The Eastern Cape Department of Health has for years made headlines for the wrong reasons. These include overcrowded hospital wards, dilapidated infrastructure, food shortages, broken-down ambulances and dodgy tenders. In addition, the high number of medico-legal claims in the province has contributed to budgets being stretched to breaking point. Some have called for the department to be put under administration.
Recently, Spotlight reported on how telecommunications company MTN temporarily withdrew services because the Department of Health had failed to pay their bills. MTN was joining a list of other providers like Afrox, medical suppliers, food suppliers, security and chemical suppliers who had been paid late. Last year, a report by Ritshidze, a community-led health service monitoring initiative, highlighted how the province was struggling with staff and medicine shortages.
Yet, speaking at the recent Rural Health Conference in Chintsa in the Eastern Cape, then head of the Eastern Cape Department of Health Dr Rolene Wagner made a compelling case that the situation is slowly being turned around. Since then, however, Wagner has been controversially removed as Head of Department and seconded to a new task team in the office of Premier Oscar Mabuyane.
Whether or not the reforms presented by Wagner at the conference continue in her absence, her presentation is nevertheless worth revisiting.
Is R28bn enough?
For the 2023/24 financial year, the Eastern Cape Department of Health has a budget allocation of just over R28 billion.
Presenting at the Rural Health Conference, under the theme “celebrating rural service”, Wagner said the health sector faces two critical challenges -the cost of healthcare increasing above the cost of inflation and the impact of lump sum payments for medical negligence claims settlements that has led to large accruals and payables (goods or services received but not yet paid for). These accruals and payables were for things like security, medicine supply, cleaning detergents, and food supplies.
“We reduced the rate of increase in accruals and payables from 16% to 5% in 2021/22 and to 2% in 2022/23 through the Health Turnaround Strategy. I’m happy to say we have stabilised the department financially; it is not where we want it to be, but it is stabilising” she said.
“Due to us not being able to honour our bills, drug companies closed their accounts and refused to deliver orders, we couldn’t pay security companies, hence unprotected patients, staff and assets, increasing the risk of theft and robberies which then leads to staff protests and patient dissatisfaction and complaints. With this, cash flow management has to be centralised and this does affect organisational clock speed,” Wagner said.
‘Can’t afford to freeze posts’
The department’s cash flow problems are not new. Presenting the Eastern Cape Department of Health Budget allocations, Annual Performance Plan and Operational Plan for the 2022/23 financial year for consideration and approval in March last year, MEC for Health in the Eastern Cape Nomakhosazana Meth said accruals and payables arose out of the historical, upfront lump sum settlements of medico-legal claims that accumulated year-on-year from 2014/2015.
Responding to questions from Spotlight at the Rural Health Conference on how the department will manage Treasury’s recent instruction regarding freezing of posts and what this will mean for the province given staff shortages and planned infrastructure projects, Meth said they just can’t afford to freeze posts.
Meth said when she became MEC in 2021 she had a report from executive management that for three consecutive years as a department they didn’t have the funds to employ new people as vacancies occurred through natural attrition, be it retirement, resignation or death.
“So we fought, we tried it all in order for us at least by the 2022/23 financial year to have a funded annual recruitment plan. For three years we couldn’t even replace our clinicians who left the system. I understand it is unavoidable to reduce the amount of those you can employ. But to say you are totally freezing, I think on this one, we need to engage further because we can’t afford that,” she said.
According to a May 2022 response from Minister of Health Dr Joe Phaahla to a parliamentary question, the Eastern Cape Department of Health had the highest number of vacant posts at 3 892. At the time there were 3 484 nursing positions to be filled, 302 medical practitioners and 61 paramedics, among others.
“Already, we are spending close to 80%-85% of our budget on Compensation of Employees, but still the vacancy rate is still so high so we can’t afford to have post frozen,” said Meth, adding that it has become increasingly difficult to respond to health care needs in the face of tight fiscal constraints.
For service providers that have not been paid (in the form of accrual and payables), Meth told Spotlight they start to settle it as the year progresses. “We do this in a manner that will not collapse the department hence we negotiate. We pay and start with the new services with the providers but at least there is an understanding because we are honest in what we are doing and try to prioritise them just as the year starts,” she said.
Health Turnaround Strategy
In an effort to resuscitate the department, the Department of Health collectively came up with the Health Turnaround Strategy. According to Wagner, the purpose of the Health Turnaround Strategy is to address the strategic, organisational and service challenges and move the health system towards a re-engineered, sustainable service platform that is digitally enabled, data-driven and focused on disease prevention and health promotion.
“The turnaround strategy consists of five pillars. These are initiatives that are aimed at financial sustainability, integrated medico-legal interventions, service delivery optimisation, among other things,” she said. She added that it is being implemented and some measurable improvements are already being noted.
Even so, Wagner said the payment of historic debt within the cash flows each month makes it extremely difficult to pay all suppliers within 30 days. “Due to the fact that we need services to keep running we need to borrow from Paul to pay Peter. The department is forced to divert funds meant for goods and services to pay claims. What has helped is also good working relations with some of the providers who have continued to offer services while we make a plan to pay them,” she said.
An integrated medico-legal strategy
One contributing factor to the department’s financial woes has been the high number of medico-legal claims in the province.
In a parliamentary briefing by the National Department of Health and the Auditor-General of South Africa in September on the state of medico-legal claims across the provincial health departments, the Auditor-General informed parliament that the government had failed to meet its target of reducing the contingent liability of medico-legal cases by 80% from the baseline of R70 billion in 2018. As of March, this year’s claims stood at R77 billion.
