Presentation to the Health Portfolio Committee NHLS 20132014

Presentation to the Health Portfolio Committee NHLS 2013/2014 Annual Performance Plan Sagie Pillay (CEO) Prof. Perez (Chair) Supporting a long and healthy life for all South Africans

2 Mission and Vision • To be the leader in pathology; service, surveillance and academic health sciences Mission • To provide quality, affordable and sustainable health laboratory services, train for health science education and undertake innovative and relevant research. Values • • • Service Excellence: To meet and exceed client expectation in diagnostics service delivery Responsive: Striving for accurate and quality response to client requests Ethical : Shared beliefs about what is important and how things are done Accountable : Committed to diagnostics services, teaching and training Customer service: Meeting the needs of our customers timely and proactively Respect: Showing respect for our clients and partners by being open, truthful and honest in all of our service renderings

3 Supporting Documents The following documents were used to inform the strategic discussion that yielded the 2013 -2014 APP: • The Maputo Declaration on the Strengthening of Laboratory Systems, WHO, 2008 • Moscow declaration on Non Communicable Diseases(NCD) • Government’s Programme of Action 2009 – Human Development Cluster: Health • NHLS Strategy 2010 -2015(2011 Review) • NHLS Annual Report 2012/2013 • National Service Level Agreement for NDOH • NHI Green Paper and related Planning Documents

4 Planning Process • This plan is aligned to the 5 year strategy plan of the NHLS and the of the NDOH. • Based on an evaluation of the last two financial years. • Taken in to account reviews of the 2012 -2013 Annual Performance Plan. • Two day planning workshop of executives and Board. • Presented to the Board and approved • Presented to honourable Minister for Health and approved.

5 NHLS 10 point plan 1. Developing a new service delivery model that is more affordable for the public sector; 2. Determine a best fit service delivery model; 3. Deliver a quality, customer focused service; 4. Align resources, support services and infrastructural development for service delivery; 5. Become laboratory services “Employer of Choice”; 6. Prioritise innovation, teaching and research to be relevant, appropriate and leading edge; 7. Become the health information powerhouse; 8. Drive stakeholder collaboration; 9. Position NHLS as the “Provider of Choice” for NHI; and 10. Protect our community and environment.

6 The 4 pandemics • Most severe and very expensive burden or pandemic is that of HIV and AIDS and TB • Unacceptably high maternal and child mortality • Alarming and ever increasing incidence of noncommunicable disease i. e. high blood pressure and other cardiovascular diseases; Diabetes mellitus; chronic respiratory disease; the various cancers and mental health. • The pandemic of violence and injury.

7 National Service Level Agreements Alignment with the National Service Delivery Agreement • Output 1: Increasing Life Expectancy • Output 2: Decreasing Maternal and Child Mortality • Output 3: Combating HIV and AIDS and decreasing the burden of diseases from Tuberculosis • Output 4: Strengthening the Health System Effectiveness

8 National Service Level Agreements • NHI -11 pilots Districts • Reengineering PHC and the DHS • specialist teams • School health programme • Ward based PHC • Increased through-put and New medical schools • New teaching hospitals

9 Upscaling the Gene Xpert program • Support the NDOH in its quest to urgently strengthen programs against TB, MDR-TB and XDR-TB • Support the implementation of new HIV and AIDS strategies announced on World AIDS Day.

10 Support for NHI Initiatives NHLS to support the NDOH (pilot studies and strengthening the health system) in the following areas: • Quality improvement (Proficiency Testing) • Medical devices including equipment (Assessments) • Information management and systems support (Interfaces)

11 Strategic Outcomes • Develop a new service delivery model that is more affordable for the public sector • Determine a best fit service delivery model • Deliver a quality, customer focused service • Align resources, support services and infrastructural development for service delivery • Become laboratory services “Employer of Choice” • Prioritise innovation and research to be relevant, appropriate and leading edge • Become the health information powerhouse • Drive stakeholder collaboration • Position NHLS as the “Provider of Choice” for NHI • Protect our community and environment

12 Develop a new service delivery model that is more affordable for the public sector • Proposal for Alternative Funding Models for Teaching, Research and Surveillance • Maintain annual price increase below inflation until 2013 • Improved Electronic Gatekeeping • Continued Support (for NDOH) in rollout of Gene. Xpert

13 Determine a best fit service delivery model • Point of Care Testing - Policy/ Implementation Plan/ Rollout by NHLS • Develop and Implement Total TAT methodology • Implement Standardised Laboratory Technology Framework - automation, centralisation, decentralisation

