Massive overspends and huge weakness – IST reports

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Massive overspends and huge weakness – IST reports

Weaknesses include a bloated bureaucracy, poor financial management and inadequate monitoring.

These are the confidential findings of the health department’s Integrated Support Team (IST), appointed by previous health minister Barbara Hogan to investigate problems in the provinces after the Free State ran out of money in late 2008.

The damning collection of reports have revealed the extent of shortcomings, ranging from strategic planning and leadership, through to financial management and monitoring and evaluation during the tenure of then health minister Dr Manto Tshabalala-Msimang and her director-general Thami Mseleku.
The confidential reports were leaked this week to Section 27 and the Rural Health Advocacy Project after several attempts by Health-e and others to access the reports via various channels including the Access to Information Act failed.

The reports include nine provincial versions and one consolidated report. Key authors of the report were health systems experts Drs Peter Barron and Laetitia Rispel. Barron is currently a special advisor in the health department and Rispel heads up the Centre for Health Policy at the University of Witwatersrand.

The consolidated report warned that overspending had the potential to undermine the capacity of the national health system to improve health outcomes, in particular the health sector’s response to the HIV epidemic.

The report raised “serious concern” about “the continued growth in management and administrative positions across the various provinces, especially in provincial head offices” at the expense of healthworkers implementing services.
In February 2009, there were 269 007 health department staff in the provinces, the highest in KwaZulu-Natal at 67 389. Provinces spent an average of 56% of their budget on salaries.

Management was found to pay far more attention to ‘bureaucratic issues” than service delivery implementation.

There was little co-ordination between key areas such as HIV, TB and maternal and child health and the national TB programme was not well implemented across provinces.

There was an “absence of guidelines in critical areas, such as service packages for different levels of care, human resource production and highly specialised tertiary services”.

Patients generally bypassed clinics and went straight to hospitals.

The report stated that the exact amount of overspending had been significantly understated and it estimated that a minimum of R7,5-billion was required to get the health system back on a sound financial footing with about 80% of this attributable to the KwaZulu-Natal, Gauteng and Eastern Cape provinces.

The IST also found that the ultimate budgetary allocations was determined by the provincial treasuries, but to a large extent it was not aligned to provincial health departments’ operational plan and budget submitted.

Unfunded mandates – changes in policies or operational requirements resulting in additional expenditure for which provision had not been made in the approved budgets – were identified as a contributing factor to the overspending at provincial level.

These included the Occupational Specific Dispensation, nationally negotiated salary increases for 2008/09 were 10,5% although the provinces had budgeted for between 5 and 8%, shifts of services such as Emergency Medical Services, an increase in patient activity levels (antiretrovirals), new clinics opened after political promises but with no operational budget, new policies such as the Prevention of Mother-to-Child Transmission programme and legislative requirements.

A key finding of a rapid study commissioned by the IST found that over the 10 year period commencing in 2000/01 - and using changes in morbidity as a proxy for changes in needs - overall budget allocations expressed in real money have not been sufficient to keep pace with need.

The IST also warned that the current model for the scale up to antiretroviral therapy, reliant on centrally located hospitals and medical doctors, was unsustainable from a health system perspective and unaffordable from a budgetary perspective.

The reports identified a number of “other factors” that it felt had an important effect on the capacity of the health system to deliver.

It revealed that over the 12 year period commencing in 1995, the coverage of the population covered by the private sector decreased from 18% to 14%. This was over and above the increasing cross-border flow of people from other countries, although this number has not been quantified.

It also found that there had been a significant and sustained decline in the number of employees from the 1995/96 financial year to the 2002/03 financial year.

The team added a final perspective from an unidentified “well respected operational leader” in the health system: “This person indicated that substantial additional funding, without fundamental improvements in the health delivery system, starting with a common vision and focus, strong central leadership and appropriate measures to enhance effectiveness and efficiency, will only result in more usage and spending. Additional funding alone, which is not focused with laser-like precision, may temporarily resolve the pattern of overspending which has recently become pronounced in the system, but such overspending is then likely to continue once the additional funding is exhausted.”

Section 27 described the IST reports as “an honest, sobering assessment of the inadequate financial capacity of provincial departments of health” and called on the health department to urgently implement the recommendations.

“The findings in these reports reveal fundamental failures in political and bureaucratic leadership, inappropriate financial management systems, inadequate monitoring and evaluation systems, and a failure to plan appropriately for human resources, amongst others.”

Source: Health-e News , By Anso Thom and Kerry Cullinan

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