Our Response

1. Our Response The Eastern Cape – a compelling place to live, work, play and enjoy wellness

2. South African realities • R79bn on 85% uninsured population • R84bn on 15% insured population (7m population) • The EC has a budget of R14.2bn for 7m population • National revenue will not increase significantly and health’s portion unlikely to grow much • SA has poor health outcomes in terms of equivalent middle income countries • Therefore we have to do more with less and spend prudently

3. Provincial Reality • 2009 2010 • Budget R 11. 8b R 13.6b • Overspend R 2.4b R 1.6b • Escalation R 1.4bR 1.5b • 2010 budget need R 15.6b R 16.6b • Actual Budget R 13.3bR 14.2b • Deficit R 2.3bR 2.4b The population of the EC is +/- 7m and is equal to Medical Scheme population However, their budget = R84b !!

4. Budget 2010/11 • Accruals 2009/10 R 1.4b • Top slice R 444.2m (R1.7b over MTEF for projected overspend) • Conditional grants cut by R 82.9m (R317.8m over MTEF) • Accruals 2010/11 R1.2b + R 400m overdraft • Unfunded OSD & HRopt caused COE to increase from R6.26b to R 7.92b (by R1.6b or 26%) • Unfunded HRopt is R468m + R9m pm • COE increases to 63.6% and G&S to decrease by 8% (actual) or 13% against revised estimates

5. Budget 2010/11 • Total Budget R 14.237b which includes the Priority alloc. R 197.4m (R1.1b over MTEF) • Increase of R394 Million or 2.8% from the 2010/11 adjusted appropriation (R13,842b) • However, decrease of R871 million or 5.8% as against the 2010/11 revised estimate • With Inflation – decrease of 3.7% of approp. & decrease of 11.2% of dept. expenditure estimates.

6. EC Peculiarities: • Unstable and fractured department • Demotivated; disempowered & inappropriate staff • Budget cuts and inappropriate expenditure • 5 different MECs in last 4 years • 4 different HODs in last 4 years • Treasury whose idea of a turn-around strategy is cost- cutting • High vacancy in critical posts with a moratorium on non-clinical posts

7. EC Peculiarities: • Per capita alloc. does not take into account cost of delivery • Poor infrastructure (roads; water & elect) • SDP has 68 dist. hosps; 2 regional hosps and 5 tertiary hosps – too many; dysfunctional; poor condition & poorly managed • R26b infrastructure with R1.2b budget • Admin increase by 159.8% vs. Clinical increase of <2% (inappropriate staff) • Fraud & Corruption

8. Provincial Challenges: 1. Budgeting Process: • Historical vs. Activity vs. Performance (Cluster) vs. Needs / Demographic based budgeting 2. Performance Budgeting: • Merging of financial and non – financial info. • Optimum usage of resources • Enhanced service delivery outputs & inputs • Linking our limited resources to results & outputs • Increase efficiency and effectiveness 3. Organisational Development: • Rationalized SDP with PHC approach

9. Challenges: 4. Financial Management, Environment & HR Mx & Leadership • Repeated poor audits despite numerous interventions • Poor Financial Mx with a lack of competent capacity at many levels resulting in negative audit opinions • The negative audit outcomes will continue until the fundamentals are not addressed - which are the effective facilitation of the Financial Control Environment, Financial Control Activities, Financial Information and Communication, Financial Monitoring and Evaluation Activities • Transversal IT systems with Connectivity

10. Health Sector Plan Do More with less by: • Social Compactto prevent diseases & over utilisation of facilities • Re-engineer Business(RPHC towards NHI -prevention is better than cure) • Improve procurementto get value-for-money • Increase efficiency & effectiveness e.g. decentralise with central M&E and sometimes central co-ordination • Income Generation: (NHI compliant services/ facilities)

11. Social Compact • Responsibility for health • “I am responsible; We are responsible & South Africa is responsible” • Prevention • MVA • Mass HCT program • Circumcision • Substance abuse etc etc • Participation • DHA • Selection of providers for training & serving community • CHP • Nurses • Doctors

12. Procurement Plan • Transparency with second bite principle • Value-for-money • No “Winner takes all” • Reserve suppliers • Devolved administration with budgets • LED

13. Turn-around Plans: • Revenue Generation • Clinical Health Services Turnaround • Finance Turnaround • Integrated Human Resources Mx Turnaround • Infrastructure Turnaround & Accommodation plans • Information Systems (incl. VPN, Patient Registration System) • Monitoring and Evaluation

14. HR Turnaround Plans: • Organogram to address functionality • Person to post matching • Persal cleanup and document management • Electronic leave management • Contract employees cleanup • Compliance monitoring tool • HRD plans • Social compact • Grant Mx • Improve Training capacity

15. Finance Turnaround: • Re-alignment to meet function • Austerity measures & Finance t/o plan • Audit interventions • SCM revamp & Mx of declarations & delegations • Logis implementation • Finance Monitoring tool • Revenue Generation • Fraud Mx

16. Infrastructure Turnaround: • IDIP • IRM update • Preferred SCM process & policy with own BEC and BAC • Re-prioritization of project – RPHC • Maintenance contracts • Health Technology committee • Re-alignment with DHS • IT plans

17. Clinical Turnaround: • Revitalization of PHC • Priority sub-districts development • Quality outcome management • HCT & TB campaign • PBM • Radiology plans • EMS plans • IT – integrated DHIS • Academic platform

19. Get the Balance Right Costs Equity Efficiency Quality “To provide care of the highest possible quality, at the least possible cost” Prof. Edward Hughes