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The Supply Chain Within The Framework of Health Sector Reform DR. RENE CASTRO S. The Supply Chain Within The Framework of Health Sector Reform DR. RENE CASTRO S. 8 th semi-annual meeting Washington, DC, 24 - 25 October 2007

CHILE, 2002 • Total population: 15, 116, 435 • 86. 5 % Urban • CHILE, 2002 • Total population: 15, 116, 435 • 86. 5 % Urban • 15 • 50 • 350 Regions Provinces Municipalities

NATIONAL HEALTH CARE NETWORK (S. N. S. S. IN SPANISH) 28 Regional Health Service NATIONAL HEALTH CARE NETWORK (S. N. S. S. IN SPANISH) 28 Regional Health Service Areas Primary Health Centers • Urban 214 • Rural 142 • CECOF 74 ØRural Posts 1, 168

SOURCES OF PROCUREMENT FOR CONTRACEPTIVE SUPPLIES - UP TO 1995 1. USAID Donation APROFA SOURCES OF PROCUREMENT FOR CONTRACEPTIVE SUPPLIES - UP TO 1995 1. USAID Donation APROFA 2. 3. 2. APROFA MINSAL (CENABAST) 4. 3. CENABAST 26 Regional Health Service Areas 4. Regional Health Service Areas Health Centers (Municipalities)

USAID – MINSAL Phase-Out Process John Snow Inc. , I. P. P. F. 1992 USAID – MINSAL Phase-Out Process John Snow Inc. , I. P. P. F. 1992 - 1993 Development of a Logistics Management Information System (LMIS) for MINSAL and health system, in order to determine consumption, estimate needs, ensure max/min levels for inventory control at the service delivery points (health facilities) Training of trainers: midwives of MINSAL and health system in the implementation of the LMIS; development and dissemination of System Operation’s Manual.

REQUISITION AND PROCUREMENT PROCESS FOR CONTRACEPTIVE SUPPLIES, AFTER 1995 1. Health Centers 28 Health REQUISITION AND PROCUREMENT PROCESS FOR CONTRACEPTIVE SUPPLIES, AFTER 1995 1. Health Centers 28 Health Services 2. 2. 28 Health Services Women’s Health Program 3. 3. Women’s Health Program CENABAST 4. 4. CENABAST 5. (I. S. P. ) 28 Health Services (FONASA)

SOURCE OF FUNDING FOR CONTRACEPTIVES Budget for contraceptive supplies Chile 1999 - 2003 700 SOURCE OF FUNDING FOR CONTRACEPTIVES Budget for contraceptive supplies Chile 1999 - 2003 700 M i ll o n e s d e p e s o s 600 500 400 requested allocated 300 200 100 0 1999 2000 2001 2002 Years Annual Budget : P. R. A. P. S. (Per capita, Family Health Plan) U$ 850. 000 per year + Municipal own sources 2003

CENABAST: BACKGROUND • 1924: Ministry of Hygiene and Social Welfare is established; • 1930: CENABAST: BACKGROUND • 1924: Ministry of Hygiene and Social Welfare is established; • 1930: Procurement Center is created • 1952: National Health Service (S. N. S. ) is established. CENABAST becomes a Procurement and Distribution Center • 1979: Health Services National System is created • 1992: CENABAST becomes the procurement agent and distribution entity for the public health sector (all essential drugs, including contraceptives)

MISSION “Carry out, with effectiveness, transparency and efficiency, the procurement of essential drugs, medical MISSION “Carry out, with effectiveness, transparency and efficiency, the procurement of essential drugs, medical supplies and public goods on behalf of the health system network, through leadership in the use of information, technology and knowledge, ensuring the timely availability of the goods required, in order to contribute to the timely and adequate provision of health services to individuals. ”

Procurement Process 1. Clients’ Requirements (Facilities of the Health Services National System: Regional Health Procurement Process 1. Clients’ Requirements (Facilities of the Health Services National System: Regional Health Services, Hospitals, health centers and other member entities) 2. Bidding process (Public Sector Contracting and Procurement Division, Website “www. chilecompra. cl”) 3. Reception of Bids (local and international) 4. Selection of providers 5. Award of contract 6. Reception of Products

An illustration of how the procurement process works…. An illustration of how the procurement process works….

…Hospitals in the public health network are using CENABAST as a mediator, as well …Hospitals in the public health network are using CENABAST as a mediator, as well as the health care centres which are located in the central region of Chile. The new model has resulted in an increase in CENABAST’s transactions, as well as in the share of the National Health Service spending (S. N. S. S). The experience in Chile also illustrates how electronic bidding and information dissemination through the internet are useful tools to mitigate against the risk of corruption. The Chilean case illustrates that not one strategy, but a mix of strategies, can help minimize corruption in pharmaceutical procurement. They include a centralized agency that assumes a role as mediator between suppliers and clients and an electronic biding system that can lead to more cost-effective purchasing. While imperfect, the Chilean experience shows how small but deliberate steps can be powerful in the battle against corruption. It also demonstrates how information technology and good institutional designs can allow governments to become more service-oriented so they perform the job they are mandated to do by the public.

Problems identified in the contraceptive supply chain ü Untimely delivery of information from local Problems identified in the contraceptive supply chain ü Untimely delivery of information from local levels: from Ministry Health Programs to CENABAST, and from CENABAST to Health Services (pending shipments, end-of-year stock balances) üProcurement requests made through multiple channels and by different individuals (roles not clearly defined) ü Slow implementation of processes ü Lack of knowledge of CENABAST’ procurement cycle ü No compliance with shipping schedule established between CENABAST and Regional Health Services

Online Procurement Planning System CENABAST - MINSAL • Online application that supports procurement planning, Online Procurement Planning System CENABAST - MINSAL • Online application that supports procurement planning, and provides online access through the institutional web page • Application with access codes based on users’ profiles: § Needs forecaster: technician or person responsible for the health program at the facility level; § Approval of forecast at the Regional Health Service level (Network Manager, or whomever he appoints); § Approval of forecast at the National level: a staff at the Subsecretariat of Health System Network • System has quality control procedures: it establishes detailed timelines for the activities to be performed for each user’s profile (programming/planning, local validation, national validation)

Online Procurement Planning System CENABAST - MINSAL In process • Validation of users • Online Procurement Planning System CENABAST - MINSAL In process • Validation of users • Training of users and online delivery of users’ passwords and codes • Continuous improvement of the system