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Informed Design: Supply Chain Costing for Policy

Decision Making

Cost-Effectiveness of Vaccine Supply Chains in Mozambique

USAID | DELIVER PROJECT Critical Issues SeriesWashington DC, July 30, 2012

Leah Hasselback

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Why do supply chain costing?

• Costs of getting commodities to health facilities is often overlooked or unknown• Knowledge of operating costs and cost drivers should be used to

make decisions about:• Supply chain design• Implementation• Performance

• Advocate for funding supply chain• Align pricing policies with actual costs• Improve efficiency and effectiveness of the supply chain

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Project History

• 5-year supply chain redesign pilot project implemented in Cabo Delgado province (Dedicated Logistics System)• Old: Collection-based, ad hoc

system• New: Delivery-based, vendor

managed inventory with level skipping• Included supportive

supervision and information system

• Conducted impact evaluation in Cabo Delgado, using neighboring Niassa province as a comparison

Mozambique

Cabo DelgadoNiassa

Nampula

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Impressive results…but at what cost?

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Indicator Baseline Result

Coverage Rates (DPT-Hep B3) 68% 95%

Vaccine stock outs 80% 1%

Cold chain functioning ~40% 96%

DPT1-3 Dropout Rate 12% 3.8%

Trust in the public health system

91% visited in last month despite :•47% of families living over two hours away; •85% of them having to walk to get there ; and•most common reason for vaccination failure being “place of immunization too far.”

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Cost Study

• Objective– Compare the costs of

vaccine logistics in the pilot province and a control province.

• Challenges– Haphazard nature of

supply chain in Niassa.– Wide variety of activities,

participants, frequency, and costs.

– Lack of cost records.– Sufficient recall.

• Methodology– Excel-based cost model

• Transport, personnel, cold chain, vaccine & supplies

• Immunization portion only

– Niassa as comparison province

– Niassa 10% random sample using PPS• 10 health centers in 8

districts• Surveys at health centers,

districts, and province & national transport & maintenance staff

• Total 42 surveys

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Description of Logistics System Assessed

• Cabo Delgado– Project system– Active logistic delivery system– Vaccines reliably delivered to

health facilities each month

• Niassa– Mixed & inconsistent– Collection & distribution– Varies by location & month

Mozambique

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Cabo Delgado: Dedicated Logistics System

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DistrictStorage

ProvincialStore

Health Centers

Outreach Teams

4. Field coordinator office- input data- analyze information- prepare for next trip- training

1. Leave with: - medical supplies

- propane - equipment, parts - knowledge

2. Site visit:- record & stock inventory- service equipment- collect data- supportive supervision

3. Return with:- data

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Niassa: Old System

DPSLichinga

DDSLagos

DDSMajune

DDSMandimba

DDSNipipe

DDSMetarica

DDSCuamba

DDSMecanhelas

Cuamba Regional Desposito

DDSLichinga Cidade

USLichinga

USChiulugo

USBandeze

USLuambala

USLipúsia

USCheia-Cheia

USNamicunde

USMitucue

USCoronga

USChissaua

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ResultsCharacteristic / Comparison Niassa Cabo Delgado Difference

Niassa – Cabo DelgadoAbsolute Costs

Population 1,178,117 1,632,809 -454,692Total Vaccine Logistics Costs (1 yr) $266,563.04 $305,418.80 -$38,855.76

Transport $ 35,968.39 (14%) $ 55,234.48 (18%) -$19,266.09 (-4%)Personnel $75,482.23 (28%) $ 35,376.00 (12%) +$40,106.23 (16%)Cold Chain $31,306.42 (12%) $27.191.82 (9%) +$4,114.60 (3%)Vaccines & Supplies $123,806.00 (46%) $187,616.51 (61%) -$63,810.51 (15%)

Costs Controlling for Population DifferencesPopulation of Children U5 179,892 303,007 -123,115Total Cost Per Child U5 (1 yr) $1.48 $1.08 $0.40

Relative Cost-EffectivenessDPT3 2008 Coverage Rate among children aged 24-35 months

70% 95.4% -25.4%

Total Cost Per Child Receiving DPT-Hep B3 (1 yr)

$6.07 $5.03 $1.04

Relative Cost-EfficiencyNumber of Vaccine Doses Delivered (1 yr)

498,624 889,152 -390,528

Total Cost Per Dose of Vaccine Delivered

$1.50 $1.18 $0.32

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Results: Breakdown of Costs

14%

28%

12%

46%

Niassa

18%

12%

9%

61%

Cabo Delgado

Transport

Personnel

Cold Chain

Vaccines & Supplies

Conclusion: The Dedicated Logistics System (Cabo Delgado) is more cost-effective and efficient, which leads to government savings.

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Using the Results

• Results were used to advocate for expanding the Dedicated Logistics System to other provinces, building on 15 months of advocacy with impact results.

• 3 months later expansion approved by the Minister of Health.

• Today 4 of Mozambique’s 10 provinces implement the Dedicated Logistics System, which now extends to over 445 health centers.

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Thank Youwww.villagereach.org

Leah HasselbackMozambique Country Director

leah@villagereach.orgTel: +258 827324196

Av. 25 de Setembro, 1123-11º. EMaputo, MozambiqueTel: +258 21326446 Fax: +258 21326448