Global Health Delivery Logistics’ Grantee MeetingBill & Melinda Gates Foundation

Nairobi, Kenya

May 18-19, 2011

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Slide 1 – Speech Text (Part 1)

I’m sure everyone in this room agrees that strengthening logistics for medicalcommodities in low-income countries will bring significant improvements in health. Weshould all be very pleased that in recent years there have been some very significantinvestments to increase the capacity of value chains for medical commodities. Most ofthose investments, however, have been applied high in the value chain to improve drugmanufacturing, procurement, forecasting and even central medical stores. It is wellunderstood that this approach has widened the value chain pipeline at the top but left thenarrow bottleneck at the service delivery level or “last mile.” In effect, our pipeline isshaped like a funnel leading to the problem of “innovation pile-up.” For example, when themalaria vaccine arrives, we will likely be trying to deliver those vaccines to these kids witha health system that looks a little like this truck.

For over a decade, VillageReach has focused on increasing health system capacity at theservice delivery level. We believe that by addressing the last mile bottleneck, we canunlock all of the increased value that is being put in at the top of the health value chain.Today I would like to review our work in Mozambique to design and implement a new lastmile distribution system for the Ministry of Health. This work received Gates Foundation

support from 2004 to 2008.

Systems Change

DistrictStore

RegionalStore

Health Centers

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Slide 2 – Speech Text (Part 1)

Here’s a diagram of the last mile of the value chain. On paper, there is a policy describing afunctioning distribution system, but due to lack of resources there typically isn’t one inpractice.

From the district level on down, a collection-based approach is typical, meaning healthworkers at the health centers have to find the time and resources to travel to their districtto collect supplies. But frontline health workers are already overworked andoverwhelmed. As a result, the health centers are constantly out of the medicines theyneed to provide quality healthcare to their communities.

So our first step is to put a simple system in place. We consolidated responsibility for thedistribution system in a small group of government workers called field coordinators.Each month, a field coordinator will visit each health center to restock supplies, providesupportive supervision and collect data. Essentially we made a process change in thelogistics system by shifting responsibility for certain tasks from one set of workers toanother. The improvement in the performance of the distribution system was huge. Stockouts dropped from 80% to 1%. In Mozambique this system is called the “dedicateddistribution system.” It is similar to the “moving warehouse” concept run by JSI inZimbabwe and Project Optimize’s demonstration project in Senegal. (continued on nextslide)

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Slide 2 – Speech Text (Part 2)

Now, you might think the front side of the circle is all that’s necessary – that is the last mileof distribution for the medicines. After all, the right product has been delivered the to theright place at the right time, etc. But the back side of the circle is just as important – that’sthe first mile of the information system. To manage a system effectively, those responsiblefor the system need a up-to-date information on how the system is performing so they canidentify and address problems. We believe this first mile is critically important, but in thisenvironment it’s also very challenging.

Ground Cloud

Slide 3 – Speech Text (Part 1)

So we designed an information management system that takes advantage of thiscirculation. Data comes in from a number of sources: paper forms, SMS, smartphones, andcomputers. We are able to use an Internet application in the cloud to consolidate the datathen report it back out as useable information to each of those devices. Workers can usewhatever device is available to them to report and access relevant information. Everyonethen has the information they need to manage and improve the performance of the healthsystem.

I don’t have time for a live demonstration of the system, but at the breaks I would behappy to show it those of you who want to see it. For now, I have passed out a hand outwith a few examples that I would like to explain.

On the left of this slide you see a number of devices people use to input data or accessinformation regarding system performance. We have the distribution system running inhundreds health centers across Mozambique, but over 80% of those centers do not haveelectricity and most do not have cellular coverage. So at the bottom of the stack of devicesis the paper form. The field coordinators use these forms to collect 185 data points fromeach health center each month. The next device is a 2G phone with SMS. (continued onnext slide)

Slide 3 – Speech Text (Part 2)

SMS is not useable for that many data points, so we have found it more useful for healthworkers to send an alert to the web application so their request is added to the fieldcoordinators task list for the next visit. We have developed forms for use on smartphones.Field coordinators can use these offline at health centers to collect and cache the data thenupload it to the web application once they drive back into GPRS coverage. Finally, at thetop we use offline and online computers for data entry and information access. The offlinecomputers connect to the cloud periodically using the GPRS cellular data network.

With this approach we can bridge the last mile connectivity challenge, use all the latesttools available in cloud and illuminate how the delivery and health system is performingdown to the service delivery level. In the hand out you will see a few of the reports thatare available to workers managing the system.

mScan

• Digitize paper-based data via low-cost mobile imaging technology.

