STRATEGIC AND BUSINESS ANALYSIS OF THE WESTERN CAPE DEPARTMENT OF HEALTH AND THE STRATEGIC PARTNERSHIPS FUNCTION IN CONTEXT OF THE HEALTHCARE SECTOR IN SOUTH AFRICA AN ANALYSIS OF THE POTENTIAL COMPETITIVE ADVANTAGES AND STRATEGIC IMPERATIVES AND DIRECTIO

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PROGRAMME NAME: EDP 2012

MODULE: Strategic Management

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DUE DATE: 8 October 2012
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REPORT AND RECOMMENDATIONS

PREPARED FOR CONSIDERATION BY THE EXECUTIVE MANAGEMENT COMMITTEE: Western Cape
DEPARTMENT OF HEALTH
[WCDOH]

8 OCTOBER 2012

STRATEGIC AND BUSINESS ANALYSIS OF THE WESTERN CAPE DEPARTMENT OF HEALTH AND THE
STRATEGIC PARTNERSHIPS FUNCTION IN CONTEXT OF THE HEALTHCARE SECTOR IN SOUTH AFRICA
AN ANALYSIS OF THE POTENTIAL COMPETITIVE ADVANTAGES AND STRATEGIC IMPERATIVES AND
DIRECTIONS REQUIRED TO ACHIEVE THE STRATEGIC OBJECTIVES OF THE WESTERN CAPE GOVERNMENT
AND SPECIFICALLY OF THE Western Cape DEPARTMENT OF HEALTH

HEALTH, WELLNESS and SOCIAL DEVELOPMENT AS DRIVERS OF ECONOMIC GROWTH, DEVELOPMENT,
POVERTY ALLEVIATION AND REDUCTION OF INEQUALITY

PARTNERSHIPS, COLLABORATION, CO-CREATION, CO-PRODUCTION: CREATING AN ENABLING ENVIRONMENT
TOWARDS ACHIEVING NATIONAL, PROVINCIAL, LOCAL AND SOCIETAL STRATEGIC OBJECTIVES AND
OUTCOMES WITHIN RESTRICTED BUDGETARY ENVIRONMENT

PREPARED BY:

AMANDA BRINKMANN
ADVISER TO THE MINISTER OF HEALTH: WESTERN CAPE GOVERNMENT
HEAD OF STRATEGIC PARTNERSHIPS: WESTERN CAPE GOVERNMENT

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TABLE OF CONTENTS

1. WESTERN CAPE GOVERNMENT: STRATEGIC OBJECTIVES

1.1 ACHIEVING THE WELLNESS OBJECTIVE
1.1.1 DEFININING WELLNESS AND HEALTH
1.1.2 THE SOCIAL DETERMINANTS OF HEALTH AND WELLNESS IN CONTEXT OF POVERTY
ALLEVIATION, ECONOMIC DEVELOPMENT AND GROWTH OUTCOMES
1.1.3 THE COST TO GOVERNMENT AND SOCIETY OF CONTINUING WITH A „ BUSINESS-AS-USUAL‟
APPROACH
1.1.4 PROVINCIAL TRANSVERSAL MANAGEMENT SYSTEM [ PTMS]

2. WCDOH VISION 2020 – PARTNERING AND PARTNERSHIP AS A STRATEGIC PRIORITY

3. WCDOH: CONSTRAINTS – RATIONALISING THE NEED FOR INNOVATION AND PARTNERSHIPS

4. STRATEGIC PARTNERSHIPS: WESTERN CAPE GOVERNMENT: A vision of an ideal future of
health and wellness: 2020 and beyond
5. SPACE MODEL MATRIX ANALYSIS: WESTERN CAPE DEPARTMENT OF HEALTH AND STRATEGIC
PARTNERSHIPS
5.1 CONTEXT
5.2 ENVIRONMENTAL STABILITY
5.2.1 RATIONALISING THE RATINGS
5.3 INDUSTRY ATTRACTIVENESS
5.4 COMPETITIVE ATTRACTIVENESS
5.5 FINANCIAL STRENGTH
5.5.1 RATIONALISING THE RATING
5.6 THE OUTCOME – WHERE IT ALL COMES TOGETHER – CONCLUSIONS AND
RECOMMENDATIONS
6. CONCLUSION
7. REFERENCES

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1. WESTERN CAPE GOVERNMENT: STRATEGIC OBJECTIVES

The Western Cape Provincial Government has developed a Provincial Strategic Plan with eleven
provincial strategic objectives in order to effectively pursue the vision of creating an „open
opportunity society for all‟. [WCDOH. March 2012]

The provincial strategic objectives are closely aligned with the national outcomes particularly in
relation to concurrent functions such as health.

The provincial strategic objectives are:

1) Creating opportunities for growth and jobs
2) Improving education outcomes
3) Increasing access to safe and efficient transport
4) Increasing wellness
5) Increasing safety
6) Developing integrated and sustainable human settlements
7) Mainstreaming sustainability and optimising resource use efficiency
8) Promoting social inclusion and reducing poverty [SO8 and 9 are being combined)
Increasing social cohesion [SO8]
Poverty reduction and alleviation [SO9]
9) Integrating service delivery for maximum impact
10) Increasing opportunities for growth and development in rural areas
11) Building the best-run provincial government in the world.

The Western Cape Department of Health is responsible for the implementation and stewardship of
Strategic Objective 4: Increasing Wellness

1.1 ACHIEVING THE WELLNESS OBJECTIVE

1.1.1 DEFININING WELLNESS AND HEALTH

Dictionary.com [Accessed September 2012] defines health as follows:

• The general condition of the body or mind with reference to soundness and vigour: good
health; poor health.
• Soundness of body or mind; freedom from disease or ailment: to have one's health; to lose
one's health.
• Vigour; vitality: economic health.

Earthzense.com [Accessed September 2012] defines and described wellness as follows:

Wellness is a term that has become extremely popular in recent years, so much so that the
definition of wellness has also rendered different meanings to different people. Most define
wellness as simply “being physically well” most of the time.

All inclusive, the generally accepted definition of wellness is:

To stay in good condition physically, mentally, and spiritually, especially through healthy choices in
those areas – a balance in all of these areas indicates wellness in an individual. This definition of
wellness seems to imply that wellness is a lifestyle choice.

And it defines wellness to include not just being healthy physically, but embraces a holistic concept
of health that encompasses our whole being - body, mind and spirit. Wellness is a natural human
condition that has become negatively conditioned throughout the passages of time by the lifestyle
choices we make.

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1.1.2 THE SOCIAL DETERMINANTS OF HEALTH AND WELLNESS IN CONTEXT OF POVERTY ALLEVIATION,
ECONOMIC DEVELOPMENT AND GROWTH OUTCOMES

In its Burden of Disease Study [Myers, Naledi, et al.2007] the Western Cape Department of Health
[WCDOH] identified the upstream, socio-cultural factors that impact downstream health outcomes.
The upstream risk factors touch on issues of development, such as: inequity, poverty, low income
and unemployment, homelessness, social inclusion, and justice. These determinants fall outside of
the direct ambit and control of the WCDOH‟s primary mandate.

The findings of this report are further supported by the Rio Declaration on the Social Determinants of
health [World Health Organisation. 21 October 2011], which was in turn an outflow of the World
Health Organisation [ WHO] Conference on the Social Determinants of Health, which was held in
Brazil in 2011. The Rio Declaration reached the following agreements:

 Social and health equity can be achieved through action on the social determinants of
health and well-being. This should be attainable via a comprehensive, inter-sectoral
approach.
 It was agreed that health equity is a shared responsibility that requires engagement of all
sectors of government, all sectors of society and all members of the international
community in an „ all for equity‟ and „health for all‟ global action.
 Three overarching recommendations were adopted: * to tackle the inequitable distribution
of power, money and resources; * to improve daily living conditions * to measure and
understand the problem and assess the impact of action.

In the WHO report titled, Macroeconomics and Health: Investing in Health for Economic
Development [Sachs, J, D. 20 December 2001] it is further confirmed that health is a developmental
outcome.
“Whilst it is accepted that health is a developmental outcome, the opposite view that health can
be a driving force for development and economic upliftment has not been fully recognised. The
Commission on Macroeconomics and Health asserts that, if upstream risk factors were controlled in
conjunction with improved health services to address the downstream risk factors,
… impoverished families could not only enjoy lives that are longer, healthier, and more productive,
but they would also choose to have fewer children, secure in the knowledge that their children
would survive, and could thereby invest more in the education and health of each child…the
improvements in health would translate into higher incomes, higher economic growth, and
reduced population growth [Sachs, 2001].”
To address the burden of disease, one needs to understand that determinants of health
encompass both downstream biological and behavioural risk factors, and upstream societal and
structural risk factors.

The importance of the MDGs in health is, in one sense, self-evident. Improving the health and
longevity of the poor is an end in itself, a fundamental goal of economic development. But it is also
a means to achieving the other development goals relating to poverty reduction. The linkages of
health to poverty reduction and to long-term economic growth are powerful, much stronger than is
generally understood.