The Auditor General indicated that the cumulative total value of all 15 148 claims made against the National Department of Health during the 2021-2022 Financial Year stood at R125.3 billion, with 96% being for medico-legal claims. Of the 15 148 claims, 4 443 were from the Eastern Cape, followed by 3 783 from Gauteng, 2 915 from KZN and 1617 from Limpopo.
With its integrated medico-legal strategy, the Eastern Cape Health Department aims firstly to stop the outflow of large sums of money that is caused by court orders when there is non-payment of medico-legal settlements. Secondly, to have a coordinated legal defence which will effectively manage current medico-legal cases and mounting a coordinated and tactical defence. Thirdly, to strengthen the administrative claims processes within the Health Department, ensuring that the clinical teams keep accurate and relevant patient notes and records which most of the hospitals don’t have, making it difficult to defend medical claims in court. And lastly, to prevent future cases of medico-legal litigation by improving the quality of clinical services especially maternal and child health services.
“With the help of the strategy and other measures in place, there has been a significant reduction in medico-claims and the lump sum pay-outs,” Wagner said.
Turnaround strategies to continue
As Head of Department, Wagner would have been the driving force behind many of these strategies. But with her having been moved out of the department, some may question whether the reforms will continue.
Mkhululi Ndamase, Meth’s spokesperson, this week told Spotlight that “the Health Turnaround Strategy, the integrated medico-legal strategy and other strategies will continue being implemented by the department regardless of who is at the helm. The Health Turnaround Strategy and medico-legal strategy are part of the department’s effort of ensuring we improve the quality of health and care we offer to the millions of people who rely on the state for their health needs,” he said.
He said it would be wrong to imply that now that Wagner has been reassigned to the Office of the Premier, the Health Turnaround Strategy will not be implemented anymore.
In the statement announcing Wagner’s move, Mabuyane said that S. Gede would take over as head of the province’s department on an acting basis.
Ndamase said that part of the continuous implementation of the strategies was the successful organising of a medico-legal intervention seminar on 11 and 12 October at the Nelson Mandela Academic Hospital in Mthatha. He said that as a central hospital, Nelson Mandela Academic Hospital not only renders these services to residents in its immediate surroundings, but also to referrals from over 20 hospitals across the province. “This hospital is one of the most litigated hospitals to the tune of R3 billion annually, this places a huge strain on the hospital itself and the Department of Health as a whole,” he said.
“At the seminar, doctors, nurses, academics, management and civil society discussed ways of decreasing medico-legal claims and medical negligence, which is part of the integrated medico-legal strategy. The different stakeholders unpacked strategies that could be employed in order achieve less litigations against the department which are due to a number [of] factors,” he said.
‘Situation is dire’
Meanwhile, Jane Cowley, the Democratic Alliance’s Health spokesperson in the province, described the situation as still being “dire”. “Eastern Cape Department of Health is financially bankrupt. They can’t pay their service providers. The department is collapsing,” Cowley told Spotlight in September. “Medico-claims are soaring.”
“There is no way hospitals will be fully functional with skeleton staff. There are workers who are claiming overtime which was not even worked which then runs to millions of Rands. Over a third of all the medico-claims in the country come from the Eastern Cape, this tells a big story on the state of the department,” she said.
Cowley also doesn’t think moving Wagner out of the department was a good idea. “I believe she has put several plans in place to reduce medico-legal risk going forward and she, being a qualified doctor has a solid grasp of the challenges facing the department. I’m worried the current acting head of department will not have the same level of understanding,” she said. Though Cowley said she is not sure why the shake-up happened, she strongly believes that there were tensions between the MECs and the heads of departments.
“I think that Dr Wagner was trying to make effective changes but it’s very difficult when the department is bankrupt, because service delivery will still be very negatively impacted for a long time to come. There are no quick fixes and there is no financial support forthcoming from either national or provincial treasury,” she said.
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‘Place EC under administration’
Cowley has been calling for the department to be placed under administration in accordance with Section 100 (1) (b) (i) of the Constitution, to ensure that established minimum standards for rendering health services in the province are maintained.
“This will recraft the whole department and tidy up the mess,” Cowley said. “We are lacking political will from National Treasury and National Department of Health for this to happen. Placing them under administration will not be a permanent resolution but until such a time that they have cleared out the mess and able to focus on patient care.”
“It’s also not just about placing them under administration,” Cowley said. “There is need for someone who has nerves of steel to make sure that corruption is rooted out. There are other unnecessary positions in the departments which can be merged or done away with, and it will save money. There is bad management, people are appointed and they can’t do the job.”
‘It’s a complex matter’
Russell Rensburg, Director of the Rural Health Advocacy Project, told Spotlight that managing public funded health networks is complex and turning around an underperforming or dysfunctional department even more so.
“In my view the approach taken by the Eastern Cape Department of Health to focus on [a] turnaround plan informed by health system data is a good one and is delivering some good results. But as we have seen from other provinces, to sustain continuous improvement we need stability in the leadership team,” he said.
“Leadership teams in all provinces are facing significant challenges with optimising service delivery with less resources since 2012, so the accruals could also be indicative of underfunding as budgets have not grown at the same pace as medical inflation,” said Rensburg.
Speaking on Wagner’s removal, Rensburg said he is not entirely sure how things will work now. “I am honestly not sure as the Health Department is included in the departments the crack team will be working on. Was the move to diffuse tensions between the MEC and the head of the department?” he asked.
The nub of the issue, according to Rensburg is that: “we need to pay attention to defining the accountability between the political head and the accounting officer (head of department)”.
He said the National Health Act does not define the two roles very well. “In my view we should work towards developing a framework to govern the relationship. Additionally, we should also consider strengthening the MEC’s accountability to the legislature and the multi-sectoral provincial health council as described in the Act,” he said.