Healthcare is people intensive exercise and the cost of employment is the largest component of the budget of every provincial health department in South Africa and elsewhere. It follows that only staff who are skilled and essential at all levels of the organisation to the delivery of quality and affordable healthcare should be employed. Unfortunately, in my experience, the South African Public Health Service has too many people who lack the required skills or are wrongly placed in the organisation resulting in poor performance. It follows also that a person unable to effectively perform his or her allocated tasks, for whatever reason, or who is not essential to the delivery of healthcare results in an unnecessary financial burden on the organisation.
Recently I was speaking to a retired manager from the retail sector who reflected on the factors that had made one large retailer more profitable than another. He identified the control of personnel expenditure as being a major factor in determining the profit margins of these companies. Following this conversation I reflected on the similarities with my experiences in health management in the public sector and that described by my friend from the private sector. While profit margins are not relevant in the public health sector, the cost of employment if not controlled leads to over-expenditure and an inability to afford the other essential components of the health budget.
When I initially entered health management from clinical practice in the Free State, I as many of my erstwhile clinical colleagues regarded it as incontestable that when clinical staff were required that they should be appointed without question. It was a rude awakening when my financial manager pointed out that if this trend continued, the department under my leadership would significantly exceed the allocated budget. Despite his warning I persisted and the departmental budget overrun that year exceeded the allocated budget by over 15% resulting in a provincial budget crisis. Chastened, I never made this error again despite the pressure from clinicians to do so, many of whom at that time who were my ex-colleagues.
Some years later, I faced a similar challenge when I became the Head of the Western Cape Department of Health and as a result with the assistance of an excellent Chief Financial Officer set up systems to monitor and control personnel expenditure amongst other budget lines. As a result the department was able to remain within the allocated budget for the 12 years of my term of office despite at times criticism that I “put cash before care”. An important point is that all categories of staff are essential to the provision of quality healthcare and while clinical staff are on the “frontline” and essential, without administrative, logistic and supply chain support the health system grinds to a halt.
Subsequent to my retirement, I have been a member of various ministerial task teams set up to investigate the functioning of hospitals and health services in various provinces in South Africa. The findings of these task teams, available in the public domain, reinforce my view that effective management of personnel costs is an essential component ensuring that a department can function within the available funds. The consequence of not doing so was, and still is, significant budgetary overruns and the negative consequences of an accumulation of unpaid accounts or what is somewhat euphemistically termed “accruals”.
In response to accumulating accruals or debt, Treasuries, both National and Provincial then apply the blunt tool of a “moratorium” on the appointment of staff, sometimes all and at other times excluding what are termed, “essential staff”. The application of this blunt tool, as evidenced by my experience in the various task teams, has negative consequences for the quality of health services that can be delivered. In particular, while in certain cases key clinical staff were not appointed, the unintended consequence of a moratorium imposed on the appointment of so-called “non-essential” staff was in many instances the failure to fill key vacancies within administrative and support staff.
Since personnel costs are the major cost-driver within the health sector, every post in the staff establishments of health departments must be essential for the delivery of quality healthcare. While retrenchment is not possible in the South African public service, all posts deemed not essential should be phased out and abolished through processes such as attrition, voluntary severance and early retirement. This should be the major and urgent thrust of management initiatives in all health departments across South Africa.
Notwithstanding the numbers and the finances, to ensure optimal output of both quality and quantity healthcare against the available budget high levels of productivity and efficiency must be maintained across the total workforce. A situation not dissimilar to the scenario described by my friend in the private commercial sector where staff costs and productivity affect the bottom line. Effective people management of the staff who are indeed employed becomes even more critical if productivity is to be maintained at the levels required by a cost-effective health service. This is a particular challenge for the public service where amongst many, in my experience, a culture of entitlement exists rather than a culture of service to the public. In the somewhat hackneyed words of President John F Kennedy, “Ask not what your country can do for you – ask what you can do for your country” is a challenge to every public servant who has the privilege of employment in the public health service of how they can contribute to the public good. Consequence management must apply to those who are not productive and not willing to make their contribution to the public good. If effective and dedicated people indeed make quality healthcare affordable, then it behoves those in leadership to make every effort to support and motivate effective and dedicated people in every manner possible.
My conclusion is that it is essential to focus on the numbers and cost of personnel employed in the public health service but equally to focus on the support and motivation of those who are productive if the quality of healthcare delivered by the South African public service is to improve.