14 Deliver a quality, customer focused service • Encourage customers to utilise Electronic Access to Laboratory Results • Develop and Maintain internal accreditation system for peripheral labs. (ISO 15189) • Expand EQA programmes

15 Align resources, support services and infrastructural development for service delivery • Rollout Trakcare Lab to remaining laboratories • Create and Implement Health Technology Assessment Unit • Continuous Productivity Improvements • Optimise National logistics tracking system

16 Become laboratory services “Employer of Choice” • Establish NHLS Academy , Implement Management and Leadership Development Programmes • Develop Succession Plan • One Performance Management System for ALL employees • Drive Organisational Culture

17 Prioritise innovation and research to be relevant, appropriate and leading edge • Innovate in systems and processes to improve laboratory and health service delivery • Research output aligned to National Priorities • International benchmark against diagnostics best practices • Increased focus on Non-Communicable Diseases

18 Become the health information powerhouse • Develop IMU to provide appropriate information to stakeholders • Provide single source of information • Deliver Enhanced Business Intelligence • Enhance Data Quality and Consistency • Provide Historical Intelligence • Provide quality Reports • Support stakeholder decision making.

19 Drive stakeholder collaboration; • Safeguard national assets by establishing a Biorepository - specimens for Teaching and Research • Safeguard national assets by establishing Institutional Archives - recording pioneering ventures + historical "firsts” • Develop and Implement Structure for Intersectoral Collaboration, including framework for alignment of priorities • Create Stakeholder Management Strategy + Implement

20 Position NHLS as the “Provider of Choice” for NHI; • Prepare for NHI • Continued support for NHI pilot sites • Investigate Joint Ventures with other service providers/Suppliers

21 Protect our community and environment. • Environmentally-sustainable disposal of Biomedical, Electronic and Laboratory Equipment waste • Implement recycling of materials, including paper, plastic and glass at every NHLS site • Implement Energy/Utility Savings in the operations

22 Balanced Score Card • Outlines the strategic objectives and KPI • Each objective has specific activities with SMART targets quarter by quarter • Reviewed by Exco & monitored by CEO monthly. • Monitored and approved by Board quarterly • Review by Internal auditors quarterly • Report quarterly to NDOH and Treasury.

23 Customer Perspective VISION MISSION VISION To be a leader in Pathology; services, surveillance and academic health sciences To be a leader in Pathology; services, surveillance and academic health sciences STRATEGIC OBJECTIVE To provide Quality, Affordable and Sustainable health laboratory services, train for health science education and undertake health research 100% KEY PERFORMANCE INDICATOR 2008 Actual 2009 Actual 2010 Actual 2011 Actual 2012 Forecast 2013 Target 2014 Target 2015 Targ et 2016 Target 2013 Weight CUSTOMER PERSPECTIVE 40% STRATEGIC OBJECTIVE CUSTOMER PERSPECTIVE C 1. Improve Customer Satisfaction C 2. Improve Total Turnaround Times C 3. Improve Quality of Tests CSI - Service n/a 54. 4% 59. 7% 66. 6% 69. 6% +3% TAT - TB Microscopy n/a 57. 0% 95. 0% 90. 0% TAT - CD 4 n/a 86. 0% 80. 0% 85. 0% 90. 0% TAT - Viral Load n/a 41. 0% 52. 0% 80. 0% 85. 0% 90. 0% TAT - HIV PCR n/a 55. 0% 67. 0% 80. 0% 85. 0% 90. 0% TAT - Cervical Smear Proficiency Testing - Excl Paracytology + Morphology Proficiency Testing - Paracytology + Morphology n/a n/a 47. 0% 60. 0% 65. 0% 70. 0% 90. 0 % 75. 0 % n/a n/a 90. 0% 95. 0% n/a n/a 70. 0% 75. 0% 0. 0% 5% 95. 0 % 0. 0% 5% 75. 0 % 0. 0% 5%

