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Tshabalala-Msimang: Health Dept Budget Vote 2004/2005 (17/06/2004)

17th June 2004

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Date: 17/06/2004
Source: Ministry of Health
Title: M Tshabalala-Msimang: Health Dept Budget Vote 2004/2005


BUDGET SPEECH BY THE MINISTER OF HEALTH, DR, M TSHABALALA-MSIMANG, National Assembly, 17 June 2004

Madame Speaker, it gives me great pleasure to present the Department of Health's budget vote to you today.

As we enter the second decade of our democracy we are more aware than ever of the opportunity and responsibility that attaches to public office.

While we celebrate our achievements in the first decade, we also dedicate ourselves to ensuring that the fruits of the second decade exceed those of the first.

I wish to pledge -- as several of my Cabinet colleagues have done -- that the vote of confidence that our people have registered for the African National Congress will never be taken for granted.

I find myself acutely aware of this, having been entrusted by the President with a second a second term of office as Minister of Health.

Honourable Members, there are priorities from the first two terms of government that remain top of the agenda as we commence the third term.

These are programmes related to the goal of ensuring that the fruits of our freedom and democracy are enjoyed by all South Africans wherever they might live in the Republic.

Our nation-building project demands that we sustain the support for policies that seek to promote the interests of the poor.

We must continue to take pride in being the champions of policies that move us toward equitable, affordable, accessible and good quality services.

Where our early strategies to achieve these goals are not really effective, we must not shrink from asking whether we are going about it the right way.

We must be steadfast in our goals, but flexible and open to the wisdom of others in improving the methods we adopt to achieve these goals.

This goal is as critical to our progress as the direction of True North is to a sailor navigating the open seas.

In fact, this is our constitutional mandate.

We have achieved much in the past 10 years and we are on course towards our chosen destination, even though there is still a good deal of work to be done.

During my first term of office, in 1999, we adopted a 10 Point Plan for the public health care sector.

This action plan served to guide and coordinate the actions of national, provincial and local government.

We aimed to make a critical impact on the health status of our country by decreasing morbidity and mortality.

I believe our major gains have been in relation to vaccine-preventable illnesses, better management of malaria, improved reproductive health services, a more focused approach to disability, reducing tobacco use and the gradual achievement of a truly comprehensive response to HIV and AIDS.

We targeted the accelerated development of primary health care services and the establishment of the district health system.

During the past 10 years this government has built more than 1300 new clinics in under-served areas of our country, and we now have functioning health districts right across the country - which is a real achievement, considering the fact that local government was undergoing simultaneous restructuring and re-demarcation of municipal boundaries.

We pledged to revitalise our public hospitals, and began with renovation projects scattered across a wide front.

This gave way to a more focused, long-term strategy that combines physical redevelopment with initiatives to strengthen management capacity and to improve the quality of service.

We undertook 966 rehabilitation projects and built 18 entirely new hospitals.

We undertook to improve the quality of care in our hospitals and clinics and, accordingly, took steps to improve clinical standards and to introduce features of customer care.

We introduced a Patients' Rights Charter and saw provinces gradually initiate complaint systems, help desks and incentives for good service.

In the area of improved management and resource mobilisation, we focused on hospitals - which consume the bulk of health budgets - introducing cost centre management, hospital information systems and standard billing systems.

The reform of the medical aid legislation has resulted in a stabilisation of the financial situation of the medical aid schemes to the extent that there have been no bankruptcies in the past two years.

We targeted better utilisation of human resources for health and more appropriate development of such resources.

During this period, the system of community service took root and proved its worth as a resource in our least developed areas.

We supported community service health professionals by implementing telemedicine and introducing the scarce skills and rural allowances which have substantially improved their remuneration packages.

These initiatives have begun to have a positive effect on provision of health services in rural areas but clearly more needs to be done.

We recognised the need to reorganise support services to promote equity and ensure good standards nationwide.

We established the National Health Laboratory Service.

