Owed Phalala service providers demand interest
MBABANE - Government will have to act quickly to clear invoices of old accounts dating back as far as 2012 in respect of Phalala Fund referrals.
This is because the Ministry of Health annual performance report for the financial year 2023/2024 has revealed that the Phalala Fund Accounts Office continues to face challenges when it comes to the processing of invoices.
It is stated that one of the challenges is the old accounts, which do not have supporting documents dating back as far as 2012.
The report mentions that the invoices remain a problem for Phalala, as service providers continue to call and demand payments for the accounts.
“Service providers have indicated that they want to include interest in the money owed due to delay in payments. Most of the service providers in South Africa do not have contracts because they want old debts paid first then new terms be drawn,” the report states.
It is also highlighted that the shortage of accounting personnel has remained a huge concern, as the volume of work in the Phalala Accounts Office continues to escalate, resulting in a need for the officers to work overtime.
Highlighted
Furthermore, it is highlighted in the report that some local doctors charged high amounts, something that needed to be corrected by having the Phalala specific tariffs.
In the analysis of the performance of the fund, it is stated that it continued to facilitate the referring of patients in need of specialised healthcare services from government specialists to private specialist providers within Eswatini and externally to Mozambique and South Africa.
However, it is mentioned that due to poor payment record, most service providers, both locally and internationally, have continued to deny patients from the country services.
This, it is stated, limited the availability of specialists in some disease conditions.
“This delayed specialist intervention has resulted in patient complications, which then need extensive correction at a much higher cost,” reads part of the report.
Analysis
An analysis of the Phalala electronic system is also provided in the report, where it is stated that the office that administers the fund is mainly paper-based, something which has proved to be a challenge, because of the large amounts of money it manages.
It is highlighted that during the period under review, the office received commitment of funds.
The Ministry of Health Procurement Unit is said to have been informed and the office was reportedly told that due to the length of time the process had taken, the office had to start the process afresh.
“While the office was working on
advertising, a team from the Royal Science and Technology Park (RSTP) told Phalala that the development of the system is their responsibility. At the close of the reporting period, a meeting with the RSTP and the ministry principals was yet to be undertaken. This is an urgent need, as effecting Phalala tariffs is dependent on the existence of an electronic system,” the report states.
It is noted that to eliminate the determination of prices for services by providers, which is on the higher side, the Phalala Office requested to use SwaziMed as basis for tariffs. In the period under review,
the report states, an approval to use the tariffs was granted.
“The tariffs need to run on an electronic system and this makes the development of the electronic system a priority. This is one strategy that can contribute to the control of the Phalala debt,” the report highlights.
In terms of the Phalala Fund financial report, it is reflected that the total budget allocation for the current financial year was E179 928 740.
The amount, it is mentioned, was released in two trenches in the period under review. The first release was E44 982 185 and the second was made available on May 15, 2023, and it amounted to E134 946 550.
It is highlighted that to date, total invoices totalling E173 891.88 for both local and international providers have been processed and sent to the Treasury Department for payment.
It is stated that the office has around E201 535 630.04 worth of invoices for the period November 2022 to date, that have not been processed for payment due to shortage of funds, of which most were local service providers.
Of this amount, E134 561 500.67 is debt for the past financial year and E66 974 130.04 is for the current financial year.
Complete
“Without financial injection to Phalala the current debt will continue to grow unless there is a complete cessation of referring patients. In light of the shortage of funds, a request for a supplementary budget was submitted which if approved will be able to pay the Phalala Fund,” the report mentioned.
Cases of government owing South African health facilities in respect of the Phalala Fund are not new.
In 2019, the fund owed SA hospitals medical bills estimated to be around E66 million. It was stated that some of the outstanding bills dated back to the year 2013. These millions owed by the fund combined six referral hospitals and clinics, which accepted local cancer patients to be treated in SA.
In 2014, the same occurred as the Phalala Fund was haunted by debts to the tune of nearly E40 million.
The debts, mainly unpaid remunerations to health service providers, in and outside the kingdom, were accrued from the year 2008 to 2012.
In the same year, about 128 patients could not benefit from the Phalala Fund as the State was defrauded E9 million due to multiple payments in the past three years.
The challenges faced by the Phalala Fund are one of many which have made operations difficult in the health sector.
When presenting the budget speech last month, Minister of Finance Neal Rijkenberg stated that following the outcry during the Sibaya People’s Parliament around the problems in the Ministry of Health, as well as from the public in the submissions for the budget speech on the virtual platforms, emphasized the need for additional funding to turnaround the Ministry of Health and for this reason, government has allocated E250 million more to the health budget bringing it to a budget of E3 billion for the next financial year which begins next month. This represents 10 per cent of the total budget.
Questioned
Last week, Minister of Health Mduduzi Matsebula was questioned by parliamentarians on what government was doing to restore the dignity of the country’s health sector.
The parliamentarians raised a concern that every year, one and the same challenges are reported in the sector.
It should be noted that government has introduced different strategies to try and solve the health crisis in the country.
One of the strategies was the formation of a Cabinet sub-committee, which was tasked with solving the drug shortage.
Chairperson of the committee, Minister of Commerce, Industry and Trade Manqoba Khumalo recently gave feedback on how far government had gone, in terms of making medicinal drugs available to the public.
The minister has also reported that there has been progress in the matter of the Central Medical Stores, as delivery vehicles were now at 80 per cent of reinstallation of tracking devices and cameras.
Drugs
He explained that most of the suppliers had the drugs and material but were constrained because government had owed them for some time.
These include oxygen suppliers, cleaning services, security services and catering services.
When the committee was announced, Prime Minister (PM) Russell Dlamini lamented how government spent about E2.6 billion on the health sector annually, which is equivalent to about 10 per cent of the annual national budget.
The PM said at least E700 million of the E2.6 billion was used to acquire pharmaceuticals.
He explained that this huge investment on the health sector came at the expense of other development sectors and it was almost impossible to stretch the envelope further.
Despite the huge investment, the PM mentioned that the health system had continually deteriorated with serious shortages of medicines and drugs, effectively, putting the lives of emaSwati at risk.