1.1.3 THE COST TO GOVERNMENT AND SOCIETY OF CONTINUING WITH A „ BUSINESS-AS-USUAL‟
APPROACH

The Western Cape Government is essentially caught in the proverbial „Catch 22‟ situation, where it
is compelled to spend the majority of the available budget on things that are entirely preventable.
The list is nearly never-ending: * Crime * School drop-out * Substance and alcohol abuse *
Teenaged pregnancies * Welfare * HIV/AIDS * Burden of Disease * Unemployment * Inter-personal
violence * Collective Depression – and so the list continues. Governing is effectively reactive.

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Government resources are stretched to the limit to fulfil its mandate of dealing with the
consequences of societal decay and the resultant un-wellness of its citizens. The cycle of
government spending can be likened to constantly putting Band-Aids on gaping wounds. In some
instances, 90% of available budget and resources are spent on the things that could be prevented,
if only systemic, future-focused interventions were implemented in partnership with the whole-of-
society.

The private sector, philanthropic and global donors have been funding a plethora of NGO‟s and
programmes and yet, outcomes are, at the very least moderate. This can be ascribed to the fact
that there is no strategic model that seeks to address the systemic causes of the cycle of poverty,
despair and hopelessness that continues to perpetuate itself in a ubiquitous cycle of behavioural
and socialisation repetition. Government, funders, NGO‟s and researchers are all working in
isolation of one another, rather than to collaborate and partner to amplify outcomes. Such
collaboration would more than likely lead to duplications in funding and programmes being
eradicated as well as to improve overall outcomes, whilst using fewer resources.

By imaging that by putting more resources into health and education any of the developmental
outcomes will change, we are fooling ourselves and doing nothing more than to assuage our
conscience that we are at least doing SOMETHING.

The answer to creating societal wellness, breaking the cycle of poverty and all of the
consequences that are ultimately dealt with mainly by departments of Health and society as a
whole, lies in an implementation model that seeks to disrupt the circumstances that children are
born into as well as the socialisation process that nearly pre-determines their future by virtue of
these circumstances. Just on 16 million patient contacts at Primary Health Care sites in the Western
Cape alone, provides an indication of the un-wellness of our citizens. Add to that the fact that
estimates put undiagnosed mental illness, such as depression as high as 17% and one starts
understanding that a great many patients that are presenting at state facility may indeed be
somatising. If they were correctly diagnosed and treated, but moreover, if the cycle of depression
and despair were interrupted at an early and systemic stage, the savings to the health care system
and society would be immense.

The Strategic Partnerships Portfolio within the Western Cape Government was given the freedom to
define the scope and boundaries of its work and to find transversal solutions to societal challenges.
In the course of the 3 year process of working across all three spheres of government, with civil
society, the private sector, academia, research institutions, philanthropic donors and the citizens of
the country and province, the writer has developed and piloted a model and methodology called:
A PASSPORT TO WELLNESS© A roadmap out of poverty, towards growth and development
[Brinkmann, A. February 2010 onwards]. [Appended]

This model disrupts and intervenes within the socialization process to move from current future to
ideal future in a practical and pragmatic manner. This strategy has been adopted by the Western
Cape Government, has support from civil society and donors and will, over time, have the effect of
freeing up capacity within health facilities, release funds spent on all of the issues that are
preventable, so that in five, ten and fifteen years from now, government and society are able to
spend more of their resources on growth and development outcomes.

1.1.4 PROVINCIAL TRANSVERSAL MANAGEMENT SYSTEM [ PTMS]

The PTMS provides a structured opportunity to mobilise role players outside of health to address
these upstream determinants of health and wellness. The Provincial Transversal Management
System is a priority of the Western Cape Government, providing political support for effective inter-
sectoral collaboration within the provincial government.

This is informed by the philosophy that acting in a united manner around a common set of
objectives as a “whole of society” and a “whole of government” will promote delivery. This further
evidenced and demonstrated within the PASSPORT TO WELLNESS model [Brinkmann, A. February
2010 onwards].

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The strategic objectives are clustered into three sectors i.e. human development, economic and
infrastructure, and administration and inter-governmental. Each of the strategic objectives has a
steering group to co-ordinate the working groups within the strategic objective.

2 WCDOH VISION 2020 – PARTNERING AND PARTNERSHIP AS A STRATEGIC PRIORITY

In November 2011, WCDOH released its Vision 2020 – The Future of Health care in the Western
Cape: A Draft Framework for Dialogue [WCDOH. November 2011]

“Seven guiding principles have been identified to guide the 2020 strategy:
1. Patient-centred quality of care
2. A move towards an outcomes-based approach
3. The retention of a Primary Health Care philosophy
4. Strengthening the District Health Services model
5. Equity
6. Affordability
7. Building Strategic Partnerships “

The document deals very expressly with what should be done differently and what the case for
change is. Some of the compelling motivations for change include: * changes in the provincial
demography * socio-economic determinants of health and the burden of disease * advances in
technology * global, national and provincial environments * extreme tightening of the fiscal
envelope, necessitating innovation and different ways of doing things * sustaining existing good
practice and improving on others * cost effective interventions within limited resources * prevention
of disease and promotion of wellness.

Building Strategic Partnerships

It is essential that the provincial government seeks out and builds creative partnerships with role-
players in the private sector, civil society, higher education, labour movement, other spheres of
government and internationally. There is a realisation that improving the health status of the
population requires a whole-of-society approach and that the capacity and resources within the
private sector need to be engaged, given the disparity between what is spent versus the
population coverage in the public and private sectors.

The provincial Ministry of Health, via its Head of Strategic Partnerships has already started an
exciting engagement with the private sector, which has shown a willingness to invest in the public
sector. Commercial opportunities are being investigated that can be mutually beneficial. A public
– private health forum exists which provides a structured opportunity for engagement with the
private sector. The Health Foundation was also recently established by the private sector, on a
similar basis as the Red Cross Children‟s Trust, with the intent of assisting the Strategic Partnerships
Portfolio and WCDOH in achieving its objectives and outcomes via a range of partnerships and
collaborations.

A range of diverse partnerships have already been realised and the benefits and outcomes for all
parties involved have surpassed expectations. This provides a strong foundation upon which to
build. One of the key differentiators in respect of how the private sector and partners are engaged
is that it is done with business, economic growth and mutually beneficial outcomes in mind. The
Strategic Partnership Portfolio functions as though it is a private sector entity and has therefore
developed a common and understandable language between the public and private sector.

3 WCDOH: CONSTRAINTS – RATIONALISING THE NEED FOR INNOVATION AND PARTNERSHIPS

3.1 The Western Cape accounts for 10.4% of population or 5. 287 million citizens of which an
estimated 80%+ are served by the public health system.
3.2 In 2012/13, it is projected that 16 348 182 patient contacts will be managed at Primary Health
Care [PHC] level, 511 367 patients admitted to the department‟s hospitals, 135 018 patients
treated with anti-retroviral therapy, 487 781 patients transported in ambulances, 98 500 babies

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delivered in the maternity services and 6 909 cataract operations performed [Western Cape
Department of Health. March 2012].
3.3 Both Gauteng and the Western Cape will continue to experience shifts in demography and
population distribution related to inward migration from the Eastern Cape and Limpopo – this
inward migration places additional stress and pressure on already over-burdened state
3.4 An asset/equipment backlog exists generally within the WCDOH, but specifically at the three [3]
Tertiary, Central Hospitals: Groote Schuur Hospital, Tygerberg Hospital and Red Cross Hospital.
3.5 Some, or all, of the facilities managed by the WCDOH have a shortage of equipment and/or
ageing or obsolete equipment that need to be upgraded or replaced.
3.6 There are real costs, financial and non-financial, associated with the lack of necessary
equipment in certain facilities.
3.7 The budget allocated by Treasury to the WCDOH is currently not sufficient to meet the annual
equipment demands of all facilities, and by inference, insufficient to reduce and/or eliminate
the existing backlog. [Botha, T. 26 March 2012]
3.8 There are significant maintenance and infrastructure backlogs, which despite the accelerated
infrastructure spend over the past 3 years, will not be dealt with within the constrained budget
as allocated by National Treasury.
3.9 Strategic Partnerships, efficiency, innovation, stretching the healthcare rand and patient-
centricity are all at the very heart of achieving the objectives of the WCDOH. [ Botha, T. 26
March 2012]
3.10 National Treasury has issued a notice indicating a tightening of the budgetary envelope.
The estimated time horizon is anticipated to be three to five years. [National Treasury
Department: South Africa. August 2012]
3.11 Notwithstanding the above, negative impact on service delivery is not an option as is
evidenced by the Strategic Objective Four of the WCDOH as set out within the Annual
Performance Plan 2012/13[Appendix F:Western Cape Department of Health. March 2012] as
well as with the spirit, content and objectives of Vision 2020 [WCDOH. November 2011]. This is
reiterated within the content of the WCDOH Budget Speech 2012 [Botha, T. 26 March 2012].

It is therefore vital, now, more than ever, to engage in mutually beneficial partnerships and
collaborations with a deep and broad range of role players so as to deliver on the objectives of the
WCDOH and society as a whole.

