The total collapse of the National Health Laboratory Service appears imminent if provincial Health Departments owing it nearly R11bn don’t pay their high outstanding bills soon, reports News24.
KwaZulu-Natal is the leading debtor, having racked up more than R4.8bn for lab services linked to testing, followed by Gauteng with R3.2bn and the Eastern Cape with more than R1.1bn.
Only three provinces – the Western Cape, Limpopo and Mpumalanga – were lauded for satisfactory payment records.
The entity’s senior management briefed Parliament’s Portfolio Committee on Health on Friday, revealing that the total outstanding amount was R10 995 254 375.
Chief financial officer Phumeza Mayekiso said North West owes R607m, the Northern Cape R75m, while the Free State owes more than R331m, and that some of the debt dated back to the 2008 financial year.
CEO Koleka Mlisana said the NHLS has more than 233 diagnostic labs across the country which service public health, and a number of subsidiaries, including the National Institute for Communicable Diseases (NICD), but collects 89% of its revenue from the tests conducted for provinces.
“And then 5% is received from the National Department of Health grant, which covers the NICD, the NIOH (National Institute for Occupational Health), the forensic chemistry labs as well as teaching, training and research,” she said, adding that the NHLS also received money from academic institutions, among other sources.
“However, the grant does not adequately cover all of the expenses from these institutes as well as teaching and training. So over and above the work we do, we are also supporting and ensuring that the functions of NICD, NIOH, teaching and training and research, continue to happen.”
She said when departments do not service their debt within 30 days, it places the entity under “serious financial risk of not being able to deliver our mandate efficiently”.
“If this continues, we are looking at an unsustainable revenue model… and might not be able to deliver what is expected of us. This poses a big threat if our liabilities exceed our assets.”
The filling of vacancies and IT equipment replacement were also affected as the entity has to reprioritise.
Additionally, Mlisana said that for the past eight years the service’s tariff increase requests submitted to the Health Minister had not been approved.
She recommended that laboratory services funds be ring-fenced by Treasury as an essential service.
“Our ask is that while we are talking about historical debt, it becomes important to make sure the current debt is serviced timeously, which comes with a small incentive.”
She said talks were under way with the various provinces on how the debt would be settled.
MPs pull no punches
The EFF’s Naledi Chirwa-Mpungose slammed KwaZulu-Natal and Gauteng for not paying their bills.
“The NHLS is linked to primary functions of the Department of Health, and you (KwaZulu-Natal) are overseeing that in your province, but it is not a priority to you?” she said.
“What is a priority is you paying organisers for ludicrous meetings and gatherings, but you fail to prioritise the NHLS. What do you think the impact of this debt is on rural hospitals like those in eMkhayakude and Zululand, where laboratory turnaround times are already poor?”
She asked if KZN Health were struggling to make the link between its hospital crises and its failure to pay the NHLS for services.
“KZN is of great concern, chairperson, and I think we must not let them off the hook.”
She said Gauteng was a rich province but failed to pull its weight. “Limpopo is doing better, Mpumalanga is doing better despite their budgetary constraints.”
Paulinta Marais, also from the EFF, also criticised Gauteng, saying its hospitals were deeply implicated in corruption scandals, some of which are central to the establishment of the Madlanga Commission and others involving “skinny jeans” – in reference to the R2.3bn Tembisa Hospital fraud scandal.
See more from MedicalBrief archives:
AG sounds alarm over NHLS financial audit
Gauteng Health still owes billions to NHLS
Questions after NHLS audit procurement flaws flagged
NHLS corruption clean-up pays dividends