Economics and Financial Management - World Health Organization

ECONOMICS AND FINANCIAL MANAGEMEN T : WHAT DO DISTRICT MANAGERS NEED TO KNOW ?

Department of Health Policy, Development and Services Evidence and Information for Policy, WHO

Making health systems work

WORKING PAPER No. 6

MAKING HEALTH SYSTEMS WORK _______________________________________

ABBREVIATIONS ACT

ANC CEO COGES DHMT DMOH FP GAVI HC MoF MoH NGO OPD PHC PHRplus

PNC PPP TEHIP WHO

Artemisinin-based combination therapy. A combination of artemisinin or one if its derivatives with (an) anti-malarial(s) of a different class. ante-natal care Chief Executive Officer District Health Management Committee (in some Francophone West African countries) District Health Management Team District Medical Officer of Health family planning Global Alliance for Vaccines and Immunization Health centre Ministry of Finance Ministry of Health nongovernmental organization out-patients department primary health care Partners for Health Reform plus – a U.S. Agency for International Development (USAID) project in health policy and systems strengthening post-natal care public-private partnerships Tanzania Essential Health Interventions Project World Health Organization

ECONOMICS AND FINANCIAL MANAGEMENT: WHAT DO DISTRICT MANAGERS NEED TO KNOW?

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EXECUTIVE SUMMARY This paper describes an initial exploration of the question: “Could there be a more coherent global approach to management development activities related to health economics and financial management at the district level?” This is an important question because there is much talk of the need for “management development” – but in practice, few descriptions of what this actually entails. The work is in 3 parts. Part 1 develops a list of core topics in the fields of health economics and financial management which district health managers should know about. Part 2 uses this list of topics to analyse related training materials and management tools. Part 3 summarizes the findings of interviews with district health managers in eight countries. The findings of the 3 parts are then brought together to address the study question. The answer is a tentative “yes” – there are some general points that can be made about what district health managers need to know in the fields of economics and financial management. No management development tool was found which addressed all these points – indeed many of the tools concentrated in great detail on one relatively narrow area of economics/financial management, without dealing with the broad picture of the district health economy. “Health economy” here means all resources devoted to health – from the public and private sectors, as well as from households. Key issues to consider when thinking about management development activities for districts in the fields of health economics and financial management include: 1. Most district health offices receive funding from several sources. Training should reflect this and explore the advantages and limitations of different funding sources. 2. The fragmented nature of funding and resource allocation makes it difficult for managers to get an overview of the health economy of their district. Management development activities should provide district managers with basic information about the health economy of a typical district in their country. 3. Many district managers are expected to be fund-raisers. Management development activities should therefore include relevant skills such as proposal-writing and setting fee levels. 4. Decentralization is a relevant force for many district health managers. District managers need to be aware of the mandate of district administrations and to know how to interact with powerful local institutions. 5. Some skills may be relatively easy to teach, but may be of limited practical applicability. Examples are comprehensive planning, costing and cost-effectiveness analysis. 6. Not all skills are required in all countries (e.g., contracting). 7. Even in countries without strong donor alignment to government systems, development agencies can help district managers by harmonizing their financial and planning arrangements. In some countries, harmonized donor resources give the district manager their only opportunity to make local resource allocation decisions.

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1. INTRODUCTION This paper explores the question: “What should district health managers know about health economics and financial management?” This is part of a wider question being asked by WHO: “Should there be a more coherent global approach to management development activities?” This is an important question because there is much talk of the need for “management development” – but in practice, few descriptions of what this actually entails. The work is in 3 main parts: •

A list of core topics in health economics and financial management for district managers.

•

Comparing this list with a limited number of financial management/health economics tools – what issues do the tools cover?

•

Interviews with district managers to assess what they know and would like to know about financial management and economics. Throughout this work, we interpret “district manager” as the head of the district health team – i.e., the District Medical Officer, District Health Officer or equivalent.

The paper ends with conclusions about the extent to which there can be international generalisations about management development for district health managers in the subject areas of economics and financial management. This work was exploratory – the aim was not to achieve a comprehensive overview of management development tools and district managers’ views about health economics and financial management. Rather the idea was to get a feel for whether the idea of a “coherent global approach to management development activities” had any relevance in this area.


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2. CORE TOPICS FOR DISTRICT MANAGERS - ECONOMICS AND FINANCIAL MANAGEMENT To start the work, a list of core economics/financial management topics was developed by a small “expert group” with economics and accountancy skills. This list is shown in Box 1. The list was developed by discussing the question: “What economic and financial topics do district health managers need to understand?” The list was then used to analyse the management development tools and to develop the questionnaire for interviews with district health managers. Box 1. Core topics for district managers: economics and financial management a.

People and processes

1.

2. 3. 4.

Understand the roles of, and relationships between, various stakeholders in financial management and economics – local government, line ministry accounting and technical/managerial staff, Ministry of Finance and local communities. (This is related to decentralization). Understand own financial management and economic responsibilities and level of delegated decision-making. Understand formal planning, budgeting and expenditure processes and how they are linked together. Understand how figures in the budget are calculated.

b.

Financial management

5. 6. 7. 8. 9.

Core financial information – what documents should the manager be regularly reading, receiving or producing? Specifically, understand statements of income and expenditure. Understand arrangements for release and spending of government budget - salary and non-salary. Capital accounting policy – accounting for fixed assets, depreciation cost of capital, etc. If dual budgeting, accounting and reporting (i.e., development vs. non-development, recurrent vs. capital) – how are they linked? 10. Basic organizational financial controls. 11. Internal and external audit – what they are; when and why they are done. c.

Health economics

12. General information about economics of district, e.g., per capita health expenditure, public and private treatment costs for a very prevalent condition. 13. Awareness of National Health Accounts. 14. Sources of funds into district and relative size. 15. National health financing policies – insurance, fees, etc. 16. Specifically, user fees policy and practice. 17. Understand various aid instruments and their role at district level. 18. Use financial information to make decisions on service delivery. 19. How to do basic costing. 20. Decisions on how much to spend on different line items – drugs, other supplies, transport, maintenance, etc. 21. Cost-effectiveness and its possible uses at district level. Are resources allocated to get the best possible health outcomes? (Is resource allocation informed by a strategic document or set of goals/objectives?) 22. Measuring and enhancing equity in service provision. 23. Contracting and other financial relationships with the non-governmental sector.

3. ANALYSIS OF TRAINING MATERIALS AND TOOLS IN FINANCIAL MANAGEMENT AND HEALTH ECONOMICS The next phase of the work was to identify some management development materials related to financial management and health economics and to analyse these according to the list of core topics given in Box 1. “Management development materials” was interpreted as including both training materials and relevant tools (e.g., in cost analysis). The materials were identified through a search of the worldwide web and by asking key contacts about country-specific materials. Some materials had to be excluded from the analysis because they were out of print or unobtainable for other reasons. As stated above, the aim was not to be comprehensive – rather it was to get an overview on the kind of topics which the materials covered.

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The selected training materials and finance/economics tools were assessed against the list of core topics. The materials assessed were: •

Central Board of Health and Zambia Integrated Health Programme. Financial management course for district and hospital managers. (Tool 1).

•

Health Systems Trust and Department of Health, South Africa. Financial management – an overview and field guide for district management teams. (Tool 2).

•

Management Sciences for Health. Cost Revenue (CORE) Analysis Tool (part of The Health Manager’s Toolkit) (Tool 3).

•

Management Sciences for Health. Financial Management Assessment Tool. (Tool 4).

•

MANGO (Management Accounting for NGOs). Practical financial management for NGOs getting the basics right. (Tool 5).

