NHLS Amendment Bill -WCGH comments Presentation to the Standing Committee for Community Development by the National Council of Provinces. 28 August 2018

ESTABLISHMENT OF THE NATIONAL HEALTH LABORATORY SERVICE (NHLS) The NHLS was established in 2000 by an Act of Parliament, amalgamating the former South African Institute for Medical Research (SAIMR), National Institute for Virology and National Centre for Occupational Health as well as university and provincial pathology laboratories. The objects of the Service are to:- provide cost-effective and efficient health laboratory services to:- (i) all public sector health care providers; (ii) any other government institution inside and outside of the Republic that may require such services; (iii) any private health care provider that requests such services; (b) support health research; and (c) provide training for health science education.

NHLS’ PROBLEMS AND CHALLENGES NHLS has achieved certain objectives, but its overall leadership and governance has created problems and challenges, which has started to impact on their service delivery. The proposed amendments to the NHLS Service Act, 2000 (as per NDOH and NHLS) are to: define certain expressions and to amend or delete certain definitions; make the Preferential Procurement Policy Framework Act, 2000, applicable to the National Health Laboratory Service; adjust the objects and duties of the National Health Laboratory Service; strengthen the governance and funding mechanism of the National Health Laboratory Service; provide for matters connected therewith.

NHLS’ footprint in Western Cape 18 Laboratories to services > 600 Health facilities: Central laboratories: TBH; GSH; RXH Regional laboratories: Green Point; George; Paarl; Worcester District laboratories: Vredendal; Vredenburg; Karl Bremer ; Mitchells Plain; Khayelitsha; Helderberg; Hermanus; Oudtshoorn; Mossel Bay; Knysna; Beaufort West POCT laboratory: New Somerset hospital GeneXpert lab at Pollsmoor Prison

Section 4 of the National Health Laboratory Service Act, 2000 (Act No Section 4 of the National Health Laboratory Service Act, 2000 (Act No. 37 of 2000) (“the Act”) currently reads: The objects of the Service are to— provide cost-effective and efficient health laboratory services to: all public sector health care providers; any other government institution inside and outside of the Republic that may require such services; any private healthcare provider that requests such services; support health research; provide training for health science education”. It is proposed that section 4(a)(i) of the Bill be amended to provide as follows: “(i) all public sector health care providers that requests such services”.

Section 15(1) of the Act currently reads: “15(1) Public health sector service providers must purchase laboratory services from the Service. Private health sector service providers may purchase laboratory services from the Service.” Proposed amendment to section 15: Section 15(1) of the Act should be amended to replace “must” with “may”. In this regard it is noted that the National Health Insurance Bill, 2018 which was advertised for comment on 21 June 2018 in GG 636 makes provision for the procurement of health goods and services from both public and private service providers.

Motivation for change request to sections 4(a)(i) and 15(1) of Act 37 of 2000 The proposal to have the ability to procure test from laboratories other than the NHLS, is not to undermine the NHLS, but to allow for the following: Enable the WCGH to send urgent tests to a laboratory in closest proximity Improve accessibility Improve turnaround times. Improve patient management- diagnose/ initiate treatment Reduce length of stay Improve patient outcomes Multi level savings for the Department and patient 2. Alignment with NHI principles 3. Discourage/prevent monopoly of services: to protect the interests of consumers; prevent excess prices; allow competition; improve quality of service.

Amendment of Section 5- clause 4 of Act 37 of 2000 “(b) promote the training of its laboratory and associated personnel;”   It is unclear how this will affect training and outreach to health facilities e.g. cervical smear collections, sample collection and bilateral agreements between universities and the NHLS, forensic pathology services and the NHLS. There may be possible cost implications for the Department if the NHLS only promotes training of their own personnel. More clarification is needed w.r.t the funding of teaching and training by National Treasury. The question is whether the NHLS will be relieved from the mandate to provide training to health science education. It is proposed that Section 5(1) (b) should remain unchanged.

Substitution of section 7 and 8 of Act 37 of 2000 Provincial representation is not catered for in terms of the proposed new section 7 which will regulate the composition of the Board.   [It is noted that version B15-2017 was amended to include three representatives of provincial departments, however in version B15B -2017, this has now been removed]. The person representing the public health sector appears to be replacing the provincial representative on the Board. It is proposed that each province is represented on the NHLS Board. If this is not possible, there should be at least three representatives from the provinces. Proposed that membership is determined on the basis of population size and utilization of laboratory services.

Substitution of section 7 and 8 of Act 37 of 2000 (cont. 1) The new proposed section 7(1)(b) proposes a new category for the Board representation, namely the chief financial officer of the Service by virtue of his or her office. It is proposed that the chief financial officer of the Service not be appointed as a full Board member, but be invited to attend meetings when so indicated. Having both the chief executive officer and the chief financial officer of the Service as full Board members may influence the vote and may have governance implications.

Substitution of section 7 and 8 of Act 37 of 2000 (cont. 2) It is further noted that in version B15B the category for Board representation of one representative from organized Labour has been reinserted. This representative may also, in terms of proposed section 9(1), be appointed by the Minister as the chairperson or vice-chairperson of the Board,  Hence, the proposed section 9(1) provides:  “The Minister must appoint a chairperson and a vice-chairperson for the Board from amongst the members appointed in terms of section 7(1) (c), (d) or (e)”. It is further proposed not to include a representative from organised labour as a full Board member as it might impact and influence negotiation and consultations processes.  A representative of organized Labour can be invited when so indicated.

Substitution of section 20 of Act 37 of 2000 In version B15B -2017, it is proposed to delete section 20 and substituted with section 18. As clause 18(3) the following provision: A new clause 18(1) is also proposed be inserted which provides as follows: “ 18(1) The Minister, in consultation with the Minister of Finance, must prescribe a financing mechanism for the Service in order to ensure that the Service is adequately and sustainably funded and thereby enabling the Service to achieve the objects of this Act” “The Service must charge such fees for services rendered that are not covered by the financing mechanism contemplated in subsection (1) as prescribed by the Minister, after consultation with the Minister of Finance”. It is proposed that Section 20 of the Act remain unchanged. OR That the new clause 18(1) make provision for consultation with the NHC, the provincial MECs of Health and Provincial Treasury on Laboratory Financing mechanisms and/or fees charged. It is unclear why the provision for consultation with the NHC which was include in B15-2017 has been removed in version B15B-2017.

Repeal of section 25 of Act 37 of 2000 Clause 15 of version B15B-2017 proposes to repeal the entire section 25. This section regulates non-compliance by the NHLS with the Act and the remedial steps which the Minister may take. Section 25 hence provides: “25. Proceedings by Minister for non-compliance with Act by Service— If at any time it appears to the Minister that the Service has failed to comply with any of the requirements of this Act, he or she may by written notice require the Service to remedy the default within a specified time. The Minister may apply to a High Court having jurisdiction for an order compelling the Service to remedy the default if the Service fails to comply with the terms of a notice referred to in subsection (1)”.”  Section 25 should not be repealed. The power of the Minister to call for remedial steps, when there is non-compliance must stand.

Thank you