KZN biggest culprit in lab cash crisis

By Lungelo Mkamba and Thandi Skade Time of article published Feb 1, 2012

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At least six National Health Laboratory Service (NHLS) labs have been shut because of the service’s cash crunch. And KwaZulu-Natal is the country’s worst culprit.

The labs were closed because the service – the sole service provider contracted to deliver laboratory diagnostic tests, screening for chronic diseases including HIV and cervical cancer, and services for all public health-care facilities – is owed R2.1 billion in outstanding bills from provincial health departments.

KZN and Gauteng collectively owe R1.7bn, or 82 percent of the total amount outstanding. Both provinces are also the slowest to pay back their debts, with payment delays as long as 315 days for KZN and 200 days for Gauteng.

KZN is in debt to the tune of R1.06bn, while Gauteng owes R709.4 million.

NHLS CEO Sagie Pillay said three laboratories in each of the two provinces were shut at the beginning of the year.

“It’s a dire situation at the moment. We are seriously concerned about our staff and how it impacts on them,” he said.

For now, staff from closed down laboratories have been deployed to other facilities within a 15km to 20km radius.

Pillay said services provided to the public would not be compromised.

“We’re working with all provinces to reduce our expenditure patterns without compromising quality or access to patients,” he said.

Despite a promise to pay R90m for the month of January, the Gauteng health department has only paid R25m, while the KZN health department has increased its payments from R34m to R43m a month.

However, the service needs at least R350m a month to cover its operational costs and it too is in debt – it owes creditors about R700m as a result of the “erratic payment environment”.

A further 25 laboratories in KZN and 20 in Gauteng are expected to close in the next three to four weeks.

DA health spokesman Mike Waters said the lack of payment was jeopardising the overall viability of the service.

“This is a national disaster for our health-care system, which is being held to ransom as a result of bad financial management in select provinces… the health system relies on the NHLS to be quick and accurate in processing diagnostic tests.

“The institution is now operating on a shoestring budget, which is not sustainable,” he said.

The DA called on Health Minister Aaron Motsoaledi to hold health MECs accountable for the position in which they had put South Africans.

Pillay said that to cut costs, all vacancies had been frozen and the training of registrars, technologists and technicians had been suspended.

While the National Treasury has approved an overdraft for the NHLS, the condition of the loan is that it must be paid back by March 31, which Pillay said was “impossible”.

KZN health department spokesman Chris Maxon said

: “We are currently paying, as per an interim agreement with the NHLS, R43m a month.

“The amount they are claiming is in dispute, and the (health) minister has appointed a judge to mediate on the amount in dispute.”

Asked where KZN hospitals and clinics would send their samples for testing if 25 NHLS laboratories in the province closed down, he said: “I do not know why he (Pillay) is relating to journalists because the minister is handling this matter. I cannot comment beyond that.”

In December last year, Maxon told The Mercury that it would be a matter of days before the department settled its bill with the service.

National health department spokesman Fidel Hadebe was apparently off sick yesterday and could not be reached for comment.

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