•

Ministry of Health, Kenya. Team building meetings for District Medical Officers of Health (DMOHs) and District Accountants. (Tool 6).

•

Ministry of Local Government, Uganda. Financial management for non-finance managers in lower local governments. (Tool 7).

•

WHO. Analysis of hospital costs: a manual for managers. (Tool 8).

•

Tanzania Essential Health Interventions Project (TEHIP). District health accounts tool & Costeffectiveness and district cost information system tool. (Tool 9).

The full analysis of the tools is given in Annexes 1 and 2 (pp. 12-16). The terms “management strengthening tools” covers a range of activities. The tools assessed here include: • • • • • •

Materials for training courses (1, 2, 7) Manuals (3) Costing techniques, based on step by step rules and/or ready-made spreadsheets (4,8,9) Meetings with the aim of solving practical problems (6) Assessment of financial capacity (5) Software to standardize budget and planning information in a user-friendly way (9).

The core topics for district managers in financial management and economics were grouped under three headings: • • •

People and Processes Financial management Health economics

With the exception of the costing materials, most tools covered the “People and Processes” issues, though obviously this could be much more precise for country-specific tools. These issues are about the basic organizational context in which financial management and economics operate. Some of the tools take great care to explain the organizational context – particularly who does what – in great detail (e.g., Tool 2 from South Africa). This would seem to be an important area – many of the practical problems identified in the Kenyan meetings (Tool 6) were to do with responsibilities and communication. Most of the tools covered either financial management or health economics issues. No tool dealt with both comprehensively. Nor did any tool cover all the health economics topics identified as relevant to district managers – the most comprehensive was TEHIP (Tool 9). In contrast, several of the tools dealt in detail with financial management, though this tended to be the management of finances from one particular source (either government or NGO), rather than finances from a variety of sources. In many aid-dependent countries, district managers often have to manage several streams of financial flow, from a variety of sources. None of the tools dealt in any detail with this situation - no tool targeted at district managers looked at the management of funds holistically (i.e., giving equal weight to all source of funds). ECONOMICS AND FINANCIAL MANAGEMENT: WHAT DO DISTRICT MANAGERS NEED TO KNOW?

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There is no doubt that managers need to know the basic rules and procedures about financial management. None of the tools seemed to differentiate between the role of the manager and of the accountant/accounts clerk. The main issues here are the level of detail required and whether or not it is worth adapting multi-sectoral financial management strengthening tools for the health sector. Adaptation clearly has its costs, but may bring the advantages of being more interesting, relevant, time-efficient (because irrelevant topics are not covered) and more closely linked to the resource allocation decisions which health managers face. No tools were found which covered a range of “applied health economics” topics. According to the list of core topics, applied economic concepts which may be relevant to a district manager include cost-effectiveness (and hence costing too); a basic knowledge about what is spent on health locally, by whom, and on what; understanding the incentives associated with funds coming from various sources; health financing (context specific); equity and contracting. The one topic which did receive attention – costing – was dealt with in radically different ways. The tools differed widely in the level of detail which they thought relevant. One tool – from the TEHIP project – explicitly concluded that knowing how to do costing studies and cost-effectiveness analyses are not priorities for district managers: •

•

TEHIP concluded that it was not worth spending a lot of time and effort on costing because detailed work revealed very little variance in costs among facilities or over seasons. Costing was better seen as a periodic exercise to estimate the actual costs of interventions. TEHIP also concluded that very little cost-effectiveness analysis was possible at the district level, if only because basic epidemiological data was not available. (The exceptions were ante-natal care and immunizations.) It may well be that what district managers need to know is the latest evidence on cost-effective interventions, rather than how to do their own local cost-effectiveness analyses. Or is it the job of the Ministry of Health Headquarters to be aware of the latest evidence and set guidelines? In various settings, how much discretion do district managers have? Might such knowledge be useful to guide district managers in negotiations with NGOs (or Global Health Initiatives) about interventions, for example? Or is this too ambitious when many district managers lack basic training in public health and financial management?

4. VIEWS OF DISTRICT MANAGERS Detailed interviews were conducted with eleven district managers in eight countries. These interviews give a rich picture of the realities of district health management in low-income countries. Details of the interviews are recorded in tabular form in Annex 3 (pp. 17-26).

The main themes emerging from the interviews are: • • • • • • • •

Many district managers are dealing with multiple funding sources. Many district managers are expected to be fund-raisers – indeed this is often regarded as a crucial element of their work. User fees are an important part of many district health economies. Donor funds sometimes provide the only opportunity district managers have to practise sound financial management and decision-making. Planning and budgeting are not rational processes from the viewpoint of many district managers. Decentralization is a significant issue for many district health managers. Limited awareness of overall local per capita expenditure on health. Contracting was highly relevant to some managers, but not to others.

Many district managers are dealing with multiple funding sources Table 1 below illustrates the multiple sources of funds received in the districts. To further complicate it, each of the columns in the table may represent multiple bank accounts – e.g., fees from various health facilities or funds from donors operating unilaterally. This vision of a manager 4



as a juggler of multiple funds is rarely expressed – and hence, rarely tackled in management strengthening activities. Yet it is the reality for all the countries where interviews were held. Government is clearly an important source of resources and it is vital that district managers understand how to account for government resources. But they need to know the financial management rules for the other funding sources as well – and to be able to think holistically about the money coming into their district and how it should best be used. Table 1. Multiple sources of funds Government Country A (√) through district council

Country C Country D Country E Country F

√ through multiple channels, as complex federal state (√) through district council √ √ √

Country G Country H

√ √

Country B

Fees √

Insurance √

√

X

√ √ √ √ (in some facilities)

√ √ √ X

√ √

X √

Development agencies √ generally managed by DHMT, not district council √ √ √ √ (√) work is contracted out centrally through NGOs – i.e., effectively bipasses district manager √ √

Many district managers are expected to be fund-raisers Several respondents specifically said that they were expected to raise funds for their district and that this was a part of their role for which they felt ill-prepared. (In practice, several were not actively fulfilling this role, but still felt they were expected to do so.) One respondent from Anglophone Africa worried that expectations of raising revenue through fees were too high and that the system had lost sight of the importance of health outcomes. He cited examples of districts delaying in, or failing to, label a disease outbreak as an epidemic (which would entitle clients to free services) and incentives for hospitals to maximize revenue rather than health outcomes. One country was experimenting with many ideas for fund-raising. One manager had been asked to comment on the wisdom of a local authority selling a plot of land or other assets to raise money for building or renovating a health station. Another was raising money from parking, hospital catering and laundry and from providing services to patients outside his own district! As for the multiple funding sources, this pressure to raise money – and the skills involved – are not often talked about or reflected in management strengthening activities. The skills involved are various – they include understanding fees and how their worst effects can be mitigated through cross-subsidization; dealing with donors and writing proposals; and contracting with insurance companies. User fees are an important part of many district health economies 1 All eight countries had user fees – in some countries income was managed by the district. In more others, the management was at the facility level. In five of the countries, income from fees was used to buy drugs. Fee income was also used for buying other basic inputs for health services. At a time when there is some international pressure to abolish fees for primary care, it is vital that their importance in district health economies is understood. If fees are abolished, the money they raise has to be replaced. Where local managers had discretion over how income from

1

Since these interviews were conducted, one of the countries has abolished fees for primary care. ECONOMICS AND FINANCIAL MANAGEMENT: WHAT DO DISTRICT MANAGERS NEED TO KNOW?

