1. Abt Associates Inc. In collaboration with: I Aga Khan Foundation I Bitrán y Asociados I BRAC University I Broad Branch Associates I Deloitte Consulting, LLP I Forum One Communications I RTI International I Training Resources Group I Tulane Universitys School of Public Health Performance Incentives to Strengthen Supply Chain Performance Rena Eichler, PhD Broad Branch Associates renaeichler@broadbranch.org October 6, 2010 National Press Club

2. What are Performance-based Incentives for Health? Performance-Based Incentives(PBI) : Transfer of money or material goods conditional on taking a measurable health related action or achieving a predetermined performance target * No results, no performance payment Global fad or here to stay? Most PBI initiatives focus on service delivery, quality and use. Missed opportunity to introduce performance incentives to improve performance of supply systems, labs, blood banks, other? *From the Center for Global Development Working Group on Performance-Based Incentives

3. Where do the break downs in supply chains occur? Photo by Nirali Shah, Haiti in 2010

4. Consider incentives in a typical public supply chain system in a developing country Port central storeregional store POS user Photos by Maria Miralles, Angola 2010

5. Who bears the risk for poor performance? What incentives do individuals face? Public Facilities Mission Facilities Private Facilities Pharmacies Drug Shops Other informal outlets Prescribers & Dispensers Care Giver District or Regional Stores Mission Sector National Medical Stores Mission Sector Natl Buyers Private Importers Procurement Agents Adapted from Yadav, 2009 Patient Wholesalers

6. Some principles: Identify who bears the performance risk at each link Introduce incentives to realign risks Incentivize teams rather than individuals Ensure that individuals benefit directly from performance incentives Remember the private sector

7. Indicators to consider? Annual forecast accuracy Measures supply performance and demand creation. Supply system responsiveness Days from request for supplies at national level to receipt at service delivery point Wastage Measures over stocking, poor storage, inadequate transfers, cold chain rupture Sample commodity utilization ratios Measure inputs/outputs Example: # immunized/ vaccine vials

8. PBI could contribute to: Better demand forecasting More effective procurement Fewer stock-outs Less waste Better drug quality Enhanced cost control Greater accountability Strengthened health systems that deliver improved health outcomes.

9. Abt Associates Inc. In collaboration with: I Aga Khan Foundation I Bitrán y Asociados I BRAC University I Broad Branch Associates I Deloitte Consulting, LLP I Forum One Communications I RTI International I Training Resources Group I Tulane Universitys School of Public Health Thank you Reports related to this presentation are available at www.HS2020.org