• Gates Foundation Grand Challenges Explorations award

• Developed in partnership with University of Washington Department of Computer Science & Engineering

• Prototype to be tested in Mozambique to evaluate its advantages over existing information system process

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Slide 4 – Speech Text (Part 1)

We are continually looking for new ways to use technology to improve the informationsystem. For example, we have developed a prototype application for smartphones thatscans paper forms, structures the information and uploads it directly to the webapplication. We just received a Gates Foundation Grand Challenges Explorations award totest this application in Mozambique.

Results

Impact Health center stock-outs …80% 1%

Vaccine coverage … 68.9% 90%+

20% less cost per child immunized

Ministry of Health adopts new system

New Logistician position created

VidaGas … equity investment, profitable

Sustainable

Scalable National expansion of new system• 4 provinces implementing with their

own resources

VidaGas … largest supplier N. Mozambique

Mozambique

Slide 5 – Speech Text (Part 1)

At the end, for us it is all about measurable and documented results. The new systemsignificantly increased the percentage of children vaccinated to over 90%. The newsystem is also 20% cheaper for the government of Mozambique to operate.

With those documented outcomes, the Minister of Health has adopted the system asgovernment policy that will be sustained going forward. At his request, we are alsoworking with the Ministry of Health to scale the system to the entire country. VidaGas is aprivate company we established to provide energy to support the health system. I’llexplain a little more about it in a few minutes.

VillageReach Programs/Engagements

Medical Commodities Distribution• Mozambique: Ministry of Health, Elizabeth Glazer Pediatric

AIDS Foundation

Village Health Worker Systems Support• Malawi: Ministry of Health

Vaccine Distribution• Senegal: WHO/PATH• India: GlaxoSmithKline

Supply Chain Assessment and Design• Nigeria: Global Fund• Tanzania: USAID|DELIVER• Uganda: CDC – PEPFAR

Information Systems• Malawi: Concern Worldwide, Gates Foundation• Malawi: Medicines for Malaria Venture• Zambia: PATH, USAID|DELIVER• Sierra Leone: Ministry of Health• mScan technology: Gates Foundation Grand Challenges

Explorations with UW Computer Science Engineering

Private Sector Engagement/Outsourcing• Global: USAID|DELIVER• Nigeria: DIFD, MIT Zaragoza

VillageReach programs

Contract engagements

Slide 6 – Speech Text (Part 1)

Helen asked us to provide a quick overview of our logistics experience and currentactivities. I won’t go into detail on this slide, but I did want to give you a sense of the lastmile work we are doing in a number of different countries.

Helen also asked us to comment on a really interesting question: What do I worry aboutat night? Well, that’s obvious . . .

Monsters In My ClosetInstitutional Absorption of Catalytic Change

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The Valley of Death

VillageReach Theory of Change for Public Health Systems

Identify high-value problem

Implement change with proven results

Institutions scale and sustain the change

Public health system institutions absorb the change

Slide 7 – Speech Text (Part 1)

. . . I worry about the monsters in my closet.

Now this first monster has a rather ugly name: “Institutional Absorption of CatalyticChange.”

The best way to explain what he’s about is to understand our theory of change for publichealth systems. For us the high-value problem is the last mile bottleneck. I have justreviewed how we implemented a change in vaccine distribution and documented itseffectiveness and cost efficiency in Mozambique. Now, at the end of the demonstrationphase, comes the hard part – getting the Ministry of Health and its advisors and donors toadopt the new system as their policy, for only they have the ability to scale and sustain thechange. So the key challenge is to survive the transition from proven demonstrationproject to institutional absorption of the catalytic change.

We call this transition the “Valley of Death.” In this diagram, you see the pilot project on theleft funded with catalytic funding from foundations. Our Gates Foundation grantcontributed to this phase. The objective is for the Ministry of Health and its donors to makethe new system their policy and fund their ongoing costs of operating it. We are seeing thathappen now in Mozambique as the one large NGO is using PEPFAR money to fund the costsof the Ministry’s operation of the system in three provinces. But the valley of deathchallenge goes well beyond funding questions.

