1. Direct Health Facility Financing as a practical approach for strengthening strategic purchasing in Tanzania
Strategic purchasing for universal health coverage: theory and practice Presented by the iHEA Financing for Universal Health Coverage SIG Tuesday, March 26, 2019
Gemini Mtei

2. Introduction
Government of Tanzania aim to ensure universal access to health care using limited available resources
Fragmented financing system
Domestic tax revenue,
Development Partners (DPs) General Budget Support (GBS)
DPs heath sector budget support through Health Basket Fund (HBF)
Result Based Financing (RBF) in selected regions
DPs support through Vertical Programs
Health Insurance (NHIF, CHF, Private insurance)
User Fees
Long Term Vision: Introduction of Mandatory National Health Insurance (NHI) as a way to achieve UHC
Step by step implementation process
Alignment between health financing and public financial management to improve purchasing
Direct Health Facility Financing (DHFF) and its shift to output-based payment as a key reform to improve provider visibility, autonomy and efficiency

3. Long term SNHI vision

4. Step by Step implementation towards SNHI

5. Direct Health Facility Financing (DHFF)
Revolution in provider payment system in Tanzania
A key step to preparation for establishment of Mandatory NHI
DHFF includes the following fund sources that flow to service providers (in addition to user fees);
Health Basket Funds (HBF) flowing through MOFP (Central Budget)
Health Insurance Claims (National Health Insurance Fund, Community Health Funds)
Result Based Financing (RBF)
Formula based allocation to service providers
Unified payment mechanism slowly applied across different fund sources
Initially all funds were flowing to district and providers received inputs as in-kind (passive purchasing)
DHFF Introduces Strategic purchasing
Better matching resources to priority services
Predictability of funds availability to facilities
Facility Autonomy to plan, budget, procure inputs
Improved facility general, financial and human resource management
Enforce Accountability…compliance to financial accounting and reporting (FFARS)

6. Unified Provider Payment Mechanism under DHFF
Both HBF and CHF use formula based allocation to providers
Capitation Payment with Adjustors;
Shift from input to output based provider payment
Reduce fragmentation in provider payment
HBF DHFF is proof that it is possible to gradually introduce Strategic Purchasing under core central budget including adapting to PFM systems and rules
HBF adjustors
Catchment/Service population as a measure of Need -weight of 30%
Utilization as a measure of Performance -weight of 50%
Distance from LGA HQ as a measure of Equity -weight of 20%
iCHF adjustors
Catchment/Service population as a measure of Need -weight of 20%
Utilization among CHF members as a measure of Performance -weight of 70%
% of Population enrolled to iCHF in the catchment area as a measure of Performance -weight of 10%
RBF on top of HBF and iCHF to stimulate performance in large public health systems…disbursed on agreed indicators
Over time alignment of NHIF to HBF and iCHF unified payment systems

7. Extending systems to service providers for implementing DHFF-1
Planning and Budgeting System-PlanRep:
PlanRep is a web-Based Planning, Budgeting and Reporting System
It used to be a desk stop system and later converted to a web-based system
Efficiency improvement- cost saving (time & money)
Quality Plans and Budgets
Accessible everywhere with any one that has access right
Introducing service provider visibility in the Government Chart of Accounts (COA)
Facility ceilings
Facility plans and budgets
Introduce Service Outputs in the Government planning system
A step towards Output Based budgeting
Great potential to align Development Partners support
Interoperability with financial management systems (revenue, accounting systems)
Improved reporting (both financial and implementation report)
Room for Performance auditing
Change of Chart of Account (COA)

8. Extending systems to service providers for implementing DHFF -2
Financial Management System-FFARS:
Harmonized Facility Financial Management System across all Service Providers and all Fund Sources using Facility Financial Accounting and Reporting Systems (FFARS)
Comes in two forms
Manual
Electronic
Web-based FFARS
Mobile FFARS to be used with facility that have no computer or internet connection
Follows standard accounting procedures but with simplification to suit needs and technical capacity of service providers
Facilities are mandated to use automated FFARS to produce Financial reports (Monthly/Quarterly/Annually reports)
FFARS is Interoperable with PlanRep
A sound financial management system at service provider level is key when introducing Strategic Purchasing in Central Budget System

9. Extending systems to service providers for implementing DHFF-3
Other Systems:
Unified Facility Level Information System across providers
Important for establishment of good Claims Management
GoTHOMIS- Government of Tanzania Health Operations Management Information System used to manage patients across all public facilities
Patient Information Management System
(Registration, diagnosis, prescription, pharmaceutical, financial)
Potential data to inform claims management/provider payment system
In the process of becoming interoperable with NHIF claims system
Interoperable with Health Management Information system (HMIS/DHIS2)
Improve quality of data
Interoperable with Medical Store Department electronic Logistic Management Information System (MSD-eLMIS)
Improve supply chain at service provider
Stock management
Timely procurement

10. MOFP disburse HBF funds monthly/quarterly
Fund Disbursement to LGA B/A
Councils procure inputs
Service Providers deliver services
Summary: Introducing Strategic Purchasing under Treasury System through DHFF
BEFORE DHFF
Service providers manage funds and procure inputs to deliver priority services
Councils oversee and monitor service provision
Formula based Disbursement
to Facility Bank Account
Inputs Supply
AFTER DHFF
PlanRep
Epicor
GoTHoMIS/eLMIS
IGFT for Salary, OC, etc.
Epicor
FFARS

11. Conclusions
Achieving UHC is a gradual process that requires step by step improvement in financing system (three functions of revenue, pooling and purchasing)
Strategic Purchasing can be a crucial step for aligning system financing on the right path towards UHC
DHFF in Tanzania proves that it is possible to create momentum at service provider level to improve availability and quality of service delivery through management improvements and efficiency gains
Service provider autonomy and predictability of funds is crucial
It is also possible to gradually introduce Strategic Purchasing under the core PFM/Treasury system
Important to have planning, budgeting and financial management systems extended to service provider level
Review COA to include service providers as spending entity in Treasury systems