Strategy 2010 - 2015

Presentation to the Health Portfolio Committee Sagie Pillay CEO Strategy 2010 - 2015 May 5, 2010

STRATEGY 2010-2015: Mission & Purpose Guiding Principles: “NHLS Credo” Strategic Dialogue Key Strategic Issues Strategic Dilemmas: “Themes” Strategic Dream: “Vision” Strategic Drivers: “10-point Plan” Strategic Deliverables: “Strategic Objectives” 5 yr Strategic Deliverables: “Balanced Score-card” 1 yr 2

To provide quality, affordable and sustainable health laboratoryand related public health services, • To train for health science education, and • To promote and undertake health research In support of National & Provincial Departments of Health In their delivery of health care to the nation Our PURPOSE & MISSION 3

Our first responsibility is to our customers whom we desire to serve with passion and commitment, and strive to provide with an effortless quality yet affordable experience • We are accountable to our employees, respect their dignity and recognise their value. • We value a disciplined organisation culture that promotes loyalty, trust, accountability and collaborative effort to mutual benefit, with employees who seek to contribute to the pursuit of NHLS’s purpose • We endeavour to maintain exceptional standards and improve our offering through continuous learning and innovation appropriate to our environment • We strive to contribute to and make a difference to the Communities in which we live and work, ultimately influencing the improvement in our Nation’s health The NHLS Credo: “Our guiding principles” 4

STRATEGIC DIALOGUE STAKEHOLDER INPUT • For the first time in NHLS history, Key Stakeholders were invited to engage in a national Strategic discussion to provide insight and guide the strategic thrust of the next 5 year period. • The following documents were used to inform the strategic discussion: • The Maputo Declaration on the Strengthening of Laboratory Systems, WHO, 2008 • Government’s Programme of Action 2009 – Human Development Cluster: Health • NDOH 10 point plan • NHLS Strategy 2007-2010 (February 2009 Review) • NHLS Annual Report 2008/2009 • Invitees included*: • Key Customers on Service Delivery: DDG: Strategic Health Programmes, CD: Communicable Disease, CD: Non-Communicable Diseases (from National Department of Health), all 9 Provincial Heads of Health, • Key Stakeholders in Research and Teaching: Department Science and Technology, all 9 Deans of University Faculties of Health Sciences, all 9 Heads of Schools of Pathology (or equivalent), Key representatives from Universities of Technology • Internal Stakeholders: Chairpersons of NHLS Board and its Subcommittees, in addition to the NHLS Executive Management Team *Full list of Attendees, and their Strategic Input (in the form of Powerpoint presentations) are attached as Appendices 5

STRATEGIC DIALOGUE DIRECTION OF TRAVEL.... • Where we’ve come from... ...Where we’re going to Phase 1: 2001 – 2005 Amalgamation & Formation Phase 2: 2005 – 2010 Financial & Operational Stability Phase 3: 2010 – 2015 Customer Focus & Affordability 6

STRATEGIC DIALOGUE KEY STRATEGIC ISSUES IDENTIFIED Strategic Issues related to SERVICE DELIVERY: • The NHLS and the DOH need to weigh up the affordability of the current fee-for-service model, which results in invoices that exceed DOH’s budget, against the cost of accessibility of NHLS services, particularly in relation to the expectation by the DOH that laboratories be available at the most local level. • The NHLS must seek clarity on who is/should be responsible for containing DOH costs through “gate-keeping” the volumes & types of tests requested in relation to the established guidelines. • The NHLS must establish a costing model and correlate this to its key cost drivers, namely: Human Resources, Technology and Physical Infrastructure (whilst maintaining Quality Assurance). • The NHLS must establish a funding model that will generate a meaningful tariff. The options to weigh up are the current fee-for-service model, Lump Sum estimates, Conditional Grant, or combination. • Given the recent Strategic Alignment of NHLS with Government’s Programme of Action, especially the Accelerated Programme for Development, the NHLS must ensure its capacity in terms of Human Resources, Technology and Infrastructure, to respond to help address the emerging Burden of Disease. • The NHLS realises that it is under-utilising its vast potential to provide Information to DOH which should assist with decision-making that informs policy and practice. The potential is currently diminished by the lack of a unique patient identifier, as well as a common IT platform within DOH , & between DOH & NHLS. • The lack of an over-arching framework – such as a National Policy for Laboratory Services – to inform Guidelines (e.g. Point Of Care Testing), Quality Assurance, Training, Monitoring & Evaluation is not ideal and must be addressed. 7