4 STRATEGIC PARTNERSHIPS: WESTERN CAPE GOVERNMENT: A vision of an ideal future of health
and wellness: 2020 and beyond

“You never change things by fighting the existing reality.
To change something, build a new model that makes the existing model obsolete.”
Richard Buckminster Fuller [1895-1983]

“In order to change an existing paradigm you do not struggle to try and change the problematic model.
You create a new model and make the old one obsolete.”
― Richard Buckminster Fuller

“I am enthusiastic over humanity‟s extraordinary and sometimes very timely ingenuity. If you are in a
shipwreck and all the boats are gone, a piano top buoyant enough to keep you afloat that comes along
makes a fortuitous life preserver. But this is not to say that the best way to design a life preserver is in the
form of a piano top. I think that we are clinging to a great many piano tops in accepting yesterday‟s
fortuitous contriving as constituting the only means for solving a given problem.”
― Richard Buckminster Fuller

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5 SPACE MODEL MATRIX ANALYSIS: WESTERN CAPE DEPARTMENT OF HEALTH AND STRATEGIC
PARTNERSHIPS

5.1 CONTEXT
It is generally considered to be unusual to apply the Space Matrix analysis to a government entity.
In this case, I have taken up the challenge that was laid down, given that I have spent the majority
of my career in the private sector as an entrepreneur, in advertising, marketing, business consulting,
construction, forex trading, importing and exporting and management consulting. I was
specifically approached to give life, shape and form to the Strategic Partnership Portfolio because
of my commercial and entrepreneurial bent, my ability to work at the highest levels of complexity
with ease and to therefore understand the inter-relatedness and inter-connectedness of all things.

I also speak the language of business, whilst having a strong social bent and am motivated by a
strong sense of purpose and meaning to be part of the positive change in the world. The role and
work that I do is not about me, but rather about what I can contribute to the overall benefit of
society. In my opinion, there is always a way to ensure that benefits accrue to all parties involved –
such mutual benefits are found by structuring wants, needs, expectations, boundaries and
limitations up-front and being honest and forthright about what each party desires and what they
are prepared to contribute and/or concede to reach their objectives. Innovation, often moving
into the realm of blue-skying, lies at the core of imaging all that could be – without limitations or
restrictions. I am yet to encounter a challenge or problem for which there are not multiple possible
solutions. It is with this mind-set, years of evidence-based experience and a need to be the
change in this world, that I am tackling this analysis – essentially using a hybridised version of the
Space Matrix Modelling – so as to accommodate the unique idiosyncrasies of a portfolio that
ensure that I am not a government official, do not tow any party lines and no interest or objectives
other than to improve quality and access to services, quality of life, wealth, health and prosperity
for all involved. Bearing this brief background in mind, let us proceed to the unpacking of the
various elements of the Space Model Analysis:

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5.2 ENVIRONMENTAL STABILITY


This aspect of the matrix provides rather a conundrum, in that one has to, by inference, compare
the environmental stability of the country as a whole and thereby, the National Department of
Health, with the same metrics in the Western Cape and WCDOH. I had to make intuitive
determinations in regards to which metrics would be most appropriate to compare in this manner.
I would imagine that given more time and further thought and engagement with this analysis,
having the ability to do a current as well as future-focused SWOT analysis of National Department
of Health, WCDOH and the Strategic Partnerships portfolio, I would at the very least find a
supportive basis for the findings within this particular model.

Social trends with the Western Cape and Western Cape Government can be described as stable,
when compared with the rest of the country, and specifically, when compared to some of the
more troubled provinces and health departments.

The Economic climate in South Africa is hovering on the verge of instability, given the current
wildcat strikes, the jostling for political position pre-Manguang as well as the smouldering powder
keg that is the unemployed youth bulge. Because of demography, the Western Cape is slightly
more insulated against instability than for instance KwaZulu-Natal and Gauteng. In the main, the
economic climate within the Western Cape remains stable due to relatively consistent growth and
development, inward investment and a government that has achieved unqualified audits in all of
its 24 departments and Special Purpose Vehicles. Legal compliance is therefore also high.

Unemployment is also lower in the Western Cape than in the rest of the country. The WCDOH is
very stable from a financial perspective, as is evidenced by its financial statements, unqualified
audits and ability to deliver quality services within limited budgets.

Political change is strongly linked to the economic outlook and it is evident that the power struggle
within the ruling party, the fragmentation of the alliance and labour, the reports of political
patronage, corruption and rent-seeking behaviour is negatively impacting on the economic

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outlook and sentiment for South Africa. We have just recently seen a downgrading of by Standards
and Poors.
In contrast and in comparison, even when taking the alleged “Project Reclaim” that seeks to
destabilise the province into account, it would seem that the political landscape is, for now,
relatively stable with little chance of significant change on the cards.

The province has embarked on a phased project to ensure technological advances in the
knowledge economy, but specifically, in connectivity for all of its citizens over the next 5 years. The
government itself has had to deal with a legacy ICT system that was less than satisfactory and so a
comprehensive Microsoft migration is in process, thereby improving business efficiencies
significantly. Statistics show that there is a direct link between connectivity and technological
advances and growth in GDP and development.

On the metrics of demand variability, barriers to entry and competitive pressure, I have chosen to
focus on the unique value proposition that my portfolio, open door approach as well as access to
the Executive of the province, city and national government offers prospective partners. I do not
perceive rank or file, have built a supportive shadow network within the structures and together, we
are able to keep the end goal of societal benefit in mind so as to find new and innovative ways of
doing things. In fact, one of the maxims by which I work with all of my colleagues, is to remind
them that we are here to serve the people of this province, that it is by their grace and tax money
that we wake up every morning and have a purpose and that when we look at any piece of
legislation, regulation or policy, we must not only look at what is in front of us, if what is in front of us
seems to hamper the achievement of the desired outcomes. We must rather look at what we
should change, adapt or alter, in order to make such outcomes possible. Any barriers to entry are
dealt with by employing the „break it to fix it‟ and „find the ONE way in which this can happen‟
approach.

No other province seems to have established a portfolio with the scope, mandate and access that
the Strategic Partnerships portfolio has and in fact, there have been advances to assist in setting
similar structures up in other provinces, due to the perceived competitive advantage that this
conveys on WCDOH and the province as a whole.

It is important to note that the appointment is non-political, non-partisan and on a contractual
basis, meaning that no agendas other than the improvement of the lives of the people of the
provinces are in play. This is vital to the success and credibility of the portfolio and its work and
outcomes.

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5.3 INDUSTRY ATTRACTIVENESS


Health and Education are rated as the top priorities not only for government spending, but by a
great many corporate and philanthropic donors, as well as Non-Governmental Organisations
[NGO‟s]. Both of these areas are key drivers of growth and development.

In general, growth and investment in the Western Cape has remained stable with growth in certain
sectors, such as for instance Green Manufacturing and Health Biotechnology. The WCDOH is mid-
life-cycle, from the perspective that it has made significant advances over the past decade, is the
highest functioning health system in South Africa and has already achieved most of the objectives
that the NDOH has set out to be achieved in the rest of the country over the next decade.

There is however more work to be done to improve on best practice, work on staff morale,
upgrade infrastructure in collaboration with a range of partners and enter into innovative
transactional partnerships that would have the net effect of increasing service access points for
state patients, whilst assisting in generating annuity revenue for WCDOH over time, so as to
become less reliant on the fiscus as its sole source of income.

The WCDOH and WCGOV is perceived as being differentiated from the other provinces by virtue of
its geographic location, its unique demographic and psychographic profile, its cultural and
religious diversity, its natural beauty and of course, the high functioning nature of the state
institutions in regards to service delivery.

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More and more donors, partners, corporates, NGO‟s and organisations are approaching the
Strategic Partnerships portfolio via referrals and word-of-mouth. In fact, it is fair to say that I have
not had to make one pro-active appointment in three years. This is both a good and bad thing of
course. Good, in the sense that we have been over-run with proposals and offers of pilot projects,
partnerships and collaborative engagements; bad – because a great many opportunities may
have been lost due to not having the luxury and time to take a breath and plan pro-actively and
capitalise on existing as well as pre-existing relationships. This situation has now however been
addressed by the narrowing of the scope of the portfolio and by agreeing very specific
performance indicators and objectives.

By nature, the „profit‟ potential for government and WCDOH is generally high within the partnership
space, specifically when working within the CSI space. But even then, we try to innovate by for
instance making a fully equipped, state-of-the-art theatre complex, donated and funded for the
most part by a range of partners, available as their showroom in South Africa and Africa. By
exposing surgeons and registrars in training to the new technology, it is common knowledge that
there is some influence on future purchase decisions and specifications, if said equipment show
real benefit and value in terms of clinical and patient outcomes. We also ensure that we provide
as many publicity opportunities as possible to our partners, so that they reap the benefit of the
goodwill with their prospective customers.

5.4 COMPETITIVE ATTRACTIVENESS


The WCDOH serves approximately 75-80% of the population in the Western Cape – which pretty
much ensure market dominance in the health care industry. Having said that, the Western Cape
has one of the highest concentrations of private health facilities in the country and is also the
destination of choice for clinicians to settle with their families, due to the quality of life issues
attached to living in the province. The province also benefits from semi- and retired clinicians how
offer their services to mentor and train clinicians across the province.

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Given that the Strategic Partnerships portfolio has had the privilege of building robust relationships
across all three spheres of government and with a myriad of role players and partners, its position is
currently relatively uncontested.

In terms of product quality, one always pushes towards improvement and excellence, so as to
surpass your best efforts of the day before. WCDOH certainly feels the pressure of improving on
and strengthening the foundation it has laid over the past decade and is making a paradigm shift
from curative to preventative health, as well as patient-centricity.

