Direct Health Facility Financing as a practical approach for strengthening strategic purchasing in Tanzania Strategic purchasing for universal health coverage: theory and practice Presented by the iHEA Financing for Universal Health Coverage SIG Tuesday, March 26, 2019 Gemini Mtei

Introduction Government of Tanzania aim to ensure universal access to health care using limited available resources Fragmented financing system Domestic tax revenue, Development Partners (DPs) General Budget Support (GBS) DPs heath sector budget support through Health Basket Fund (HBF) Result Based Financing (RBF) in selected regions DPs support through Vertical Programs Health Insurance (NHIF, CHF, Private insurance) User Fees Long Term Vision: Introduction of Mandatory National Health Insurance (NHI) as a way to achieve UHC Step by step implementation process Alignment between health financing and public financial management to improve purchasing Direct Health Facility Financing (DHFF) and its shift to output-based payment as a key reform to improve provider visibility, autonomy and efficiency

Long term SNHI vision

Step by Step implementation towards SNHI

Direct Health Facility Financing (DHFF) Revolution in provider payment system in Tanzania A key step to preparation for establishment of Mandatory NHI DHFF includes the following fund sources that flow to service providers (in addition to user fees); Health Basket Funds (HBF) flowing through MOFP (Central Budget) Health Insurance Claims (National Health Insurance Fund, Community Health Funds) Result Based Financing (RBF) Formula based allocation to service providers Unified payment mechanism slowly applied across different fund sources Initially all funds were flowing to district and providers received inputs as in-kind (passive purchasing) DHFF Introduces Strategic purchasing Better matching resources to priority services Predictability of funds availability to facilities Facility Autonomy to plan, budget, procure inputs Improved facility general, financial and human resource management Enforce Accountability…compliance to financial accounting and reporting (FFARS)

Unified Provider Payment Mechanism under DHFF Both HBF and CHF use formula based allocation to providers Capitation Payment with Adjustors; Shift from input to output based provider payment Reduce fragmentation in provider payment HBF DHFF is proof that it is possible to gradually introduce Strategic Purchasing under core central budget including adapting to PFM systems and rules HBF adjustors Catchment/Service population as a measure of Need -weight of 30% Utilization as a measure of Performance -weight of 50% Distance from LGA HQ as a measure of Equity -weight of 20% iCHF adjustors Catchment/Service population as a measure of Need -weight of 20% Utilization among CHF members as a measure of Performance -weight of 70% % of Population enrolled to iCHF in the catchment area as a measure of Performance -weight of 10% RBF on top of HBF and iCHF to stimulate performance in large public health systems…disbursed on agreed indicators Over time alignment of NHIF to HBF and iCHF unified payment systems

Extending systems to service providers for implementing DHFF-1 Planning and Budgeting System-PlanRep: PlanRep is a web-Based Planning, Budgeting and Reporting System It used to be a desk stop system and later converted to a web-based system Efficiency improvement- cost saving (time & money) Quality Plans and Budgets Accessible everywhere with any one that has access right Introducing service provider visibility in the Government Chart of Accounts (COA) Facility ceilings Facility plans and budgets Introduce Service Outputs in the Government planning system A step towards Output Based budgeting Great potential to align Development Partners support Interoperability with financial management systems (revenue, accounting systems) Improved reporting (both financial and implementation report) Room for Performance auditing Change of Chart of Account (COA)

Extending systems to service providers for implementing DHFF -2 Financial Management System-FFARS: Harmonized Facility Financial Management System across all Service Providers and all Fund Sources using Facility Financial Accounting and Reporting Systems (FFARS) Comes in two forms Manual Electronic Web-based FFARS Mobile FFARS to be used with facility that have no computer or internet connection Follows standard accounting procedures but with simplification to suit needs and technical capacity of service providers Facilities are mandated to use automated FFARS to produce Financial reports (Monthly/Quarterly/Annually reports) FFARS is Interoperable with PlanRep A sound financial management system at service provider level is key when introducing Strategic Purchasing in Central Budget System

Extending systems to service providers for implementing DHFF-3 Other Systems: Unified Facility Level Information System across providers Important for establishment of good Claims Management GoTHOMIS- Government of Tanzania Health Operations Management Information System used to manage patients across all public facilities Patient Information Management System (Registration, diagnosis, prescription, pharmaceutical, financial) Potential data to inform claims management/provider payment system In the process of becoming interoperable with NHIF claims system Interoperable with Health Management Information system (HMIS/DHIS2) Improve quality of data Interoperable with Medical Store Department electronic Logistic Management Information System (MSD-eLMIS) Improve supply chain at service provider Stock management Timely procurement

MOFP disburse HBF funds monthly/quarterly Fund Disbursement to LGA B/A Councils procure inputs Service Providers deliver services Summary: Introducing Strategic Purchasing under Treasury System through DHFF BEFORE DHFF Service providers manage funds and procure inputs to deliver priority services Councils oversee and monitor service provision Formula based Disbursement to Facility Bank Account Inputs Supply AFTER DHFF PlanRep Epicor GoTHoMIS/eLMIS IGFT for Salary, OC, etc. Epicor FFARS

Conclusions Achieving UHC is a gradual process that requires step by step improvement in financing system (three functions of revenue, pooling and purchasing) Strategic Purchasing can be a crucial step for aligning system financing on the right path towards UHC DHFF in Tanzania proves that it is possible to create momentum at service provider level to improve availability and quality of service delivery through management improvements and efficiency gains Service provider autonomy and predictability of funds is crucial It is also possible to gradually introduce Strategic Purchasing under the core PFM/Treasury system Important to have planning, budgeting and financial management systems extended to service provider level Review COA to include service providers as spending entity in Treasury systems