Many believe that integrating management systems and services and decentralizing decision making are vital to improving national public health programs. Integration often leads to better cost efficiency; decentralization can make programs more effective in reaching clients. And yet, both pose a significant challenge to maintaining the systems that deliver health commodities and, therefore, to health commodity security.
Integration can involve adding products into an existing single-purpose system or adding new products into a system that has already been integrated for other commodities. Valid technical reasons to either integrate a logistics system are—
improved access or system coverage
improved customer service
increased efficiency
cost savings.
It is essential to understand that integration is not an all-or-nothing proposition. It is quite possible to integrate some, but not all, of a program’s health products into a single system. For example, even when all other products are integrated, vaccines are usually distributed through a separate supply channel because of their cold chain requirements. It is also possible to integrate some logistics system components (e.g., transportation), while keeping others separate (e.g., procurement). Finally, circumstances may dictate that some levels of the distribution system (e.g., the service delivery level) should be integrated, while other levels (e.g., the central level) should be managed vertically.
Implemented correctly, an integrated supply chain can provide the necessary products effectively and efficiently. Implemented incorrectly, it will be unable to guarantee availability of required commodities, disrupting the entire service delivery system.
Health sector decentralization usually pushes procurement responsibility and distribution decisions to intermediate and lower levels of the service delivery system. Decentralization appeals to many people because of perceived advantages, including—
more rational and unified health services that cater to local preferences
improved implementation of health programs
decreased number of duplicate services as target populations are more specifically defined
fewer inequalities between rural and urban areas
reduced costs by moving to streamlined, targeted programs
improved community financing and involvement of local communities
better integrated activities of public and private agencies
improved inter-sectoral coordination, particularly in local government and rural development activities.
By contrast, modern logistics technology increases efficiency by consolidating procurement and distribution decisions at higher levels, reducing the length of the pipeline by eliminating intermediate levels and putting customer service responsibility at the center of the organization. In considering decentralization, it is important to ask the following questions:
Can the strategies of modern logistics technology be made to work as non-logistics decisions are decentralized?
Can the program afford the inefficiencies of not implementing these strategies?
How can national formularies be enforced in a decentralized environment?
How can product quality be assured if procurement is decentralized?
How can procurement procedures be designed so commodity purchase prices do not drastically increase, as they easily can under decentralized procurement?
In most Latin American and Caribbean (LAC) countries, health center reform (HSR) and sector wide health strengthening initiatives have impacted contraceptive logistics systems. The integration of vertical health programs and the decentralization of the health sector–—two components of HSR—have had significant impact, particularly for Ministry of Health and social security contraceptive supply systems in the LAC region. In September 2007, a regional workshop was held in the Dominican Republic on the effects of health sector reforms, particularly decentralization and integration on contraceptive supply chains of the public health system. Based on a global paper on this topic developed by the project in 2007, the workshop highlighted experiences throughout the LAC region, as well as other regions. Lessons and recommendations for how to ensure strong logistics systems during integration and decentralization were analyzed and transferred to participants from Bolivia, Dominican Republic, Guatemala, El Salvador, Nicaragua, Honduras, Peru, and Paraguay.
Under the LAC Regional Contraceptive Security Initiative, a study is currently underway to examine the results and impact the integration of essential medicines and contraceptive logistics systems have had upon both contraceptive availability, as well as essential medicine commodity security. In particular, the project is examining results of integration in Nicaragua and developing a case study that will discuss both impact as well as process towards integration. The analysis includes both qualitative and quantitative components, specifically looking at how processes have been modified under integration and how selected key logistics indicators (e.g., reporting rates, stockouts, stock status, stockout duration, and stock frequency) responded to these changes for contraceptives and essential medicines. The result of this research will be a paper that documents the processes toward achieving integration, challenges and opportunities along the way, and concrete results achieved both in terms of contraceptive availability and availability of selected tracer drugs.
