KEY CHALLENGES EXPERIENCED IN THE EC HEALTH SECTOR SELECT COMMITTEE ON SOCIAL SERVICES 26 MAY 2015

1. KEY CHALLENGES EXPERIENCED IN THE EC HEALTH SECTORSELECT COMMITTEE ON SOCIAL SERVICES26 MAY 2015

2. PRESENTATION OUTLINE • Service delivery environment • Demographic profile of the province • Socio economic profile • Burden of disease • Departmental performance – 31 March 2015 • Financial performance • Performance against pre determined objectives • Infrastructure • SCM • HR • Challenges & related interventions • Way forward

3. SERVICE DELIVERY ENVIRONMENT (1) • Demographic profile of the province • The Eastern Cape Province ( ECP) is spread over 168 966 km with an estimated population of 6 882 982 people which constitutes 12.6% of the S.A population. • 2/3 of the population is 30 years & below and 12.6% is under 5 years • The province has 8 health districts (6 municipal districts & 2 Metros) • The majority of the population resides in: • O.R Tambo District (20.8%) • Nelson Mandela Metro (17.6%) • Lowest percentage of population is in: • Joe Ggabi (5.3%) • Sarah Baartman (6.9%)

4. SERVICE DELIVERY ENVIRONMENT (2) • Socio economic profile • Predominantly rural community with high poverty and high unemployment rates • Low socio-economic status with high poverty rate at 57.2% • Most affected districts are Alfred Nzo, Amathole, Chris Hani and O.R. Tambo • Burden of disease • Quadruple burden which includes TB, HIV, non-communicable diseases and unnatural causes like injuries • Communicable diseases like TB (11.4%) and HIV diseases (5.4%) are leading causes of mortality • Non-communicable diseases like heart diseases (4,7%),cerebrovascular diseases (4.6%) & Diabetes Mellitus( 4.3%) are also common causes of mortality • Maternal and Child Mortality Rates remain high with: • MMR at 148.3 /100 000 live births; and • Under 5 mortality rate is 14/1 000

5. FINANCIAL PERFORMANCE – 31/03/2015

6. FINANCIAL PERFORMANCE – 31/03/2015 • Overall, the department spent 99.3% of its adjusted appropriation & underspent by R129.189 mil (0.7%) • All programmes underspent except for Pr. 2 which overspent by R80 mil • All the main economic classification levels underspent except for Goods & Services which overspent by R801.509 mil, • Main reasons for the over expenditure: • Effects of the settlement of medico legal claims; • Exchange rates causing price increases in excess of budgeted CPI; • Pressure for the supply of additional medicines and high value vaccines. • The over expenditure could not be avoided because Clinics, Community Health Centres and District Hospitals form the backbone of the primary health care system and the department had to ensure that services needed continued uninterrupted • To defray, this over expenditure, savings had to be realised from all other programs, hence the under expenditure

7. FINANCIAL PERFORMANCE – 31/03/2015 • The main under expenditure in Pr.8, under machinery & equipment was due to delays in finalising specifications & tenders for medical equipment which were mostly finalised around year end • From the total under expenditure, R114.673 million has been requested for roll over (R54.933 mil from Equitable Share & R59.740 mil from Conditional Grants) • On the audit side, the department currently has two audit qualifications, being irregular expenditure and employee benefits, the aim is to receive an unqualified audit opinion for the 2014/15 financial year.

8. PERFORMANCE AGAINST PRE DETERMINED OBJECTIVES – 31/03/2015 Targets achieved

9. PERFORMANCE AGAINST PRE DETERMINED OBJECTIVES – 31/03/2015 Targets achieved • Procurement & delivery 110 new & 178 replacement ambulances; procurement of 3 emergency helicopters & installation of EMS tracking system • Reduced deaths related to circumcision from 43 deaths in 2013 to 28 in 2014 • Strengthened medical depots to provide medicines to all health facilities & avoid drug stock outs

10. PERFORMANCE AGAINST PRE DETERMINED OBJECTIVES – 31/03/2015 Targets not achieved • Main causes of poor maternal mortality ratio are linked to the poor referral system which results in delays in transferring patients to the level of care • Additional ambulances provided to address this • High PDE in most district hospitals although not providing the full of package of health services • Department is in the process of reclassifying all small hospitals into CHCs that can provide a full package including caesarean sections and advanced neonatal care

