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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

3

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

4

Goals of Tanzania’s RBF

4 Global health Supply Chains. Dar es Salaam Tanzania 2016

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


Background selection of areas of focus for MSD

6

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


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

7

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

4


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

6

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

6

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

4

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


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


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


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


The implementation – Results Q1





16



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

18

The implementation - Invoices


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

19

The implementation - Invoices


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%


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


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%


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?


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

24

Challenges

Proposed Design Changes

25

• 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


Timeline

26

Preparatory Activities

Pilot

Actual Implemetation


Thanks to our generous sponsors

27

https://www.usaid.gov/


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