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Promoting innovation, performance, data use and self-evaluation through introduction of a supply chain results-based financing in Tanzania
31 October 2016
• Background
• The RBF MSD design scheme
• The implementation and results
• Challenges
• Proposed design change
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Outline
Global health Supply Chains. Dar es Salaam Tanzania 2016
OVERALL GOALS •Strengthen the health and supply chain system
•Accelerate Tanzania mainland’s move to UHC
•Help focus government and donor attention on outputs and outcomes
•Re-orient mindset of health service providers and providers of related services like health commodities and supply chain services
IMMEDIATE GOALS •Increase utilization of specified services in health facilities
•Increase quality of service provision
•Incentivize more focused health workers and management teams and supply chain service providers
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Goals of Tanzania’s RBF
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Background selection of areas of focus for MSD
5
Interdependencies on commodity availability at MSD central & zones
Accurate forecasting
MSD
Adequate funding
Updated pipeline
Suppliers deliver
commodity timely
Accurate forecasting
CENTRAL/PROGRAM
Adequate funding
Updated pipeline
Suppliers deliver
commodity timely
CENTRAL MSD ZONAL MSD
Central MSD commodity available
Trained staff to use e9 to
process orders
Central MSD operations
e.g. receiving, put away, pick
and pack
Timely transportation
of full consignments to MSD Zones
Commodity availability at MSD Zones
MSD Zones ability to order correctly and
timely
Global health Supply Chains. Dar es Salaam Tanzania 2016
Background selection of areas of focus for MSD
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Interdependencies on commodity availability at MSD Zones & HFs
Zonal MSD commodity available
Trained staff to use e9 to
process orders
MSD Zonal operations
e.g. receiving, put away, pick
and pack
Timely transportation
of full consignments
to HFs
ZONAL MSD HEALTH FACILITY
Commodity availability at HFs
Facility Budget
HFs ability order
correctly and timely
Global health Supply Chains. Dar es Salaam Tanzania 2016
Overview of the Medical Stores Department
8 Zonal Stores & 2 Sales Points
5700+ Health Centers & Dispensaries
ILS
MSD
R
egio
n
Dis
tric
t
Esse
ntia
l Med
icin
es
Mal
aria
Fam
ily P
lann
ing
ARV/
HIV
Lab/
Dia
gnos
tic
Imm
uniz
atio
n
Tube
rcul
osis
Combined Total of appx. 800 Products
Tanzania’s MSD delivers over 800 of products to over 5700 health facilities
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Overview of the supply chain information and ordering process
instant
Health Facilities
District
eLMIS
paper
eLMIS
LMU/MSDZone
E9
instant
eLMIS / ILSG Central / MOH
Central/MOH accesses ILS Gateway and eLMIS data instantly.
1
2
LMUs
1 2 3
1. Facility will create paper R&R 2. District will receive paper R&R and
enter into eLMIS 3. LMU/MSD will receive approved R&R
and review before entering in to E9 4. Central level will view reports and
dashboards and receive alerts
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Global health Supply Chains. Dar es Salaam Tanzania 2016
END
Providers 1) Health Facilities 2) MSD Strategic
Business Units (SBUs)
Regulator Ministry of Health and Social Welfare
Disburses funds to the MSD SBUs
Receives funds and sends confirmation of
receipt to NHIF
Facilitator PMO-RALG
Verifier
Internal Auditor General
Quarterly review of data
CAG Annual review
Document the services
provided, generating data
START 1
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5 data moving between actors
funds moving between actors
4 Interim
Payer Ministry of Finance
Disburses funds to MOHSW 3
Purchaser National Health Insurance Fund
Confirms funds to be disbursed
to provider
2
Receives receipt of deposit
Long Term
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4
9
MOHSW receives funds from MOF and issues to MSD/HF SBU
Flow of funds for the RBF
Scheme Payer deposits payment into fundholder account 1
NHIF reviews and approves verification report and authorizes fundholder (MOF) to issue payment
2
Ministry of Finance issues payment to MOHSW
3
MSD/HF SBUs Invest funds in business
plan activities 6
MSD/HF SBUs Submit proof of deposit
to purchaser (NHIF) 5
4 Interim
4 Long Term
MOHSW receives data from NHIF and shares
with other stakeholders
SBU Manager and the HF in charge collects data on indicators
at the end of the quarter and compiles a report
IAG convenes verification team to review results, carry out verification procedures &
compile report for purchaser
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1
2
3
MSD/HF Executive Management reviews the quarterly report
MSD/HF M&E Unit Reviews report and submits to SBU committee
SBU Advisory Committee meets to review and approve the report
MSD/HF Director General approves and sends report to verifier
Flow of information and reporting for the RBF scheme
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Day 15 MSD provides
performance report from last quarter
Day 30 Verification led by IAG completed