The product quality of the Strategic Partnership portfolio is evidenced through daily written and
verbal feedback related to the speed of service, the level of innovation, the passion and energy
for the task at hand, the grasping of a plethora of options and opportunities and the conversion
into real action and implementation in the shortest time possible. The role is also known for
unlocking and unblocking red tape and clearing speed bumps with some haste, when these issues
are holding up positive momentum. In my humble opinion, the quality of service, guidance,
assistance, counsel and relationships are held in high esteem by most of the „ partners‟ that I have
had the honour and privilege to engage with. Customer and partner loyalty is therefore very high
and trusting relationships exist.

WCDOH has a 4.1% staff vacancy rate - far lower than all other provinces. There are challenges
related to absenteeism due to stress and staff churns of about 14%. WCDOH is however working on
staff retention strategies as well as succession planning, aligned with improved performance
management.

Given that infrastructure and maintenance backlogs are estimated at R 1 billion and given that this
funding is not on budget, there is a high level of investment required from a range of partners in
order to achieve modernisation of infrastructure and equipment. We have however identified 16
potential areas of partnership – from straight forward cause marketing, adopt-a-facility or ward to
transactional relationships involving the possibility of exploring co-locations and co-ownership of
niche medical facilities adjacent to state health facilities, the availability of for instance mini
supermarkets at health facilities – rendering a service to communities, staff and patients, whilst
creating annuity revenue for the facility and department so as to expand and/or maintain levels of
service delivery during fiscally constrained periods. The notion of selling the „naming or
commercial‟ rights to key facilities to brands is also not out of the question. A range of innovative
options are currently in exploration and/or pilot phases.

It goes without saying that asset utilisation is high – and will continue to be so in the foreseeable
future, as the demand for services grow in the short term, but hopefully start declining in the mid- to
longer-term as the preventative and wellness outcomes start realising. The level of investment has
to be relatively high so as to convert the WCDOH into the most modern public health system on the
continent so that we are able to attract, train and retain the best possible clinical skills in our
province, country and continent.

Level of control is a contradictory term and perhaps begs exploration – there are mechanisms put
in place that allows our partners control in terms of where their funding is spent, what the outcomes
are and how transparent processes are. At the same time, the WCDOH is highly governed and
therefore controls and manages efficiencies. From the perspective of Strategic Partnerships, the
control is more subtle and involves using a strong and committed internal shadow network to
monitor the progress of projects and to ensure that they move through the system as swiftly as
possible towards implementation.

15

5.5 FINANCIAL STRENGTH


As alluded to earlier in this document and substantiated by the financial statements and audit
status of the WCDOH and WCGOV, the province and department are financially strong and stable.
Compliance and fiscal management are non-negotiable and qualified audits will not be tolerated.
The Ministers of all departments are well aware of the fact that if they receive a quaified audit, they
should not bother to greet the Premier on the way out; they should pack their belongings and exit
the building post haste. A great many of the Ministers jokingly [ but with some seriousness] point out
that their political party does not have a redeployment strategy in the case of failure on the
governance front.

As discussed earlier, one of the hallmarks of partnership agreements is to ensure that there is
equitable return on investment for all parties involved. All negotiations are done based on sound
business principles and benefits therefore accrue accordingly.

The liquidity of WCDOH and WCGOV is managed with an iron fist – but does happen within a
severely constrained fiscal envelope. It is therefore one of the strategic objectives of the Strategic
Partnerships portfolio to innovate operationally, in order to stretch the health care rand as far as
possible. One of the proposals that has recently been tabled involves the adoption of a moderate
Operating Leasing strategy, so as to release net cashflow in years when the department decides to
gear. In the assumptive modelling, an effective gearing factor of 4.5 was assumed in the years
that a portion of high technology, high redundancy, high maintenance equipment would be
acquired via operating leasing. Financing costs would be mitigated by the upfront purchase of
maintenance agreements by the vendor, ensuring savings of up to 25% and Extended Producer
Responsibility and Green Procurement provisions would be built into the lease contracts, including
the donation of the assets to the department, via The Health Foundation, for deployment into lower
tiered facility, where the equipment can live out the rest of its useful life. Central or training
hospitals would therefore constantly be able to renew equipment required for teaching and
improved patient prognosis.

16

Cash flow is well managed and when entering into any form of partnership, a clear exit strategy is
agreed up-front so as to ensure that the department can plan over the Medium-Term Expenditure
Framework to bring operational and any other related costs into the budget. This ensures
sustainability of services.

Given the level of governance, quality of management and professional, business-like approach of
WCDOH and Strategic Partnerships the risks involved in doing business with WCDOH are low – if not
non-existent.

5.6 THE OUTCOME – WHERE IT ALL COMES TOGETHER – CONCLUSIONS AND RECOMMENDATIONS

 From the graph above, it is evident that doing business with and partnering with the
WCDOH through its Strategic Partnerships Portfolio is highly desirable.
 The department and portfolio both rank highly on all four quadrants of the matrix – which
provides a fair amount of comfort to potential partners and investors.
 The scope of this particular report does not allow for a comprehensive and in-depth
discussion and analysis of all of the competitive dimensions that I would ideally like to
analyse in order to plot a clear and comprehensive strategy.
 In an ideal world, I would have started the process with a current as well as future SWOT
analysis of NDOH, WCDOH and Strategic Partnerships. This would be the first phase of my
base analysis.
 These analyses would complement Porter‟s Five Forces Model – which would look at the
industry growth overall.
 The BCG Analysis would confirm the direction of the marketing orientation and strategy and
provide a clear direction on which projects and priority areas most of the resources should
be directed at and also, our market share and growth relative to our largest competitor.
 I would then have proceeded to an Internal Factor Evaluation [IFE] to educate myself as to
the strengths and weaknesses in the functional areas of the business and the relationships
between these areas.

17

 Thereafter, it follows that I would do an External Factor Evaluation [EFE], so as to confirm and
evaluate the current business and trading conditions that I am functioning within, visualise
and prioritise opportunities and threats facing the organisations and portfolio and of course,
include a comprehensive PESTEL analysis for good measure, as further benchmark and
baseline.
 What makes these two models attractive from a multi-basing perspective, is the fact that
one is able to add a great many relevant elements, weight them and therefore bring a
more factual and numeric measure into the mix.
 The natural progression for me would be to move to the Internal-External Model, which
combines the IFE and EFE, so as to assess the available strategic options.
 If there are multiple strategy options, I would proceed to the Quantitative Strategic Planning
Matrix [QSFM] to establish where the real competitive „edge‟ is located.
 I would more than likely end with the Balanced Scorecard to ensure that a performance
framework is put in place to ensure that that right decisions are taken and that there is
constant monitoring of the achievements against the strategic objectives of the
organisation – internally and externally.
 All of these analyses, read together with the Space Matrix Model would provide the multiple
dimensions required so as to move forward with confidence and comfort.
 It must of course be said that one is also led by your instinct and intuition in issues of strategy
and so common sense would still prevail in the midst of the potential analysis paralysis.

6 CONCLUSION

I have found this exercise interesting, informative, instructive and thought-provoking and have
already started the process as described above, against a range of strategic objectives, so as to
trial various combinations of methodologies and to compare their outcomes.

It has been satisfying to use the Space Matrix Model within the public sphere. The caveat in this
instance is of course that this is not necessarily „government-as-usual‟ in the traditional sense. The
structure, mandate, scope and business-like approach demonstrated by the WCDOH and
Strategic Partnerships may have skewed the outcome of the analysis and it would be extremely
interesting to in fact complete a comprehensive analysis as described within the section before –
by analysing and comparing NDOH, WCDOH, ECDOH and Strategic Partnerships and its successes
and innovations as part of the Unique Value Proposition of WCDOH and WCGOV.

In the final analysis, the Space Matrix Analysis process did however provide sufficient proof or
ratification that we are on the right track and that we should continue to explore, exploit and grow
our competitive advantage – not only in the interest of the people of our province, but with the
intent of building best practice models that could be scaled and replicated where it is most
needed, in the rest of the country.

18

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Khayelitsha, South Africa – a primary data analysis. Cost Effectiveness and Resource Allocation
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Day, C. Barron. P. Montecelli, F. Sello, E. [editors] 2009. The District Health Barometer 2007/8. Durban:
Health Systems Trust 35

Day, C. Gray, A. 2008. Health & Related Indicators. In Barron P, Roma‐Reardon J (Eds). South
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System. A process convened and facilitated by the Development Bank of Southern Africa.

Dorrington, R. Johnson, L. Bradshaw, D. Daniel, T. 2007. The Demographic Impact of HIV/AIDS in
South Africa: National and Provincial Indicators for 2006. Cape Town: Centre for Actuarial Research,
Medical Research Council and Actuarial Society of SA.

Harrison,D. December 2009. An Overview of Health and Health Care in South Africa 1994-2010:
Priorities, Progress and Prospects for New Gains. A Discussion Document Commissioned by the
Henry J. Kaiser Family Foundation to Help Inform the National Health Leaders‟ Retreat, Muldersdrift,
January 24-26 2010 [Appendix B]

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Department of Health. http://www.doh.gov.za/ [Accessed July 2012]

Hirschowitz, R. Orkin, M. 1995]). A national household survey of health inequalities in South Africa.
The Community Agency for Social Enquiry (CASE) for the Henry J. Kaiser Family Foundation, Menlo
Park, CA.

