This presentation was given at the International Health Economics Association (iHEA) World Congress in Milan, in July 2015. It includes results and policy implications from the RESYST Purchasing Study conducted Tanzania.

1. A critical assessment of health care purchasing
in Tanzania: a comparison of the mandatory
National Health Insurance Fund (NHIF) and
voluntary Community Health Fund (CHF)
Dr. Gemini Mtei,
Ifakara Health Institute
iHEA, Milan; Wednesday 15 July, 2015

2. Overview of the key purchasing actors
 Government through general taxation-controlled by MOF
- Pay salaries to public facility staff
 - Investment and procurement of drugs and medical supplies
 - Budget based
 Community Health Insurance (CHF) -Voluntary insurance for informal
sector managed by local governments
• - Funds used to purchase drugs, supplies, facility maintenance, etc
• -Budget based-not used to reimburse providers for service given to CHF members
• - Members access at public primary care facilities only except in few districts that
have included hospital care
 National Health Insurance Fund (NHIF) - Mandatory insurance
for government employees, voluntary for others
- Comprehensive benefit package – outpatient & inpatient
 - All public facilities automatically accredited and selected private facilities
 - Fee for service reimbursement

3. Is there strategic purchasing under NHIF & CHF?
Yes & No!
•What is purchased?- Limited package for CHF members,
comprehensive for NHIF (Wider choice) -Both NHIF and CHF have weak
systems for member engagement
•Where services are purchased?-Primary facilities only under CHF-
service agreements for referral care to CHF members in few districts -broad
choice of providers under NHIF, with automatic accreditation for all public
providers under NHIF
•How purchased? - Budget based under CHF; Fee for service under NHIF;
NHIF makes loans to facilities for equipment & supplies

4. Findings - Citizen-purchaser relationship (1)
 Both NHIF and CHF have mechanisms in place to identify
members’ needs.
 NHIF normally use media, Researchers, field visits, client service day and
actuarial reports
 CHF relies on health facility committees and village meetings to identify needs
 ‘‘We have a forum; it is two years of implementation conducted. We go and visit CHF members
whereby we call for a meeting with the citizens; we explain about CHF, we give citizens opportunity to
ask us questions so it is that formality. Last year we conducted in ten wards, we were conducting
meetings with the citizens to discuss about health insurance scheme. (IDI, CHF Coordinator, rural
district)
 “…….Here at the headquarter we have that arrangement of doing research using journalist every year.
We use journalists, we send them to the regions without our presence, they go there interview
members and observe how our members receive service at the facilities, they document challenges
facing members and needs. They record and prepare documentaries that we sit and discuss and decide
what to change and what not….. But also internally we have research department which conduct
research to collect members’ and providers’ views; the research department is also in-charge of the
journalist study…… (IDI, NHIF National level)

5. Findings - Citizen-purchaser relationship (2)
• Opinions from members showed some doubts in terms of
effectiveness of available mechanisms to identify needs and
ensure members participation
“To be honest we never see CHF implementers rather of being emphases by providers
to join CHF, for example in the village meeting, the representative take a role of
persuading people to join CHF ”(FGD -CHF member -rural district)
“….They talk on Tv and Radio but we want them to come to us members, face to
face…they can do seminars that are more relevant I think not the radio….they
sensitize the advantage of insurance but we as members we don’t see those
benefit….(FGD, NHIF members, Urban District)

6. Findings - Provider-purchaser relationship (1)
• There is no split between purchaser and provider roles under
CHF
• Local government authority manages both CHF and public facilities that provide
services for CHF members
• CHF members can only access services from public providers who
frequently run short of drugs and other essential supplies
• “The challenge is that for example we have shortage of drugs so I can’t say we are
treating this patient according to the appropriate standard, we really have a
shortage of drugs, the government is trying and we purchase a certain amount of
drugs by using cost sharing but due to the big number of patients most of the times
we have shortage of drugs” (FGD-health providers rural district)

7. Findings - Provider-purchaser relationship (2)
• Providers are not reimbursed for services provided to CHF members BUT
CHF revenues are budgeted for purchasing drugs and other medical
supplies for the whole facility
• NHIF is mandated to contract all public providers while certain criteria
(e.g. certification & agreement to price guide) are used to contract
selected private providers
• “….in principle all these public facilities are supposed to provide services to our members by default, we have
also accredited private facilities but they have to follow our procedure, we receive applications, but in some
areas it is our initiative due to suggestions that we received from the community in our visits and meetings…”
(IDI, National Level)
• “…….they assesses the space of the facility, numbers of doctors, and the capacity in terms of how many services
the facility is able to provide, how much are they able to manage. Do they have all the important diagnostic or
the basic equipment, even to test malaria? (IDI, District Manager, Urban District)
• NHIF reimburses all facilities through a fee for service

