Provider Purchasing and Contracting for Health Services_The Case

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• Developing the capacity of the MSL staff complement, with a focus on the senior managers • Developing and institutionalizing new systems and operating procedures where appropriate • Planning and implementing major capital investment programs covering all areas of MSL As an autonomous institution, MSL is allowed to serve other clients that require its services such as CHAZ, cooperating partners, and other private health care providers. Figure 6 shows the contracting arrangement for drug and supplies management and the role of MSL. The actual procurement of drugs is done by the Procurement and Supply Unit in the Ministry of Health. Depending on the size of the tender, planned procurements are reviewed by the Zambia National Tender Board. Generally, the drugs are procured from international drug manufacturers, and very few drugs are procured within the country. Figure 1: MSL role in drug supply management Government of Zambia Ministry of Finance Ministry of Health Cooperating Partners Finance Information Ministry of Health Board reporting to shareholders Operational finance Drug information, stock, MSL Reports to CPs Crown Agents HQ Finance, Supplier monitoring Crown Agents MSL Board Management Team & Support National Counterparts Statutory reports and business plan Crown Agents Local Stock information MSL Goods STAKEHOLDERS: CHAZ, Other ministries, UN Agents, Private, etc. Public Health Institutions District Health Management Teams Hospital Management Teams Once drugs and supplies have been secured and have reached the country, MSL then takes over the storage and distribution functions. Thus, warehousing and distribution are performed centrally by MSL, which distributes drugs and supplies regionally to the 72 District Health Management Teams and to the second- and third-level hospitals directly. MSL’s core operations consist of order processing, stock and information management, warehouse management, and transportation and distribution. According to the guidelines, each hospital and district management team has a virtual account with MSL from which supplies and drugs 40
are drawn. MSL is supposed to supply drugs upon and in accordance with the requisitions from the hospitals and District Health Management Teams. Thus, MSL is responsible for ensuring equitable and reliable distribution of essential drugs to the 80 hospitals and 72 districts nationwide. Financing of MSL MSL submits a business plan for the coming year and negotiates a fee for carrying out the plan. Thus, MSL is not compensated on an activity basis, but is paid monthly in advance; it is funded as a grant, not as a line item. The contract stipulates time frames and is renewable upon production of acceptable reports and based on terms and conditions agreed upon by the parties involved. The contract has details of duration and information on the responsibilities of the management contractor. In addition, the contract specifies transitional provisions to be met by the management contractor. Moreover, the contract obliges MSL to ensure that the procured drugs meet the quality requirements and related services. Performance targets The MSL is assessed based on the performance indicators stipulated in the management contract: • Number of orders and deliveries to various District Health Management Teams and hospitals • Volume of deliveries • Timeliness and accuracy of deliveries to customers • Value of goods delivered • Cost of delivery per kilometer Accordingly, MSL is required to report on its core operations, human resources, finance, accounts and audits, information technology, purchases, corporate governance, capital investments, and, in some cases, proposed details of the next project plan. Contracting arrangements after 2005 Following the dissolution of the Central Board of Health, the Ministry of Health assumed the roles that the board had performed. Generally, the budgetary process, fund disbursement, and contracting procedures among the different tiers of the health sector have remained the same. However, the institutional framework has changed slightly. The roles that were played by the boards have been assumed by District Health Management Teams and Hospital Management Teams. In addition, the Provincial Health Offices have become the link between the boards and the Ministry of Health’s head office. Contracting with private for-profit and private not-for-profit organizations The inclusion of the private sector through the establishment of partnerships is one of the key principles of the Zambian health reforms. The vision is to create strong, sustainable partnerships among all key stakeholders involved in health service delivery in Zambia. Accordingly, partnerships have been established in each district at all levels of service delivery. These partnerships allow key stakeholders to work together to analyze health 41
Page 1 and 2: The Rockefeller Foundation-Sponsore
Page 3 and 4: Contents 1. Introduction...........
Page 5 and 6: Executive Summary Objective and rat
Page 7 and 8: 1. Introduction Reforms in the heal
Page 9 and 10: principles laid down in the Nationa
Page 11 and 12: In the first phase, the study mainl
Page 13 and 14: where funders of care tend to aband
Page 15 and 16: Following independence in 1964, the
Page 17 and 18: • Budgetary reform whereby Distri
Page 19 and 20: statements and operational issues i
Page 21 and 22: Year Key Events/Reforms • Nationa
Page 23 and 24: Ministry of Health is in a stronger
Page 25 and 26: Unlike the pre-reform structure, th
Page 27 and 28: Figure 2: Distribution of health fa
Page 29 and 30: Table 5: Summary of health institut
Page 31 and 32: Table 7: Distribution of beds by pr
Page 33 and 34: ecause there is no direct platform
Page 35 and 36: Figure 3: Distribution of mission h
Page 37 and 38: The memorandum of understanding giv
Page 39 and 40: ased organization; HMBs = Hospital
Page 41 and 42: The Ministry of Health contracted w
Page 43 and 44: Paying the providers Health care pr
Page 45: clearly specified the obligations o
Page 49 and 50: eimbursement process does not diffe
Page 51 and 52: services. Often, private facilities
Page 53 and 54: intermediary for the District Healt
Page 55 and 56: Table 10: Expenditure performance o
Page 57 and 58: Table 11: Contracting revenue for m
Page 59 and 60: managers observed that most of the
Page 61 and 62: ecommended drug, artemether-lumefan
Page 63 and 64: Favorable tax incentives are being
Page 65 and 66: Zambia’s health delivery system t
Page 67 and 68: References Ashton, T. 1998. Contrac
Page 69 and 70: Walsh K., 1995 Public Services and
Page 71 and 72: General Hospital - Second-level ref
Page 73 and 74: Appendix 3: Hospitals by Type, Owne
Page 75: Southern Province Western Province

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