11. INFRASTRUCTURE PERFORMANCE – 31/03/2015 • The department continues to make significant progress on infrastructure especially in the pilot site of OR Tambo • From a successful infrastructure bidding process, allocations of R592 mil, R533 mil & R558 mil were allocated over the MTEF • Improved relations between NDOH and DBSA resulting in the replacement of 8 clinics in OR Tambo (construction is on-going) & 14 Clinics (also in OR TAMBO) were provided with additional consulting rooms and diagnostic equipment sets • Completed projects in 2014/15 • Oncology & critical care units at Frere hospital • Upgrading of Majorie Parish, Nkqubela & Jose Pearson TB hospitals • 72 hr psychiatric observation unit, OPD, paeds, pharmacy & nursing college at Dora Nginza hospital • Cecilia Makiwane mega project & upgrading of Frontier hospital will be completed in the 2015/16 financial year • Upgrades to various clinics (providing additional consulting rooms, pharmacies etc.) • Maintenance contracts have been entered into with 9 service providers for maintenance of critical medical equipment

12. INFRASTRUCTURE PERFORMANCE – 31/03/2015 • Projects under construction – OR Tambo NHI site

13. INFRASTRUCTURE PERFORMANCE – 31/03/2015 • Projects on tender – OR Tambo NHI site • Large Clinic – Lusikisiki Village (contractor to be on site in June 2015) • Upgrade of Bambisana and Zithulele Hospitals – Request for Proposals (RFP) from multi discplinary engineering teams (for design and project management purposes) are currently evaluated. Appointment to be concluded before June 2015. • SakhelaClinic (Mqanduli) – contractor appointed and will be on site in June 2015 • Upgrade of St Lucy's Hospital – appointed of a contractor will be concluded in June and a contractor will be on site by June 2015 • 40 clinics scheduled to received additional consulting rooms

14. SCM PERFORMANCE – 31/03/2015 LOGIS IMPLEMENTATION AND UTILISATION CHALLENGES

15. HR PERFORMANCE – 31/03/2015 • The department has made great progress in stabiling management in the department • The Executive Management Team (SG & DDGs for the Clinical, Finance & HR clusters) have been appointed • 94% of SMS posts (120 out of 128) are filled • 7 out of 8 District Management posts have been filled • Overall vacancy rate in the department is at 9.2%, & major contributor being nurses who resign because of fears related to changes in GEPF rules • 100% of SMS have contracted for the 2014/15 financial year & current financial year • The department is at advanced stages of finalising its organogram, which focuses on a learner Head Office, and bringing more resources to districts & facilities (closer to patients) for improved patient care

16. CHALLENGES & INTERVENTIONS • Budget shortfalls • Overall, the department is underfunded. At least, R2 billion would be required to expend services to reach the poorest & most remote areas of the province • On EMS • Carry through costs amounting to R64 mil from funds received from Treasury during the 2014/15 adjustment estimates period. However, no carry through costs were provided for the EMS personnel & operational costs • R320 million required to operate the EMS fleet • Infrastructure (especially in the NHI pilot sites) • Despite progress made on infrastructure in the province, there is still a continuing need for upgrades and refurbishments of infrastructure across the province • Budget is required for the infrastructure upgrades in the Alfred Nzo pilot site once the plan has been finalised and costed • On the Cuban programme • Carry through cost of R34 million for Cuban programme from funds received during the adjustment estimates

17. CHALLENGES & INTERVENTIONS • Impact of litigations & medico legal claims • There has been an exponential rise in the level of medical malpractice claims and resultant legal fees in the past 2 years • As at the 31 March 2015, the department has an unconfirmed contingent liability of R8,.251 billion, an increase of R4.723 billion year on year. • The department owes the DoJ R82.1 million at year end for legal services. • on year on year. • Hospitals with highest litigations in the province are Butterworth hospital, St Elizabeth hospital, Mthatha Regional & Dora Nginza • Total legal fees & settlements paid over the 3 yrs:

18. CHALLENGES & INTERVENTIONS • Interventions employed to address the rampant medico legal claims • Improvement of clinical management to reduce litigations • Process underway to establish of a provincial office for a Health Ombudsman • Appointment of a panel of medico legal experts to look at all the department’s cases • Appointment of a multi disciplinary internal committee to look at adverse events • Building internal capacity at the 4 priority hospitals to manage medico legal claims

19. WAY FORWARD • It is recommended that the Select Committee on Social Services: • Notes the performance of the department for the 2014/15 financial year, its achievements & challenges • Supports the department in its bid to obtain additional funding to expand its services & to fund its budget pressures • Supports the department in its bid to rationalize service delivery facilities and improve the utilization of PHC services and district based services • Notes the risk of medico legal claims and the impact thereof on already tight budget envelope