I am pleased to have the opportunity to talk to you today and outline two critical issues that we as a department of health in Gauteng have been busy with in the last couple of months.
As you are aware the department faced tremendous pressure in the 2011/12 financial year to settle supplier debt as delays in payments were having a negative impact both on the side of the suppliers as well as service delivery by the department. The department together with the Provincial Government undertook various interventions in an attempt to manage cash flow challenges that we were facing and to improve the situation.
Interventions made included making money available from the Provincial Treasury to enable the department to service its debts. Budgets of all Gauteng provincial departments were also cut to improve the availability of resources to the department to address payment of suppliers. This made R1.5 billion available to the department to service accruals. The department devised a payment plan which stipulated that it would use the resources to pay off all suppliers by the end of June this year.
This is how we use the resources that we made available to us from April to June this year. In April we released R105 million to service providers and suppliers. This was followed by R1.9 billion and R2.4 billion in June.
A total of R4.4 billion was therefore paid from April to June this year and we can now say that the deadline of settling accrual by 30 June has been achieved. Where invoices are still being processed, payments will be released as soon as the invoices have been captured in the system and verified.
We have now put in place a plan to avoid a recurrence of the accruals and cash flow challenges that we have experienced. Our plan includes achieving a cost saving of R1.6 billion through cost containment measures. Cost saving will be achieved by managing the compensation of employees, reducing costs associated with pharmaceutical, surgical items, medical equipment, security services and the use of government vehicles.
We will also focus on reducing the costs of medical litigation against the department and the costs of blood, laboratory tests and x-rays through the implementation of the electronic gate keeping system. Intensive measures will also be implemented to collect debts that are owed to the department.
To achieve further improvements and sustain the success we have achieved, we will have developed a Gauteng Health Turnaround Strategy (2012 – 2014). The implementation of the strategy will be focusing on eight core areas namely;
District Health Services
Communication and Social Mobilisation
Infrastructure and Maintenance
As part of improving financial management we plan to review all contracts for currency, performance, cost effectiveness against market rates. We intend to re-negotiation prices and conditions in order to contain the expenditure of the department within the approved budget.
We will commission a study on Gauteng funding for Health in order to answer the question: “Is the Gauteng Health Department adequately funded to meet its constitutional imperatives, statutory mandates and strategic objectives?” The outcomes of the study should inform budget processes for 2013/14 Medium Term Expenditure Framework process.
We will decisively address fraud, corruption and maladministration through prevention, investigation and appropriate action on suspected and confirmed cases.
We will undertake a process of verification of employees, perform payroll based post-to-person matches and confirmation of the numbers of employees we have, as part of improving human resources management.
We intend to establish an office for ethics and discipline in the Department and clinical heads of departments in hospitals will be held accountable for abuse of overtime and remunerated work outside of the public service (RWOPS) by their staff.
We will undertake a re-engineering programme of primary health care services as part of the National Health Insurance to ensure continuous quality improvements at all district hospitals, clinics and community health centres.
To improve ambulance response times, we will appoint a chief executive officer for emergency medical services and implement an improvement plan that will cover norms, personnel, budget, communication systems, and transportation for ambulances and planned patient transport.
To address adverse events and instances of medical negligence, we will seek to reduce work related constraints such as breakdowns of equipment, shortage of commodities and human resources issues such as high patient / health professional ratios.
Where medical negligence is confirmed we will endeavour to avoid protracted court battles by entering into appropriate settlement negotiations with affected parties. Disciplinary measures against professionals implicated in proven cases of medical negligence will be instituted immediately and they will be reported to the Health Professionals Council of South Africa.
All institutions will be required to develop and implement costed infrastructure maintenance and rehabilitation plans. These plans will be reviewed quarterly to ensure that the environment in which we care for patients does not deteriorate.
We are confident that the interventions outlined in the turnaround strategy would lead to more effective utilisation of available resources by the department; the clearing of debts and accruals; delivery within allocated budgets; improvement of health outcomes, entrenchment of the desired organisation culture, enhanced internal discipline throughout the organisation; and improved public and partner confidence.
The implementation of the Gauteng Health Turnaround Strategy will form part of the performance agreements of all senior managers, CEOs of hospitals, district and facility managers. All operational plans will mainstream the implementation of the strategy.