Appendix 3 A POSITION PAPER ON Revolving Drug Funds
3RD INTERNATIONAL MEETING ON ESSENTIAL DRUGS AND COMMUNITY HEALTH SYSTEMS
DRS. TAKUSEI UMENAI & INDERMOHAN NARULA
DEPARTMENT OF HEALTH POLICY AND PLANNING, UNIVERSITY OF TOKYO
Introduction
To seek treatment when one is sick is a very human thing to do. Since time immemorial human beings have sought to alleviate their suffering through a variety of means, including the consumption of plants, herbs and foods, application of various poultices, and the adoption of specific behaviors to ease pain and suffering and bring about healing.
In every community, health care is provided through two streams: one is self medication, which ranges from resting and eating a variety of foods, to taking medicinal plans and substances found in the local environment, to the taking of complex treatments which may be social and/or psychological; the other is the receipt of expert medical care, modern or traditional, by trained/experienced practitioners who use a range of sophisticated medications and treatments. In both systems, medicines are used to heal, alleviate, or palliate. Medications and treatments always involve the exchange of energy and resources in terms of cash or kind, payment or barter. Hence, the basic method for the provision of health care is an economic one, namely the exchange of resources.
The revolving drug fund concept describes this exchange of resources to bring about better health and improve the quality of life. The starting point of the economic paradigm is the recognition of the scarcity of resources and the making of choices regarding the optimal distribution of these resources for intensifying the generation of economic energy that maintains and sustains the development of systems, whatever these may be.
Therefore the RDf concept at the local level provides the framework for linking the provision of health services to the underlying economy of a community and builds upon the basic economic paradigm, this while conferring upon the community control over the provision of health services at the community level. (See Appendix 4)
Role of essential drugs in health security
One thing is certain: drugs and medications are an essential part of healing processes, and their availability and proper use is a indicator of effective health services and hence health security. Revolving drug funds could become an important mechanism that ensures that affordable and acceptable quality drugs are accessible to all and used in rational and prescribed ways.
Health care services cost. These costs are paid either indirectly through national health insurance, or as health care provided by the government (using taxes and state revenues) or directly through fee-for-service schemes and charges for drugs.
Key system development components of the RDF projects
The RDF projects, depending on the implementation framework in each participating country, have a number of system development components. Recent experiences in Vietnam, Myanmar, Honduras and Guatemala have shown that effectively operating RDFs have a vitalizing effect on the performance of health services. Furthermore, through the generation of a sense of ownership, they stimulate communities to increase participation in ensuring the continuity of reasonably affordable and acceptable quality drugs supplies at the community level.
The first system development component of an RDF project is the strengthening of management capacity in community organizations (especially the RDF/health committee) through training and the imprint of RDF operational patterns on the community. In countries where the initiative has been taken by local NGOs and community-based organizations, supported and aided by UNICEF, this has encouraged the further development of the capacity of local community-based NGOs to act as community development catalysts and increased the community's capacity for advocacy and leadership.
In ensuring that RDFs do not run down or decapitalize, RDF operations have significantly contributed to the second system development component: the strengthening of the management capacity of local public sector health facilities. A commensurate development of health teams at district and provincial levels has come about because of training, provision of guidelines and checklists, improved supervision, promotion of rational drug use, and the clarification of various management procedures. In some countries, the government has actually embarked on plans and initiatives to strengthen district health services in recognition that districts are the interface between policy formulation/interpretation and policy implementation, and between health service management and service delivery in the community.
The third system development component that has been directly influenced by the operation of RDFs is the development and streamlining of drug replenishment mechanisms that are crucial for the survival and sustainability of RDFs. These replenishment systems could not have been put into place without a government review of the national drug policy＊ and the EDL. For example in Vietnam, where the RDF Project has been operational since 1994, the national drug policy review highlighted the need to examine the pharmaceutical sector. The need was especially pressing because the second phase of the NF-supported RDF project was already underway in eighteen of fifty-three(34%) provinces and required ongoing replenishment.
＊ Vietnam, Nepal, Myanmar, Lao, El Salvador, Honduras and Peru (based on reports provided)
RDFs require basic accounting and financial skills to guard against decapitalization. Drugs must be purchased to replenish stock and profits calculated. Thus the fourth systems development component is management of revenues from drug sales, user charges, and fees. This highlights the need to promote review and revision of accounting and financial management processes and procedures at health facilities and at other health service levels.
As observed from the experience of implementing the Nippon Foundation Essential Drug Project, RDFs tend to thrive in an environment where local economies are vibrant and growing and where communities are already participating in their own economic development as a practical issue rather than as just a political or ideological issue.
Setting up RDFs
The setting up of an RDF requires a considerable increase in the basic management skills of the health team and the community. As seen in the country reports, the interaction of health teams and communities ranges from health teams managing the day to day operation of funds under the supervision of RDF committees composed of community representatives, to direct local management of the funds with delegation of daily operations to the MOH.