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Kevany, S. Meintjies, G. Rebe, K. Maartens, G. Cleary, S. 2009. Clinical and financial burdens of
secondary level care in a public sector antiretroviral setting (G F Jooste Hospital). South African
Medical Journal 99: 320 ‐ 325

Lawn, S. Churchyard, G. 2009. Epidemiology of HIV‐associated tuberculosis. Current Opinion in HIV
and AIDS 4:325‐333

Lawn, S. Wood, R. 2007. When should antiretroviral treatment be started in patients with
HIV‐associated tuberculosis in South Africa? South African Medical Journal 97: 414 ‐ 415

Lewin, S. Norman, R. Nannan, N. Thomas, E. Bradshaw, D and the South African Comparative Risk
Assessment Collaborating Group. 2007. Estimating the burden of disease attributable to unsafe
water and lack of sanitation and hygiene in South Africa in 2000. South African Medical Journal 97:
755 – 762

Mayosi, B. Flischer, A. Lalloo, U. Sitas, F. Tollman, S. Bradshaw, D. 2009. Health in South Africa 4: The
burden of non‐communicable diseases in South Africa. The Lancet 374: 934‐47

McIntyre, D. Bloom, G. Doherty, J. Brijlal, P. 1995. Health Expenditure and Finance in South Africa.
Durban: Health Systems Trust and World Bank

Myers, J. Naledi, T. et al. 2007. Western Cape Burden of Disease Reduction Project: Report
National Department of Health Strategic Plan 2010 – 2013.

Nannan, N. Norman, R. Hendricks, M. Dhansay, M. Bradshaw, D and the South African Comparative
Risk Assessment Collaborating Group. 2007. Estimating the burden of disease attributable to
childhood and maternal under nutrition in South Africa in 2000. South African Medical Journal 97:
733 ‐ 739

20

National Committee on Confidential Enquiries into Maternal Deaths. 2008. Saving mothers
2005‐2007. Fourth Report on Confidential Enquiries into Maternal Deaths (Expanded Executive
Summary). http://www.doh.gov.za/docs/reports‐f.html. [Accessed February 2010]

National Department of Health. 24 May 2012. Strategic Plan for Maternal, New-born, Child and
Women‟s Health [MNCWH] and Nutrition in South Africa 2012-2016

National Department of Health. 4 March 2012. Annual Performance Plan 2012/13 – 2014/15.
APPENDIX A: EXCERPTS

National Department of Health .2009a. Annual Report 2008/9. Pretoria.
http://www.doh.gov.za/docs/reports/annual/2009 [Accessed September 2012]

National Department of Health. 2009b. Strategic Plan 2009/10 – 2011/12. Pretoria.
http://www.doh.gov.za/docs/strategic09‐11‐f.htm [Accessed September 2012]
(Accessed November 2009)

National Department of Health .2009c. Operational Plan for HIV Prevention (in final draft,
December 2009). Pretoria

National Department of Health and Medical Research Council. 2008. South Africa Demographic
and Health Survey 2003.
http://www.doh.gov.za/docs/reports‐f.html

National Department of Health. 2008. Annual Report 2007/8. Pretoria.
http://www.doh.gov.za/docs/reports/annual/2008 [Accessed October 2012]

National Department of Health. 2007. A policy on quality of health care in South Africa. Pretoria.
http://www.doh.gov.za/docs/policy/qhc.pdf

National Department of Health. 2006. A National Human Resources Plan for Health to provide skilled
human resources for healthcare adequate to take care of all South Africans; 2006.
URL: http://www.doh.gov.za/docs/discuss/2006/hrh_plan/index.html

National Department of Health. 2005. The Charter of the Health Sector of the Republic of South
Africa (Draft revised 28 October 2005).
http://www.doh.gov.za/docs/misc‐f.html

National Department of Health. 1997. White Paper for the Transformation of the Health System.
Pretoria: Government Printer

National Treasury South Africa. 22 February 2012. 2012 Budget Speech Minister of Finance Pravin
Gordhan

National Treasury Department: South Africa. August 2012. Medium Term Expenditure Framework
Guidelines. Preparation of Expenditure Estimates for the 2012 Medium Term Expenditure Framework.

Norman, R. Bradshaw, D. Schneider, M et al. 2007. A comparative risk assessment for South Africa in
2000: towards promoting health and preventing disease. South African Medical Journal 97: 637 ‐
641

Sachs, J, D. 20 December 2001. Macroeconomics and Health: Investing in Health for Economic
Development. Report of the Commission on Macroeconomics and Health

Scott, R. Harrison, D. 2009. A gauge of HIV prevention in South Africa. Johannesburg: loveLife Trust.
http://www.lovelife.org.za/prevention_gauge

Seedat, M. van Niekerk, A. Jewkes, R. Suffla, S. Ratele, K. 2009. Violence and injuries in South Africa:
Prioritizing an agenda for prevention. The Lancet 374: 1011‐ 1022

21

Segall, M. May 1999. “The Bottle Is Half Full”: Policy Oriented Overview of The Main Findings of a
Review of Public Health Service Delivery

Statistics South Africa. Statistical Release P0302. 27 July 2011. Mid-year Population Estimates 2011.
http://www.statssa.gov.za/

Statistics South Africa. 2005. Mortality and causes of death in South Africa, 1997 – 2003. Statistical
release PO309.3.
http://www.statssa.gov.za/publications/P03093/P03093.pdf. [Accessed February 2012]

Statistics South Africa. 2009a. Mortality and causes of death in South Africa, 2007. Findings from
death notification. Statistical release PO309.3.
http://www.statssa.gov.za/publications/P03093/P030932007.pdf. [ Accessed March 2011]

Statistics South Africa .2009b. Road traffic accident deaths in South Africa, 2001 – 2006: Evidence
from death notification. Report no. 03‐09‐07. Pretoria:
http://www.statssa.gov.za/publications/Report‐03‐09‐07/Report‐03‐09‐07.pdf

Statistics South Africa .2009c. Gross Domestic Product Annual Estimates 1993 – 2008: Third Quarter
2009. Statistical release PO441.
http://www.statssa.gov.za/publications/P0441/P04413rdQuarter2009.pdf

Taylor, B. 2007. Rationing of Medicines and Health Care Technology. In Harrison, S. Bhana, R. Ntuli,
A. (Eds). South African Health Review 2007. Health Systems Trust.

Van Holdt, K. Murphy, M. 2007. Public hospitals in South Africa: stressed institutions, disempowered
management. In Buhlungu, S. Daniel, J. Southall, R. Lutchman, J. State of the Nation: South Africa
2007. Cape Town: HSRC Press

Van den Heever, A. 2009. The determinants of medical scheme membership. In CMS News. Issue
No. 2 of 2009 – 2010. Pretoria: Council for Medical Schemes. http://www.medicalschemes.com

Western Cape Department of Health. November 2011. Vision 2020 – The future of health care in the
Western Cape: A Draft Framework for Dialogue [Appendix G]

Western Cape Department of Health. March 2012. Annual Performance Plan 2012-2013

Western Cape Department of Health. August 2012. Annual Report 2011-2012

Western Cape Department of Health. 8 November 2011. The Cape Town Declaration on Wellness:
Wellness Summit [Appendix H]

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http://www.worldbank.org

World Health Organisation. 4 April 2011. South Africa Health profile. www.doh.gov.za.[ Accessed
September 2012]

World Health Organisation. 21 October 2011. Rio Political Declaration on the Determinants of
Health. http://www.who.int/sdhconference/declaration/en/. [Accessed September 2012]

www.earthzense.com/Definition-of-wellness. Define: Wellness: Accessed September 2012

22

APPENDIX A: NATIONAL DEPARTMENT OF HEALTH: ANNUAL PERFORMANCE PLAN: HIGHLIGHTS
[National Department of Health. March 2012.]