STRATEGIC DIALOGUE KEY STRATEGIC ISSUES IDENTIFIED Strategic Issues related to OPERATIONAL PROCESSES: • Skills shortages and the inequitable geographic distribution of talent is a major challenge. In fact the NHLS has an absolute shortage in four key professional groupings which demand long lead times to fill. The NHLS should consider the option of training mid-level laboratory workers to fill the gap. • The NHLS must investigate the cost-benefit of in-sourcing key Auxillary Services which have a massive impact on service delivery - e.g. Transport & Logistics, and Health Care Waste Removal – against the current option of outsourcing alone. • The NHLS must drive Standardisation of Technology to reduce cost and wastage, and improve quality. • Customer-related concerns such as the following must be addressed: 1. Turn Around Time (TAT) issues such as the inability to measure & account for Total TAT, as well as key priorities e.g. TB Culture 2. The DOH’s need to eliminate duplicate test requests 3. Interpretation Issues w.r.t. Billing, Programme Data and Customer Satisfaction Survey results : confusion with regards to non-coterminous boundaries between NHLS Branches and Provinces, and between Business Units and Districts 3. Training required on Thusano and wwwDisa 4. Training required on clinical specimen collection (e.g. dry spot collection) and request form completion) 5. Poor Communication between Stakeholders contributes to unmet expectations. 6. Space requirements of NHLS that are not met by DOH compromise the ability to get the job done, and to meet expectations. 7. The NHLS should consider Task-shifting, such as Phlebotomists at high volume hospital • The NHLS has major Cash Flow challenges due to significant outstanding debtors. • The users’ poor awareness of NHLS, lack of single identity and poor customer perceptions does not bode well for the organisation. • Poor Staff morale and entropic organisational culture compromise stability and skills retention. 7

STRATEGIC DIALOGUE KEY ISSUES IDENTIFIED Strategic Issues related to RESEARCH & DEVELOPMENT: • This was a previously under-emphasised mandate within NHLS, whereas it is a Cabinet imperative, which has resulted in a missed opportunity for synergy around a National perspective vs. individual University perspectives alone. This must be rectified. • Under-collaboration with the Department of Science and Technology has been a missed potential opportunity. • The Funding Model for research, which currently entails cross-subsidisation from Service Income and externally-funded Grants, must be interrogated. NHLS needs to even consider shifting to a Conditional Grant model or investigate other alternatives. Currently research is an “unfunded mandate” with the resultant impact being poor retention ability of talented & skilled researchers. • The challenge between alignment with National Research Priorities against funder interests & expectations, and even against individual researcher interests, may limit opportunity for “leap-frog” innovation if the NHLS introduces a complete limitation on “blue-sky” research. • Research should be translational i.e. lead to and/or impact changes to policy and practice. • The footprints of the National Institutes for Communicable Diseases and Occupational Health (NICD & NIOH) are too localised, and the NHLS must aim towards extending these nationally. 8

STRATEGIC DIALOGUE KEY ISSUES IDENTIFIED Strategic Issues related to TEACHING & HUMAN RESOURCE PIPELINE: • Unlike the DOH, the NHLS does not have a 10-year Human Resource Plan for its Core Professionals of Pathologists, Scientists, Medical Technologists and Technicians. • The NHLS is not fully leveraging its relationships with Universities & the Universities of Technology to ensure the sustainability of laboratory services. • The NHLS must recognise that the role of academic institutions is far greater than merely teaching & research; it includes Academic Leadership to optimise technology. • Recruitment for the four core professionals is very difficult. • The failure rates of Medical Technologists is concerning; especially with reduced capacity in NHLS to supervise students. • With the reduction in applications into Clinical Pathology as a discipline, academic institutions are questioning the profitability of providing this specialisation. The NHLS must consider the potential implications should universities decide to cease teaching Clinical Pathology. • The NHLS should consider playing a greater role in undergraduate teaching, thereby also improving current diluted exposure & education in pathology. In addition, the NHLS needs to clarify its teaching role at the Universities of Technology. • There are opportunities for partnering with academic institutions to extend teaching into Africa. • There is a challenge with finding the balance for professional workforce between service : teaching : research • Opportunities for New Professionals exist, e.g. BTech; but experience with conversion courses is problematic. • The current Funding model – which entails Cross-subsidisation from Service Income – needs to be interrogated and perhaps even consider shifting to a Conditional Grant or other alternatives. 9