Day 42 IAG
issues payment request to NHIF
Day 60 MOF
disburses funds to
MSD SBUs
Day 70 MSD
provides proof of
deposit to NHIF
End Q1
Data review & verification | Funds issuance
End Q2
Chronology of events between quarters
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LEVEL INDICATOR ORIENTATION WEIGHT
Zone Order fill rate for district approved orders
External, customer-oriented 5
Zone On time delivery rate External, customer-oriented 5
Zone Put away accuracy Internal, process-oriented 1
Zone Inventory accuracy Internal, process-oriented 1
Zone Order lead time External, customer-oriented 2
Zone Damaged or expired commodity rate External, customer-oriented 1
Total per quarter 15
Central Damaged or expired commodity rate External, customer-oriented 2
Central Order fill rate to zones External, customer-oriented 5
Central Fleet Utilization Internal, process-oriented 3
Central On time delivery rate External, customer-oriented 5
Total per quarter 15
RBF quantity indicators by MSD level and weighting
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The implementation
• Three SBUs are implementing have been trained since April 2016
Vertical Program (VP) Warehouse (MSD headquarters) Transport unit (MSD headquarters) Mwanza zone (Includes Muleba Sales point)
• Trainings Implementers ?? 24 internal verifiers and 40 external verifiers
• One verification exercise has been conducted
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The implementation – Results Q1
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The implementation – Results Q1
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The implementation – Results Q1
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The implementation – Results Q1
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Indicator B T R V Error rate
Unit Cost ($)
Amount earned
Final incentives
Order fill rate
C 69% 80% 80% 52% 28% 32,000 0 0
Z 35% 70% 78% 42% 36% 9,000 1,821 1,639
On time delivery
C 0% 100% 72% 0% 72% 32,000 0 0
Z 100% 100% 100% 51% 49% 7,200 0 0
Expired commodity
C 0.5% 0.25% 8.9% 9.0% 0.1% 12,800 0 0
Z 3.5% 1% 2.1% 3.2% 1.1% 3,600 432 432
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The implementation - Invoices
Global health Supply Chains. Dar es Salaam Tanzania 2016
Indicator B T R V Error rate
Unit Cost ($)
Amount earned
Final incentives
Central
Fleet utilization
75% 85% 79% 69% 10% 19,200 0 0
Zonal
Put away accuracy
75% 85% 89% 80% 9% 1,800 900 900
Inventory accuracy
50% 80% 79% 60% 19% 1800 600 540
Order lead time
46 38 40 59 19% 0 0 0
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The implementation - Invoices
Global health Supply Chains. Dar es Salaam Tanzania 2016
The implementation - Summary
Indicator Unit cost
Amount earned
% unit cost
Error rate
Final incentive
Error losses
Order fill rate
C 32,000 0 0% 28% 0 NA
Z 9,000 1,821 20% 36% 1,639 10%
On time delivery
C 32,000 0 0% 72% 0 NA
Z 7,200 0 0% 49% 0 NA
Expired commodity
C 12,800 0 0% 0.1% 0 NA
Z 3,600 432 12% 1.1% 432 0%
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The implementation - Summary
Indicator Unit cost
Amount earned
% unit cost
Error rate
Final incentive
Error losses
Central SBU
Fleet utilization
19,200 0 0% 10% 0 NA
Mwanza SBU
Put away accuracy
1,800 900 50% 9% 900 0%
Inventory accuracy
1,800 600 33% 19% 540 10%
Order lead time
3,600 0 0% 19% 0 NA
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The invoice - summary
Allocation(US$) /Quarter Earnings Percentage
MSD Central SBUs 96,000 0.00 0%
Mwanza zone SBU 27,000 14,314 53%
TOTAL 123,000 14,3134 12%
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Challenges
DESIGN CHALLENGES • Are the targets achievable? • Is the baseline data reliable? These two have implications on the amount earned before error penalties • Inconsistency in the error deductions with the HF
RBF component • Are the indicators right? Is there a need for supervision
indicators for central to zonal MSD?
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TRAININGS Implementers – ?MSD staff Verifiers – Focus on MSD existing systems • More of practical E9 and eLMIS sessions • Car tracking systems VERIFICATION Lead verifier – IAG ? Sitting region, all regions, central Does the lead verifier capacitated enough? MSD RBF INTERFACE For reported and verified data entry and invoice generation
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Challenges
Proposed Design Changes
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• With the introduction of bar coding – Put away accuracy have become redundant
• Measuring the same things - Order lead time and on time
delivery • Categorization of the verification criteria to be responsive to
levels of efforts exerted • Out of stock notification indicator – Incentives for efforts to
make commodities available at HF in light of current stock outs at the Central MSD
Global health Supply Chains. Dar es Salaam Tanzania 2016
Timeline
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Preparatory Activities
Pilot
Actual Implemetation
Global health Supply Chains. Dar es Salaam Tanzania 2016
Thanks to our generous sponsors
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