INLSA

Minister of Health Dr Aaron Motsoaledi

The KwaZulu-Natal health department is set to officially challenge the amount it allegedly owes the National Health Laboratory Service (NHLS) when the matter is heard before arbitration this week.

The matter was referred to arbitration by Health Minister Aaron Motsoaledi, who also appointed retired judge Jerome Ngwenya to preside over the hearing.

The public entity is owed a total of R2.17 billion by provincial health departments, with KwaZulu-Natal and Gauteng being the main culprits. KZN alone owes R1.06bn to the NHLS, while Gauteng owes R709.4 million.

Last week Gauteng paid R150m of its debt to the NHLS. A solution is still being sought in KZN.

On Tuesday the KZN health department tabled a report before the legislature on the impasse over the debt – but this has been kept secret from the media, as it contains arguments to be used during the arbitration process.

The Daily News understands that the case to be presented by the KZN health department centres on three arguments to be presented before the arbitrators next week.

These include the department disputing the amount on the basis that it had expected to be charged a flat rate by the NHLS.

“Original agreements were that the province would pay a flat fee of R32m a month, but this did not happen, as the NHLS invoiced on a monthly basis amounts that were way above that,” said a source.

Secondly, the department is to argue that the service provided by the NHLS is too expensive, as in some cases patients are even charged for test tubes.

The department has argued that in some instances tests would be much cheaper if outsourced to private labs rather than the NHLS. “Some of the costs are even double what one would pay in private labs.”

Thirdly, the department is not happy with the arrangement that the NHLS is housed at some hospitals but does not contribute to any of the running and utility costs, such as electricity and parking costs.

But the NHLS has disputed all these arguments.

It said the initial agreement stated that KZN was going to be charged as per services rendered, and not a flat rate.

Charge

“KZN was among the last provinces to come on board after the NHLS was created through the (NHLS) Act. When they came on board they wanted to be charged a flat rate, but this could not happen, as we charge a fee for a service,” said Kamini Reddy, the NHLS spokeswoman, who disputed that there was an agreement that KZN would be charged a flat rate.

Currently the KZN Department of Health was paying the NHLS a flat rate of R43m a month, Chris Maxon, the spokesman for the department, said this week.

Reddy also disputed claims that the NHLS was more costly than private labs, saying the service provider remained the cheapest, but that some of the costs needed to be understood “within a certain context”.

“For instance, for a CD4 test we charge R53.82, while the medical aid rate is R332.30. There are also those tests which the private labs cannot do, and they depend on us to conduct them, and obviously they will charge more than us for those.”

However, she admitted that there were cases in which patients were charged for test tubes. “It happens in cases like the Inkosi Albert Luthuli hospital, because the hospital is run through a PPP (private-public partnership) model. We have to buy the tubes from them (the hospital), and hence we charge for those.”

She said that it also had to be taken into consideration that some of the NHLS costs had to factor in things like research and training.

“Our mandate is threefold: it’s not just about testing, but also about research and training. Every pathologist in this country is trained by us.”

Reddy said in some cases – like at Albert Luthuli hospital – the NHLS lab paid for the electricity it used, and this differed from site to site, depending on the agreement.

While KZN had always expressed dissatisfaction with the cost of the service provided by the NHLS, it was bound by law to continue using its services.

The NHLS was created through the National Health Laboratory Service Act of 2000 as the only service provider of laboratory services to the Department of Health.