2.Service Funding Model 1.Service Delivery Model 3.Positioning NHLS for NHI • On-site Lab access vs. On-site Test access? • Capacity & capability to respond to massive increases in Programmes? • Out-sourcing vs. In-sourcing? 4.Teaching & Research Role & Funding Model Strategic Dilemmas 5. Using & Managing Information STRATEGIC DIlemmas CONVERT TO STRATEGIC THEMES TO SHAPE STRATEGY 2010-2015 • ↓Costs to Customer (but maintain QA) • FFS vs. Fixed Fee vs. Conditional Grant ? • Other Revenue opportunities? • Cost Drivers - HR, Technology, Infrastructure • ↓Cost-Subsidisation – Teaching & Research • Provider of Choice vs. Mandatory Provider • Alone vs. Joint-Venture with Private Sector 8.Technology & Innovation • Cross-Subsidisationvs. Conditional Grant vs. other Revenue Generation opportunities • Advanced vs. Appropriate? • Capacity & capability to respond to massive increases in Programmes? • Smaller numbers, high volume analysers vs. higher numbers, smaller volumes? • Access to data – who owns the data? • Adding value: Routine vs. Ad hoc reporting vs. Analytical capability - translating data into information • National resources: Biorepository, Archives 7.Stakeholder Collaboration & Partnerships 6.Advocacy & Policy Input • Actively manage vs. reactive • Partnerships & Collaboration at organisation vs. individual level • Translating information into knowledge • Advocating change in policy &/or practice 10

STRATEGIC DILEMMAS for the nhls 1. SERVICE DELIVERY MODEL • Current Service Delivery Model: • Extended “footprint” of numerous physical laboratories country-wide close to periphery However, challenges are: • Potentially inefficient test repertoires • Costly to run • Difficult to staff with Skills shortage • Difficult to upscale capacity rapidly • Potential options for the service delivery model • Large capacity laboratories with less diverse “footprint”, equipped with bulk analysers and ramped-up logistics to ensure acceptable TAT standards • Hybrid model as a combination of smaller “footprint” and Point-of-Care-Testing (POCT) However: Is a hybrid model that involves POCT sites which are not managed by a nurse, but by a travelling lab technologist in areas where there is no high throughput possible and financially feasible? • Should the role of the NHLS, NICD particularly, be expanded beyond surveillance alone to that of support to all DOH services? 11

STRATEGIC DILEMMAS for the nhls 2. SERVICE FUNDING MODEL • Current Service Funding Model: • Fee-for-Service with Cross-subsidisation of Teaching & Research Mandates However, challenges are: • Unaffordable for Provinces • Does not encourage Efficiency and Waste reduction (for customer or NHLS) • NHLS should investigate and pursue alternative Funding model options such as: • Conditional grant funding for Research & Teaching + FFS without cross-subsidisation • Fixed Costs, trading volume for margin • Increasing surveillance grants • Other revenue generation opportunities • Key Cost Drivers are Human Resources, Technology, Infrastructure • Explore the modification of Service grant reporting to reflect Income vs. Outputs • The NHLS must convince the DOH about the additional value that it provides for the cost of “lab services” 12

STRATEGIC DILEMMAS for the nhls 3. POSITIONING FOR NHI • The NHLS must maintain competitiveness in an NHI environment • Price will be an issue – particularly in a climate where new entrants could partner with Indian companies. • Thus NHLS should: • Explore Optimising partnerships for logistics to bring down costs • Explore Partnering with new entrants through a JV system • Leverage on current standing - as service provider (with extended test repertoire), training next generation and conducting research. • Improve billing, systems, etc, as this will be even more pertinent than currently. • Improve & upscale skills and technical capacity • Remain alert to the potential risks (losing public sector work) vs. potential return (gaining additional private sector work) • Worst case scenario: The NHLS will have to BID to be the preferred provider – the NHLS Act is unlikely to be “protective”. • The NHLS must get involved on technical committee to be set up by the Minister to understand and influence policy formulation. 13

STRATEGIC DILEMMAS for the nhls 4. Model for teaching and research • Current Teaching & Research Funding Model: • Cross-subsidisation of Teaching & Research Mandates from Fee-for-Service Tariffs • NHLS should investigate and pursue alternative Funding model options for its Teaching MandateNote: NHLS not registered as a higher education institution. • NHLS must gain understanding of the implications of a Conditional Grant vs. Fee-for-service on: • budgeting • the NHLS’ ability to deliver on the mandates of training and research sustainably • ability to attract and retain cutting edge talent • Risk with Conditional Grant: NHLS could eventually viewed as merely “a laboratory service” from which to cherry-pick, and lose the ability to attract core professionals, such as Pathologists and Medical technologists to be the best in the world. Important to keep the currently structured NHLS intact – such as the HPA model. • The NHLS should: • Explore internal mechanism to create teaching platform budgeting mechanism. • In reporting, reflect ‘service’ provided by NICD & NIOH against grant by NDoH. • Explore additional grant / bridging finance for research to ensure continuity of research/ innovation and fulltime employment of scientists beyond the lifespan of funded Grant. • Leverage convening power of NHLS to engage with other agencies/departments. 14