RDFs also contribute to bringing about the functional integration of the health services provided, especially at the operational level. There are a variety of ways that RDFs are implemented in various countries but there appear to be a number of shared concerns and issues that weave a common thread through the various RDF projects:
1. Community participation is primarily through representation on RDF/PHC committees, which in the majority of the countries tend to be dominated by MOH or NGO staff.
2. Accounting and reporting formats are not standardized within countries and between different communities and districts, making it difficult to monitor, supervise and compare progress.
3. Many countries have not allocated the resources and limited access to foreign exchange needed to purchase drugs to meet basic health care needs. In some situations, countries just cannot afford to provide these funds, while in others, expenditures in the procurement and distribution of drugs are not meticulously justified and the working relationships with national planning and finance authorities are not close. Lack of adequate data further undermines attempts to justify such expenditure in the face of limited foreign exchange reserves.
4. The setting up RDFs in almost every country exposed basic weaknesses in the management systems of MOHs in particular and governments in general, particularly at district and provincial levels. Also highlighted were the shortcomings of national accounting and financial management systems, particularly in terms of logistics management which in turn has a direct impact on the effective functioning of RDFs.
5. RDF projects have generally come about in response to donors such as Nippon Foundation providing drugs. Many of the project proposals lack clear project management frameworks for the implementation and regular monitoring of the projects.
6. The gap between communities and the health workers representing the MOH is still wide; interactions in more centralized countries appear to be nominal and token. Despite rhetoric to the contrary, communities and community organizations are expected to comply rather than participate.
7. National health insurance is generally nominal and, more often than not, inadequate and poorly managed. In some countries, these schemes are an attempt to camouflage free health care, since health insurance premiums are still paid by the government (as in Mongolia) with partial payment by government employees. These schemes tend to cover only the formal sector and the waged, leaving out vulnerable groups. Shortage of funds and delays in reimbursement are also quite common, creating bottlenecks and contributing to stock-outs. There is also a tendency for governments to get into large scale national health insurance schemes too soon, with detrimental effects, as the management infrastructure at operational levels is not yet robust enough to shoulder the additional burden of the meticulous management required for effective insurance schemes. A gradual phased approach (and this does not have to be on a pilot project basis) may provide the experience to strengthen management capacities at peripheral levels before scaling up to regional or national levels.
8. National drug policies in many countries do not adequately address such areas as legislation and regulation, regulatory control in terms drug registration and licensing, cost and price, regulations on prescribing and dispensing at different levels, choice of drugs and pharmaceutical products, supply, quality assurance, revolving drug fund operation, manpower and development needs, patents, brand and generic names, appropriate drug use, self-medication, health education, monitoring and evaluation, identification of financial resources research, and development and technical cooperation between countries.
It must be recognized that if RDFs are to contribute to improvements in primary health care, the context in which RDFs are set up needs to be included in the development of the project proposals right at the very start. This does not mean that a project needs to cater to setting up all these elements, listed previously as requirements for sustainable RDFs. It does mean, however, that these elements have to considered and linkages to progress made in these areas included in the planning and management frameworks if one is not to create expectations of the quick, short-lived success stories so desired by politicians and international donors.
Setting up RDFs is a capacity building exercise that takes time if it is to belong to the community and is to be jointly managed and sustained.
The setting up of RDFs in terms of guidelines and procedures may be accomplished within a relatively short time frame, but community participation from a point of view of co-management and community supervision, and strengthening the management capacity of the health teams at the various levels to accommodate and work with the community, take a long time and have to be included within the project time frame.
Conclusion
RDFs are making it possible for rural and remote communities to have reasonably affordable drugs of acceptable quality, available on a continual basis. This is quite an achievement in many countries where drug shortages had become the norm, and when drugs were available, they were of poor quality and very expensive. However, the relative success of the RDF has highlighted a number of areas that will require concerted effort if the gains made by these functioning RDFs are not to be forfeited.
The most critical areas are the management capacity of the middle level health services administration, and the increasing visibility of the wide gap between policy and implementation as a result of the conflicting policies, developed piecemeal over a long period of time, that are still being pursued by entrenched structures within ministries of health. These structures have become adept at obtaining funding from donors to maintain the status quo. Coupled with this is the lack of appropriate supervision and adequate authority to apply the guidelines and procedures developed to ensure the smooth functioning and growth of RDFs.
RDFs can provide ministries and international agencies with a very tangible and prominent entry point to stimulating the development of health systems, not only at the community level but also throughout MOH hierarchies. They also bring into focus additional community development issues that are integral to the process by which a community prioritizes its identified needs, makes decisions and allocates resources. It also highlights the fact that the middle level health administrative and service institutions need to be developed so that the current micro-management of the health care services (exemplified by attempts to supervise the RDFs) being carried out from the central level will be directed towards policy formulation, integration and interpretation, and the development/revision of technical and management standards, and performance criteria. The implementation, management and day to day supervision domain would be left to the district and commune levels supported technically by the provincial level health administrations.
It is vital that donors do not limit themselves to provision of drugs and seed stocks, but also include support and funding for the required policy development framework for policy formulation, integration and interpretation, and the development of management systems in a coherent and coordinated manner.
