Health Systems and Health Care Services

MPH 2nd Year
Prabesh Ghimire
Health Systems and Health Care
Services

HealthSystemsand HealthCareServices MPH 2nd
Year
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TABLE OF CONTENTS
UNIT 1: INTRODUCTION TO HEALTH SYSTEM .................................................................................4
Background, Type, Characteristics and Functions .............................................................................4
Welfare Model of Health Care System..............................................................................................6
Overview of periodic plan, priority setting and essential health care package ......................................7
Quality Management System in Organization: Total Quality Management (TQM) ..............................10
Leadership in Learning Organization ..............................................................................................12
UNIT 2: MODELS OF HEALTH SYSTEMS AROUND THE WORLD ...................................................13
UK Health System.........................................................................................................................13
Germany Health System................................................................................................................14
Japan Health System ....................................................................................................................15
US Health System.........................................................................................................................16
European Health System...............................................................................................................17
Taiwan Health System...................................................................................................................18
Srilanka Health System .................................................................................................................19
Cuba Health System .....................................................................................................................20
UNIT 3: HEALTH CARE DELIVERY SYSTEM ...................................................................................21
Critical Appraisal of the MOHP Organizational Structure ..................................................................21
UNIT 4: HEALTH INFORMATION SYSTEM ......................................................................................22
Recording and Reporting (Information Management) System in Nepal .............................................22
Health Sector Information System (HSIS) in Nepal ..........................................................................24
Health Management Information System (HMIS).............................................................................25
Early Warning and Reporting System (EWARS)..............................................................................27
Human Resource Information System (HURIS)...............................................................................28
UNIT 5: INFRASTRUCTURE AND LOGISTICS MANAGEMENT ........................................................29
Logistics Management...................................................................................................................29
Logistics Cycle..............................................................................................................................31
Logistics Management System of Nepal .........................................................................................32
Store Management........................................................................................................................33
Organization structure and functions of logistics management division .............................................34
Quality Assurance and Inventory Control System ............................................................................36
Logistics Management Information System.....................................................................................37

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UNIT 6: ORGANIZATIONAL DIAGNOSIS AND MANAGING CHANGE IN ORGANIZATION ...............39
Health Sector Reform (HSR) Strategy ............................................................................................39
Nepal's Health Sector Strategy (2015-2020) ...................................................................................40
Sector Wide Approaches ...............................................................................................................42
Stewardship in health sector ..........................................................................................................43
Self and Effective Organization ......................................................................................................45
Task Shifting in Health Services .....................................................................................................46
Decentralization ............................................................................................................................47
UNIT 7: HOSPITAL MANAGEMENT .................................................................................................49
Guiding principles for hospital planning...........................................................................................49
Methods of hospital planning and design ........................................................................................50
Planning team and role of members of the team ..........................................................................50
Stages in planning and designing a hospital ................................................................................51
Preparation of the design brief....................................................................................................51
Service catchment area .............................................................................................................52
Hospital Establishment Criteria ......................................................................................................53
General Support Services Department ...........................................................................................58
Hospital Disaster Preparedness Plan .............................................................................................60
Hospital acquired infections (Nosocomial infection) .........................................................................63

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UNIT 1: INTRODUCTION TO HEALTH SYSTEM
Background, Type, Characteristics and Functions
Concept of Health Care System
WHO has defined a health system as "all organizations, people and actions whose primary intent is to
promote, restore or maintain health". This includes efforts to influence determinants of health as well as
more direct health improving activities.
A health system is more than the pyramid of public owned facilities that deliver personal health services.
It includes, for example, mother caring for a sick child at home, private providers; traditional practitioners;
health insurance organizations; BCC programs, occupational health and safety legislation.
Types of health system
On the basis of ownership
i. Government health system
ii. Private health system
On the basis of origin
i. Traditional health system
ii. Modern health system
On the basis of health care financing
i. Beveridge model
- In this system, health care is provided and financed by the government through tax payments.
- E.g National health service in UK, Sweden, Finland, etc.
ii. Bismarck model
- It uses an insurance system usually financed jointly by employers and employees through payroll
deduction.
- E.g Health care system in Germany and France
iii. National Health Insurance Model
- It uses private-sector providers, but payment comes from a government-run insurance program that
every citizen pays into.
- E.g Health care system in Canada, Taiwan and South Korea
iv. Out-of-pocket model
- In this system, the services are utilized by the users through out of pocket payment
- Most of the countries' health system predominantly falls into this model of health care system.
Aims/ Goals of Health System:
Four major goals of health system are
i. Health
ii. Social and financial risk protection in health
iii. Responsiveness and people centeredness
iv. Improved efficiency