STRATEGIC DILEMMAS for the nhls 5. USINg & MANAGING INFORMATION • The NHLS must provide Enabling Health Information • The NHLS must develop and expand the immense value of the extensive Health data (for which its acts as Custodian) into useful Information, through: • Developing Stakeholder Accessibility to NHLS Information Systems • Thereby enabling improved Monitoring & Evaluation of passive surveillance programs & NCR • Improving Stakeholder Information Accessibility to Active Surveillance Programs • Improving Stakeholder Information Accessibility to utilisation trends to enable effective management 15

STRATEGIC DILEMMAS for the nhls 6. ADVOCACY & POLICY FORMULATION • Key value-add of NHLS: Translating information into knowledge (adding expert analysis and interpretation) • NHLS needs to take this step further: Advocating change in policy &/or practice • Key Policy initiatives to engage in and drive: • National Laboratory Policy • NHLS to take lead in driving this crucial process • Point Of Care (POC) Testing • Requires extensive discussion and investigation • Clarity required as to interpretation of POCT (5000 clinics or 265 labs?). • NHLS should conduct internal analysis to determine feasibility and value-add to health delivery of POCT; however, POC is not an alternative to a centralised service. • Also important to investigate consequences of POCT on teaching and research • NHLS must take the lead in informing policy around the issue of POCT. • NHLS must deal with misperceptions around POC. • Current reality: International agencies are pushing POCT and the Department of Science and Technology (DST) is informing NDOH that it can work. Should NHLS disagree , must be able to show empirical evidence that POCT not viable option. • Gate-keeping / monitoring use of tests • Should the NHLS be the “gate-keeper” for the DoH in terms of declining test requests to limit over-utilisation or over-servicing? • Or should NHLS rather provide protocols and formularies, as well as provide management information to empower hospitals to deal with “guilty doctors” who over-utilise. 16

STRATEGIC DILEMMAS for the nhls 7. Stakeholder management & partnerships • Given that there are many more stakeholders in health than NDOH, the NHLS should endevour to ensure synergy of efforts and elimination of duplication & overlap in funding and service & research efforts • NHLS therefore needs to engage the following stakeholders: • Public Sector: DST, DTI, DOE, DOL, DPSA, Dept Public Enterprises, Treasury • Private Sector: other Pathology providers, suppliers, logistics & supply chain management • International: WHO, ILO, etc • The NHLS must actively manage vs. reactively respond to these stakeholder relationships, given that NHLS has significant convening power. • NHLS must ensure that partnerships and collaboration occurs at an organisational vs. individual level, so as to live beyond the individual. • Every overseas visit should be seen as networking and exploratory collaborative opportunity 17

STRATEGIC DILEMMAS for the nhls 8. Technology & innovation • NHLS must ensure Technology is appropriate yet innovative • The NHLS must find the balance between acquiring and utilising highly Advanced “cutting-edge” technology” vs. technology appropriate to resource-limited settings • NHLS must balance the needs and the consequences of affordability vs. future opportunity and possible “leap-frog” innovation created through “cutting-edge” research and retention of committed skilled professionals • The NHLS must ensure technological capacity & capability to respond to massive and rapid upscaling in Priority Health Programmes, as well as consequent large and rapid downscaling with policy changes • NHLS must ensure technology is appropriate to the Service Delivery Framework, Platform and Model, such as: • Smaller numbers of high volume analysers for extended “footprint” of testsvs. larger numbers of small volume analysers for extended “footprint” of labs • NHLS must explore other Innovative ways to deliver Laboratory services in resource-limited settings, and in in remote settings. 18

5-yeAr STRATEGIC dream THE DESTINATION…2015 The NHLS will be: • “Household” name in health – with a SINGLE identity • Laboratory services provider of choice • Provider of Quality and cost-efficient services through Lab standardisation • African leader in laboratory services • The provider of WHO African surveillance • Primary reference point for promoting worker health sub-Saharan Africa • SA health information powerhouse • A key player in Health Policy formulation • Top employer of real talent – Laboratory services “employer of choice” • Protector of our environmentthrough Resource and Energy efficiency 19

5-yeAr STRATEGIC dream JOURNEY TO THE DESTINATION… • 2011: • Finalised Funding & Costing models • Streamlined business • disciplines to appropriate sites • Engage strategic partners • 10 yr HR plan operational • Gear up for NHI • Universal Health Information Access to Provinces • Universal Web access to lab results by Clinicians • 2013: • Footprint in SADC • Knowledge management institutionalised 2012 2015 2011 2014 2013 • 2014: • Informing Policy & Advocating Change in Practice • Fully automated central labs per NHLS region • NHLS full accountability to pre- and post-analytical processes • Quality affordable service • 2012: POC policy / approach implemented • Alignment of technology with current/future needs • National network of surveillance labs • Streamlined Supply Chain Management 20