We integrated the blood transfusion service into a single entity.

We also entered into a public private partnership with Biovac to revive the local manufacture of vaccine.

Since 1994, legislation has been a key instrument of transformation in the health sector and in the last five years, we have successfully defended groundbreaking legislation in the courts and passed additional laws.

Some laws were designed to reshape the health system to afford better access to services, while others - like the tobacco laws - protect the rights of health service users and the general public.

In the course of various processes of change and restructuring, we have attempted to improve communication to the public and consultation with important interest groups.

Finally, we aimed to maximise international co-operation, which is one of the fruits of liberation.

Our country has also played a leading role in shaping the agenda of the SADC, Africa and more importantly, the World Health Organisation.

We have put the interests of South Africa, Africa and the developing world firmly to the fore, for example in advocating action to make medicines more affordable, to manage the brain drain of health workers from developing to developed countries and to promote a comprehensive approach to disease management - an approach that would strengthen national health systems.

In short, Madam Speaker and Honourable Members, the last decade has been productive and has seen steady progress.

It is in this spirit that I turn to consider the funds that we have been allocated for 2004/05 and the remainder of the MTEF period.

The National Department has received R8, 7-billion for the 2004/05 financial year.

This is an increase of 4,8% compared to the 2003/04 financial year.

Of the R8, 7-billion allocated, R7, 7-billion - or 88% -- is in the form of conditional grants, which are allocated mainly to the nine provinces.

Conditional grants are made for the following activities:

* the Integrated Nutrition Programme;
* management of HIV, AIDS and tuberculosis;
* national tertiary services;
* training of health professionals and research;
* Hospital revitalisation; and improving hospital management capacity and quality of care.

There is also an allocation for the development of medico-legal services in the provinces. This includes the transfer of responsibility for forensic mortuary services from the police service to provincial health departments.

The Health Vote provides for a major increase in conditional grant funding for the HIV and AIDS Programme. The allocation increases from R333-million in 2003/04 to R781-million in 2004/05. These funds are to be used to finance the Comprehensive Plan for the Care, Management and Treatment of HIV and AIDS.

I would like to take the opportunity to indicate the priorities for the Department of Health.

A key priority, that is currently receiving much publicity, is the implementation of legislation designed to make medicines more affordable to South Africans and to ensure that they are more safely and effectively used.

Among other things, this legislation makes provision for the licensing of health professionals (other than pharmacists) who wish to dispense medicines; and the introduction of a transparent system of medicine pricing based on a single exit price.

On the issue of licensing of dispensing health professionals - the intention of this policy is to ensure that health professionals who dispense are competent to do so.

This is why we have put in place a licensing system that requires every health professional who wishes to dispense to undergo training and then apply for a licence. It is as simple as that - and it is not unique to South Africa, as Zimbabwe already has such a system.

Let me turn now to the issue of transparency in medicine pricing.

Medicine prices are often higher in South Africa than in many developed countries.

What is bitterly disputed is who benefits from unjustifiable profit margins.

Permit me to explain why the issue has been so clouded that every party in the supply chain could safely point fingers at the rest:

Until recently manufacturers charged different prices to different customers, using a complicated system of rebates, discounts and other perverse incentives.

As a result it has been very hard to know the price of a drug as it left the factory gate.

Wholesalers and distributors added their mark-ups to the manufacturer's price and retailers then added their mark-up. These amounts were totally unregulated.

The consumer knew that the price of medicines differed hugely depending on which pharmacy you went to. But nobody could say for sure who was taking excessive profits.

The medicines pricing regulations have tackled the challenge of reasonable pricing in a number of ways.

* They have scrapped and outlawed all discounts, rebates and other incentives
* They require manufacturers to set a single exit price for each product and to sell to all their customers at that price. The level of the single exit price is regulated through a prescribed formula
* They regulate the wholesalers' and distributors' fee indirectly by incorporating it into the single exit price
* They set a maximum dispensing fee for pharmacists and other health professionals who dispense medicines.