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fees was spent, this characteristic should also apply to whatever replaces the fee income. This is not a value judgement about fees – the point is to emphasize the importance of income from fees in many districts, both in terms of absolute amounts and in terms of local flexibility. Five of the eight countries had exemptions for the poor – at least in theory. Interestingly, one district manager had adapted a practice he heard about because there were some local-private practitioners on the DHMT. This was the practice of providing credit for patients unable to pay, if known to facility staff or having a guarantor. Donor funds sometimes provide the only opportunity district managers have to practise sound financial management and decision-making In three of the countries, donor funds were the only significant funds directly managed by the district manager. In two of these systems, government funding for anything other than salaries was virtually non-existent; in the third country, government funds were managed by the district council. In several instances, donor funds had been the only source of training and practical experience in sound financial management. Several of the managers commented on the different financial management systems of different donors. Managers had to spend time learning about these different systems and then implementing them. This shows that the Paris Declaration aim of harmonized financial management systems has real implications at the district level. In addition to the practical advantage of saving time and effort for district managers, donor funds play a very positive role in some countries in terms of empowering district managers and giving them an opportunity to make resource allocation decisions. The more that donors can work together to develop this, the better. The “in some countries” caveat is vital – in well-harmonized countries, the same rules essentially apply to government and donor funds. But in poorly-functioning or highly centralized countries, donor funds can be used to encourage local decision-making. Planning and budgeting are not rational processes from the viewpoint of many district managers Only two countries described a system of reasonably effective decentralized planning and budgeting. In three others, the government planning cycle was in effect defunct; in another the system was dominated by incentives to ask for as much of possible of everything, in the sure knowledge that line items would be cut. Two countries were highly centralized - in one of these, district planning for donor and fee income seemed to work reasonably well. There is often an assumption that management strengthening should begin with training in formal planning and budgeting. But many district managers do not work in an environment where holistic planning and budgeting takes place. Any management strengthening that ignores this reality may be seen as theoretical and irrelevant – there must be an understanding of what district managers can realistically control or influence. For example, it may be sensible to spend more time on strengthening skills related to the use of fee income than on planning for changing the numbers and mix of human resources – even though salaries account for a much higher percentage of the total budget. This would make sense if district managers have considerably more influence over the use of fee income than over expenditure on salaries. In the country where there was an incentive to ask for as much money as possible in the district budget, it would be wrong for management development activities to ignore this, even if the system as a whole is viewed as irrational. Managers need to be taught how to operate best within their own system. Decentralization is a significant issue for many district health managers. Decentralization was a relevant force for almost all the managers – sometimes this was planned decentralization, sometimes de facto because of a very poorly performing central level. One Asian respondent enjoyed recent moves towards greater decentralization, which seemed to provide him with more autonomy and job satisfaction. In three countries there seemed to be some dissatisfaction that decentralization limited the autonomy of the health sector – several managers expressed doubts about the quality of the work of district administrations, because they were overly-politicised and/or because of the level of their skills. In one Francophone country, actual spending of the available budget was low – the bottleneck was said to be with ill-trained local mayors and their staff. In an Anglophone country in Africa, the District Assembly had taken over decision-making in recent years – the manager seemed to fear that if donors moved to general budget support, he would have no discretionary funds under his authority at all. 6



One manager from Anglophone Africa was frustrated by the highly centralized administration of her country, saying that the central Ministry was just starting to “allow” district to develop annual operational plans. Limited awareness of overall local per capita expenditure on health Respondents from six of the eight countries did not seem to have thought before in terms of overall per capita expenditure on health in their district. This question epitomises the “stewardship” role of a health manager, seeing themselves as responsible for making all local health expenditure as well-spent as possible. In practice, many district health managers do not seem to think in this way. As an interesting aside, two West African respondents independently volunteered the opinion that the rise of ACTs in recent years for malaria treatment has significantly increased levels of household expenditure. Contracting was highly relevant to some managers, but not to others Understanding about health service contracts was relevant to district managers in four of the countries. In two countries, contracting was intended to complement government services. In a country with a complex emergency, one district had the extreme situation where all responsibility for service delivery had been contracted out to the non-governmental sector.


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5. LINKING THE INTERVIEWS TO THE REVIEW OF MANAGEMENT

STRENGTHENING TOOLS This section links the interview findings with the analysis of management strengthening tools. Table 2 compares some of the findings and conclusions from the work on tools with the interview results. Table 2. Management strengthening tools and the realities of district health economies Issue as emerged in review of management strengthening tools

Issue as emerged in interviews with district health managers

Several tools dealt in detail with financial management, though this tended to be the management of finances from one particular source (either government or NGO), rather than finances from a variety of sources.

Health managers deal with multiple sources of funding. As they often do not administer salaries, government funds are not necessarily the most significant in terms of local decision-making. The management of revenue from fees and development agencies is particularly important.

Understanding the incentives associated with funds coming from various sources is rarely taught, as separate funding sources tend to be dealt with in separate tools.

Linked to the row above, understanding the advantages and disadvantages of various funding sources is a crucial skill for health managers. When is it most appropriate to charge fees? What might be the advantages and risks of a strong dependence on a particular donor?

Some tools dealt with costing services in great detail. One tool concluded that it was not worth spending a lot of time and effort on costing at the district level.

In most countries, the nature of planning and budgeting means that costing is not a very useful exercise for formal government planning. In contrast, estimating costs is useful when developing a proposal for donor funds.

One tool concluded that there is very little practical opportunity for district managers to make decisions based on local cost-effectiveness analyses.

The interview results confirm this.

Most tools do not encourage a basic knowledge about what is spent on health locally, by whom, and on what.

Many of the managers had not thought about local per capita expenditure before.

6. CONCLUSIONS This work is an initial exploration of the question: “Could there be a more coherent global approach to management development activities related to health economics and financial management at the district level?” The answer is a tentative “yes” – there are certainly some general points that can be made about what district managers need to know. No tool was found which addressed all these points – indeed, many of the tools concentrated in great detail on one relatively narrow area of economics or financial management, without dealing with the broad picture of the district health economy. (“Health economy” here means all resources devoted to health – from the public and private sectors, as well as from households.) The following is intended as a checklist of issues to consider when thinking about management development activities for districts in the fields of health economics and financial management. Obviously, not all the issues are relevant to all countries but the list as a whole points towards activities which look at whole district health economies, rather than at funding from one particular source.

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Most district health offices receive funding from several sources District health managers typically have to deal with funding from a variety of sources – yet management development activities rarely reflect this reality. There are a number of practical ways in which tools could help to develop relevant skills: •

• •

Providing overall financial management training, rather than only for one particular source at a time. For all managers, it was important that they understood government systems. But knowledge of how to manage fee income and donor funds, for example, was relevant to many managers too. Analysing the advantages and limitations of various funding sources. Developing techniques for effectively combining resources from different sources.

The fragmented nature of funding and resource allocation makes it difficult for managers to get an overview of the health economy of their district District managers should know their districts well. This includes basic knowledge about: • • •

Sources of funding for health, including out-of-pocket spending. How money is spent according to various categories – including by item (salaries, drugs etc.), by health facility and by broad disease category. What is achieved in terms of health outcomes?

