When one thinks about the Development Bank of Southern Africa (DBSA), which has historically focused on regional development and municipal infrastructure, the healthcare sector does not readily spring to mind. Yet it has become a significant role-player in the health sector since 2008, working in support of the National Department of Health (DoH) and the National Treasury.
The role that the DBSA has played as a development facilitator in health has been comprehensive: starting with it convening a “roadmap” that was later converted into the government’s national health strategy, thereafter undertaking critical institutional and infrastructure aspects of the plan and, finally, assisting government establish its in-house capacity to implement infrastructure programmes. The process is a case study of what could be done to strengthen government in other complex and troubled sectors.
According to Ravi Naidoo, group executive of development planning at the DBSA, the bank does three things — state advisory work; finance infrastructure development; and capacity deployment to identify and appoint people who can help move projects forward. It has found planning is needed to first ensure that the right projects are financed, and thereafter capacity deployment is often also necessary to enable project implementation.
“When I joined the DBSA in 2008, South Africa was still in the throes of Aids denialism. Health was a contentious sector with little agreement among institutions of state let alone civil society organisations and the private sector. There was a great chasm between the state and most of the health sector, and much pessimism and confusion among the general public as to whether the health sector could show any improvements. All the while the poor and deteriorating health outcomes in the country were having a massively negative impact on society — South Africa was the only country going backwards in terms of its Millennium Development Goal commitments.
“Maternal mortality, for instance, had increased from 230 deaths of women per 100,000 live births in 2000 to 400 deaths in 2005. (Brazil, in contrast, had seen maternal mortality decline from 260 in 2000 to 110 in 2005). The Board of the DBSA then took the wise decision to broaden its view of development beyond physical infrastructure and focus on development outcomes,” says Naidoo.
Human development — including both health and education — is, after all, crucial to the future of a country. The DBSA also has distinct competencies in institutional capacity and infrastructure development, which are central to the success of the health sector and many others”. In this political hotbed of the health sector, the DBSA felt that it could play the role of a development facilitator given its technical capacity and the fact that it acts as a ‘trusted advisor’ within the State.
But the DBSA did not simply want to come up with another set of consultant documents that collected dust on the shelves. “We wanted to make progress happen. Given that health delivery is largely a provincial function, a lot of the health roll-out would have to happen on a provincial level. Up-front political endorsement would also be necessary to ensure a new strategy would be implemented.
Fortunately, with a new administration due to take office within a year, there was strong political interest in giving the health sector a fresh start. A “Roadmap” process, chaired by the DBSA chairperson, the Minister of Health and the head of the African National Congress’s Health and Education Leadership Group, was initiated through the DBSA. The task fell to me to implement the process,” he says.
The start of the roadmap
The DBSA had to identify doable targets which resulted in the development of a health roadmap (The 10-Point Plan). These would need to build on the achievements that had been made in the health sector since 1994. These achievements included increased access to health services and the strategic and private sector reforms that had been implemented.
“However, we focused our attention on the burning issues. For example, the death statistics in South Africa were like that from a war. People aged between 20 and 49 were dying in droves. We had to put these figures squarely on the table and focus attention on this reality and what could be done to turnaround that situation ” he says.
The process with the health roadmap saw the DBSA use working groups including experts and credible representatives from all the stakeholders. Five working groups directly engaged the many contentious issues: respectively, issues related to diagnostics (data), health sector institutions, HIV/Aids and other disease burdens, human resources in the health sector, and financing. Over a period of three months differing “facts” and opinions would be rigorously challenged and tested. By the end of the process it was able to weed out unsubstantiated opinions and viewpoints that were holding back a good sector position.
Eventually, stakeholders began to work off a common set of data and a consensus (or at least clear options) began to emerge. It was a victory for a rational, evidence-based approach to decision-making. The process did confirm that poverty is a big factor in healthcare. Almost two-thirds of children in South Africa are malnourished, making them vulnerable to illness. It confirmed that Aids-implicated deaths had risen from 3% of all deaths in 1995 to 46% in 2005.
The importance of better institutional governance and performance also featured strongly, as the actual health performance differed between the various health districts. “Some provinces were doing well relative to resources while others who had more than enough resources were doing very poorly. We needed to look at the disparity between public and private health care in the country. The private health care system at the time accounted for 42% of total health expenditure while only covering 15% of the population. Public health therefore carried a huge burden with insufficient resources,” says Naidoo.
What to do?
The quality of private healthcare, while too expensive, was significantly better than that of the public sector. Better regulation of the private sector was needed while there had to be outright improvements in the governance, capacity and performance of the public health sector. While all agreed that more funding for the public sector is needed, Naidoo highlights that this would not have been able to provide the performance which was required in the absence of institutional reforms.
“We needed to deal with the facts and had to make much better use of the resources we had. In looking at the system-wide problems causing poor health outcomes, we identified healthcare worker issues (such as substandard management), administrative issues (such as lack of specific health facilities) and patient behaviour issues (such as delays in seeking medical help). For example if you cannot stop almost 1 500 people a day being infected with HIV, then the health system’s ability to roll out anti-retroviral drugs would always be under financial and performance strains. The health sector required a behavioural change,” he says.
The Roadmap process started in May 2008 and finished in November of that year. When we presented the final proposals to all the stakeholders in plenary there was widespread endorsement. There had been so much valuable and robust engagements that key issues had been thoroughly aired. It was clear that there was strong consensus on the 10 point action plan.
In 2009, there was a new administration taking office that endorsed the process as a fundamental breakthrough and decided to adopt the 10-Point Plan. The Plan later evolved into the government’s National Strategic Health Plan. A key factor for Naidoo was having excellent and visionary health Ministers in government, the post-2009 Minister Barbara Hogan who was followed by Minister Aaron Motsoaledi.