Recent newspaper articles quoting industry analysts have already begun to confirm that our policies are correct.

Only last week the Business Day quoted an analyst as suggesting that the prices of medicines have been reduced by 16%.

We are confident that once we have completed our own analysis, we will be able to report more confidently to this House on what the impact of this legislation that you passed has been on making medicines more affordable.

Our commitment to affordable medicines and good dispensing practice has, unfortunately, created a perception that this Government is bent on destroying the private health sector.

Let me lay these fears to rest - this Minister and this Government have no desire to see the demise of the private health sector in South Africa. However, it is in everyone's interest, including that of the private health care industry, for it to make a contribution to the principles that we all hold dear. These are affordability, sustainability, efficiency, access and quality.

Madam Speaker, the need to clarify relations between the public and private health sectors is another priority for the year ahead.

In a meeting that I had with representatives of the private health sector some weeks ago, I promised to work with them to draft a Health Charter that will provide a framework for the interaction of the public and private health sectors and which will also lay out the core values that the private health sector should seek to uphold, including the ownership of private health services, Black economic empowerment and how the public and private sectors should cooperate and complement each other.

We have started some of the detailed work needed to draft proposals on social health insurance. These included consultation with some of the key stakeholders especially on the need and shape of a risk equalisation fund and the need to reform tax benefits attached to medical scheme contributions.

We will have firm proposals before the end of the year, which we shall table before Cabinet.

One of the challenges that we have in implementing our policies is capacity, especially in terms of skilled human resources.

We have many challenges in this regard.

* Firstly, many developed countries are recruiting our health professionals very aggressively
* Secondly, the public health sector is competing with the private health sector for health human resources
* Thirdly, even in the public health sector, rural areas with provinces and the more rural provinces have greater difficulty in attracting and retain health professionals
We have begun to respond to these challenges.

The steps we have taken include the introduction of scarce skills and rural allowances since July 1 last year.

Our initiatives also include the hard lobbying we have pursued in international forums like the Commonwealth and the World Health Assembly to secure agreements that will regulate the movement of health professionals from developing countries to developed countries. At the recent World Health Assembly, a resolution was adopted recognising the need for developed countries to compensate developing countries for the loss of skill health professionals through migration.

Health professionals do not always leave for financial reasons. Many health professionals have told me that they would like to work overseas for professional reasons - to grow as professionals.

We have developed a protocol with the United Kingdom for example, which will allow us to regulate the movement of health professionals between South Africa and Britain.

We also recognise the need to develop our mental health services and interventions to reduce non-natural causes of death.

We are seeing an increase in non-natural causes of deaths. These are deaths from traffic accidents, homicides and suicides. We need to better understand the psychosocial underpinnings of these issues and shape our interventions accordingly. The national school health policy, introduced last year, will assist in the early detection of learners who may be considered high risk in terms of suicide.

Honourable Members, those of you who followed reports on the recent World Health Assembly will know that non-communicable diseases, such as diabetes, hypertension, cancer and osteoporosis, are increasingly being recognised as global health problems.

For many years they have been seen as the scourge of rich countries.

This is no longer the case.

Many developing countries face a growing burden of chronic, non-communicable disease - and South Africa is certainly one of them.

A priority over the next five years, therefore, is to develop meaningful strategies for preventing these diseases that are so difficult to live with and so costly to manage.

Fortunately, the strategies for prevention are the same for many non-communicable diseases - they centre on good diet, responsible alcohol consumption, regular exercise and avoiding tobacco use.

We need to develop a culture that emphasises healthy lifestyles and increase physical activity and we must take collective and individual responsibility for this.

As government we will provide a policy framework, for example, that will contribute to responsible alcohol consumption. During this term, we will introduce legislation after proper consultation with all stakeholders that will limit the advertising of alcohol and complete the process of labelling bottles that contain alcoholic beverages.

Madam Speaker and honourable members, you will have noticed that we have provided this House with some aids to initiate our healthy lifestyle campaign.

