Speaking at the provincial branch launch of a medical services provider, Papo said the department faced a number of problems from 2009.
These included management instability, poor financial management, shortage of essential drugs, inadequate emergency medical services, and poorly maintained equipment due to contractual disputes and non-payment of suppliers.
"We owned up to these problems and developed a turn-around strategy (TAS) 2012-2014 to ensure the department moved away from organisational decline and collapse of service delivery," said Papo.
"Soon after its adoption by the Gauteng Executive Council in July 2012, and subsequent implementation, progress has been registered in a number of areas."
As of January 31, the department had settled accruals to the value of R4.2-billion.
"This includes commitments of the previous financial year which would have become payable in 2012/2013," said Papo.
"The department has therefore settled approximately 99% of the total accruals that were owed."
The department was working hard to ensure payments were made within 30 days of invoice arrival.
With around R1.5-billion owed to suppliers last year, the department currently reported R250-million was waiting to be released to suppliers.
Essential drug stocks had improved from 40% at the end of the 2011/2012 financial year to 76% by the end of last year.
"We are confident that the target of 98% availability will be attained," said Papo.
"We have also managed to fill key management vacancies."
He said work in Tshwane, one of the 10 pilot projects for the National Health Insurance scheme, was underway in preparation for the scheme's implementation.
"The first phase of the pilot will be implemented in two sub-districts which are comprised of Hammanskraal, Atteridgeville and surrounding areas and the Tshwane City Centre," he said.