The passion and strategic insight of Minister Motsoaledi make it no surprise that all of a sudden South Africa had a health Minister who was “A-rated”. Even though Motsoaledi became Health Minister after the roadmap was completed and politically endorsed, a person of his calibre has meant that implementation followed swiftly. The Health Roadmap and the implementation that has followed is a good example of the turn-around that excellent political leadership and a sound technical process can deliver.
“The DBSA had started the work to help facilitate the South Africa Inc plan for health. The new administration in 2009 walked into office with a social compact on health that was technically rigorous. All the key stakeholders agreed that healthcare strategy in South Africa was finally on the right track and that it now needed to be implemented,” adds Naidoo.
For the DBSA, this ushered in a new phase to help government with the implementation of the health plan. The first element was around infrastructure. The DBSA had programmes to upgrade clinics and then to work with a number of government departments to coordinate the implementation of an infra- structure delivery improvement programme. This led to the deployment of infrastructure planners to the provinces.
Turning plans into actions
The two parts of the plan that were particularly important to action was to overhaul the healthcare system and improve its management. Unless you have the people in place, all the infrastructure and processes in the world would not make a difference, says Naidoo.
“So, at the request of Minister Motsoaledi, we started working on a public health management programme that entailed undertaking a competency assessment of all hospital CEOs and, amongst other things, working out what the minimum requirements should be for appointments. Seeing as there was no health-specific senior management requirement, we had to design a competency requirement for a public hospital CEO practically from scratch,” he says.
The DBSA had the opportunity to work out the ideal type of person who would fit the role of CEO. It would then run a competency assessment for all the existing public hospital CEOs and identify their strengths and weaknesses. In turn, the Ministry would work out how to best deal with those elements, i.e. if a province was weak in financial management then it would not delegate financial responsibilities to them.
The project was completed earlier this year and in August the Ministry used the results to gazette the enhanced minimum requirements for appointment as a public hospital CEO. This would create a situation where the CEOs would be competent to manage the complex situations that prevail in public hospitals. Having the right CEO is only part of the solution, but it is a good start.
Nuts and bolts
The second part of the plan that needed immediate action was the revitalisation of infrastructure. Many hospitals in the country are in a dilapidated state. Yet government has been struggling to spend money on infrastructure. Given its decades of expertise in infrastructure, the DBSA was approached by both the Department of Health and the National Treasury to undertake a programme to revitalise priority hospitals.
To this end, it worked with the National Treasury and the provinces to ensure that programmes were put in place that could be expedited to fix hospitals.
A lot of hospitals also needed to be built from scratch.
“There are two ways to build a hospital. Firstly, government can use the money it has in its budget, award a tender and build the hospital directly. The second method sees specialised hospitals that run through public-private partnerships. This brings in the private sector to help fund the building of a hospital with a public sector institution leading the process. With government asking the DBSA to drive the public-private partnership process, we are the lead arranger of the process to implement all six health public-private partnerships including five large, new hospitals and a collective set of nursing colleges,” says Naidoo.
Getting its hands dirty
At the moment, the DBSA is playing a more detailed operational role with government wanting it to assist in appointing teams. The DBSA is also assisting the DoH in putting in place systems that can manage infrastructure internally.
“In the end, government must have the capacity to deliver. As a development institution, DBSA is very careful not to take over functions that should reside within a government department. We cannot substitute for government but rather only implement specific projects and transfer whatever skills we can. To structure this relationship well, the Director General of the department, Dr Precious Matsoso, and her top management in the HoD agreed to jointly establish an infrastructure unit with the DBSA.
Now that we have a common programme team in health, with a view to jointly implement the key projects. This team will reside within the department with the DBSA assisting in starting the team but we hope that much of this team will be absorbed into the department over time,” says Naidoo.
Such a team would be specialised and competent to shape health infrastructure programmes and be able to assist provinces implement them. It will also monitor and evaluate programmes. Ultimately, the team is designed to take the best capacity from anywhere in South Africa.
In the next two years, the DBSA aims to start withdrawing from the programme and play less of a role with the DoH taking over the reins. This will also enable the DBSA to devote similar time and resources to work with another priority infrastructure-related department.
A good model
“This model has worked fairly well and we could easily apply it to any other government department, “says Naidoo” Naidoo feels that for the DBSA this has been a very useful experience. Health has become an important part of the DBSA’s development portfolio and this has opened up a new approach in dealing with social infrastructure. The work has not been that of standard investment banking but then the DBSA is not your standard investment bank.
As a development bank reporting to National Treasury the work ensures that government would get better value for the money it has spent in this priority sector. This does not mean that South Africa’s health outcomes will suddenly be fantastically improved.
“One has to start from where you are. Major improvements will only occur in the longer term, say ten years — but the hard-work to turn the system around must first be done. There have been significant improvements since 2008, and even the New York Times devoted a lead article to the improved health results in South Africa.
How the sector pans out in the end is up to government, not the DBSA. But as an institution that can facilitate development, we have seen the positive impact of a comprehensive approach to working in an entire sector. There are many incredibly passionate and hard-working officials and professionals in government working under adverse conditions.
In the end, whether we like it or not, the success of South Africa will depend on the country having a functioning State. Key departments must work, as the vast majority of the population and the economy relies on such services.
The DBSA is an infrastructure bank, but also a development facilitator. Hence it will continue to partner with government infrastructure programmes in an integrated and comprehensive manner that promotes better development outcomes for South Africa,” Naidoo concludes.
This article originally appeared in the Mail & Guardian newspaper as an advertorial supplement