Provider Purchasing and Contracting for Health Services_The Case

Table 10: Expenditure performance on selected cost items for DHMTs
2005 2007
Cost Item Target Actual Variance Target Actual Variance
Allowances 44% 57% 98% 10% 57% 82%
Drugs 12% 7% -8% 31% 12% 1%
Maintenance 14% 17% 24% 21% 5% -3%
Training 3% 2% -3% 4% 7% 9%
Capital 26% 17% -12% 35% 19% 11%
Total 100% 100% 100% 100% 100% 100%
Total
(millions of
Zambian
kwachas) 1,134 1,484 — 1,284 3,739 2,455
DMHTs = District Health Management Teams.
In response to underfunding and delays in disbursements, most of the providers observed that
they cut down on expenditure in non-priority areas such as payment of utility bills, quality of
food given to patients, and, in some instances, allowances to staff members. In addition,
providers tend to get goods and services from suppliers and only pay when they have funds
available.. In some instances, hospitals enter into debt swaps to liquidate their debt by
providing health services to creditors.
Generally, inadequate funding has a negative impact on adherence to targets and,
consequently, quality and equity of access. Some managers stated that, with inadequate
funding, they cannot afford to buy essential drugs once there is a stock-out or maintain the
laboratory and theater equipment. As a result, they have either to provide prescriptions to
patients or refer them to other facilities, thereby compromising the quality of care provided.
Even in cases where an improvement in disbursements was noted, the respondents observed
that it was too early to judge the impact on the quality of care. This is further supported by
the empirical data, which indicate that staffing levels, bed occupancy rates, and patients’
length of stay have remained fairly unchanged over the years (see appendix 2).
Regarding procurements, the responses were mixed. Most managers noted that the
procurement and delivery of accurate drugs from MSL have slightly improved. However,
some providers complained that the drugs are sometimes inadequate compared with the
Central Board of Health period. The increased reliability of disbursements has led to
improved local procurements, while the use of internally generated funds has remained the
same. On the other hand, the delivery of supplies procured from the Ministry of Health has
become less efficient.
Engagement of new staff and staff motivation
The responsibility of employing health staff under the Central Board of Health was delegated
to the District Health Boards and the Hospital Management Boards. The managers noted the
hiring of health staff was easier under the boards than it is now. Moreover, they stated that,
unlike the board system which allowed managers to employ health staff as the need arose, the
system is now more bureaucratic, resulting in delays of between three and six months in the
hiring of health staff. This has adversely affected service delivery.
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