The SA Medical Device Industry Association (Samed) is owed more than R1.1bn by provincial Health Departments because of administrative weaknesses that are unlikely to improve under NHI, it has warned.
Member companies supply products ranging from bandages to orthopaedic devices, and most of those which are owed money are small to medium sized manufacturers.
“There is a disconnect between planning, procurement and budgets,” said Samed board member Monica Lucas, who chairs the association’s outstanding payments project.
Even the Western Cape, which consistently gets clean audits from the Auditor-General owes millions of rands to medical device suppliers, reports Business Day.
Figures provided by Samed show 39 of its member companies were owed R1.109bn by May 24. Almost 45% (R493m) of this debt is owed by Gauteng, followed by KwaZulu-Natal (R149m), and North West (R97m). Western Cape owes R93m, of which R51.4m is debt of more than 120 days.
Samed had made submissions on the NHI Bill when it was before Parliament, saying the legislation did not contain adequate measures to establish a framework for key administrative functions, including information technology and human resource infrastructure to process millions of claims, invoices and payments.
The Act was vague and did not offer sufficient comfort to medical device suppliers, added Lucas. “I appreciate you can’t put every detail into legislation, but there should be some specifics about how this will work.”
The private sector used automated systems for the procurement and payment of medical devices, and paid suppliers promptly, she said. By contrast, the state relied on cumbersome manual processes that were time-consuming for staff and suppliers.
The MD of one medical device company that supplies hospitals in both the public and private sector said payment delays from the Gauteng provincial Health Department were affecting the amount of stock he could supply to other provinces.
Gauteng was “the worst offender”, accounting for more than R40m of the total R68m owed by the state. His company also supplies private hospitals, which generally paid invoices within 30 to 45 days, he said.
The Western Cape health and wellness department declined to answer Business Day’s questions, saying only that it monitored supplier payments and reported to its provincial treasury monthly.
The Gauteng Health Department had not responded to a request for comment at the time of publication.
Business Day PressReader article – NHI worries medical device association (Open access)
See more from MedicalBrief archives:
Gauteng Health owes thousands of suppliers R4bn
Gauteng Health worst for non-payment of creditors
Eastern Cape Health starts year owing billions in unpaid bills