| Moderator: |
What I have tried to do based on what was discussed is to make a list of six or seven points, critical issues that came up. Now, this is not an exhaustive list. Many things can be added. This is just to start the process. |
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1. Inflation and the rising cost of drugs, particularly with changes in currency prices, seem to cut into the buying power of revolved funds. |
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2. How can pricing be done to sustain the RDF while maintaining affordability? |
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3. RDFs at district and regional hospitals. Integration of hospitals into primary health care. As RDFs become more and more mainstream in primary health care, the role of regional, provincial and district hospitals and RDFs at those facilities. |
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4. The legal status of RDFs. Who owns them? What are the implications of ownership in terms of banking and interest income that comes from the money being banked, etc.? |
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5. Accounting and financial management. The link between inventory management, financial management, and accounting at the community level. Oversight by the community. |
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6. Supervision. Who supervises and at what level? The community? The MOH? |
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7. Health education of the community and proper drug use. |
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8. Exemptions. How are they determined? What are the criteria for exemptions? What are the effects on RDFs in terms of decapitalization? Are there other sources of funding? |
| Chairman: |
Please pick issues most directly linked to the development of your project next year, given your country's stage of progress. |
| Moderator: |
Are there any other issues to be added to the list? |
| MSH: |
What is the goal of your RDF? Is it to recover all costs, or only some costs? If it is to recover all costs, then you get into the exemption issues. If it is only to recover some costs, where is the rest of the money coming from? Is the government subsidizing, or is a donor expected step in? |
| Plenum: |
What would be the common denominator for evaluating our RDFs? Is that too big a question? |
| Moderator: |
Perhaps that needs to be addressed in terms of specific indicators. One might be Vietnam's use of the revolving drugs cycle as the indicator. Another may be the cost ratio used by Mongolia. Maybe you can explain how you came about these figures, and what use they have for evaluating your programs. |
| Vietnam: |
Before 1993, we had an inflation problem, so we used the amount of drugs as the indicator. But since then, we don't seem to have an inflation problem. We use as an indicator the total drug fund. What are the levels of the funds at the beginning of the year and at the end of the year, and what is the total purchase amount in the year? A revolving cycle is the total purchasing cost of the year divided into the capital at the beginning of the year. That information helps us to see if the community has good purchasing power or not. |
| Moderator: |
So what you are basically doing is dividing total purchasing cost by the original capital to give you the revolving cycle. If the revolving cycle is low, purchasing capacity is not enough. If it is high, then it means that they are purchasing much more, which means the drugs are being revolved more frequently and there is a greater flow. |
| Mongolia: |
I use cost recovery as an indicator. We think having an indicator is important because our RDF is established at two levels, the national and provincial. At the national level, because of fluctuations in the exchange rate and devaluation of the national currency, we have not always recovered the full cost of drugs. At the provincial level, it is different. Since we supply the annual drug requirement, and since the drug price includes the total cost of the drugs, we have been able to achieve full cost recovery. At the national level, we have been able to achieve only perhaps 40 to 45%. The cost recovery indicator has shown us how the replenishment is going. |
| Moderator: |
Why is it so low at the national level? Why is it half at the national level as that of the provincial level? |
| Mongolia: |
We were not selling the drugs at full cost because all drugs were received from grant aid or donations. We charged only 20 to 30%. Starting from last March, we introduced full cost recovery. Before 1996, we did not. |
| Nepal: |
I would like to add two issues. One is self-medication. As Cambodia brought up, that is the first choice of the people and where they spend the most money. When we think of ultimate decentralization and mobilization, we will reach into the families. The other is what would be the role of RDFs in the overall spectrum of health services? |
| Moderator: |
Let's go country by country and say which two issues, based on the discussant's input, each would like to consider in the small group discussions, looking at the questions in the guidelines for the working groups and action plan development. That does not preclude at all any other points, concerns or issues that you may have. If there are points that need to be brought up we still have time to do that. This is a forum for exchange of experience or thoughts. |
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Myanmar |
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1. Buying power of the revolving fund |
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2. Pricing mechanism and policy |
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Vietnam |
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1. Accounting and finance. |
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2. Rational drug use |
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Laos |
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1. Exemptions |
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2. Supervision at the community and MOH levels |
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Mongolia |
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1. Legal status of RDFs |
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2. Accounting and financial status at the community level |
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Cambodia |
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1. Pricing mechanism |
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2. Integration of supervision of community financing into overall supervision |
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Nepal |
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1. Replenishment mechanism |
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2. Accounting and financing |
| Chairman: |
To Myanmar, I suggest that the issue of decentralization in the area of replenishment systems is most important for your country. |