Such broad overviews are generally overlooked by management development tools. Each manager does not need to have exact district-specific data – but management development can provide him/her with basic information about the health economy of a typical district in his or her country. Many district managers are expected to be fund-raisers Many district managers require skills in fund-raising. The exact skills required may differ from country to country – for example, writing proposals for donors, setting fee levels and negotiating with insurance companies. Managers also need to understand the possible tensions between health impact and fund-raising, particularly with respect to fees and insurance. Decentralization is a relevant force for many district health managers Many countries have at least some degree of effective decentralization, meaning that health authorities have to work with, and often work through, district administrations. Relations with these district administrations are crucial – how, for example, should a district manager behave when he has no direct power over expenditure, but has a significant advisory role about how the health budget is spent? Some skills may be relatively easy to teach, but may be of limited practical applicability Textbook skills such as planning, costing and cost-effectiveness analysis may be of limited relevance to district managers if there is no room in the system for them to make decisions based on these skills. For many managers, for example, a very basic approach to costing may be appropriate, as there are many costs which they may not be able to influence. Similarly, an understanding of what cost-effectiveness is – and the importance of value-for-money – may be relevant, but district managers are unlikely to need a detailed knowledge of how to conduct costeffectiveness studies. Not all skills are required in all countries There are, of course, considerable variations among countries – for some district managers, it is important to understand contracting and other aspects of public-private partnerships. In other countries, these topics are not a priority at all. The most extreme case in the small sample in this paper was a country in a complex emergency where all responsibility for service delivery was contracted out. Many of the core financial management and economic topics were not immediately relevant to district managers there – but they needed to understand the role of district public health administrations in a fully contracted-out system. This example also serves as a warning about developing a hierarchy of skills – for example, thinking that there are core skills, and advanced skills for more mature management systems. In this case, the most relevant skill in an emergencycountry is in an area which is often thought of as an “advanced” economic skill – managing contracts. ECONOMICS AND FINANCIAL MANAGEMENT: WHAT DO DISTRICT MANAGERS NEED TO KNOW?

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Harmonizing financial management systems can bring real benefits at the district level Harmonizing financial management systems can simplify the work of district managers and in some circumstances can be used to give district managers one of their only opportunities to make local resource allocation decisions. Finally, tools found to be holistic and practical in terms of an overall economics/financing content may be worth exploring as to whether such tools, used in one country, can easily be adapted for use in other countries.

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7. ANNEXES Annex 1. Assessment of training materials and tools Title 1. Financial management course for district and hospital managers Organization Central Board of Health and ZIHP, Zambia Date 2002 Objective “To develop the understanding and skills of district and hospital managers in their responsibilities as custodians of health resources”

Audience Length Suitability for district staff – tailored to local degree of decentralization Teaching methods Availability Use of local data or examples A1. Understand roles of stakeholders A2. Understand own responsibilities A3. Formal planning, budgeting and expenditure processes A4. How budget figures calculated B5. Core financial information B6. Statements of income and expenditure B7. Release and spending of government budget B8. Capital accounting policy B9. Dual budgeting B10. Basic financial controls B11. Internal and external audit C12. Economics of own district. C13. National Health Accounts C14. Sources of funds into district C15. Health financing policies C16. User fees policy and practice C17. Aid instruments C18. Use of financial information C19. Basic costing C20. Decisions about line items C21. Cost-effectiveness; possible uses C22. Equity C23. Contracting; other relationships with nongovernmental sector

District and hospital managers 5 days teaching

2. Financial management – an overview & field guide for district management teams Health Systems Trust and Department of Health, South Africa 2002 To provide a framework – not a how-to manual 1. Make financial management concepts clear & accessible to help District Health Managers 2. An overview of usable financial management concepts, processes and techniques for a district 3. Explain financial management cycle and role of district managers. District health managers 40 pages

Yes, country-specific and audience-specific

Tailored for South African districts

Discussion, activities, group-work, use of financial documents, practical examples Not located on Internet.

Can be downloaded. http://www.hst.org.za/publications/484

Uses real-life forms

Some local examples; clear local context

Through context √ √ For expenditure processes

√ √ √

X

√

√ √ √

√ √ √

√ √ √ √

X X √ X

X X √ X √ Management of fees √ A little 1 session (4.5 hours) on linking information to decision-making – using broad budgeting information, rather than costs X √ X X X

X X X X A little X √ For budgeting √ X √ X


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Title

3. Cost Revenue Analysis Tool [CORE] (part of The Health Manager’s Toolkit) Management Sciences for Health 1998 Teach how to use the Cost Revenue Analysis Tool to make sound management decisions about covering costs and valuefor-money Senior and mid-level managers of health and/or family planning organizations

Organization Date Objective

Audience

4. Financial Management Assessment Tool (FIMAT) Management Sciences for Health 2004 FIMAT is a method for assessing the current capacity of an organization to manage its finances and provides ideas about improving that capacity. Health managers – public sector at HQ, district and facilities; NGO and private. External consultants. Doing the assessment and responding to the findings requires a substantial commitment in terms of time and determination. The Tool stresses the need for an “ongoing commitment from senior management to allocate resources for the assessment and for carrying out the recommended improvements.” Especially suitable for an organization with subsidiary units. Assumes considerable autonomy for that organization – more than many districts would have.

Length

Very varied, depending on organization size, availability of data and detail of analysis. Example is 4 weeks for 3 health facilities.

Suitability for district staff – tailored to local degree of decentralization

Not country-specific; assumes managers have considerable autonomy to make decisions.

Teaching methods Availability

Includes diskettes with worksheets and explanations on how to use them Available for sale

Use of local data or examples

All (fictitious) health examples

A1. Understand roles of stakeholders

X

A2. Understand own responsibilities A3. Formal planning, budgeting and expenditure processes A4. How budget figures calculated

X X X

Global tool – examples of how it has been used √ In terms of this assessment, not stakeholders in a public sector system √ In terms of this assessment Not a “how to” – this is assessing capacity to perform these functions As A3

B5. Core financial information

X X X

As A3 As A3 As A3

X √ Links capital and recurrent expenditure. X X

As A3 As A3 As A3 As A3

Collection and analysis of local cost data. X Focuses on fees X √ X √ Cost information √ √ More about quality and cost recovery X X

X X As A3 X X X As A3 As A3 As A3 X As A3 X

B6. Statements of income and expenditure B7. Release and spending of government budget B8. Capital accounting policy B9. Dual budgeting B10. Basic financial controls B11. Internal and external audit C12. Economics of own district. C13. National Health Accounts C14. Sources of funds into district C15. Health financing policies C16. User fees policy and practice C17. Aid instruments C18. Use of financial information C19. Basic costing C20. Decisions about line items C21. Cost-effectiveness; possible uses C22. Equity C23. Contracting; other relationships with nongovernmental sector 12

For sale by MSH. www.msh.org



Title

5. Practical financial management for NGOs - getting the basics right

Organization

MANGO (Management Accounting for NGOs) 2005 Good practice in financial management for NGOs. This will enhance the achievement of objectives, accountability, confidence in the NGO and sustainability. NGO managers

Date Objective

Audience Length Suitability for district staff – tailored to local degree of decentralization Teaching methods Availability Use of local data or examples A1. Understand roles of stakeholders A2. Understand own responsibilities A3. Formal planning, budgeting and expenditure processes A4. How budget figures calculated B5. Core financial information B6. Statements of income and expenditure B7. Release and spending of government budget B8. Capital accounting policy B9. Dual budgeting B10. Basic financial controls B11. Internal and external audit C12. Economics of own district. C13. National Health Accounts C14. Sources of funds into district C15. Health financing policies C16. User fees policy and practice C17. Aid instruments C18. Use of financial information C19. Basic costing C20. Decisions about line items C21. Cost-effectiveness; possible uses C22. Equity C23. Contracting; other relationships with nongovernmental sector

78 pages, plus appendices Not applicable – this is for NGOs. A manual – “not a substitute for a training course” Free of charge in English and French from http://www.mango.org.uk

