Gauteng health finances in crisis
The crisis at the Gauteng Health Department deepens by the day as unpaid suppliers withhold services and legal claims mount, while services are paralysed because bank accounts have been attached and phone lines have been suspended.
The department, described as the worst managed in the country, is facing massive financial problems and, if not handled quickly, will soon be impacting on essential health services.
And now, as the Life Esidimeni arbitration hearings proceed, there is a possibility that the department’s financial problems will deepen should retired Judge Dikgang Moseneke rule that the families of the 141 mentally ill patients who died as a result of government action should be financially compensated.
More than two months ago (on August 20) the Nurse Mate Agency that provides nursing services to public and private hospitals withdrew all their nurses from Rahima Moosa Hospital. They say that they are owed about R3.6-million and want assurances that this will be paid before they will resume duty.
“We have withdrawn our nurses pending formal confirmation that the Rahima Moosa Hospital or the department will be able to pay, and specifically when that payment can be expected,” said Paul Biyase, the manager of Nurse Mate Agency.
According to Biyase, although the amount they are owed is currently sitting at R3,6million, “if we add all arrear invoices – some dating back to August 2016 that have not been processed because the Gauteng Health Department is delaying things – the total figure is above R5 million”.
Biyase said while the Rahima Moosa Hospital was anxious to clear the debt, the department had no money available and was busy applying for funding from Treasury.
Failed to process payment
“They (Gauteng Health Department) ignore all enquiries, and are very insensitive. The hospital cannot say when we will be paid,” Biyase said.
Biyase said he was disappointed by other hospitals that had made use of the agency, yet had failed to process payments for the services, some dating back as much as a year.
The National Health Laboratory Services (NHLS), which processes most of the tests necessary to diagnose illness, is owed billions by the Gauteng Health Department and other provinces. This debt has meant that the NHLS has been unable to give employees better wages, and they went on strike in July.
During the strike, NHLS CEO Shabir Madhi told the media they were owed more than R5-billion by various provinces, with Gauteng having the largest outstanding debt.
Professor Eric Buch, Chairperson of the NHLS Board, said that service was continuously engaging with the provinces in efforts to secure payment for all the diagnostic services provided by the NHLS.
However by the end of September, the total debt accrued from previous years by all provinces was effectively R2.3 billion and debt for the current financial year was R1.29 billion.
According to Buch, of the total R3,6billion, Gauteng alone owed over R2,6-billion (R2,656 980 428), of which R878-million was under review.
Buch said the culture of non-payment and under-payment for NHLS services had affected its ability to invest in strategic infrastructure critical to the operations of the entire organisation.
“The NHLS has also been unable to reduce its debt to its creditors, so the procurement of essential materials like reagents is now at risk,” said Buch.
Telkom cut the phone lines
The money owed to the NHLS needs to be paid immediately so that the service can continue to provide its essential diagnostic services. It has warned that it will not be able to pay its staff beyond November if the debts are not settled.
“We still believe that with the ongoing support of the Minister of
Health and through continuous engagement with the role players in the public healthcare sector, the challenge will be resolved,” Buch said, hopeful that reports that they would be unable to pay their staff by November would not transpire.
The Gauteng DoH said it had been paying the NHLS R106-million a month since April. But Buch explained that this amount was not even enough to cover the province’s monthly R151-million bill, meaning they were only paying about 64 percent of what they owed and their outstanding debt was constantly growing.
On top of these woes, the Sheriff of the Johannesburg High Court attached furniture and computers from the provincial head office following a R6.2million medical negligence claim it had failed to pay.
The department had failed to negotiate with O Joubert Attorneys to resolve the matter. On September 13, the court issued a further warrant of execution allowing the law firm to attach 14 department bank accounts in order to claim R33.7-million plus 10.5 percent interest for late payment.
Telkom cut the phone lines to the head office in February as well as to Bheki Mlangeni Hospital in Soweto. Staff at Bheki Mlangeni Hospital resorted to using a single cellphone to ensure services, according to The Star. The cellphone was placed in the casualty ward which admits around 19 211 patients monthly.
Nurses use this cellphone to communicate with doctors and Chris Hani Baragwanath Academic Hospital, where they refer critical patients.
Medical negligence claims not paid
Olof Joubert of O Joubert Attorneys said the health department still owed their client money, and that attaching furniture had not been a publicity stunt.
Gauteng Department of Health’s Chief Director of Legal Services, Thulani Mlambo, explained during a television interview that the department was not permitted to budget for negligence payouts.
“The department has not met its obligations in terms of the court order, that is why the sheriff had to come and attach the furniture,” he said, adding that they were facing over 2000 more medical negligence matters.
In another TV interview, Mlambo said: “I cannot tell you where the money will come from to pay for these claims, because we don’t have it.”
The health department declined to respond to Health-e ’s questions about the seized furniture, medical negligence claims and the money owed to nursing agencies, the NHLS and Telkom.
“We can confirm that the Gauteng Department of Health has paid Telkom and telephone lines are now operational – including phones at Bheki Mlangeni Hospital,” said department spokesman Khutso Rabothata, declining to explain anything else.
Treasury to step in
However, Jack Bloom of the Democratic Alliance said many more companies were being told they could not be paid because of budgetary pressures in the department.
“The department is besieged on all sides by claimants, including lawyers seeking payment of court-ordered settlements for medical negligence,” he said.
He added that there were significant and increasing extra costs arising from the Esidimeni debacle, including the costs of the current arbitration hearings and also the tribunal that is hearing the appeal against the Ombudman’s report.
“Judge (Dikgang) Moseneke is likely to award a fairly high monetary payout to bereaved relatives of the (141) deceased Esidimeni patients,” he said.
“I am aware that the Gauteng Health Department has applied for extra funds from the Treasury, but this has not been forthcoming so far,” said Bloom.
According to Bloom, the provincial government is going to have to somehow find money for a financial bail-out, because the health department will be unable to deliver services if unpaid companies stop critical supplies.
“There will be an adjustment budget in November which is likely to feature a large allocation to the health department,” he said.
Commenting on how the department got itself in financial straits, Gauteng Health director of communications Lesamang Matuka said that the provision of health services was a constitutional obligation on the Gauteng Department of Health.
“In discharging this duty, the department does incur supplier debt,” said Matuka.
Supplier debt had outstripped available cash resources for various reasons – including increases in the burden of disease, increases in the population serviced, high medical inflation and more people losing their medical aids and depending on public health due to the economic environment. This was compounded by the fact that no additional money had been made available.
One way of managing this, he said, was through aggressively pushing preventative health care programmes.
“These are meant to keep patients out of hospitals, thus decreasing demand and by necessary implication accruals,” he said, adding that engagements with Treasury were continuous.
Mark Heywood of Section 27 said the financial problems facing the Gauteng Department of Health were compounded by misspending, as each year billions could not be properly accounted for.
“The figures that we are looking at now are close to R7-billion over the past five years,” he said.
He said years of financial mismanagement was now impacting on the public’s access to services.
“For a long time the various MECs and senior officials have been able to get away with it,” said Heywood, explaining that an investigation by the Hawks into Gauteng finance launched in 2008/2009 had resulted in a report finalized only in March this year.
“But that the report is still not public. We are looking at the worst managed health department in the country,” said Heywood, claiming that essential health service delivery would soon be affected if mismanagement was allowed to continue.
An edited version of this story was also published on IOL