I implore the Honourable Members, in the spirit of a people's contract, to work with communities in your constituencies to develop practical programmes that will ensure that the healthy lifestyles campaign is spread though the length and breadth of this country.

In order to communicate more effectively with communities, I am committed to holding imbizos with the provincial MECs in every health district in the country over the next 5 years.

These imbizos will enable us to better understand what the impact of our policies and services are in communities and what challenges exist in every part of our country.

We will also strengthen our use of mass communication media to communicate more regularly with the public in general.

Now, permit me Madame Speaker, to outline what I intend to do in the next year to sharpen the implementation of our sound policies:

* Firstly, I intend to review the way in which the Health MINMEC functions. We need to ensure that the decisions that we take are genuinely collective decisions and to support each other in their implementation. We need to take account of the different circumstances that provinces face and, therefore, I shall be requesting MECs to report at every meeting on the challenges they are experiencing in policy implementation.

* Secondly, I will ensure that the national Department strengthens it capacity to monitor programme implementation and to assist provinces in a more focussed way when they experience difficulties. The Director-General in the national Department, whom we will be appointing soon, together with provincial counterparts will be expected to provide me with monthly reports on implementation of a core set of priorities which shall be determined by the Health MINMEC.

* Thirdly, support teams from the national department will visit provinces on a regular basis to provide support to provincial and local government counterparts. I shall expect these teams to meet with communities, not just with health personnel, during their provincial visits. Such visits will therefore complement the imbizos that I referred to earlier. These teams will focus on improving the quality of care delivered at health facilities.

* Fourthly, I commit the Department to work more closely with other government departments and other stakeholders. For example, cholera is related to such issues as the movement of people and the lack of basic sanitation and clean water.

We will work more closely with the Department of Water Affairs and Forestry, the Department of Education and with local government to ensure that our people have access to sanitation and water services that sustain life.

We are thankful that as a government we are not wholly dependent on donor assistance to implement our policies and programmes.

However, we do accept donor aid with gratitude.

We must, however, ensure that we have a proper framework for the acceptance and use of donor assistance.

We will implement one policy, one co-ordination mechanism and one framework for monitoring and evaluation of the impact of this assistance. If we do not, it may be impossible to focus on one set of national priorities.

In terms of new legislation, quite a number of Bills have been drafted.

A number of these Bills entail quite specific amendments to earlier legislation.

The more substantive laws are the Traditional Health Practitioners Bill and the Nursing Bill.

The Traditional Health Practitioners Bill provides for the self-regulation of practitioners through a statutory council and mandatory registration.

The Nursing Bill replaces the present Nursing Act and really overhauls statutory provisions for the profession.

It aligns the law with developments in nursing training and practice and with changes in governance and administration of public entities.

During the course of 2004/5 the final regulations to the Mental Health Care Act will be published and various regulations in terms of the National Health Bill are likely to be published for public comment.

In conclusion Madame Speaker, I wish to place on record the contribution made to the legislative process, in particular by the Portfolio Committee on Health led by the Honourable James Ngculu and the Select Committee on Social Services led by the Honourable Loretta Jacobus.

I am confident that we will work as well with members in the new committees in both houses.

I would also like to take this opportunity to thank the MECs for Health and their staff who worked tirelessly in the past five years to improve the health of our people.

I also wish to thank the politicians and officials in the various municipalities for their contributions.

Let me also say how much I appreciate the support of managers and staff in the national and provincial Departments of Health, as well as the many committed health workers who are at the cold face of service delivery.

Finally I wish to extend a warm welcome to the new Deputy Minister of Health, Comrade Nozizwe Madlala-Routlidge, and the MECs for Health.

I am confident that these colleagues will bring a commitment to building this critical partnership, this contract with our people that will take us forward to a healthier future.

Let us heed the President's call to roll up our sleeves and get to work.

Phambili ma-Africa, Phambili!

Issued by: Ministry of Health
17 June 2004
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