In its Annual Performance Plan 2012/13 – 2014/15, [National Department of Health. 7 March 2012]
the following highlights and priorities are iterated:
7.1.1 One of the focal areas remains dealing with the Quadruple Burden of Disease [BOD]:
HIV/AIDS, TB, Violence & Injury and Non-Communicable Diseases [NCD].
7.1.2 The focus on dealing with NCD will be: * Reducing tobacco smoking * Reducing of
harmful alcohol consumption * Promoting physical activity * Addressing unhealthy diets.
7.1.3 It is recognised that to deal with inter-personal, gender-based violence and injury, a
broader, inter-sectoral, societal approach will be required.
7.1.4 Infrastructure continues to crumble and there are huge backlogs in maintenance,
upgrades, equipment that need to be dealt with in order to strengthen the healthcare
system.
7.1.5 Primary Healthcare [PHC] re-engineering, district health, PHC outreach programmes
and school health will be put in place.
Human Resources for Health [HRH] strategy and plan have been put into place to deal
with the shortage of clinical staff in South Africa.
7.1.6 After the national audit of all health facilities, it has been determined that there is an
urgent need to train and up skill the management at health facilities.
7.1.7 There is also an urgent requirement to strengthen health information systems.
7.1.8 Furthermore, there is a need to accelerate collaboration with other government
departments so as to expedite the national turnaround strategy.
7.1.9 All efforts are focused on the eventual roll-out of the National Health Insurance [NHI]
and Universal Healthcare for all.
7.1.10 In terms of refocusing on the re-engineering of the PHC system, the social determinants
of health must be dealt with; this was agreed at the World Health Organisation [WHO]
Conference on the Social Determinants of Health, held in Brazil in October 2011. This led
to the Rio Declaration on the Social Determinants of Health [World Health Organisation.
21 October 2011].
7.1.11 It is anticipated that this Declaration will be the basis for the development of a
framework and plan that would seek to deal with the social determinants of disease –
the starting point being to firstly establish and agree what these determinants are and
how they should be dealt with.
7.1.12 NDOH plans to deploy at least 5000 Community-based Healthcare Workers to assist
District Teams.
7.1.13 There will be a renewed focus on school health with nurses being deployed to the 8000
schools in the lowest quintiles and supplementation with mobile health units to provide
packages of health screening and treatment – including oral, dental,
7.1.14 In Grades 8-10 there will be a focus on HIV/AIDS prevention and education, prevention
of teenaged pregnancies and drug abuse; the focus will be on prevention and health
promotion.
7.1.15 Public Private Partnerships are viewed as one of the ways in which the delivery of health
infrastructure could be accelerated.
7.1.16 The Baseline for Under Five Infant Mortality is currently 56 in 1000 live births; a target of 50
in 1000 live births has been set for 2014/15.
7.1.17 The Baseline for Infant Mortality is currently 40 in 1000 live births; a target of 36 in 1000 live
births has been set for 2014/15.
7.1.18 The Baseline for Maternal Mortality is currently 310 per 100 000 births; the target for
2014/15 has been set at 270 per 100 000 births.

23

n general, NDOH has agreed to the Health Sector Negotiated Delivery Agreement, which has 12
outcomes in total. NDOH is responsible for the achievement of Outcome 2 namely: A long and
healthy life for all South Africans.
NDOH has furthermore committed to the delivery of the Health-related Millennium Development
Goals: * to eradicate extreme poverty and hunger * Promote gender equality and empower
women * Reduce child mortality * Improve maternal health

24

APPENDIX B: STATE OF THE NATIONAL HEALTH CARE SYSTEM: SITUATIONAL ANALYSIS
[Harrison, D. December 2009]

 Improvements have been achieved in terms of access, rationalisation of health
management and more equitable health expenditure
 However, 15 years later, these gains have been eroded by a quadruple burden of disease
and more specifically, the strain that HIV/AIDs is placing on the health system, generally
weak health systems management and low staff morale.
 The overall result is poor health outcomes relative to the total health care expenditure in the
public health sector in South Africa

 The burden of HIV on mortality and the health system is enormous and managing the
HIV/AIDS epidemic will more than likely continue to dominate during the next decade and
beyond.
 A balance will have to be found between the ability to finance the prevention and
treatment of HIV/AIDS on a national basis, whilst improving service efficiency and quality of
care.
 Funding formulas to make the proposed National Health Insurance [NHI] a reality will pose
further challenges.
 There are opportunities for significant systems improvements as well as on focusing on
specific policy priorities.
 Given the dire state of the health care system in general, the challenge for policymakers is
to demonstrate rapid improvement in the quality of care and service delivery indicators,
such as waiting time, patient satisfaction, whilst at the same time addressing the intractable
health management issues that continue to bedevil efficiency and drive up costs.
 Even though a district-based system can be considered as one of the biggest post 1994
innovations, the success has been hamstrung by the failure to devolve authority fully and by
erosion of efficiencies through lack of lack of leadership and low staff morale.
 Re-engineering or retooling of district health management to improve local service delivery
would therefore seem to be one of the „breakthrough strategies‟ that could be
accomplished fairly easily.
 Other chronic disease epidemics such as TB and alcohol abuse and their effect on the
health system, cannot obscure the burden of disease related to other chronic diseases.

25

Prevention and treatment needs underscore the urgency of new health financing models,
pushing the consideration of the NHI to the fore of policy priorities.
 Grand policy initiatives can therefore only be applauded if they are implemented effective
and can produce demonstrable benefits.

 Proposed strategies are laid out systematically in the diagrams that follow.
 They start off with key policy programmes and service priorities to reduce the burden of
premature death in South Africa.
 It then goes on to outline some of the most important policy and management instruments
to improve the state of the health system.

26

7.1.19 MORTALITY
The completeness of death registrations has improved from 67% to 82 % [Stats SA. 2009 a]. The real
number of deaths in South Africa has increased sharply since 1998; Figure 1 below indicates that
the figures have in fact almost doubled. To date, AIDS has resulted in the deaths of at least 2.6
million South Africans, mostly children under five and young adults.

The number of deaths registered for children younger than five has doubled over this period of
time, whilst the figures for those aged between 20 and 39 years old, has trebled [Figure 2]. This has
resulted in the median age of death having fallen significantly. The infant mortality rate has
increased significantly since 1980. The expansion of the Mother-to-Child transmission prevention
programme has assisted in reverting back to mortality levels of 1994 [Health Systems Trust. 1995-

27

 Death rates for many, but not all, categories of non-communicable diseases [NCD] have
increased. The time frame for review of these trends was relatively short and so accurate

29

mortality rates for hypertensive and ischaemic heart diseases show little change. It is
nevertheless important to note that these conditions now disproportionally affect poorer
people in urban areas [Mayosi et al. 2009].
 On the other hand, the trend in other diseases, such as stroke, diabetes mellitus and chronic
kidney disease has increased upwards considerably.

 Based on the age profile related to mortality attributed to NCD‟s, it suggests that the
apparent increase in deaths from NCD‟s is AIDS-related.

 The real increases in mortality from diabetes mellitus, chronic kidney disease and cancer of
the prostrate are more than likely unrelated to HIV.[ Mayosi et al. 2009]
 This reinforces the fact that South Africa is facing a quadruple burden of disease [BOD]
associated with AIDS, other diseases of inequality and poverty, diseases of transition and a
persistently high fatality rate from injury and other external causes.

30

 HIV/AIDS is however projected to account for about 75% of premature deaths in South
Africa in 2010. [ Bradshaw. 2003]

 The four greatest disease priorities in reducing premature mortality in South Africa are:
 HIV/AIDS and TB
 Injuries from inter-personal violence and road traffic accidents
 Other infectious diseases and conditions related to poverty, mostly affecting children
 Cardiovascular conditions and other chronic diseases of lifestyle
 Together, these account for 90% of premature deaths

7.2 Trends in underlying risk factors
The National health risk profile, calculated in relative contribution to risk factors to disability adjusted
life years [DALYS] – mirrors the mortality profile.

31

 In 1996, NDOH commissioned the Council of Scientific and Industrial Research to undertake
a national audit of health facilities [CSIR.1996]. The audit concluded that about R 7.6 billion
was needed to restore the estate to acceptable conditions.
 In some provinces, the situation was much worse. In Limpopo, almost a quarter of facilities
needed to be replaced or condemned. Substantial capital funding was made available
for the worst-off provinces.
 In 1998, the Hospital Rehabilitation and Reconstruction Programme was initiated, including
the replacement of equipment and facilities in hospitals across South Africa. It also
included the construction of 11 district and regional hospitals and three new academic
complexes.
 As part of the 10 point plan, this programme sought to simultaneously improve infrastructure,
health technology, organisational management and service quality.

37

 By 2008 there were 40 participating hospitals but by 2009, this number was reduced to 27 as
a result of a sharp reduction in infrastructure funding. [ NDOH. 2009 b]
 A further limitation to progress has been the availability and appointment of suitable
staffing.

38

Devolution of management authority
There are two urgent priorities with respect to devolution of authority, namely the institutionalisation
of the district health system and devolution of staffing, budgeting and expenditure control of
hospitals to hospital management.
Some of the key challenges are described below:
District health system:
Since 1994, the district health system has been recognised as the main mechanism for
implementation of primary health care (Owen 1995). Yet it has failed to be properly institutionalised.
District management teams have been appointed and are responsible for day‐to‐day

