Strengthening the Geographical Resource
Allocations for the Health Sector in Tanzania
Jamie Boex and Selemani Omari
Inception Mission Debriefing
January 18, 2013
Presentation Overview
1. Background of the assignment
2. Issues for strengthening the equity and
efficiency of resource allocations for the health
sector
3. Options for strengthening the equity and
efficiency of resource allocations
4. Next steps
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BACKGROUND
Study objective (1)
“The objective of the consultancy is to undertake a
thorough review both of the design and use of
different resource allocation formulae within the
health sector, in the context of broader government
policy, and to recommend changes where
necessary….”
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BACKGROUND
Study objective (2)
Main funding flows to be looked at:
1. Health Basket Fund Grant
2. Block Grant – Personal Emoluments
3. Block Grant – Other Charges
4. Allocation of resources for drugs and medical
supplies
5. Health sector development expenditures
(MMAM / HSDG)
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Source: http://www.localpublicsector.org/profiles/tza0910.htm
LG = local government, LPS = local public sector
BACKGROUND
The big picture:
local public health expenditures
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BACKGROUND
A short history of health sector
allocations in Tanzania
• Prior to 2004, HBF allocated $0.50 per
person to LGAs; Government OC was
discretionary allocation
• Introduction of current formula in 2004/05:
– 70% in proportion to population
– 10% in proportion to poverty
– 10% in proportion to Under Five Mortality
– 10% in proportion to medical vehicle route
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BACKGROUND
Legal basis:
Local Government Finances Act
“There shall be paid annually to [each local] authority by way of
block grants from the public revenue of the United Republic the
following amounts, for which payment there shall be no further
authorization other than this section, such sum as the Minister
[responsible for local government] may after consultation with
the Minister responsible for finance, determine as being the cost
to be incurred by the [local] authority for development and
maintenance of services particulary education, health, water,
roads and agriculture.”
“Payment of block grants … may vary from one local authority to
another depending on the grades and standards as may be
prescribed by the Minister [responsible for local government].”
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BACKGROUND
The political economy of health
sector allocations in Tanzania
• Original formula agreed after extensive dialogue
between MOHSW, MOFEA and PMO-RALG
• HBF allocations annually prepared according to
formula in consultation by MOHSW and PMO-RALG
• Prior to 2008/09, PMO-RALG prepared LGA Budget
Guidelines, including formula-based OC allocations
and formula-based LGDG
• From 2009/10, MOFEA prepares LGA allocations.
PMO-RALG continues to prepare LGDG allocations
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ISSUES
Context for strengthening the
geographic resource allocations
• Health sector formula has been objective,
transparent and stable
• Data increasingly outdated
• Adherence is variable (in part because
formula does not capture all needs or
constraints)
• Tanzania’s economy and the focus of
health policy are evolving over time
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ISSUES
Issues for strengthening the
geographic resource allocations (1)
• Census population, service population and
utilization
• Poverty and burden of disease (utilization)
• Cost variations in health service delivery
• Improving the provision of basic health
services in under-staffed councils
(“equity”)
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ISSUES
Issues for strengthening the
geographic resource allocations (2)
• Stimulating performance of the facilitylevel in delivering services
• Council performance (management
performance; budget execution)
• Health infrastructure needs
• Resources for local health administration
• Councils with extra-ordinary needs
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OPTIONS
Options for improving resource
allocations – PE
• In 2004, expectation was that block grant formula
would be applied to PE and OC together
• Use formula-based measure of staffing needs as
guide to inform the allocation of staff and PE
(prioritizing additional PE where the needs are the
greatest)
• Problem is not finance: Need incentives, improved
motivation and other administrative mechanisms
for reducing staff disparities
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Options to explore:
• Updating data for existing windows, no change
in formula
• Shift more weight within formula on poverty,
BoD, remoteness – pros and cons
• Replace census population with estimated
service population, taking into account
differential reliance on private health care
options in urban and rural
OPTIONS
Options for improving resource
allocations – OC & HBF (1)
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OPTIONS
Options for improving resource
allocations – OC & HBF (2)
• Small fixed amount to account for fixed costs
• Consider addition of window that aims to improve
health services in under-staffed councils (“equity”
or “service improvement”) – pros and cons
• Consider additional window for selected councils
with extra-ordinary needs – pros and cons
• Consider implications of performance (both at
council and facility level) on allocation of resources
• Should OC & HBF continue to follow the same
formula?
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OPTIONS
Options for improving resource
allocations – Medicines
• Allocation of medicines and medical supplies for basic
health services is now done using an allocation
formula that is similar to main formula (70/15/15)
• Allocation of drugs to health facilities within district is
done on based estimated service population of each
facility
• Major improvement versus previous allocation pattern
• Should this formula potentially be revised to mirror
changes in OC/HBF formula?
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OPTIONS
Options for improving resource
allocations – HSDG
• HSDG adopted the main health sector
formula as interim measure
• Should HSDG focus on:
– “Infrastructure gap” for those who have belowaverage infrastructure?
– “Infrastructure gap” based on “a dispensary in
every village”?
– Health staff housing in under-staffed places?
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NEXT STEPS
In what directions are we thinking about
the main health sector formula (1)
• Many of the same issues that led to the current
formula are still relevant today
• Updating the data for the existing formula would
go along way to updating the allocation patterns
• Small fixed amount or replacing population with
estimated service population might make the
formula somewhat more pro-poor/pro-rural
(without tipping the scales or relying excessively
on weak data)
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NEXT STEPS
In what directions are we thinking about
the main health sector formula (2)
• It would be good to maintain the same formula for OC
and HBF
• Extra-ordinary costs faced by some councils are
reasonable to include in the allocation formula (but
needs to be through an objective and transparent topup)
• Equity or improving service delivery: What
interventions are in place to ensure that increasing OC
for under-served councils (in terms of health staff) will
result in improved service delivery? Are top-up
allowances for remoteness –as separate from
performance- acceptable to government?
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NEXT STEPS
In what directions are we thinking about
the main health sector formula (3)
• Performance-based funding (together with resultsmonitoring and in-line clinical mentoring) has the
potential to unlock the potential of existing health staff
• Performance allocations to health facilities do not
necessarily need to be incorporated into the formulainstead, councils may be directed to set aside a share
for such performance incentives as part of the CCHPG
• Performance incentives for councils might be best
provided through the development side of the budget
– should be closely tied to (i) on-spending resources to the
facility-level; (ii) supporting/mentoring and strengthening
front-line service delivery; (iii) reporting
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NEXT STEPS
Next steps
• How does the resultant formula fit with the desire
of MOHSW to shift to a more performance-based
funding system?
• Preparation of simulations for various options and
finalization of report
• Need for MOHSW, PMO-RALG and MOFEA –
informed and supported by selected other
stakeholders- to convene a joint working session;
analyze allocation options and reach policy
consensus on revised health sector allocation
formulas in accordance with the law
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NEXT STEPS
A final note
• Improving the geographic distrubution of health
resources is only one piece of the puzzle
• Many of the obstacles to effective health service
delivery have to do with administrative
impedements:
– Adjustment of salaries/allowances to conform to
market conditions
– Problems with provision of medical supplies through
MSD; inability to flexibly procure supplies from market
as needed
– Weak motivation, monitoring and mentoring
– Inefficient paper reporting systems at facility level
– Council-level capture of facility resources?
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