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Functions of Health System
i. Stewardship (oversight)
ii. Financing (collecting, pooling and purchasing)
iii. Creating Resources (Investment and training)
iv. Delivering services (provision)
Components/ Building Blocks of Health Care System
There are six building blocks of a health care system as proposed by WHO
i. Service Delivery
- In any health system, good health services are those which deliver effective, safe, quality personal
and non-personal health interventions to those who need them, when and where needed, with
minimum waste of resources.
- The service delivery building block is concerned with how inputs and services are organized and
managed, to ensure access, quality, safety and continuity of care across health conditions, across
different locations and over time.
ii. Health Workforce
- A country's health workforce consists broadly of health service providers and health management and
support workers, both at public and private sectors.
- In any health system, a well-performing health workforce is one which is competent, responsive,
efficient and productive to achieve the best health outcomes possible, given available resources and
circumstances.
iii. Information
- A well-functioning health information system is one that ensures the production, analysis,
dissemination and use of reliable and timely information by decision makers at different levels of the
health system.
- It involves three domains of health information; on health determinants, on health sy stems
performance and on health status.
iv. Medical Products, Vaccines and Technologies
- A well functioning health system ensures equitable access to essential medical products, vaccines
and technologies of assured quality, safety, efficacy and cost-effectiveness, and their scientifically
sound and cost-effective use.
v. Financing
- A good health financing system raises adequate funds for health, in ways that ensure people can use
needed services, and are protected from financial catastrophe or impoverishment associated with
having to pay for them.
- Health financing systems that achieve universal coverage in this way also encourage the provision
and use of an effective and efficient mix of personal and non-personal services.
vi. Leadership and Governance
- The leadership and governance of health systems, also called stewardship, is arguably the most
complex but critical building block of any health system.
- This involves overseeing and guiding the whole health systems, private as well as public, in order to
protect the public interest.

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- Leadership and governance involves ensuring strategic policy framework exists and are combined
with effective oversight, coalition-building, the provision of appropriate regulation and incentives,
attention to system-design and accountability.
Welfare Model of Health Care System
- A welfare model is a concept of government in which the state plays a key role in the protection and
promotion of the social and economic well-being of its citizens.
- Although there is significant variation as to organization, this type is based on the concept of social
solidarity and characterized effectively by a universal insurance coverage generally within the
framework of social security.
Various types of welfare models
i. Nordic Welfare model
- The Nordic welfare models include the northern
European countries such as Norway, Denmark,
Sweden, Finland, etc.
- The fundamental principle of Nordic model is
egalitarianism and universalism.
- The state is the key player in the protection and
promotion of economic and social welfare of its
civilians.
- The healthcare is almost completely and publicly, financed by taxation and nearly all hospitals are
publicly owned and managed
ii. Liberal Welfare Model
- This type of welfare model exists in UK and Ireland.
- It is identified by the provision of social benefits to all who are in need by the state welfare systems,
while the social funds are accumulated mainly by the citizens themselves.
- The main characteristic of this model is its social assistance of last resort.
- Previous employment defines the access to benefits, which means that those who haven’t been
employed would not be admitted to such.
iii. Corporatist-conservative model (Bismarck) Model
- This model includes Austria, France, Germany, Belgium etc.
- This model is very much based on the principle of security and is seen as middle ground of Nordic
and Liberal models
- This model is characterized by Bismarck insurance schemes.
- A well funded state allows poverty reduction, high quality health care and disability pensions.