47

management of primary health facilities and community outreach. A number of initiatives have
strengthened their capacity, including management training and tools for budgeting and
expenditure analysis. But they have acted as units of a de‐concentrated provincial system, rather
than as management entities with delegated authority. The effect has been accountability to
provincial government – often largely driven by the imperatives of the Public Finance Management
Act – and insufficient accountability to the people of the district for health service provision.
The National Health Act of 2003 made provision for the appointment of district health councils
charged with ensuring „co‐ordination of planning, budgeting, provision and monitoring of all
services that affect the residents of the health district for which the council was established.‟ It also
required provinces to legislate for the functioning of district health councils and to enter into
agreements with municipalities where certain PHC services are provided by the latter. To date, only
one province has legislated for district health councils.
Devolution of staffing, budgeting and expenditure control to hospitals:
The high degree of management centralisation at provincial level sets up a vicious cycle:
competent managers are frustrated by the lack of autonomy and leave – while provinces are
reluctant to devolve management authority to junior or less competent managers. This cycle will
only be broken if there is clear definition of the delegations of authority to hospital managers, linked
to performance monitoring (van Holdt & Murphy 2007). Similarly, the sense of exclusion from
decision‐making experienced by many senior clinicians in central and provincial hospitals will need
to be addressed.
Specific delegations need to include control over the staff establishment (staff numbers & mix),
hiring and firing of personnel, budgeting and control of expenditure and greater control of
procurement ‐ in a streamlined system of interaction with provincial systems of monitoring and
accountability. Without clear delegations of authority, the Inspectorates of Health Establishments
will have no teeth, because hospital managers will be able to point to protracted delays in
procurement, budget approval and staff appointments beyond their control.
Good examples of agency‐led support for quality improvement include the Initiative for
Sub‐District Support of the Health Systems Trust, the Youth Friendly Clinic Initiative (DoH and
loveLife), and the accelerated plan for PMTCT.
2.2.9 Health worker morale
A five year review of the public health sector conducted in 1999 found that, with respect to human
resources, “the single most consistent finding in our field studies in all parts of the country is that
morale among health workers is low, especially among nurses” (Segall 1999). It concluded that
although nurses ascribed their morale to overwork, this was probably not the main factor – and that
a sense of neglect and lack of support was at the heart of problems of low morale. Unfortunately,
reviews of the health system since then have tended to reach the same conclusions.
Strategies that could improve health morale fairly rapidly include:
• A national campaign to affirm the value of health workers (linked to rewards and recognition);
• Re‐asserting the primary role of the district management team in supporting personnel within the
district (as opposed to interacting with provincial and national processes);
• The simplification of paperwork, including a brutal trimming of the national health information
minimum dataset and condensing annual business plans and programme reports;
• Facilitated processes of in‐service support to health workers that go beyond occasional trainings;
and
• Incentivising further study and personnel development, through for example a dedicated
programme linked to the National Students Financial Aid Scheme (NSFAS).
There are undoubtedly places of excellence and dedicated health workers in clinics and hospitals
across the country, rendering high quality services even in the face of constrained resources. A
common denominator in all these exemplars is strong and motivated leadership within the health
facility and it is now imperative that the type of leadership training that has been provided to senior
and middle‐level health managers should now be extended to clinic managers.
But, ultimately, the morale of health workers will only improve if they have a real sense of mission
and personal fulfilment, which to a large extent depends on the ability of national and provincial
managers to articulate a clear vision and plan of action.
2.2.10 Leadership and innovation
Andrews and Pillay (2005) identified a number of factors critical to success of the implementation of
the 2004‐2009 Strategic Plan, including:

48

• Leadership, and in particular, political leaders as well as managers in the health system, must
clearly articulate and communicate a vision and a mission that will resonate with front line health
workers.
• A programme of action that is developed with, and that captures the imagination of, those
charged with its implementation. This would require greater empowerment of leaders at the local
level to drive the change agenda.
These critical success factors are just as relevant today. To these, a third should be added – namely
a mechanism for leadership development and public innovation in the health sector. This
mechanism – an agency (or agencies), working with provincial and district managers ‐ would be
able to provide „horizontal support to the district management team and health workers at facility
level.
In this way, an agenda of change would remain on the front burner, even as pressing concerns
and management crises inevitably take up the time of senior health service managers. But neither
should the latter abdicate responsibility: a mechanism of „horizontal support‟ will only work if it
enjoys the backing of senior management. A commitment by senior management to visit health
facilities at least once a month to share the vision and provide encouragement could rebuild a
sense of common purpose.
PROSPECTS FOR NEW GAINS
The review of successes presented in section 2.1 above shows that many of the breakthroughs
were achieved through bold policy initiatives. Not surprisingly, many of them were accomplished in
the first five years of democratic government, which presented a singular window of opportunity for
policy development and implementation.
The squeeze on public spending in the late nineties knocked the wind out of the sails of health
systems transformation. But the loss of momentum was not only the result of financial constraints:
Failure to regulate the private sector properly, coupled with the inability to motivate staff across the
public sector, accelerated the drain of health professionals in the first few years of the new
millennium.
The advent of the mortality phase of the AIDS epidemic – noticeable from about 1998 – signalled a
period of growing pressure on the health system, and growing frustration from both health workers
and civil society alike at the apparent ambivalence of Government to deal with it effectively.
Nevertheless, it should be noted that, even during this phase, there were some important
breakthroughs in health policy, including anti‐tobacco legislation and community service for
graduating health professionals. There were also incremental improvements in health systems
management and rationalisation in a number of provinces, which received little media attention.
The time and effort taken to unravel and restructure the fragmented health services of apartheid
should not be underestimated. But now, the South African public health system stands on the edge
of a chasm, which can only be bridged by new resources and decisive leadership. There is no way
that the public health system will be able to be sustained at current levels of funding – if the rollout
of the ART programme is to continue.
To some extent, the resources may be obtained by better use of the public resources and services
of the private sector. To a large extent, it will require new funding.
This is the intent of the proposed national health insurance (NHI) system. There is however the risk
that the NHI will be viewed as the panacea for both financing shortfalls and health service
deficiencies, and sight should not be lost of the fact that the NHI is essentially a financing
mechanism. In this regard, it would be injudicious to rule out the option of sourcing new funding
through general taxation – as opposed to a dedicated payroll tax – until the implications of the
latter are fully understood.
The pressures on the health system over the next five years imply that there will be little margin for
trial‐and‐error. Some of important factors to consider in decisions about an NHI are presented in
Appendix 1, but the key point is that an NHI (and/or other financing mechanisms) will enable the
implementation of policies and programmes that address national health priorities. Of itself, it is not
a national health priority. These are described below.
HIV prevention:
If health planning is informed by an analysis of the burden of disease, there is no doubt that the
greatest health priority is to prevent new HIV infection. This will require the full and urgent
implementation of the comprehensive strategies outlined in section 2.1. An urgent priority for the
financial year 2010/11 is to saturate the demand for condoms in high prevalence districts and
most‐at‐risk groups. The big gaps in coverage of community‐level behaviour change programme
will need to be urgently addressed – requiring additional funding from Government and its bilateral

49

partners. And the elimination of missed opportunities for PMTCT provides an obvious source of
incidence reduction in 2010.

HIV treatment:
With such significant residual mortality – at least 250,000 deaths per annum even at 90% coverage
(see Figure 14) – serious consideration will need to be given to simplifying the model of care for
patients on ART. In particular, the routine use of laboratory tests to monitor progress (CD4 and viral
load, in the absence of other clinical indications) will need to be reviewed. The trade‐offs between
earlier initiation of treatment and higher levels of coverage will need to be evaluated at policy,
service management and clinical levels.
Furthermore, the non-sustainability of a donor‐dependent ART programme needs to be fully
recognised.
Combating alcohol abuse:
Morbidity and mortality data point strongly to the fact that the country can no longer ignore the
impact of alcohol abuse, which contributes to injury, HIV transmission, domestic violence and child
abuse. The experience of other countries and the precedent of the national anti‐tobacco
programme in South Africa both point to potential new gains if this risk factor is taken seriously. This
will require collaboration across government departments and sectors of society and will need full
political support.
Preventing non‐communicable disease:
The immediacy of the HIV epidemic means that the focus on non-communicable disease must be
on their prevention. In this regard, further reductions in the prevalence of tobacco smoking remain
a priority.
As community‐level adherence support for TB and HIV prevention and treatment become more
entrenched, there will be opportunity to integrate community‐level care for all chronic conditions.
But it would be risky to attempt such integration now – when the priority must be integration of
TB‐HIV services.
Improving the quality of care:
Clear priorities will need to be established in terms of both health programmes and facilities. They
include prevention of mother‐to‐child transmission, ART adherence support, TB prevention and
management, syndromic management of sexually transmitted infections, and maternal and
perinatal care.
In terms of health facilities, the findings of the maternal and perinatal mortality review point to the
need to focus on district hospitals in particular. As discussed earlier, improving the quality of care
will require both systems of monitoring and support to health workers. These require the
establishment of deliberative programmes driven by dedicated agencies.
Most importantly, efforts to improve the quality of care need to be driven from the front, by political
and health service leaders who can communicate the mission and inspire health workers to have
the biggest possible impact on the health of the communities they serve.

APPENDIX C: NATIONAL DEPARTMENT OF HEALTH: ANNUAL PERFORMANCE PLAN: 2012-2014:
EXCERPTS – GRAPHS AND STATISTICS

50

Key Strategic Issues: Health Sector Negotiated Service Delivery Agreement

Government has adopted an outcome-based approach to service delivery, which consists of 12
outcomes. This is articulated in the revised Medium Strategic Framework (MTSF) for 2009-2014.

The 12 Outcomes are as follows:

 Improved quality of basic education
 A long and healthy life for all South Africans
 All people in South Africa are and feel safe
 Decent employment through inclusive economic growth
 A skilled and capable workforce to support an inclusive growth path
 An efficient, competitive and responsive economic infrastructure network
 Vibrant, equitable and sustainable rural communities with food security for all
 Sustainable human settlements and improved quality of household life
 A responsive, accountable, effective and efficient local government system
 Environmental assets and natural resources that are well protected and continually
enhanced
 Create a better South Africa and contribute to a better and safer Africa and World
 An efficient, effective and development oriented public service and an empowered, fair
and inclusive citizenship

The health sector is responsible for the achievement of Outcome 2 namely: A long and healthy life
for all South Africans.