6. Team building meetings for District Medical Officers of Health (DMOHs) and District Accountants Ministry of Health, Kenya 2003 “To provide a participatory environment to allow DMOH and District Treasury personnel to share ideas, experiences and problems” (related to government and project funds) DMOH and District Treasury personnel (also district hospital managers, public health nurses and internal auditors) Series of meetings throughout the country Entirely in context of Kenyan decentralization Participatory meetings Consultant’s report – not in public domain

Global product – global examples

√ All based on local experiences

√ For NGOs. √ For NGOs. √ For NGOs. √

√ Raised as an issue √ Raised as an issue √ Not systematically – highlights problem financial areas X

√ √ Not applicable

√ Some aspects raised as issues √ Some aspects raised as issues √ Major issue

√ √ √

X X √ Raised as issue √ A little

Not applicable X Not applicable Not applicable (Different context.) X √ X X X X X

√ Partial X √ Some X X Some project money X X X X X X


13


Title Organization Date Objective

Audience Length Suitability for district staff – tailored to local degree of decentralization Teaching methods

7. Financial management for non-finance managers in lower local governments. Ministry of Local Government, Uganda. 2003 “To update participants from lower local governments on emerging government standards for financial management systems within the scope of mandated operations” (budgets, performance targets, accountability) Non-finance managers in lower local governments (e.g. districts) 5 days training Specifically geared towards “lower local governments”

8. Analysis of hospital costs: a manual for managers WHO 2000 “Provides a framework for deriving and analysing hospital costs” and using cost data for decision-making

Managers at various levels with responsibility for hospitals 100 pages Global tool – managers to use parts of it they find relevant Manual has been used as the basis for workshops. For sale from WHO. English language only.

Availability

Should be available on www.molg.go.ug , though the current author has never found these pages active.

Use of local data or examples

Specifically about the Ugandan system; a (very) few Ugandan examples √ √ √

X X X

Not in detail

X

√ √ √

X X X

√ Linking revenue and capital expenditure not explored √ √

√ But not country-specific policies X

C13. National Health Accounts C14. Sources of funds into district C15. Health financing policies C16. User fees policy and practice C17. Aid instruments C18. Use of financial information

X - Not a health-specific activity X X – Specifically about government funds No Just practical accounting X Very generically

C19. Basic costing

Very briefly

C20. Decisions about line items C21. Cost-effectiveness; possible uses C22. Equity

X In passing X X

Encourages finding out about hospital costs X X X X X Yes, within a hospital, between hospitals and appropriateness of hospital versus other settings. Manual about how to cost. Basis for countries to develop their own hospital costing methodologies. √ X Between hospitals X

A1. Understand roles of stakeholders A2. Understand own responsibilities A3. Formal planning, budgeting and expenditure processes A4. How budget figures calculated B5. Core financial information B6. Statements of income and expenditure B7. Release and spending of government budget B8. Capital accounting policy B9. Dual budgeting B10. Basic financial controls B11. Internal and external audit C12. Economics of own district.

C23. Contracting; other relationships with nongovernmental sector 14

X

X X



Title

9. District health accounts tool (DHAT) & Cost-effectiveness and district cost information system tool (CEDCIST) Tanzania Essential Health Interventions Project (TEHIP) 2001-4

Organization Date Objective

Audience Length Suitability for district staff – tailored to local degree of decentralization Teaching methods Availability Use of local data or examples A1. Understand roles of stakeholders A2. Understand own responsibilities A3. Formal planning, budgeting and expenditure processes A4. How budget figures calculated

DHAT: software tool to analyse budgets in a standard way to generate graphics that show how plans (or commitments) for spending coalesce as a complete plan. Shows planners how individual spending options translate as % of overall budget, where funding comes from, and what is being funded. CEDCIST: tools to use periodically to estimate actual costs of interventions. District Health Management Teams Tools used in long-term action research programme Tailored for Tanzanian districts. See www.idrc.ca/en/ev-3170-201-1-DO_TOPIC.html This website has contact details for obtaining the tools. Designed to use districts’ own data.

Links into these processes by making data more accessible. Helps develop budget from priorities and interventions

B5. Core financial information B6. Statements of income and expenditure B7. Release and spending of government budget B8. Capital accounting policy B9. Dual budgeting B10. Basic financial controls B11. Internal and external audit

√ (Uses these, rather than teaches about them) X

C12. Economics of own district. C13. National Health Accounts C14. Sources of funds into district C15. Health financing policies C16. User fees policy and practice C17. Aid instruments C18. Use of financial information C19. Basic costing

√ X Yes, captured by tool X X √ All sources of finance √ Developed cost tracking tool but concluded that this better used periodically rather than regularly, as little variance in cost between facilities or over seasons. √ Yes, but based on generic cost-effectiveness data, not local. Yes, but based on generic costeffectiveness data, not local. Local data was generally not available, except for immunization and ante-natal care. Budgets were set according to priorities defined by the burden of disease. √ X

C20. Decisions about line items C21. Cost-effectiveness; possible uses C22. Equity C23. Contracting; other relationships with nongovernmental sector

X Combines capital and recurrent cost considerations. X X


15


Annex 2. Notes on Tools 1.

2.

3.

4.

5.

6.

7.

8.

9.

Financial management course for district and hospital managers Central Board of Health , Zambia Financial management – an overview & field guide for district management teams, Health Systems Trust and Department of Health, South Africa Cost Revenue Analysis Tool [CORE] (part of The Health Manager’s Toolkit), Management Sciences for Health Financial Management Assessment Tool (FIMAT). Management Sciences for Health Practical financial management for NGOs, MANGO Team building meetings for District Medical Officers of Health (DMOHs) and District Accountants, Kenya Financial management for non-finance managers in lower local governments, Ministry of Health, Uganda Analysis of hospital costs: a manual for managers, WHO

Very strong focus on financial management. Lots of health-related examples and strong local contextualization.

District health accounts tool (DHAT) & Cost-effectiveness and district cost information system tool (CEDCIST) Tanzania Essential Health Interventions Project (TEHIP)

DHAT was designed to give planners a quick overview of what bearing local health indicators had on budgeting and planning priorities. Colourful charts and graphs allow managers to compare information easily and quickly and are much more readily understood than tables of numbers. The idea behind these tools was to empower district officials to deal with local needs. District planners are more likely to use a tool if it can help them to solve a variety of routine problems. DHAT serves about 10 routine, minor functions in addition to the main task it was designed to accomplish.

Financial planning and management specifically for health managers. However, this is not a “parochial” health document – it is firmly placed in the wider civil service environment. Has the advantage of many health examples. Discusses planning and allocating resources when there is less money than needed. Begins to link financial management with context and health economics. Detailed costing work for a fairly specific context – facilities that charge for services and organizations/facilities with a high degree of autonomy, including over-staffing. Needs adapting and localizing for public sector use. Good examples of how cost information used to improve service delivery. To assess an organisation’s financial management capacity and plan for its improvement. Not applicable to lower levels of a government system acting independently. Could be recommended for use by, e.g., an NGO with a number of health facilities. Financial management for NGOs; includes a section on Designing a Finance System.

Basic management of bank accounts was raised as a problem.