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iv. Familistic welfare model
- This model is used in Italy, Spain, Portugal etc.
- The model is based on the principle that the family has the main role in supporting its socially
unprotected members.
- The level of social assistance is much lower than in the other countries.
v. Transition welfare model
- Eastern and central European countries are classified as transition welfare models.
- For a long period, they have been developing different arrangements, influenced by other countries’
models.
Overview of periodic plan, priority setting and essential health care package
Overview of fourteenth periodic plan (2073/74-75/76)
Goal: To provide quality basic health services to all the people of Nepal at free of cost
Objectives
- To increase equitable access to basic and quality health services to people from all regions and
communities.
- To develop quality human resources and increase access to quality and nutritious food.
Policies
- Provide effective health services to everyone for ensuring easy access to quality health services.
- Increase awareness regarding nutritious food and increase access of people to its services.
- Reduce neonatal, infant and child mortality rate and increase average life expectancy.
- Provide emphasis on local production of quality drugs and health commodities.
- To increase involvement of co-operative and non-governmental sectors in health sector and manage
investments from these sectors.
- To develop Ayurvedic Medicine System by utilizing and managing herbs available in the country and
also protect and manage other alternative medicine.
Strategies
- Necessary measures for human resource planning, production, development and utilization will be
utilized
- An effective accountable health system will be developed by ensuring necessary drugs, equipments,
technology and skilled health workers.
- Health insurance program will be implemented to ensure access of everyone to equitable health
services.
- Health related research activities will be made effective.
- Preventive, promotive, and curative health programs will be conducted on various communicable and
non-communicable diseases.
- Necessary measures will be taken to establish well-equipped hospitals with specialist services in
each province as per the federal structure.
- Health related professional councils will be made capable and accountable.
- Current Multi-secotral nutritional plan will be implemented effectively to improve maternal and child
health nutrition.
- Good governance will be emphasized to ensure transparency, accountability and people
centeredness in delivery of health services.

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- Awareness campaigns regarding "Golden 100 days" will be continued.
- Health facilities will be established as per existing building codes and these facilities will be made
disabled friendly, child friendly and earthquake resistant.
- Coordination and collaboration will be maintained with government, private, community and
cooperative sectors.
Strengths
- Makes provisions for emergency health such as emergency health fund from centre to local level,
mobilization of health RRT, integrated health surveillance, etc.
- Puts strong focus on quality health services.
Weakness
- Although some programs have been specified in the plan document, the strategies are silent
regarding many emerging health problems such as non-communicable diseases, mental health
Priority Setting: Priority programs of Nepal
The government of Nepal has categorized the priorities of health programs into three categories:
i. First priority (P1) programs
ii. Second priority (P2) programs
iii. Third priority (P3) programs
i. First priority programs
- Integrated child health and nutrition program
- Integrated reproductive health and FCHV program
- Control of HIV /AIDS and STIs
- TB control program
- Leprosy control program
- Epidemiology and control of diseases (control of Malaria, Kala-azar elimination)
- Primary health care revitalization
- Rural health and model VDC program
ii. Second priority programs
- National health training
- National Public Health Laboratory
- National Health Education Information and Communication Center
- Bir hospital
- Sahid Sukraraj Tropical and infectious disease hospital
- Kanti Children Hospital
- BP Koirala Memorial Cancer Hospital
- Sahid Gangalal National Heart Center
- National Academy for Medical Sciences
- Patan Academy for Health Sciences
- Karnali Academy for Health Sciences
- BP Koirala Institute of Health Sciences, etc
iii. Third priority programs
- Vector borne disease control research and training center (VBDRTC)
- Health Insurance Fund

