Our Response
The Eastern Cape – a compelling place to
live, work, play and
enjoy wellness
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
Provincial Reality
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Budget
Overspend
Escalation
2010 budget need
2009
2010
R 11. 8b
R 2.4b
R 1.4b
R 15.6b
R 13.6b
R 1.6b
R 1.5b
R 16.6b
• Actual Budget
R 13.3b
R 14.2b
• Deficit
R 2.3b
R
2.4b
The population of the EC is +/- 7m and is equal to
Medical Scheme population
However, their budget = R84b !!
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
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.
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
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
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
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
Health Sector Plan
Do More with less by:
– Social Compact to prevent diseases & over utilisation of
facilities
– Re-engineer Business (RPHC towards NHI -prevention is
better than cure)
– Improve procurement to 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)
Social Compact
• Responsibility for health
– “I am responsible; We are responsible & South Africa is
responsible”
• Prevention
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MVA
Mass HCT program
Circumcision
Substance abuse etc etc
• Participation
– DHA
– Selection of providers for training & serving community
• CHP
• Nurses
• Doctors
Procurement Plan
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Transparency with second bite principle
Value-for-money
No “Winner takes all”
Reserve suppliers
Devolved administration with budgets
LED
Supplier 1
Equipment 1
Supplier 2
Supplier 3
Supplier 4
x
equipment 2
x
equipment 3
x
equipment 4
x
equipment 5
equipment 6
x
x
equipment 7
x
equipment 8
equipment 9
equipment 10
equipment 11
Supplier 5
x
x
x
Turn-around Plans:
1.
2.
3.
4.
5.
6.
Revenue Generation
Clinical Health Services Turnaround
Finance Turnaround
Integrated Human Resources Mx Turnaround
Infrastructure Turnaround & Accommodation plans
Information Systems (incl. VPN, Patient
Registration System)
7. Monitoring and Evaluation
HR Turnaround Plans:
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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
Finance Turnaround:
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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
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
Clinical Turnaround:
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Revitalization of PHC
Priority sub-districts development
Quality outcome management
HCT & TB campaign
PBM
Radiology plans
EMS plans
IT – integrated DHIS
Academic platform
Health Reform Timeline
Revise tax
incentives
Create risk
Equalisation
fund
Mandate
restricted
membership
schemes
Gov.
sponsored
low-income
scheme
Medical
schemes Act
2003
1998
Mandate
public sector
coverage
2003
2004
2003
Mandate
medical scheme
membership
2005
2005
2004
Introduce
differentiated
amenities
Introduce PSCF
Set up
legislation PSCF authority
Create legislation
Introduce revised
for autonomous
hospital
public hospitals
reimbursement
(special
system
dispensation)
Source: Social Security Committee Presentation
Introduce
mandatory
environment
Get the Balance Right
Costs
Equity
Efficiency
Quality
“To provide care of the highest possible
quality, at the least possible cost”
Prof. Edward Hughes