| Moderator: |
Maybe Myanmar might need to look at devolving responsibility down rather than at where it is. Currently, even though the decision on what to procure is prepared by the townships, the ultimate decision as to authorizing it still is at the central medical level. Maybe Myanmar might want to look at how this can be devolved down to the township level, so there is more opportunity for the township people to exercise some choice in terms of not just deciding what drugs are needed but also having some control over the actual purchase process. |
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Now we have some time for pursuing some of the issues raised in the morning session. |
| Laos: |
I would like to ask Vietnam about revolving cycles. How do you link this indicator to the number of cases of disease, because the revolving cycle, itself, cannot measure the effectiveness of the RDF project. If that were the case, the implication would be that if people buy more, it is good. So, how do you link this? How do you link disease profiles with affordability for people? If they are sick, can they buy? |
| Vietnam: |
We have many assessments and studies on RDFs at the community level. Most of the evaluations reveal that there are different relations and correlations between the fund and [various accounting services] at the community level. In short, I can say that in those places where we see clear revolving cycles, we have high utilization rate. In the health centers, we have both the private sector and public sector. This means that if your service is not good, drugs cannot solve the sickness problem in the community, because the sickness is always there. If the public sector has good services and affordable prices, then the people when they are sick, they trust the public sector and go to use it more than in the places which do not give good service. |
| Laos: |
I see. In our case, the correlation is different. Our RDF is decreasing because the sickness of the people is declining due to public education and everything. I understand you. This is in the case of district hospitals, yes? |
| Vietnam: |
We do not find any clear relationship between each district RDF and improvement in the health status of its locality. |
| Moderator: |
I think there are a couple of issues there that are being discussed. Laos is looking at the community level, so that is a very small population. In Vietnam, the correlation found is that when the revolving cycle has increased in number, it means that utilization has also increased. The disease level is already there, but more people are now accessing the public sector health facilities. Laos, your approach is focused on the community health level, and it is directly proportional to the amount of requests that come in from the community. So there is a difference in the relationship between the indicators you are using and the revolving cycles and what they are using. |
| Mongolia: |
In my country, we are also discussing evaluation of revolving drug fund operations with the revolving cycle. But this has been very difficult. For example, ten million dollars was just given by SIDA to one of the communities. In previous years, need based on utilization was about five million tudriks, but last year it changed to nearly eight million tudriks. The previous low level was perhaps due to the shortage of drugs, so less drugs were used. Maybe next year, with the availability of drugs, prescribers will prescribe much more and perhaps prescribe less necessary drugs. Maybe this kind of pattern will increase. It is very difficult to assess it because it is contradictory to the utilization, and the revolving cycle is contradictory to rational and proper use of drugs. This has to be very carefully discussed. |
| MSH: |
That is a interesting point because another thing that can drive up the revolving cycle is prices. If one district is charging significantly more for drugs, their cycle will look much higher. Is that not true? It depends on if you are measuring purchasing sales. |
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One question I have for all of you. Is anyone who is operating the revolving found keeping track of inventory value, stock value and the value of drugs on hand? If you were all in the private sector, if you were running a drug fund in the private sector, the things you would need to be tracking are: beginning inventory at the beginning of the year, how much should you buy (the value of your purchases), the value of drugs sold, and the ending inventory. Now with those numbers and your bank balance, you can determine whether your RDF is revolving or dying, but without those numbers you can't really do it, you're just guessing. |
| Moderator: |
For the assessment of quite a number of projects, that has been the critical issue. This goes back to what I said. You need to link financial accounting with inventory. What we found in Vietnam was that inventory was not being tracked, though the costs and the money being collected were tracked. There was no correlation between the money people had on hand and their awareness of exactly how much stock was there. People were under the impression that they had a lot of money. Yet, when they put the whole thing together, they found that they were either marginal or already beginning the process of decapitalization. This is why I raised that point that you need to integrate. Inventory has not always been regarded as an important factor. We've seen the initial input as starting the process off, but it is never seen as the point from where decapitalization can occur. Inventory management at the RDF level is weak, there is no doubt about it. |
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When you use the words financial and accounting here, it doesn't only mean money. It means stock, because stock has value. That is the value you started with, because you didn't start with money, you started with stock. If you don't monitor that stock at the beginning and end of the specified period, you're really not assessing yourself. That is why the indicators that have been developed by many of the programs are for the central level, which does not help the RDFs to assess whether or not they are functioning. That is why the financial accounting mechanism needs to be redoctored. Vietnam and Myanmar have some experience in that. |
| Vietnam: |
So far, in Vietnam, we have only quarterly inventory in the district level. During supervision, we recognized that it is not good. So in the pilot areas, we started monthly inventory of stock value, wholesale and retail amounts. In the last year, we just gave general instructions. We are developing supervision materials. We are looking into that problem of management of funds, then we will go a step further into monthly inventory. |
| Moderator: |