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- Singh Durbar Vaidyakhana
- Nepal health research council (NHRC)
Essential Health Care Package
An Essential Package of Health Services (EPHS) can be defined as the package of services that the
government is providing or is aspiring to provide to its citizens in an equitable manner.
- Essential packages are often expected to achieve multiple goals: improved efficiency, equity, political
empowerment, accountability, and altogether more effective care.
- The government of Nepal first published an EPHS, called the “Essential Health Care Services
package,” in 1999 as part of the second Long Term Health Plan, which included 20 broad health
areas.
- The government’s Health Sector Strategy (2004) acknowledged that the original EPHS was not
affordable for the government to provide and proposed to focus on delivering four main areas of
essential care across all districts: safe motherhood and family planning, child health, control of
communicable disease, and strengthened outpatient care.
- The subsequent Nepal Health Sector Program Implementation Plan 2010–2015 updated and
expanded the EPHS to include new services under the reproductive health and child health areas,
and new programs on mental health, oral health, environmental health, and community -based
newborn care, and a community-based nutrition care and support program.
- In addition, the update added a non-communicable disease control component to address changes in
demographics and diseases.
- The recent health sector strategy 2015-20 uses the term "Basic Health Services Package" and is
defined as a comprehensive set health services provided within the boundary of available resources
that satisfy the healthcare needs of the population. Access to these services is considered a
fundamental right guaranteed by the constitution; thus, the Government of Nepal is committed to
delivering these services free of cost to every citizen.
- The package of basic health services differ with levels of health facilities.
Elements of Basic Health Service Package
1. Immunization services: BCG, Polio (OPV and IPV), pneumococcal, DPT-HepB-HiB (pentavalent),
Measles Rubella, Japanese encephalitis
2. Preventive, promotive, health education and peer education
3. Outpatient services (free drug and lab services): CBIMNCI, STI management, treatments of UTI,
RTI, fungal infections, HIV (ART), leprosy, malaria, kala-azar
4. Inpatient services:
 Severe cases in children and neonates: severe pneumonia, malaria, malnutrition, measles,
sepsis, asphyxia, hypothermia, jaundice, etc
 Treatment for UTI, epilepsy, depression, schizophrenia, non-complicated malaria, lymphatic
filariasis, kala-azar
 Hospital based one-stop crisis management
5. Minor procedures
 Minor cut and wound dressing
 Simple cut and suturing
 Simple abscess drainage
 COPD and asthma emergency management
6. Screening and counseling:
 Screening for hypertension and diabetes

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 Growth monitoring and BMI screening
 Screening of pelvic organ prolapsed, cervical cancer (VIA), etc.
 HIV counseling and testing, PMTCT, GBV counseling, etc.
7. Other services
 Micro-nutrient supplementation
 ANC check up, delivery, postnatal care
 Post abortion care
 Family planning services
 De-worming
 Selected laboratory services
Quality Management System in Organization: Total Quality Management (TQM)
Total Quality Management is defined as a management philosophy concerned with people and work
processes that focuses on customer satisfaction and improved organizational performance. In TQM,
systems are established to prevent health and administrative problems, increase client satisfaction,
continuously improve the organization’s processes, and provide better health care services.
The following fundamental beliefs form the basis of the TQM approach:
- TQM is appositive strategy for growth and should be integrated into the organization’s strategic plan.
- TQM management must be committed to and actively involved in the TQM process.
- TQM is a process, not a program.
- Quality improvement process must be applied to all levels of the organization.
Characteristics/ Principles of TQM
i. Management commitment
- Total Quality Management depends upon top management being dedicated to assume responsibility
for quality improvement performance.
- TQM places new and different responsibilities not only on top management but also on the entire
management team.
ii. Focus on client's needs and requirements
- Total quality management in health care industry is focused towards meeting the client's
requirements and expectations.
- By focusing on the needs of internal and external clients, an organization can provide both high
quality health care and also meet or exceed the needs of those it serves.
iii. Process-focused
- The key focus of total quality management is on the process and not on the individual provider.
- By involving the employees and the clients in the continuous improvement of the processes, there
occurs a better understanding of the problems, a better knowledge of what the outcome should be,
and a better ownership in the resolution
iv. People based management
- One of the core concepts of TQM is to remove barriers and empower all the people involved to work
together for quality improvements.

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- For example, in hospitals, nurses, doctors and staffs come together to discuss standards and service
design.
v. Teamwork and participation
- Teamwork and participation are essential components of TQM implementation program.
- Especially in hospitals, it requires co-operation among all related departments and centers.
- There should be formation of quality improvement teams and quality councils to remove
interdepartmental barriers. Approach like quality circle, cross-functional teams etc. are better options
Process of TQM
1. Building management commitment
- Top management of the health care industry must adhere to TQM principles, communicate with
employees, and explain the reasons for adopting TQA.
- Before implementing TQM, they should set-up the principles and quality policies that are practical to
support TQM programs such as special attention for patient care, regular quality-focused training
program for all staffs and scope of improvement through feedback system.
2. Developing resources and competency
- Organization should maintain sufficient resources for improving quality.
- Quality-focused training should be given to all managers and technical employees as well as to non-
technical employees
3. TQM Process management
a. Conducting TQM educational and training program
- Management needs to change employees' concepts into the correct concepts of quality such as
medical treatment quality, service quality and customer satisfaction.
- To impart knowledge of quality to employees would require the support of employees’ education
and training program.
b. Standardizing the processes and management
- The customer service processes and internal operation procedures should be standardized and
well managed.
- It will assure the quality of medical treatment such as prior appointment system, quick
registration, computerized on-line information, and doctor-to-bed ratio.
c. Management by fact
- Organization should assure the service delivery processes by means of performance measure.
- Standard operating procedures and norms should be available for all, use of guidelines and
procedures for dealing with complaint, and information from complaints should be used to
improve care or service
4. Building team
- There should be formation of quality improvement teams and quality assurance committee to
continuously ensure quality as well as to remove inter-departmental barriers.

