE HEALTH SECTOR PLAN PURPOSE REQUIRED BY PLANNING HORIZON NATIONAL DEVELOPMENT PLAN 2030 Outlines government s 2030 vision Cabinet Lekgotla (Sept 2013) 16 years LONG TERM PLANS (LTPs) To facilitate a review of the current shape and size of the health service delivery platform MTSF Outlines Priorities of Government including that of the health system National Health Council Programme of Action years (or longer) 5 years NATIONAL AND PROVINCIAL STRATEGIC PLANS Provides specific interventions to implement priorities of government during the term of office (linked to the electoral cycle); Public Finance Management Act 5-years Prepared once every 5- years; Updated in the Annual Performance Plans. NATIONAL AND PROVINCIAL ANNUAL PERFORMANCE PLANS (APP), AND OPERATIONAL PLANS Provide a road map of provincial objectives Set targets and enable consistent annual reporting Outline what Provinces can and cannot do due to resource constraints Public Finance Management Act 3 year, medium-term plans, linked to the MTEF cycle ANNUAL NATIONAL HEALTH PLANS A single health sector plan integrating National and provincial DoH Plans National Health Act 1 year DISTRICT HEALTH PLANS Guide planning processes at district level Include interventions to address localised challenges and to improve service delivery. National Health Act 1 year 100

101 Alignment between National <-> Provincial <-> District Annual Plans National Health Act 2003, Section 23(2) - The National Health Council may determine the time frames, guidelines and the format for the preparation of national and provincial health plans National Health Act 2003, Section 33(1) - Each district and metropolitan health manager must within the national budget cycle develop a district health plan drawn up in accordance with national guidelines issued by the Director-General 101

102 Key successes National DoH and DPME and NT have a history of a strong working relationship. National DoH provides leadership for Health sector planning. And ensures alignment of targets between provinces and National Provincial DoH APP respond to the indicators identified by the National Health System as priority indicators (through the MTSF and Strategic Plans of all Provincial and National DoH). There is a top-down link between national, provincial and sectoral priorities and the department s strategic goals and objectives Provincial department s strategic planning process also facilitates a bottom-up process for determining priorities ; A formalised process of interaction between the provincial head office and the department s district offices so that grassroots information informs the plans; It is envisaged that this top-down-bottom-up planning process will assume increasing importance as the policy of decentralisation is implemented progressively at all levels of the health system

103 Key Challenges The National DoH is providing leadership to strengthening the planning system of the health sector, however, it must be recognised that Provincial DoH are autonomous. National DoH and Provincial DoH are striving to institute better approaches to planning, which is innovative in nature, but often stifled by the regulated planning prescripts. There are a number of challenges with the generic format prescribed by National Treasury s Framework for Strategic Plans and Annual Performance Plans. o Understandably so, defining a framework that works for all sectors is not an easy task. o This function has now been shifted to DPME. DPME has carried out an evaluation of planning format of all government plans. AGSA audit of plans and MPAT perversely incentivise compliance planning. Experience shows that compliance planning is neither effective nor efficient. 103

104 Conclusion Frameworks and mechanisms are being implemented to ensure alignment between National Health and Provincial Health budget processes Huge investments are being made to ensure integrated health information systems in preparation for NHI implementation NDoH has saved money through central procurement of drugs Ensuring the effective management of personnel expenditure in the health sector The health facility infrastructure maintenance and development is driven by the provincial needs and priorities Planning and budgeting processes are being streamlined and aligned, thereby facilitating better M&E, and reporting on health outcomes and health systems performance 104