What is very interesting is what I call creative inventory management. One of the communes we visited had a mechanism for demonstrating how their value had increased. They revalued their inventory with a slightly higher price tag, and the community was convinced that the value of the RDF had gone up, even though the actual drugs in the store had decreased in amount. They changed the price and recalculated the entire value based on the increased price. That is why we realized that we needed to carry out an operations research to find what are the minimum elements we need to look at to see if a revolving drug fund is functioning, from the point of view of stock as well as of money. |
| Chairman: |
Laos, the stage of development of your logistics supply system is very important. You mentioned the involvement of the Women's Association. How you efficiently distribute drugs to the community though this association is also very important. So far, you are just delivering drugs to the district hospitals. My concern is that strengthening of logistics is still a pressing issue. |
| Laos: |
Let me clarify that for you. The Women's Association does not interfere with the management of that. Of course, all operations and management is the responsibility of the MOH at provincial and district levels. The Women's Union cannot manage the RDFs because technical skill is needed, not just a mass organization like that. The management of operations is at the provincial and district levels. Replenishment is done by the provincial and district levels. Many communities have and depend on health volunteers who are trained and have guidelines for simple diagnoses and prescriptions for common diseases. They deal with common diseases. They give reports to district health centers, which are then sent to the provincial levels. The reports include accounting and the list of cases of diseases. The district level can look at this and do replenishment every month. So this has been going on for ten months now, and it looks like it's been effective. The number of cases of diseases really looks like it's declining. We have data, we have made assessments. The project is being conducted in 391 villages, and the people there are very satisfied with it and feel very grateful. |
| Chairman: |
Yes, I realize that this is going on in the commune districts. But what about the other districts? |
| Laos: |
Communes are in one province, but there are four other provinces in the northern areas also. There are some communities very far from district centers, as far as 60 kilometers. But even there, the health volunteers submit reports every month by walking to the district centers. So there really has been effort to cooperate with and follow our schemes. |
| Moderator: |
In many ways Laos presents a very interesting perspective. You have what we call the JICA project and the expansion of the JICA project. There is a definite community component where, as you said, there are 391 villages that actually have revolving drug funds based on village health workers. Then there is the other thing, which is looking at the next stage--looking at the provincial hospitals and the support being provided to the provincial hospitals, and then to the district hospitals and then possibly to the communities. So actually, you have almost a two-tier, two-track activity going on: one is the village health workers, where village women mobilize, the MOH manages, and there is a logistics system set up; the other is the overall framework which provides drugs to the hospitals. This second part is what needs to be worked on. What are the criteria, how is management going to be done, and how are logistics going to be done? But the logistics framework for the village health workers that was set up in Khammouane has now been extended to the four others and hopefully beyond. How do the two systems link together? Or are they going to be separate systems? I think Umenai Sensei is quite right. The logistics and management of the RDFs at the provincial district levels is going to be a critical factor. That is the direction you are planning to go. The community health workers part of it is already in place. The guidelines are there. It just needs review, modification and adaptation for the other provinces. |
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I just want to take a few minutes to touch on the implications of RDFs based on what I have heard. There was a table in the last proceedings report that looked at the ten elements in setting up an effective drug supply system that was developed by the Drug Action Programme of WHO. According to the reports we received then, we gave some sort of indicators and marked where each country was. However, from that time to now, there have been a lot of changes based on the reports and the discussions we now have. RDFs are now beginning to impact on five broad areas: |
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1. Strengthening health care management. You cannot have effective RDFs if management at the community and interface between the health facility and community are not there. You also need support from the district and province levels. RDFs, whether we like it or not, as they become more mainstream, are going to put pressure on the district and provincial levels to demonstrate effective management of health care services. |
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2. Integration of health services. As drugs become available, the service provision also becomes integrated. As people come for drugs, they also have the opportunity to access other preventive and promotive health care services. |
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3. Because revolving drug funds require a certain measure of community oversight, depending on the country and the involvement, there is the requirement of increasing community participation. Once the drugs become more continuously available and affordable, and the community recognizes it and benefits from it, they are going to become more and more involved in ensuring that the drugs are always there. We need to prepare for it, anticipate it and work with them. |
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4. Local political governance: the link between local political governance, decentralization and control over resources. If you want manifest ownership, it must be reflected in control over resources. To what extent do we want to give control? |
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5. Economic liberalization. There should be access to the private market for replenishment so that these RDFs don't have to rely on only centralized, government-based procurement, supply and distribution systems, but also have access to private systems. Maybe this is only in the emergency setting initially, but later there needs to be a mechanism in place that allows replenishment not only from a centralized source but also from decentralized sources. |
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These are the five areas that are beginning to emerge because of the success of the RDFs, because the RDFs are now becoming more mainstream. |