8. Findings - Provider-purchaser relationship (2)
• To address the challenge of drug shortage, especially in public facilities
NHIF has accredited pharmacies and drug dispensing shops
• “……due to the shortages of the drugs in the facilities, we said that if they miss drugs, they will fill the form
and will get drugs from the pharmacy. But also we have accredited those called accredited drugs dispensing
outlets especially in the village areas. There are members like teachers and others they can get services from
there. Those are the key players that we deal with them. Currently we have about 56000 accredited
pharmacies. ADDOs are common in rural areas, so they serve our people such as the teachers’’ (IDI, National
Level)
• In some places, especially in rural areas, special arrangements have been put in place
to provide services that would otherwise not been provided at dispensaries but a
higher level of care
• “…..our procedure is that services should be provided according to the guidelines of the particular facility,
with regard to the level. That health facility guideline indicates the service to be provided. We talked with
people from the ministry they said that for dispensary it is not allowed to admit patients basing on the
guideline. However, we have facilities that are very remote and used as hospital to some members, so what
we normally do is to set a special agreement with the government to allows that facility to provide some
services. Because if we don’t agreed it means if you provide those services, we will not reimburse you, you
see. So if we agree with the ministry, we can allow the facility to admit patient so we will pay……(IDI,
National Level)

9. Findings - Government-purchaser
relationship (1)
• The use of CHF and NHIF funds is guided by the government rules and
regulations including the finance and procurement acts
• CHF operations are governed by the council health service board and
health facility committees
• “…when it reaches at a time of taking the money, signatory is required that is the medical officer in charge of
the respective health facility and two representatives from the committee board of a respective health
facility, money cannot be withdrawn until two representatives authorize” (IDI_CHF coordinator rural district)
• Government purchasing procedures also require internal and external
auditing of funds utilization
• “The government has purchasing procedures and have to be followed also there are purchasing expertise in
each sector, municipal but also there are internal auditors, external auditors their task is to oversee whether
we are going exactly with the purchasing plan and I trust that is a law and law has its punishment for those
who commit mistakes. I am not expert in purchasing laws but I know there is purchasing law which work
parallel with punishments and there is auditing system which aims at checking as to whether purchasing is
being followed up in all government sectors or not…(health panning officer)

10. • Both CHF & NHIF are supposed to provide operational reports to
the members and for auditing purpose
• ‘‘When the auditor comes he/she must see the procurement reports so he/she will go to the procurement
unit if he/she finds there is something he/she will come to the department and that is why they do auditing,
they do auditing from the reports you can’t do auditing if there is no any report of any kind of purchases and
that is why after every one quarter the report on purchases is submitted and discussed by the financial
committee, all the purchases which were made’’ [IDI, CHF manager).
• The social security regulatory authority is responsible for regulating
both NHIF and CHF. In addition, the Central Bank of Tanzania regulates
NHIF investments
• “…..SSRA is the one who controls us. On Monday they will come for inspection. So they are the ones who
regulate. But for the issues of investments, The Bank of Tanzania (BOT) is the regulator. Off course the SSRA
collaborates with BOT. There are BOT guidelines which support us in the issues of investment….” (IDI, NHIF
National manager)
Findings - Government-purchaser
relationship (2)

11. Key conclusions
• Some efforts have been put in place to exercise strategic
purchasing, more so under NHIF than CHF
• However challenges still exist:
• Channels that are currently been used to identify members’ needs
have not been effective for either NHIF or CHF
• Selection of providers is not strategic - purchasers don’t have power
to select better performing providers except when selecting private
providers under NHIF
• There is no separation of purchaser and provider roles under CHF;
the Act might undermine efficiency in the operation of this scheme

12. Recommendations
• It is important to establish a clear separation between purchaser
and provider functions under CHF - among options would be to
merge the two or have separate entity independent of district
management
• Communication mechanisms between members and purchasers
need to be improving by adopting a more active engagement, for
example through face to face meetings and mobile phone
communications
• The regulator of social security schemes needs to increase
engagement with all parts, members, providers and purchasers
in order to guarantee mutual accountability

13. Study team
Dr. Gemini Mtei
Irene Mashasi
Jane Macha

14. THANKS FOR
LISTENING

15. www.wpro.who.int/asia_pacific_observatory
http://resyst.lshtm.ac.uk
@RESYSTresearch
The research is a collaboration between RESYST and the Asia
Pacific Observatory on Health Systems and Policies.
RESYST is funded by UK aid from the UK Department
for International Development (DFID). However, the
views expressed do not necessarily reflect the
Department’s official policies.
More information: http://resyst.lshtm.ac.uk/research-projects/
multi-country-purchasing-study