• About us
  • GSDRC Publications
  • Research Helpdesk
  • E-Learning
  • E-Bulletin

GSDRC

Governance, social development, conflict and humanitarian knowledge services

  • Governance
    • Democracy & elections
    • Public sector management
    • Security & justice
    • Service delivery
    • State-society relations
    • Supporting economic development
  • Social Development
    • Gender
    • Inequalities & exclusion
    • Poverty & wellbeing
    • Social protection
  • Humanitarian Issues
    • Humanitarian financing
    • Humanitarian response
    • Recovery & reconstruction
    • Refugees/IDPs
    • Risk & resilience
  • Conflict
    • Conflict analysis
    • Conflict prevention
    • Conflict response
    • Conflict sensitivity
    • Impacts of conflict
    • Peacebuilding
  • Development Pressures
    • Climate change
    • Food security
    • Fragility
    • Migration & diaspora
    • Population growth
    • Urbanisation
  • Approaches
    • Complexity & systems thinking
    • Institutions & social norms
    • PEA / Thinking & working politically
    • Results-based approaches
    • Rights-based approaches
    • Theories of change
  • Aid Instruments
    • Budget support & SWAps
    • Capacity building
    • Civil society partnerships
    • Multilateral aid
    • Private sector partnerships
    • Technical assistance
  • M&E
    • M&E approaches
    • Indicators
    • Learning
Home»GSDRC Publications»Evidence and experience of procurement in health sector decentralisation

Evidence and experience of procurement in health sector decentralisation

Helpdesk Report
  • Kerry A. Millington,
  • Minakshi Bhardwaj
May 2017

Question

Review and summary of evidence and experience of other countries’ health procurement (vaccines, drugs, medical supplies and medical equipment) in health sector decentralisation. What were the different approaches/models? What were the key lessons, outcomes and impact of the approach used? What worked? What did not?

Summary

Improving the efficiency, effectiveness, equity and responsiveness of supply chains and procurement processes for pharmaceuticals, vaccines and other health products, which make up a large share of total health expenditure in low and middle-income countries (LMICs), has important implications for health system performance and population health. Decentralised governance of health services provides greater autonomy in planning, management and decision making from national to sub-national level and has occurred in many LMICs largely as a response to the primary healthcare approach promoted by international agencies. Evidence suggests that procurement is more efficient when centralised because of economies of scale and improved purchasing power whilst other health system functions such as financing and planning/budgeting benefit more from local context-specific implementation. Nepal is embarking on a process of decentralisation after adopting a federal approach to local governance. This helpdesk report looks at other countries to summarise key findings and lessons learnt from decentralised procurement.

Key Findings

  • Health system decentralisation can be implemented in different forms and to different extents depending on the existing political and public administrative structure of the country and the organisation of the health system itself. Most effective programmes that improve supply chain and procurement processes address the root causes of inefficiencies in the system and provide context-specific interventions.
  • Centralised procurement/tendering can achieve cost savings across multiple contexts by creating economies of scale and improved purchasing power.
  • A mixed procurement model can benefit health system performance with some functions decentralised, e.g. financing and planning/budgeting (as it is likely that these functions requires greater flexibility to respond to local information and can therefore benefit from greater local choice), and other functions centralised or at a higher level, e.g. inventory control, storage, logistics management information systems, transportation to transfer medicines (as these functions can benefit from oversight, storage capacity, etc.).
  • A mixed procurement model can also serve national and subnational programmes with the central level playing an essential role in the procurement, warehousing and distribution of select public health commodities e.g. contraceptives and vaccines.
  • The central level can also provide a useful vehicle to serve as the first in-bound warehouse for storing and breaking bulk orders from donors into smaller orders for downstream distribution to facilities.
  • Decentralisation can lead to a loss of drug quality oversight and regulation in procurement and across the supply chain. Petty collusions and corruption at the local purchasing level can also be an issue.
  • E-procurement can achieve savings and help overcome management concerns and corruptions issues when enabled by political support, pressures from citizens and groups for greater transparency and efficiency, and acceptance by suppliers. However, technological factors and legislative delays can be a challenge.
  • The health workforce must be recognized as an important and adaptive factor contributing to the success or failure of health system reforms.
file type icon See Full Report [PDF - 321 KB]

Enquirer:

  • DFID

Suggested citation

Millington K. A. and Bhardwaj M. (2017). Evidence and experience of health procurement in health sector decentralisation. K4D Helpdesk Report. Brighton, UK: Institute of Development Studies. Brighton, UK: Institute of Development Studies.

Related Content

M&E methods for local government performance
Helpdesk Report
2017
Disability in Somalia
Helpdesk Report
2017
Urban governance
Topic Guide
2016
Decentralisation and cash transfer programmes
Helpdesk Report
2016
birminghamids hcri

gro.crdsg@seiriuqne Feedback Disclaimer

Outputs supported by DFID are © DFID Crown Copyright 2018; outputs supported by the Australian Government are © Australian Government 2018; and outputs supported by the European Commission are © European Union 2018

Sign up to our email bulletin:

Sending ...

Connect with us: facebooktwitter

Outputs supported by DFID are © DFID Crown Copyright 2018; outputs supported by the Australian Government are © Australian Government 2018; and outputs supported by the European Commission are © European Union 2018

We use cookies to remember settings and choices, and to count visitor numbers and usage trends. These cookies do not identify you personally. By using this site you indicate agreement with the use of cookies. For details, click "read more" and see "use of cookies".OkRead more