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5. Continuous improvement process
a. Performing regular survey of client satisfaction and quality audit
- Regular customer satisfaction survey should be conducted to know the problems and necessary
steps should be taken for further improvement.
- Beside this, to assure quality activities are being properly performed, internal quality audit should
be in place on time basis and same should be sent to the top-management for necessary action.
b. Customer feedback
- Customer feedback should be taken based on scoring system addressing various dimensions.
- Various feedback practices should be followed like feedback form, exit questionnaire, customer
participation meetings, complaint box, etc. and same should be sent to quality department for
further action and improvement.
Tools for TQM
- SWOT analysis
- Force field analysis
- Team-building and group-integration tools
- Specific process/technical tools
- Process flow chart
- Check sheet and histograms
- Pareto analysis
- Process control chart
- Quality function deployment (QFD)
Leadership in Learning Organization
Peter Senge (1990) describes three types leadership that would create and lead a learning organization:
designer, steward and teacher
i. Leader as designer
- The leader-as-designer designs the systems and processes by which the organization continues to
learn.
- The designer anticipates potential problems and designs systems to handle them before they ever
arise, so they may well be invisible.
ii. Leader as Steward
- The leader-as-steward serves a cohesive vision, a bigger story, a set of governing ideas.
- A leader can manifest stewardship in many different ways. It may be a matter of regarding the
wellbeing of one's employees or community as the primary value, over competitive speed or short
term profits, for example. It may mean creating an organization that provides opportunities for
learning or self-actualization, or one that is dedicated to creativity and innovation.
iii. Leader as Teacher
- The role of the leader-as-teacher is to serve as a mentor to his or her colleagues or employees.
- Like any good teacher this means having an awareness of how others learn, and inspiring them to
keep learning, whether directly or indirectly.

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UNIT 2: MODELS OF HEALTH SYSTEMS AROUND THE WORLD
UK Health System
Introduction
- Health services in UK are largely free at the point of use.
- Established in 1948, the National Health Service (NHS) provides preventive medicine, primary care
and hospital services to all those “ordinarily resident” in UK.
- Over 12% of the population is covered by Private Medical Insurance, which mainly provides access to
acute elective care in the private sector.
Health Financing
- Health services in UK are mainly financed from public sources – primarily general taxation and
National Insurance Contributions.
- Some care is funded privately through private medical insurance, some user charges, cost sharing
and direct payments for health care delivered by NHS and private providers.
Delivery of services
- Primary and secondary care is very much separated in UK.
- General practitioners act as gatekeepers to secondary care.
- Virtually the whole population is registered with a general practitioner, who provides primary care and
controls access to hospital services.
Leadership and Governance
- The Department of Health and the Secretary of State for Health are ultimately responsible for the
health system as a whole.
- NHS England has important functions of overall budgetary control, supervision of Clinical
commissioning groups (CCGs) as well as responsibility for setting DRG (Diagnosis Related Group)
rates for provision of NHS services.
Strength
- Universal coverage
- Comprehensiveness and guaranteed treatment regardless of income level
- Health care paid through taxes
Weakness
- Government’s active role in healthcare weakens the functionality of market mechanisms.
- Higher tax rate
- Though patients have relatively easy access to primary and emergency care, specialty care is
rationed through long waiting lists.
- There is little funding directed towards technological innovation.
- Finally, with free medical services provided to all citizens, the public tend to make extensive and even
excessive use of these medical services. As such, it is common to encounter long lines in public
hospitals.

