Lessons from Kaduna state, Nigeria
As countries work to combat the spread and scourge of the COVID-19 pandemic, critical reforms have become necessary in order to ensure health systems are more resilient and responsive to pandemics such as COVID-19 and others as they emerge in the future.
To that end, advancing universal health coverage (UHC) has never been more vital.
Evidence has shown that, for many countries, achieving UHC is largely influenced by socio-economic, political and other factors — as well as the strength of the systems in place to drive progress. This includes systems that improve access to quality, affordable treatment, while reducing out-of-pocket payments in a way that ensures that these services are purchased with optimal efficiency and effectiveness.
In its quest to accelerate progress toward UHC for its citizens, the Kaduna state government in Nigeria has worked with Results for Development (R4D) to design and implement several reforms. These reforms have primarily focused on reducing out-of-pocket payment for primary care services through the introduction of a contributory social health insurance scheme. The scheme covers the elderly, pregnant women and children under the age of five and is led by the Kaduna State Contributory Health Authority (KADCHMA), with the support of R4D and in partnership with Health Systems Consult Limited (HSCL), a Nigerian-based firm.
The scheme was designed through extensive collaboration between multiple stakeholders in the state. The scheme’s design was based on evidence from various sources, including a qualitative assessment of the state’s health system, local experiences, and global best practices.
Capitation — paying a fixed amount of money in advance to the health care provider for each enrolled client, to cover care during a defined period of time — was chosen as the method for paying for primary care services. This is in line with global evidence showing that purchasing primary health care services through capitation can serve as an incentive for improvement in the quality of care. It can also increase focus on preventive care and health promotion and encourage greater autonomy of the facility to use the funds in the areas of need in the most efficient manner.
Before the design of the contributory health scheme, the state had commenced a supply chain transformation program. The procurement, supply and quality assurance of medical products for all public health facilities were centralized in order to address gaps experienced previously, such as funds diversion, dishonest dealings, and ethical hazards at facilities — which had ultimately led to stock-outs. Three years after this reform was implemented, there was an increase in the availability of medicines and commodities, improvement in real-time visibility of the inventory, and increased revenue at facilities and the state central warehouse in Kaduna state.
But this centralized approach required the Kaduna Health Authority to pay the Health Supplies Management Agency directly for all drugs and medical consumables. This presented a challenge for the contributory scheme’s capitation plan, as it would mean there would be two different payment mechanisms under the scheme. Such an arrangement would be administratively cumbersome to implement and would potentially reduce the potential of primary health care facilities to improve the quality of service delivery strategically. However, the Kaduna Health Authority had to determine a way to implement both mechanisms, especially since drugs and medical consumables constitute the highest cost components in the primary health care facilities. And so, a question emerged: How could the Health Authority purchase primary care services through capitation while paying the Health Supplies Management Agency for drugs through a different centralized payment system?
5 ways this challenge was addressed
There is no simple formula for addressing system conflicts. In most cases, the solution to such conflicts are more likely to be context-specific than generalized. However, there are five key principles, backed by experience, that can be adapted to many contexts:
1. Strategic stakeholder engagement
It was clear there was a need for increased engagement between those working on the contributory health scheme and those working on the supply chain program. The goal was to ensure full support and buy-in from the Supplies Management Agency, while also providing a platform for all stakeholders to identify and collaboratively proffer solutions to the emerging challenges. In view of this, we advised the Ministry of Health to put oversight of the design process for the provider payment system under the leadership of the Supplies Management Agency because they were familiar with and best positioned to highlight and address some of the key complexities or areas of misalignment. In addition, the R4D/HSCL consortium engaged other key decision-makers in the state who had influence in implementing both reforms.
2. Facilitating the conflict resolution process based on evidence
To objectively facilitate and guide stakeholders to resolve this challenge, it was important to provide evidence about effective practices on how to pay for drugs and medical commodities in publicly-funded health care systems. R4D and HSCL developed a brief that captured experiences from countries like Sudan and Kenya, and from other states in Nigeria that had implemented similar supply chain reforms using capitation to pay for medical supplies and commodities, such as Kano and Oyo States.
3.Collaborating with partners supporting other health system reforms
Building resilient health systems is complex and often requires working on different aspects of the system at the same time. Without careful collaboration and coordination, the reforms may conflict with, or worse, undermine one another. Hence, there was also the need to collaborate extensively with implementing partners supporting the other reform programs of the supply chain transformation program and the Financial Management for PHCs project (e.g. Pamela Steele Associates and Health Strategy and Delivery Foundation). This collaboration enhanced understanding of the technical and political complexities in these respective reforms. It also provided a platform to build consensus and joint messaging to our respective agencies on the subject matter.
4. Understanding the processes
The next important step was for stakeholders to map out the key processes and protocols involved with provider payments and supply chain payment systems. This was accomplished by conducting a step-by step walkthrough of the process at the facilities, as well as by reviewing existing relevant guidelines and documents. Reviewing the process flow of both systems made it easier to identify the gaps, exact areas of conflict, areas of alignment and shared value.
5. Achieving a win-win process
In the end, the stakeholders designed a consolidated, efficient win-win process that ensures:
- health facilities can control how many supplies they get and when (based on need);
- the Health Supplies Management Agency is guaranteed payment for the drugs supplied to the health facilities;
- the State Primary Healthcare Board will work with the health facilities to use the capitation payments to improve the quality of service delivery; and
- The Health Authority will hold facilities accountable for quality of services delivered to enrollees in the scheme.
With this new process, the agencies involved also committed to jointly provide oversight functions, sharing and synchronizing data, and continuously confronting challenges as they arise.
So, what did we learn?
The success of system reform is largely dependent on the buy-in and ownership of the stakeholders involved. This may even be more critical than the technical process of resolving the conflict itself. Secondly, it is important to remain adaptive and flexible in response to the context in which the conflict exists, while ensuring the global best principles are uncompromised. Also, technical assistance should be more facilitative and consultative — much less prescriptive. This way, technical assistance will have its credibility and respect, providing unbiased support that focuses on the needs of the system and the interest of the actors.
Finally, the current pandemic has intensified demand for stronger health systems. If there is a time to ensure that all components of health systems complement rather than conflict with one another, that time is now.