The state laboratory has urged provincial health departments to pay their bills on time, warning that even a 10% drop in revenue would compromise its ability to deliver services, reports BusinessLIVE. The National Health Laboratory Service (NHLS) is the backbone of the public health system as it provides all the diagnostic tests for patients using state services, including those for COVID-19, HIV and tuberculosis (TB).
“As provinces face fiscal constraints and tightened budgets, it is going to be very important that they recognise the role the NHLS plays and place us as priority debtors. Quite simply, if we don’t get the payments in, we will struggle to maintain our performance and the viability of our services,” the report says NHLS board chair Eric Buch has told parliament.
The NHLS receives almost 90% of its revenue from provincial health departments, which it bills for tests, and cannot rely on charging higher tariffs to push up its income, he said. Retaining a cash surplus is vital for future investments in the organisation’s capacity, said Buch. Without a cash surplus it would not have been able to invest approximately R2bn in the equipment and training required to create the extensive coronavirus testing capabilities built up during the past year.
The Treasury said in its February budget that transfers to the NHLS would shrink by an average annual rate of 12.3% between 2020/2021 and 2023/2024, falling from R855.6m to R577.6m over the period because the lab service has built up a significant cash surplus.
The Treasury instituted a R67.2bn cut to consolidated health expenditure over the medium-term expenditure framework, deepening the R3.9bn cut that had already been worked into the 2020 budget. The lion’s share of the cuts to health spending are in the wage bill, but there are also cuts to conditional grants for HIV/Aids, hospital infrastructure, and training.
[link url="https://www.businesslive.co.za/bd/national/health/2021-03-10-state-lab-appeals-to-provinces-to-pay-their-bills-on-time/?"]Full BusinessLIVE report (Restricted access)[/link]