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Summary
Country Nature Funding Primary care Strengths Weakness
UK National
health
service
Mainly from general
taxation.
A small private
sector
Primary care
services rely on
private group
practices
Equal access to
comprehensive
services.
Low costs
Bureaucracy,
Underfunding,
Rigidness
Germany Health System
Germany health system is characterized by the Socialized Health Insurance System with the statutory
health insurance (GKV) providing organizational framework for the delivery of public health care.
Germany has been recognized as the first country which introduced a national social security system.
Key features of German Health system
- The German health care system is highly decentralized with large amounts of delegation of state
power to corporatist actors.
- Privatization is another important feature of the German health care system. Some health care
sectors are based entirely on private providers, such as office-based ambulatory and dental care
sectors and private pharmacies. In other sectors both private (profit and non-profit) and public
providers co-exist.
- Private insurance companies also co-exist alongside statutory sickness funds.
Health Financing
- Health services in Germany rely on social health insurance, compulsory for almost all of the
population and financed through income-related social contribution.
- These are often supplemented out of general tax-financed government revenue.
- People earning high revenue are allowed to opt out from social health insurance to enroll in private
health insurance, with 15% of the population actually doing so.
- A wide range of primary care as well as specialist’s services are provided from independent solo
practitioners, strictly separated from hospital care.
Other features
- The German health care system is notable for two essential characteristics:
 The sharing of decision-making powers between states, federal government, and self-regulated
organizations of payers and providers; and
 The separation of SHI and PHI. Both use the same providers—that is, hospitals and physicians
treat both statutorily and privately insured patients, unlike many other countries.
Strengths
- Health coverage is universal.
- No gate-keeping mandate: Patients can freely choose among physicians and hospitals; there is no
wait for needed care.
- Individuals are free to purchase private insurance to cover what is not covered by the plan.

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Weakness
- The system suffers from lack of competition, superfluous, insufficient or inappropriate care and
shrinking revenue.
- Aging population is a problem
Summary
Germany Multiple
insurers
Mainly from
Social health
insurance.
Supplemented
by general
taxation
Primary care
services rely on
private solo
practices
Client-friendly,
Professional,
Autonomy,
Earmarked
budgets
High costs
difficult to control
Japan Health System
Introduction
Japan introduced a social health insurance model in 1922, making reference to the Bismarck model and
achieved a universal coverage in 1961.
Financing
- Health services in Japan rely on social health insurance, compulsory for almost all of the population
and financed through income-related social contribution.
- Characterized by multiple insurance funds but affiliation to a specific insurer is not a matter of
individual choice and is generally linked to professional status
- A wide range of primary care and specialist’s services are predominantly provided in private clinics
and some hospital outpatient departments.
- Primary care and specialist care are not regarded as distinct disciplines.
Governance
- The Social Security Council, a statutory body within Ministry of Health is in charge of developing
national strategies on quality, safety and cost control, and sets guidelines for determining provider
fees.
- Within the Ministry, the Central Social Insurance Medical Council defines the benefit package and fee
schedule,
Strengths
- Health coverage is universal
- Costs are controlled by a government imposed national fee schedule.
- Patients have freedom of choice among physicians and hospitals; there is no wait for needed care.
- Each physician is paid the same fee for a given procedure.
Weaknesses
- Medical services are fragmented, and in the absence of expenditure controls, both clinics and
hospitals suffer from significant duplication of services and excess capacity.

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Summary
Japan Multiple
insurers
Mainly from
Social health
insurance.
Supplemented
by general
taxation
Primary care
services are
predominantly
provided in
private clinics
Universal
coverage,
Client-friendly,
Professional,
Autonomy,
Earmarked
budgets
High costs
difficult to control
US Health System
Health Financing
- US health system has no single nationwide system of health insurance. Private insurance can be
purchased from various for-profit commercial insurance companies or from non-profit insurers.
- About 84% of the population is covered by either public or private health insurance.
- Public health insurance is offered by Medicare and Medicaid.
Delivery of Services
- Primary care physicians account for roughly one-third of all US doctors.
- The majority operates in small self-or group owned practices.
- Patients generally have free choice of doctor, at least among in-network providers, and are usually
not required to register with a primary care practice.
- Primary care doctors have no formal gate-keeping function, except within some managed care plans.
- The Department of Health and Human Services (HHS) is the federal government’s principal agency
involved with health care services.
Strengths
- High quality services are available for those with good insurance.
- US spends high percentage (13%) of nation’s GDP on health care.
Limitations
- US health system lacks universal access; therefore continuous and comprehensive health care is not
enjoyed by all Americans.
- Because of expensive high-tech diagnosis, treatment and specialization, there is not enough primary
care,
US Privatized
market and
Pluralistic
Voluntary,
multipayer
system
(premiums or
general taxes)
Private practices Provider-friendly
Autonomy,
Flexibility
Consumerism,
High costs,
Unequal access
and uninsured