Monsters In My ClosetInstitutional Absorption of Catalytic Change

Beyond Funding

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Logistics system changes require a change in knowledge, skills and behavior

• Changing behavior with role modeling

How do you create policy change for logistics systems

• Impact and cost data are critical, but not enough

How do you marry principles of efficient logistics with political systems and policies

• Level skipping vs. decentralization• Considering where capacity exists in systems design

How to create sustainable systems change

• Resources, behavior, priorities

Slide 8 – Speech Text (Part 1)

Getting the Ministry to absorb the change is also about behavior modification not only inthe capital city but in the field. As I mentioned, the Minister of Health approved the changeand instructed the provinces to find a way to implement it. At the service delivery level weusually find huge gaps between policy and practice. The new system matches availablecapacity, but the government is slow to change and move past earlier policies such asdecentralization where the districts are expected to have all necessary resources to supporttheir health centers.

We believe a lot of good ideas die in valley. The key is find new ways of shortening thedistance between pilot project to policy. I am hoping the discussion today will generatesome suggestions.

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VillageReach Theory of Change for Private Sector Infrastructure

Identify market demand for generic infrastructure

Establish business with health system as anchor customer

Profitable businessin growing market = scale/sustainability

Expand to address the non-health system market

Business Performance/ Social Benefit

Enableimproved health

Support other customers

Time

The Challenge of Getting Started

Monsters In My ClosetStarting Private Infrastructure Businesses

Slide 9 – Speech Text (Part 1)

My second monster is called “Starting Private Infrastructure Businesses.” One of thekey challenges for the health system in remote, rural areas is the lack of private sectorinfrastructure for outsourcing opportunities. In essence, the public health system hasto do everything which is not cost effective. Here’s our theory of change for privatesector infrastructure.

To function, the health system needs transportation, communications and energy –infrastructure that everyone else in the region also needs. I mentioned earlier that weestablished a for-profit company called VidaGas to provide propane to the Ministry ofHealth to support the cold chain.

Here’s a diagram of how we developed the public-private partnership and grewVidaGas to scale and sustainability. Starting on the left of the diagram we used a 1.5million dollar grant from the Dutch government to build a 2,000 kilometer-longpropane distribution system from Maputo to northern Mozambique. At first, our onlycustomer was the Ministry of Health. But soon in phase 2 VidaGas began to sell to othercustomers. [Point to phase 2 between the 1st and 2nd black dotted lines.] That allowedthe company to break even. In the third phase we raised (continued on next slide)

Slide 9 – Speech Text (Part 2)

1.4 million dollars in equity from a private social business investment fund allowingVidaGas to expand even further to support the health system as well as new customers.With the broader volume of sales, we are getting to phase 4 where the company isprofitable and for-profit companies in the south are proposing to invest or even buy inVidaGas.

It’s a great success story, but it’s one that’s very hard to replicate. Why? Even thoughthere is a lot talk in public health about the need for public-private partnerships andoutsourcing, it is still very hard to start these arrangements. In fact, VidaGas neverwould have gotten started or survived its early days had our partner Graҫa Machel notput her rather substantial political support behind the concept.

Monsters In My ClosetMomentum for LMIS Interoperability

Challenges• Islands of Data

• Legacy of standalone applications• Owners are slow to collaborate

• Desire for quick fix instead of long-term architected solutions

• Endless pilot projects that never scale

Glimmers of Hope• All Opens are web/mobile enabled: necessary

for effective/efficient data exchange• All Opens adopting SDMX data exchange

standard promoted by WHO/HMN• Rockefeller & others orchestrating

collaboration for interoperability

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LD

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VIC

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OpenELISLaboratory

OpenMRSHealth Records

DHISMgmt. M&E

OpenLMISRx/supplies

OpenINSHealth Ins.

API API

DHISMgmt. M&E

API API

OpenLMISRx/supplies

OpenINSHealth Ins.

COTSRx/supplies

COTSClaims/Fund

Mgmt.

MIS / Registry Services forFacility, Patient, Provider, Insured, Insurer API API

API

Slide 10 – Speech Text (Part 1)

I’ve called my last monster “momentum for logistics management information systemsor “LMIS” interoperability.” The challenge here is to get all the desperate parts of theinformation system supporting the supply chain and even other parts of the broaderhealth information system to work together.

If you had a chance to review the pre-reading on OpenLMIS, this diagram will lookfamiliar. It represents various components of a new health information system beingdriven by a number of open source initiatives focused on filling gaps in the informationsystem at the service delivery level. The information system we developed forMozambique creates a tremendous amount of information regarding supply chain andeven health system performance at the service delivery level. The systems up thelogistics domain stack, however, are stand alone, proprietary applications that can’treceive that information. We are wasting a huge opportunity.

Here are some of the challenges, as well as, some glimmers of hope for the new systemsthat are being built today.