[e-drug] impact of cost recovery or budget allocation systems on product availability?

e-drug
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E-DRUG: impact of cost recovery or budget allocation systems on product availability?
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Dear E-Druggers,

I am wondering if anyone has information or experience they would be willing to share on how decentralized financing (budget allocation) policies or cost recovery programs in public sector health systems have impacted availability of essential medicines at service delivery points and how countries have overcome any related challenges.

Here are some of the broad questions I am interested in:
In public health systems, what is the impact of cost recovery on availability of medicines? Does it distort facility ordering patterns for resupply, especially if some products are subject to cost recovery and others are free (or some products are subject to full cost recovery and others partial cost recovery)?

Do the funds collected for medicines impact how much a facility will order for resupply?

In countries with decentralized financing, whereby budgets are allocated to lower levels and they decide what to order for facilities, how do they decide how to spend their funds?

Are certain products ordered and others not?

In countries where cost recovery or decentralized financing policies have worked or challenges have been overcome, how has this happened? What are the lessons learned?

My objective is to first understand the impacts of policies - both positive outcomes and unintended consequences - on product availability at the facility level and ideally develop recommendations on avoiding potential negative outcomes of such policies, so I would appreciate hearing about experience that anyone has had working with either or both. (Please note, while the issue of client access at the facility level is critical, for this, I am particularly interested in product availability and resupply processes, rather than access/affordability in cost recovery systems).

I appreciate any thoughts you have to share with me on this topic.

Best regards,
Alexis

Alexis W. Heaton
Technical Advisor
John Snow, Inc.
Voice: 1.703.528.7474
Direct: 1.703.310.5035
E-mail: aheaton@jsi.com

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E-DRUG: impact of cost recovery or budget allocation systems on product availability? (2)
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Dear Alexis,

In one West African country where district and community health facilities
run drug revolving funds:
At creation of the health facility, the government capitalizes the revolving fund. The management of these funds is the responsibility of committees drawn from members of the community.
Procurement decisions for pharmaceuticals and other health products for the
health facilities are made by these committees.

Results (not published) of a rapid assessment of availability of antimalarial products in the country
conducted in 2009 showed that products were likely to be available for the
greater part of the year in facilities where the drug management committee
was able to properly manage funds, procurement, personnel and inventory.

What is even more interesting is the fact that decisions about what products
to order depended on how much cash was available in the drug fund. In one
facility where all antimalarial products were out of stock, the health
officer in charge explained that this situation was the result of poor
management of the seed grant from Government. Regarding impact of cost
recovery on products provided free to patients, my experience is that there
is the tendency for a laissez-faire attitude with record keeping for
products that are free i.e. there seems to be no incentive for storekeepers
to keep proper records.

It would be interesting to see data that show the impact of decentralization
of medical health product financing on availability and ordering especially
at peripheral health facilities.

Regards,

Yuniwo Nfor
Chemin de Blandonnet
Vernier, 1214
Geneva, Switzerland
Tel: +41.587911879
emmanuel yuniwo <yuniwo@gmail.com>