The focus of the health sector over the planning cycle 2011/12 – 2013/14 will therefore be on the
four outputs entailed in the Minister‟s Performance Agreement with the President of the Republic,
and elaborated on in the Negotiated Service Delivery Agreement for 2010 – 2014.

60

These are (1) Increasing Life Expectancy; (2) Reducing Maternal and Child Mortality Rates; (3)
Combating HIV and AIDS and decreasing the burden of diseases from Tuberculosis and (4)

Strengthening Health System Effectiveness. Strategies for achieving these are reflected in the
relevant medium term plans of the National and Provincial Departments of Health.

61

APPENDIX D: PROPOSED NHI STRUCTURE: CHALLENGES AND REQUIREMENTS FOR IMPLEMENTATION

62

APPENDIX E: SOUTH AFRICA‟S HEALTH CARE UNDER THREAT: PUBLIC VERSUS PRIVATE HEALTHCARE
[Biermann, J. 2006.]

64

By the government's own admission its health sector is not coping with the demand for health care.
The [then] Minister of Health, Dr Manto Tshabalala-Msimang, was quoted as stating that the health
system was 'in shambles' and Dr Kgosi Letlape, chairman of the South African Medical Association,
described the situation in the government health sector as 'horrendous'.

In response to the situation, the government has embarked on an on-going programme of
expanding and upgrading government health facilities and services, while, on the regulatory level,
it has adopted the National Health Act 2003, which seeks to establish a unified national health
system over which the National Department of Health will wield enormous power.

The ostensible aim of the new health legislation is to allow the health department to control and
manage the entire health system, so that it can reallocate and redistribute private and public
health resources in a "more equitable" manner.

The unified national health system envisaged in the legislation is to be characterised by:

65

 Planning interventions in the form of national, provincial and district health plans.
 Economic interventions in the form of price controls, compulsory minimum benefit
requirements for medical schemes, limitations on risk rating of patients by medical schemes,
prohibitions on re-insurance by medical schemes, and the establishment of a system of
social health insurance.
 Licensing in the form of certificates of need (CON) requirements for the establishment or
expansion of facilities and the introduction of new technologies, enabling the Minister of
Health to control the number of private hospitals and beds, the location of new hospitals,
where doctors may practise, and the dispensing of medicines by general practitioners.
 Compulsory public service for medical graduates, prescribed medical education curricula
emphasising primary health care over specialist care, prohibition of insurance policies that
cover medical expenses, compulsory acceptance of members by medical aid funds,
compulsory membership of medical aid schemes and limitations on medical aid funds and
insurers, restricting their ability to introduce innovative and more cost-effective services.
 The Act introduces South Africa's own version of a centrally planned, socialised health
system, in which the facilities, the equipment, the doctors, nurses and other medical
professionals, and services, whether in the public or private sector, have been regulated,
licensed, certified, approved and price-controlled by the government.

A Critique of the Recent Legislation

The unified national health system envisaged in the National Health Act 2003 ignores the failures of
the country's existing government health sector and the evidence from other countries with
government (socialist) health systems which shows that these systems are inefficient, expensive,
lack sophisticated medical equipment, have long waiting lists for medical procedures and
appointments with specialists, do not provide equal access to and equal treatment for all citizens,
provide lower quality health care than private systems, control costs by rationing care and medical
technology, and fall far short of attaining their lofty ideals. The experience in the countries that
serve as role models for South Africa's health-care plans, such as the United Kingdom and Canada,
is particularly relevant.

In a fully socialised health system everything is centrally planned, controlled and co-ordinated. The
government owns all the hospitals and medical facilities and government health planners
determine how many hospitals and beds there should be, where they should be located, the type
and quantity of services and medicines that will be available, the salaries health-care professionals
may earn, the amount of money that may be spent on particular procedures and technologies,
the type of equipment that may be installed at hospitals and clinics, and the prices that will be
charged for health-care procedures and medicines.

South Africa's new National Health Act subjects its private health-care providers to the same
controls applied in a socialised health system. Private care, from now on, will thus be private only
insofar as health establishments will be privately owned. The government will be planning the entire
health-care system, with dire consequences for all patients, rich and poor.

A government attempting to plan and/or provide health care to an entire nation is confronted by
the insurmountable obstacles faced by centrally planned and co-ordinated systems: the
impossibility of knowing everything necessary to ensure effective, efficient and equitable delivery of
goods and services, the misallocation of resources that result from the ignoring or obliteration of
signals provided by prices, the complexity of centralised planning, the difficulty of forecasting the
future, and the inefficiency of governments in general.

Centrally prohibited health care

When governments impose plans on their citizens, whatever does not fit in with those plans
becomes illegal. This observation led the economist Murray N Rothbard to remark that a centrally
planned economy is a centrally prohibited economy. Socialised care becomes government
prohibited health care: nothing may be done without prior government approval.

66

So, for example, South African doctors will be prohibited from opening medical practices in areas
that government health-care planners believe are adequately served. The planners will somehow
know exactly where all doctors should practise and what procedures and equipment they should
use in order to meet the needs of all patients.

Government health systems are inefficient

Compared to its private health-care providers, South Africa's government health sector is slow,
unwieldy and inefficient because it is not subject to the discipline entailed in making profits,
avoiding losses, and earning an adequate return on capital invested.

The government sector can always obtain more funds from taxpayers, or, if government health
costs and demands for service get really out of hand, ration health care.

The proponents of government health care regard the economic rationing of health care as
inequitable, but regard rationing of health care by governments as justifiable, notwithstanding the
promises to provide health-care services to all who need them. A health department discussion
document makes this admission:

In the government health-care sector, therefore, it is said to be for reasons of equity that health
services are either limited or not available. However, when economic rationing occurs in the
private health sector the proponents of socialised health care describe such rationing as
inequitable.

Government health systems, like all government activities world-wide, are encumbered by
bureaucratic procedures and are consequently unavoidably inefficient. They cannot compete
with private providers. The contracts awarded to private health-care providers by the British
National Health Service (NHS), which is under severe pressure to speed up the provision of medical
care for the more than one million NHS patients who are on waiting lists for surgical procedures,
provides an illustration of the greater efficiency of private providers.

South African private hospital groups, Netcare and Life Healthcare are among the companies to
whom contracts have been awarded.24 The contracts require the performance of thousands of
medical procedures annually, such as cataract procedures, orthopaedic surgery (including hip
and knee replacements), ambulatory surgical procedures (including arthroscopies), general
surgical procedures, and ear, nose, throat and oral procedures.

Life Healthcare, in a joint venture with Care UK PLC, has been contracted to construct and operate
three Diagnostic Treatment Centres in England, which include consulting rooms, radiology
(including X-ray, CT scanner, MRI and ultrasound), pathology laboratories, theatres, ICU beds,
general beds ,and a rehabilitation gymnasium.

The contracts awarded confirm the superiority of private care over government care as well as the
competency of South African companies in providing world-class medical care. It is unfortunate for
government sector patients that these resources are not being used locally to alleviate the pressure
on the government sector.

The quality of care and the competitive cost of private health care have made South Africa a
destination for medical tourism. Patients come to South Africa from the United Kingdom, where
they are entitled to free health care, and pay for medical treatment out of their own resources to
avoid the long waiting times for medical care in the British National Health Service (NHS).25
The knowledge problem

Proponents of government health systems argue that such systems ensure the optimal and
productive utilisation of the country's health-care resources. Their arguments are based on the
fallacy that there is someone who actually knows how to allocate health-care resources in an
equitable manner and what optimal utilisation of health resources would comprise.

67

However, as explained by Nobel laureate Friedrich Hayek, such a person or organisation cannot
exist. Hayek's writings teach us that government planning cannot achieve the efficiency in the use
of resources which market processes make possible because the knowledge required to do so is
dispersed among thousands or millions of individuals.26

All government enterprises and state controlled economies fall prey to what has become known as
"the knowledge problem" and South Africa is no exception.

In a market economy the task of "fixing" prices is undertaken by hundreds of millions of people
individually keeping track of the relatively few prices they need to know for their own decision-
making.

In a health-care system under political and bureaucratic domination, price controls are invariably
introduced, supposedly to make care affordable and to contain costs.

This obliterates the very price information system that would allow health-care resources to be
utilised most efficiently. By ignoring prices, politicians, health-care planners and policy makers have
no means of knowing what the optimal allocation of health resources should be and the fact that
they are generally driven by non-economic motives makes matters worse.

As a result, health-care delivery becomes a product of political and bureaucratic expediency
rather than a response to real health-care needs.

Equity, efficiency and effective delivery become the casualties of the absence of market prices to
co-ordinate production, supply and delivery of health care to consumers.

This is what South Africa's citizens will face if its health department continues on its current course.

68

STRATEGIC AND BUSINESS ANALYSIS OF THE WESTERN CAPE DEPARTMENT OF HEALTH AND THE STRATEGIC PARTNERSHIPS FUNCTION IN CONTEXT OF THE HEALTHCARE SECTOR IN SOUTH AFRICA AN ANALYSIS OF THE POTENTIAL COMPETITIVE ADVANTAGES AND STRATEGIC IMPERATIVES AND DIRECTIO

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