Very specific objective of transferring knowledge and skills about budgeting and accounting. Clearly links this to outputs, but this not explored in detail. Health managers could perhaps benefit from a complementary course that applied these materials to decision-making in the health sector? Very specific subject matter and target group. MSH has a planning and analysis tool that policy makers, hospital administrators and financial and department managers can use to improve hospital performance and make decisions about resource allocation within or among hospitals. (HOSPICAL: A tool for allocating hospital costs, 2001)

CEDCIST - the Cost-effectiveness and district cost information system tool - was called "the tool that got away" by the TEHIP project team. It became apparent that two vital ingredients for cost-effectiveness analysis of health interventions — costs and coverage — were not available to district planners. A cost-tracking tool was developed to capture facilityspecific intervention costs from a bottom-up approach. It found very little variance in costs between facilities or over seasons so it did not appear practical to run it continuously. It is a useful tool to apply periodically to estimate the actual costs of interventions. Districts still lack practical tools to estimate actual coverage of essential health interventions (with the exception of immunization and antenatal care where denominators are known). Without these, incremental cost-effectiveness considerations for decentralized planners are not possible, and planners are restricted to general information regarding generic cost-effectiveness from other settings. This represented a considerable shift in thinking from the original idea that understanding the incremental cost-effectiveness of health interventions was a very important tool for district planners.

16


Annex 3a. Findings of interviews with district managers – 3 countries Issue Country A (1 district, Anglophone Africa) Country B (2 districts, Anglophone Africa) District population 245,000 300,000; 638,000 No. health facilities 1 hospital and 6 health centres

DHMT membership

Government Funding

17

Accounting for government funds

“That’s for the accountants, not me” (even though he supervises the accounts staff)

Decentralization

District Finance Office of the District Assembly Effectively holds and manages government health money. DHMT can only request payments within narrow rules.

Accountant not a member. Government (2 ministries, different levels) + fees + donors Federal state. Running costs from MoH; salaries from MoF. PHC funded through local government from federal level. Secondary care funded from federal level to state government. Tertiary and specialist hospitals funded directly from federal level to facility. So government funding disjointed and uncoordinated. Reform planned. In practice, only salaries of any significance. E.g. one hospital received about $105 in a year for running costs. Salaries centrally planned and managed. In practice, CEOs (i.e. district health managers) don’t control any of these funds. Ultimately responsible but in practice do very little, because very little funding (apart from salaries) ever arrives. CEOs were unfamiliar with the Nigerian chart of accounts or accounts classification codes.

In theory, a very decentralized system, but very few resources, and even fewer discretionary resources.

District health director approves expenditures (but generally according to pre-set plans/line items) and supervises accounts staff. One district describes a more formal system – submits activity report and receipts to get funding for next activity. May be an audit, especially when district health director moves post. Then judged by standards in which s/he may not have been trained. COGES has administrative, financial and planning authority for health services in the district. Led by generally powerful mayor. Fund-raising role; can access funds direct from donors.

MAKING HEALTH SYSTEMS WORK ______________________________________


Sources of finance

Accountant not a member – invited when relevant. Government + fees + insurance premiums + donor pooled funds from centre + Global Health Initiative (GAVI) See under “decentralization”.

Country C (2 districts, Francophone Africa) 254,000; 102,000 District #1. 1 district hospital, 23 health posts (6 currently closed), 42 health huts (16 non-operational) District #2. 1 district hospital, 12 health posts, 32 health huts. Accountant a member of DHMT in one district, not in the other. Government + pooled donor funds + individual development agency/NGO support + fees (facility level) + insurance payments + Global Health Initiative (GAVI) Government and pooled donor funds go to district council. MoH decides line items; elected district management committee (COGES) has little flexibility over allocations, although this partly due to lack of appropriate management skills. District health director establishes expenditure needs of DHMT and prepares documentation for approval and spending by the COGES. District health director can obtain drugs directly from procurement agent up to set limit; COGES pays afterwards. Major capital items paid through the state’s consolidated investment budget. About 20% of central government funds go to district health director, through regional financial controller. COGES bipassed because experience has shown that often delays with COGES. This 20% can be spent on certain practical items – supplies for offices, building maintenance and vehicles. This 20% generally all spent – unlike other parts of the budget.

Country B (2 districts, Anglophone Africa)

Donor funding

Unlike government money, donor pooled funds managed by DHMT. Not sure if in the future, donors will move to budget support.

Yes, but limited. Only funds where District CEO at all involved with accounts – occasionally checks finances if release of next tranche dependent on sound accounts. Different donors have different demands about financial management practices.

User fees

Yes. Exemption system very unclear (and in practice scarcely operational, even for TB) because (a) superseded by new insurance law; (b) government very rarely paid up for exemptions anyway. In this district, DHMT provides credit services for patients unable to pay, if known to facility staff or having a guarantor. This is a practice learnt from private practitioners in the district. For emergency care, patients are treated first, then detained in hospital until relatives pay the bill. Disincentive to declare an epidemic, because then no fees can be charged. Fees not displayed for public to see. Hospital income often seen as more of an incentive than health outcomes.

Yes. Mostly for OPD and drugs, as most hospitalization, labs and diagnostics in private sector. No exemptions. Central MoH provides some guidance on charges, accounting for income and fee retention. A large proportion of fee income is sent to the central MoH and MoF. This dilutes motivation to ensure effective use of these funds. Routine fees set nationally and said to be widely known by the public. Occasionally a CEO will summarize and report on income generated.


Also a Drug Revolving Fund - new. CEO responsibility to be involved with decisions about drug procurement.

Country C (2 districts, Francophone Africa) Local councils (headed by mayors) expected to contribute to district health budget (in principle about 8% of their budget) but rarely if ever do so. May be because health seen as a relatively wealthy sector - MoH funds are much the largest source of decentralization funds coming from central Government. Also, one donor matches fourfold the local council contribution to the health budget in some districts – a de-motivating factor for districts not in this scheme? COGES (including their chairpersons) often lack necessary skills for the work. District rarely uses all the funds from central MoH - council often not able to organize payment for the needs identified by the DHMT (problem of skills, not money shortage). Some line items much more problematic than others. Can go straight to district councils, not necessarily through MoH. District health director often does spending approvals for donor funds – though according to pre-set plans. Most donors expect regular financial reports and some evidence of financial controls. Donors vary greatly as to how much of the promised funds they deliver. Fees charged for all curative and preventive services, including vaccination and ante-natal care. General meeting of the health committee decides the tariffs (within range given by MoH) - cannot be changed until another general meeting, even if prices of inputs have increased. Managed by elected facility health committees – all fee income kept at facility level. Health committee purchases drugs and other necessary items, including equipment. Have to keep 10% of surplus from drug sales for services for the poor. Social worker decides who poor and level of subsidy needed. District health director is signatory to committee’s account and co-signs with the committee President to release funds. The district health director is responsible for monitoring and controlling committees’ spending, though in practice this depends on the director’s skills. Fee rates posted public ally. Adding fees and government contribution, fees accounted for 14% income. Of the fees income, 62% was spent on drugs.


Country A (1 district, Anglophone Africa)

18

Issue

Country A (1 district, Anglophone Africa) Yes.

Country B (2 districts, Anglophone Africa) No.

Planning & budgeting

Formal planning/budgeting for government and donor funds. Incentive is to bid for as much as possible within central guidelines and ceilings, even if doesn’t make sense (e.g. worth asking for vehicle maintenance budget, even if no vehicle). Evidence/previous experience not considered. Procedure-driven.

Very little. Some planning and budgeting starting for donor funds. In effect public health system dysfunctional. No involvement in government budgeting.

Awareness about overall Health expenditure PPPs

Yes. (ACTs said to have trebled household health expenditure.)

Not known, but willing to estimate.

Yes. Nine private clinics collaborate with the DHMT to deliver PHC services to communities. Includes social mobilizationn, home visits, FP, immunization, nutrition, ANC, delivery, PNC and training. Government funds – rarely, and only if to a similar item (e.g., petrol and engine oil) Donor funds – yes sometimes, if good justification given

Major (donor-supported) efforts to develop PPPs for referral co-ordination, communications, ambulance services etc. This requires strengthening of financial management in the District Health Board.