24 Financial Perspective STRATEGIC OBJECTIVE KEY PERFORMANCE INDICATOR 2008 Actual 2009 Actual 2010 Actual 2011 2012 Actual Forecast 2013 Target 2014 Target 2015 Target 2016 Target 2013 Weight FINANCIAL PERSPECTIVE 10% F 1. Achieve Budgeted Turnover 2 237 2 667 3 033 3 456 3 460 3 650 3 851 4 082 0 0% F 2. Spend overheads as per budget Overheads 1499 1801 2042 2353 2519 2 554 2 663 2 840 0 2. 5% 27. 5% 30. 2% 29. 8% 25. 1% 26. 6% 27. 3% 26. 7% 26. 2% 0. 0% 2. 5% n/a n/a 4 536 4 786 5 049 5 352 0 0% F 3. Spend materials as per budget Material % of Sales F 4. Minimum Cash Collection Cash Received Rm F 5. Improve payment to creditors Creditor Days 6 4 n/a 59 45 2 0 40 40 40 0 0% F 6. Improve collections from debtors Debtor Days 114 45 45 45 0 5% 147 130 154 45

25 Employee Perspective STRATEGIC OBJECTIVE KEY PERFORMANCE 2008 INDICATOR Actual 2009 Actual 2010 Actual 2012 2011 Forecas Actual t 2013 Target 2014 Target 2015 Target 2016 2013 Target Weight EMPLOYEE PERSPECTIVE 30% P 1. Improve Employee Satisfaction ESI n/a P 2. Maintain low staff turnover rate Staff Turnover Rate n/a 7. 8% 10. 0% 5% n/a n/a 20. 0% 10. 0% 5. 0% 0. 0% 5% EE n/a 88. 0% 60. 0% 5% BBBEE Procurement n/a n/a 45. 0% 52. 5% 55. 0% 0. 0% 2. 5% 8 6 5 4 3 0 2. 5% 60. 0% 5% P 3. Maintain a low vacancy rate Vacancy Rate P 4. Improve EE profile P 5. Improve BBBEE procurement P 6. Improve BBBEE status BBBEE Level P 7. Maintain high Registrar pass rate Registrar Pass rate 2. 6 2. 8 6 6 0 2. 80 2. 90 - n/a n/a n/a 60. 0% 5%

26 Internal Perspective STRATEGIC OBJECTIVE KEY PERFORMANCE INDICATOR 2008 Actual 2009 Actual 2010 Actual 2012 2011 Forecas Actual t 2013 Target 2014 Target 2015 Target 2016 Target 2013 Weight INTERNAL PERSPECTIVE 20% I 1. Achieve Lab. SANAS Accreditation - accreditation Academic Labs I 2. Improve translation of research SANAS Accreditation - Regional Labs Research Reports submitted to influence policy into service Research Reports translated into service n/a n/a 64. 0% 70. 0% 75. 0% 85. 0% 100. 0% 5% n/a n/a 6. 0% 30. 0% 50. 0% 75. 0% 100. 0% 5% n/a n/a 2 3 4 5 0 5%

27 NHLS 2013 -2014: Activities • For detailed deliverables for 2013 -2014, Refer to Table B 2 , Page 12 of 26 of APP

28 2013 -2014 Budget Assumptions • • Inflation 5. 9% Salary Increase 6. 6% Volume Increase 0. 0% Test Price Increase 4. 0% Debtor Days 45 days Creditor Days 40 days Budget Cash Cover 1. 2 months Targeted Cash Cover 2 -3 months

29 Budget Summary(in Millions) Turnover 100% 4, 817 Materials 28. 2% 1, 359 Labour and Overheads 55. 8% 2, 689 Capital Expenditure 8. 3% 399 Teaching, Training, Research 7. 7% 370 Labour 65% Overheads 1, 74 8 94 1 35% Total 100% 2, 68 9 Labour & Overheads 35% Labour 65% Overheads

30 Debtors and Creditors Days 200 185 180 154 160 127 140 120 100 80 136 136 127 97 110 106 114 88 115 Creditors Debtors 89 60 45 40 40 2007 2008 2009 2010 2011 2012 2013 2014

n 13 Ja n 13 Fe b 13 Ja n 13 Ja 12 12 ec - D 12 12 ec - D ov - N 12 2 2 -1 ov - N ct O 2 -1 ct O Days Outstanding 31 Debtors Days by Province 600 500 Eastern Cape 400 Free State Gauteng 300 KZN Limpopo 200 Mpumalanga North West 100 Northern Cape Western Cape 0

32 Capital Expenditure RMillions • Land Buildings 212 • Laboratory Equipment 66 • Computer Equipment and Software 83 • Furniture + Fittings 8 • Office Equipment 30 • TOTAL 399

33 Conclusion On behalf of the Board, our thanks to the honourable chair and members for your support and guidance.

34 Questions