Transcript Performance Incentives to Strengthen Supply Chain

Performance Incentives to Strengthen
Supply Chain Performance
Rena Eichler, PhD
Broad Branch Associates
[email protected]
October 6, 2010
National Press Club
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 University’s School of Public Health
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
Where do the break downs in supply
chains occur?
Photo by Nirali Shah, Haiti in 2010
Consider incentives in a “typical” public supply
chain system in a developing country
Port
central store
regional store
POS
Photos by Maria Miralles, Angola 2010
user
Who bears the risk for poor performance?
What incentives do individuals face?
Prescribers & Dispensers
National
Medical
Stores
District or
Regional
Stores
Public Facilities
Mission Facilities
Procurement
Agents
Mission
Sector
Nat’l Buyers
Mission
Sector
Private Facilities
Pharmacies
Private
Importers
Wholesalers
Drug Shops
Other informal outlets
Adapted from Yadav, 2009
Care
Giver
Patient
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
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
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.
Thank you
Reports related to this presentation
are available at www.HS2020.org
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 University’s School of Public Health