No job orientation before it became DMOH. Attended a 4-month course abroad on decentralized resource management. Useful. 2 week course on health insurance. (PHRplus/DANIDA). Good on practical financial management, accounting, audit. 1 week course on government financial regulations. Too hurried and unclear.

No job-specific training. Functional, piecemeal training from development partners – e.g., about a previous DRG. Training included financial management, procurement best practice, prescribing, etc. Another donor-sponsored training on financial management and business planning. About to be trained for the new Drug Revolving Funds, including practical financial management training. No. The managerial chain of command is not functioning.

Viring (i.e. the authority to move funds from one input line item to another) Training

Any feedback about resource management?

Only when there’s a problem.

Country C (2 districts, Francophone Africa) Developing community-based health insurance schemes – 3 so far. Belgian support. In theory, local councils set priorities and plans, with technical support from district health director. In practice, the expenditure system described above – with central MoH setting line items – is the dominant force. More realistic plan is written for income from fees and donors – more flexibility in how to spend this revenue. An operational plan is drafted, given to financers to say what they will fund, and then revised accordingly. This revised plan then validated by MoH and expenditure done against this plan. Not known. One respondent had some idea of how to calculate it. None mentioned.

Did not see this question as of practical relevance, as there is virtually no control over any government funds. District #1. Health economics training -18 months Masters level course. Currently pursuing a public health course, part time over 2 years. District #2. Done public health, which involved some health economics. No specific financial management training. Learns from the internet.

19



Issue Insurance


Country A (1 district, Anglophone Africa) Yes.

Country B (2 districts, Anglophone Africa) Yes, but with little practical experience.

Country C (2 districts, Francophone Africa) District #1. Yes, confident. District #2. “Slightly confident.”

Regards DMOHs as having a responsibility to raise funds.

High-level gross mismanagement of resources. With such limited government funding, what can we do? “The parts of our car {i.e. the local health system} are almost assembled, but with no fuel the vehicle still will not run.” Questionnaires gave impression of disenfranchised managers who feel they have little control over district resources.

Regards DMOHs as having a responsibility to raise funds.


20

Issue Confident in financial management and accounting? Issues raised

21



Annex 3b. Findings of interviews with district managers (continued) – 2 countries Issue Country D (1 district, Francophone Africa) Country E (2 districts, Asia) District population 196,000 One district 190,000; the other (urban) district 300,000 No. health facilities Government: 1 district hospital, 1 polyclinic, 3 health centres, 18 Districts consist of communes. Every commune has a health station. In addition, there are dispensaries, 3 health huts, 3 HIV testing centres. hospitals (2 in the urban district) and inter-commune polyclinics. Non-government: 1 NGO (religious) hospital and 4 health centres, 1 private dispensary, 2 NGO health huts, 1 private HIV testing centre. Several unauthorised facilities in the district. DHMT membership Accountant and Director of Social Welfare are members. Sources of finance Central government money for salaries and hospitals + donors + Government + fees for clinical and non-clinical services + insurance + (in 1 district only) fees. modest pooled funds. No discrete donors or Global Health Initiatives. District received funds from 2 multilaterals, 2 bilaterals and 2 Global Sometimes a local authority sells a plot of land or other asset to raise money for building or Health Initiatives. renovating a health station. Government In practice, only for salaries (which are paid regularly) and the district Government money for recurrent expenditures is sent to district health bank account at Funding hospital. Not for the peripheral facilities’ needs. district treasury. District Department of Finance supervises DHMT spending. Official budget generally not realized – i.e., much of the money never Provincial Department of Health provides funds for national vertical programmes, training, actually arrives in the district. For each of the years 2001-5, the Medical equipment and other capital. district had been allocated 10-12 million CFA non-salary budget and had received no money at all from central government. Accounting for Supervises accounts staff. Approves all expenditures. Supervises accounts staff. Sends monthly, quarterly and annual government funds Sends monthly financial reports to regional director. reports. Only salary information is computerized. Decentralization De facto, there is a great deal of decentralization because virtually Yes. District Centre managed administratively by District People’s Committee (personnel, no funds reach the district from central government apart from finances), but supervised clinically by Provincial Department of Health, which funds vertical salaries. programmes. The first DHMT Deputy Director interviewed likes decentralization, as it has given him more freedom in financial management. He can now make decisions about the level and purpose of spending which used to be made by district Department of Finance. He can organize private investment in the health sector, decide what services to provide and staff recruitment, numbers and remuneration. However, all these decisions must comply with existing regulations, which have not kept pace with decentralization - this limits the real autonomy. (All this despite health seeming to be one of the less radically decentralized sectors). The second Deputy Director interviewed generally agreed with the first. He too felt that decentralization had improved things since 2001, but that there were still limits on the degree of local autonomy. He wanted service providers to be able to work in a more business-like way.


User fees

Country D (1 district, Francophone Africa) Generally, directly to districts, bypassing central MoH. (Poor government/donor relations.) Yes – for all services. MoH gives guidelines for fees, but official rates adapted to district situation by DHMT. Government directs fee income to be used as follows: • Purchase of drugs – 60% • Overheads etc. of peripheral facilities – 30% • Payments for services for the poor – 5% • Regional solidarity – 5% (for salaries of personnel engaged by the regional authority and placed in health facilities to fill gaps). Part of government budget for the hospital used to pay for services for the poor.

Insurance

No.

Planning & budgeting

Formal planning cycle incorporates local facility plans with district plans. Plans developed by looking at past experience, priorities and costs (done by accountant). Annual district and regional plans have to be consistent with the 5-year national health plan. Plans submitted to MoH, which then allocates budgets to each district – but not consistently linked to the plans and budgets submitted. In practice only salaries and amount for hospitals received – see “government funding” above.

Country E (2 districts, Asia) Not significant. First respondent: Fees only cover drugs, other consumables and operational costs - not full cost of services. Fees set by MoH/MoF. In theory, 70% of fees for cost recovery and 30% to supplement staff salary. In practice, less than 30% spent on salary supplementation. Services provided within national vertical programmes, are free. The poor should have insurance (see under “insurance”) but this does not always happen. So the poor are exempt from fees – they are identified through the “subjective feeling” of staff. Expenses for the poor are claimed after the event from the health care fund for the poor. Few cases per year – say 6 or 7. Government guidelines exist on how to use the health care fund for the poor. Disabled also exempt. DHMT Deputy Director did not know what the fee levels are. A fees schedule is posted for the public to see. The second respondent concurred with most of the above, but had more examples of areas where money could be raised. A new health centre specifically for those “with high ability to pay” had been opened; the district also ran services outside its own district. Money was also raised through catering, parking, laundry etc. Full local autonomy on how to spend income raised locally. Yes. Provincial authorities (in some provinces) buy health insurance for the poor, who are identified based on the national poverty line. However, this process is often not very accurate. There is a health care fund for the poor. Deputy Director of DHMT is responsible for submission of district annual health plan and budget to Provincial Departments of Health and Finance. Set government format for planning and budgeting – DHMT Deputy Director well experienced with this. District has great deal of autonomy, as long as keeps within national guidelines and regulations. Accounts staff involved in planning. Normally informed in advance about available resources and base budget on that. Costs based on number of beds and staff. If Provincial Department of Finance modifies the plan, DHMT re-calculates budget. Budget “to some extent” linked to plan, reflecting national and district priorities, e.g., after decision on free services to under 6 year olds, planned to expand paediatric department budget for that department increased accordingly. But budget generally doesn’t cover all the activities in the plan.


22

Issue Donor funding

Country D (1 district, Francophone Africa) Yes. ACTs have increased the amount.