5-yeAr STRATEGIC DRIVERS 10-point plan • Deliver affordable service to Public Sector • Find alternative Funding models for Research & Teaching • Determine Transparent pricing model • Ensure guaranteed Funding for Surveillance Services – NICD + NIOH • Explore other Revenue-generating opportunities • Determine “best-fit” Service Delivery Model • Ensure Capability & Capacity to rapidly upscale for Health Priority programmes – HIV/AIDS, STI’s, TB • Choose and implement On-site Laboratory Access (with tiered laboratory model) vs. on-site Test Access (with tiered test repertoire supported by massive logistics platform) • Determine Point-of-Care Testing Policy and Implementation • Determine most appropriate standardised technology – automated, centralised vs. decentralised • Fulfill Statutory Functions – NIOH, NICD, NCR, expanded to include Forensic Toxicology • Deliver Quality, Customer-focused Service • Improve Customer perceptions of service delivery to the bench-mark score of 75% • Ensure retention of international quality standards to ISO 15189 • Accredit ALL reference, academic and regional labs with SANAS • Develop and maintain internal accreditation system for peripheral labs in line with ISO 15189 • Expand accredited EQA programmes throughout Africa • Align Resources, Support Services & Infrastructural Development for Service Delivery • Implement the 10-year Human Resource Pipeline Plan • Partner with Academic Institutions to align teaching and training of core professionals for fulfilment of planned pipeline • Investigate mid-level workers • Implement the 10-year Infrastructural Plan • Enhance Supply Chain Management • Align ICT systems to optimise service delivery • Rollout LIS country-wide • Develop and utilise Health Technology Assessment Unit • Become Laboratory Services “Employer of Choice” vs. “Employer of last resort” • Recruit & retain key talent – both in core professional groups, as well as support services • Strengthen leadership & management capacity – implement NHLS Leadership Academy • Drive disciplined, accountable, collaborative, purpose-filled Organisational Culture NDOH Point 2.7 Accelerate implementation of HIV/AIDS & STI’s, & increase focus on TB NDOH Point 2.3 Improving Quality of Health Services NDOH Point 2.6 Revitalisation of Infrastructure NDOH Point 2.5 Improved HR Planning, Devt and Management NDOH Point 2.4 Overhauling Health Care System & Improve its Management 21

5-yeAr STRATEGIC DRIVERS 10-point plan NDOH Point 2.2 Implementation of NHI • Position NHLS as the Provider of Choice for NHI • Investigate Joint-Ventures with other providers / suppliers • Deliver Quality, Customer-focused Service to build credibility and Trust in NHLS • Prioritise Innovation & Research • Develop new diagnostic tools applicable to resource-limited settings • Encourage research into solutions (applicable to resource-limited settings) for priority diseases • Innovate in systems and processes to improve laboratory and health service delivery • Become the Health Information Powerhouse • Safeguard national assets • Establish Biorepository – specimens for teaching & research • Build Institutional Archives – recording pioneering ventures & historical “firsts”, retaining knowledge capital for posterity • Expand monitoring & evaluation of programme & health outcomes beyond Surveillance • Avail Health System Information to decision-makers (using coterminous health boundaries) • Provide information to manage the organisation & promote Accountability culture • Convert information to knowledge to advocate Policy and change Practice • Drive Stakeholder Collaboration • Ensure integrated and unified plans of action amongst cross-sector stakeholders • To manage priority diseases • To improve worker health • To strengthen Health system delivery • Protect our Community & Environment • Become energy & resource efficient • Dispose waste and assets in environmentally-friendly manner • Strive for paperless organisation NDOH Point 2.10 Strengthen Research & Development NDOH Point 2.3 Improving Quality of Health Services NDOH Point 2.1 Creation of Social Compact for better health outcomes 22

5-yeAr STRATEGIC deliverables STRATEGIC OBJECTIVES 23

1-yeAr STRATEGIC deliverables BALANCED SCORE-CARD 26

www.nhls.ac.za 2010-11 BUDGET HIGHLIGHTS

www.nhls.ac.za 2010-11 BUDGET ASSUMPTIONS

www.nhls.ac.za BUDGET 2010 - 2011

Our appreciation to the honourable Chair and members for this opportunity. Questions Conclusion

Strategy 2010 - 2015