Country E (2 districts, Asia) “I have no clue.”

None mentioned.

None mentioned. Yes, as long as provincial level approves.

Public health – 10 years after he started the job. Included a module on economics and accounting. Now doing a distance learning course in epidemiology which includes cost analysis/financial management for immunization.

Any feedback about resource management? Confident in financial management and accounting? Issues raised

None mentioned.

Respondent 1: None on economics or financing. Annual 1–2 day course on financial management and reporting guidelines – often introduces new government decrees, circulars, etc. Relies heavily on government circulars and implementation guidelines. Wishes he had had formal training in accounting, health economics and financial management and relevant tools. Respondent 2: Agreed with the above and that guidelines were more helpful than theoretical training from the government. Rarely – despite quarterly reports.

Slightly – would like training in economics to appreciate broader issues. Sees himself as responsible for raising revenue. Financial management tools for the districts exist. Region is piloting a tool about financial management for district management committees.

Respondent 1: “Slightly informed about health economics and health financing. Confident in financial management.” Respondent 2: Confident. Respondent 1: Deputy Director of DHMT feels he makes significant resource allocation decisions, but within national guidelines and regulations. Feels well-informed about the financial situation of the district. No drugs budget because this all through cost recovery. Never heard of any National Health Accounts. Respondent 2: “We face obstacles from current regulations. For instance, we can mobilize money from private sources, we have ideas on what (services) to invest in, but it’s difficult to get approval for our business plan. Also, often, priorities identified at central level are not the same as our priorities.” Felt that user fees were “too low” in that they did not cover the full costs of the services. In general, these two were the most confident respondents, giving the impression of working in the most smoothly-running system. But say government policies change frequently and are not always consistent with one another.

23



Issue Awareness about overall Health expenditure PPPs Viring (i.e. the authority to move funds from one input line item to another) Training

Annex 3c. Findings of interviews with district managers (continued) – 3 countries


No. health facilities

DHMT membership – accountant on team? Sources of finance

Government Funding

Accounting for government funds

Country F (1 district, Asia) 387,200 (This interview was with the head of a Provincial Public Health Directorates – the country currently has no District Health Management structure.) 2 district hospitals, 5 community health centres, 13 basic health centres and 235 health posts

Country G (1 district, Anglophone Africa) 645,713

Country H (1 district, Anglophone Africa) 166,000

1 district hospital; 1 sub district hospital; 9 health centres: 28 dispensaries

1 referral health centre; 28 health centres. District hospital under construction.

No accountant. 1 administrator and 4 administration clerks - “but they are not very qualified people”. Reforms currently under way – one administrator but no accountant in the reformed team. Government. Main channel of money is directly to an NGO – district manager was involved somewhat in the contract, but does not regularly monitor it. All capital expenditure managed from capital city - regarded as a corrupt system. The Provincial Health Departments are not budget holders. They receive only three budget lines for their operational budget: salaries, running costs (fuel, rehabilitation, supervision transportation) and equipment (for facilities and office). This budget is sent from the central Ministry of Finance to the provincial finance office. For any other activities like training courses or capital costs a special request has to be sent to the central Ministry of Public Health. Quarterly reports. Appears to be good two-way communication about “income” and “expenditure.” (In inverted commas because Health Department does not actually control these sums.)

Has a trained MoH accountant.

Government; fees; 1 donor

Government; fees; insurance payments; national donor pooled funds; global health initiatives.

Handled by district treasury (see below)

Budget held by District Director of Health.

All financial transactions and financial management issues handled by district accountant in district treasury – based on financial requests from District Medical Officer. (In spite of presence of trained MOH accountants.) This can cause delays and the DMO feels that she does not have enough say in how and when the money is used. District accountant does not report to district health office, so it is difficult to improve the system.

Done by district health office. Financial management system designated to be easy for district staff to use. Computerized system with standard codes and procedures. DHMB receives monthly updates on income and expenditure. Guidelines state that spending should be on: - rural health centres ( 50%) - district hospital/referral health centre (25%) - health office administration (15%) - interventions at community level (10%). District Director of Health is responsible for financial performance and approves activities and payments. Can procure up to a set amount (about $9,900). District tender committee can procure up to value of approximately $32,900.


24

Issue District population

Issue Decentralization

Country F (1 district, Asia)

Country G (1 district, Anglophone Africa) Centralized system, so long procedure to approve budgets and virtually impossible to vire. MoH just starting to allow districts to develop annual operational plans.

User fees

Insurance Planning & budgeting

Provincial Health Department does not appear to be involved in its management. In some clinics (the minority). Manager doesn’t feel the quality is better in the clinics with fees.

Plans done for 6 months – only for modest operational costs (salaries, fuel, office costs). Other activities occur jointly with NGO – these don’t appear in the “government” plan. Capital planning separate – economic department of provincial government collates construction budgets for next 1-3 years.

Fees recently reduced. This has led to utilization and (according to the district medical officer) falling quality. Approval to spend funds required from Provincial Medical Officer of Health. 100% retained by dispensaries and health centres; 75% by district hospital. Used mostly for drugs – and for some other services in the hospital. Dispensary and health centre fees set nationally; district hospital fees set by District Health Management Board. Exemptions for the poor. Involve facilities, programmes and NGOs in planning and budgeting. Use national planning and budgeting guidelines, plus information on resource envelope. But in practice, full budgeted amounts not made available to the district health office.

Yes. 100% retention at health facility level; fees vary from one facility to another; some exemptions by age and disease type.

Yes. Rolling plans within 3-year MTEFs. Bottom-up planning within national guidelines and resource envelopes.

25



Donor funding

Country H (1 district, Anglophone Africa) District Health Management Board (DHMB) is the management structure for the operational health units at district level. The Secretary to the District Council (local administrative authority) is an ex-officio member of the DHMB and the District Director of Health is a member of the District Development Coordinating Committee (DDCC)I which is responsible for coordinating district development plans and budgets for all sectors in the district. So in theory, the annual planning and budgeting process of the DHMB is always co-ordinated with the overall district development plan. DHMB does not depend on local government for financial or accounting services. Somewhat tense relationship because of perceived poor accounting by local government and because district council has political appointees.

Issue


Viring (i.e. the authority to move funds from one input line item to another) Training

Any feedback about resource management? Confident in financial management and accounting? Issues raised

Health services implementation is contracted out to NGOs. Yes –within some clearly specified budget categories. But done by the provincial finance office.

Not on financial management. Attended World Bank Flagship Course, which included some lectures on planning, reform and community,based financing.

Country G (1 district, Anglophone Africa)

Country H (1 district, Anglophone Africa)

No

No.

Virtually none – very centralized system.

1 week on financial management from UNICEF – would like more.

None, except 3 day (health-specific) training on the national computerized financial management system. Other financial management courses are available but Director said it is difficult to find the time to attend. Priority for the District Director is to do an MPH.

Confident in government accounting and would like more authority. Feels “slightly informed” about health economics/financing. Practical management problems accentuated by frequent personnel changes.

Not really.

Formal quarterly communications to and fro about budget. Confident with the accounting system. Would like more training for himself and the administrator on financing and accounting, involving the Ministry of Finance too. Little ownership of/responsibility felt for the money channelled to NGOs. The Provincial Health Team and the NGO do not undertake joint planning (or financial planning) and often undertake parallel activities.


26

Awareness about overall Health expenditure PPPs

Country F (1 district, Asia) No guidelines, etc. are available to help with budgeting. Planning does not include any service provision, as this is the responsibility of an NGO. Not known

World Health Organization Geneva http://www.who.int