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European Health System
Health service delivery
- Primary health care services are predominantly provided in private setting in almost all countries with
social health insurance systems and some countries with national health systems do so as well. E.g.
Germany, Netherlands, Denmark, UK, Austria, Belgium, France
- Primary care services are mainly provided in public health centers in Finland, Spain, Italy, Sweden,
etc.
Health Financing
- Health care in the EU Systems is either financed through general taxation or by contributions to
health insurance funds.
- There are three predominant systems of health care finance in the European system.
 Public finance by general taxation (Beveridge model)
 Public finance based on compulsory social insurance (Bismarck model)
 Private finance based on voluntary insurance
Predominant system of health
financing
Countries
Public: taxation Finland, Spain, Italy, UK, Denmark, Portugal, Sweden
Public: compulsory social insurance Austria, Belgium, France, Germany
Mixed compulsory social insurance
and private voluntary insurance
Netherlands
Hospital Governance
Hospital governance Countries
Decentralized Austria, Belgium, Germany, Finland, Spain, Italy, UK,
Denmark, Sweden
Centralized Ireland, Netherlands, Cyprus, etc.
Deconcentration France, Greece, Portugal
Human Resources Management
- Pay for performance schemes have been introduced in some of the European countries. In such
schemes, third party payers offer financial incentives (bonuses) to providers in exchange for the
achievement of agreed quality of care targets.
Pay for performance to primary care
physicians
Countries
Yes Belgium, Italy, Spain, Portugal, UK
No Austria, Denmark, Finland, France, Germany, Greece

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Taiwan Health System
The current health care system in Taiwan is known as National Health Insurance (NHI) which was
instituted in1995.
- It is a single payer compulsory social insurance plan that provides equal access to health care for all
citizens.
- The Taiwanese healthcare system is characterized by good accessibility, comprehensive population
coverage, short waiting times, low cost, and national data collection systems for planning and
research.
Health Financing
- National health insurance is mainly financed through premiums, which are based on the payroll tax,
and is supplemented with out-of-pocket payments and direct government funding
- Cheap and abundant care is the best description of Taiwanese health services delivery. NHI covers
almost services that can be provided by a health system: from dental care to parturition, from
Western to traditional Chinese medicine and from preventive services to elderly home care.
- Taiwan has more private establishments than the public ones who compete for payments from the
NHI.
Strengths
- Comprehensive and Universal coverage
- Owing to the single insurer system, Taiwan’s NHI has one of the lowest administrative costs in the
world.
- Patients have freedom of choice among physicians and hospitals; there is no wait for needed care.
- Taiwanese can go to any level of hospitals directly, as they wish. So, NHI has a very high approval
rate among Taiwanese citizens.
Weaknesses
- Because of lack of gate-keeping, large medical institutions are always at full capacity from patient
admissions, while the number of middle sized hospitals is shrinking progressively.
- The Taiwanese NHI does not take in enough money from premium payment to cover the entire health
care costs. The government often has to provide additional funds to keep the system running.
- Because of high outpatient visits, each patient receives short contact time with physicians.
How health system of Taiwan differ from UK?
- Both have a single payer system for health care.
- UK has much stronger focus on the gatekeeper role of primary care physicians. The Taiwanese
system by contrast allows for greater patient choice.
- The claim process for healthcare providers is very rapid, in contrast to the rather lengthy processes
for payment seen in the UK.
- With regard to health providers, the UK system is more socialized with the state providing and paying
for health services. In Taiwan, providers are primarily private and free to compete with each other,
despite the presence of some public hospitals.

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Taiwan National
Health
Insurance
(NHI)
Mainly from
premium.
Supplemented
by out of pocket
payment and
government
funding
Primary care
services are
mainly provided
by private
providers; some
public hospitals
are also present
Universal
coverage,
Low
administrative
costs,
Short waiting
time
Poor quality of
outpatient visits,
Week referral
system,
Shrinking
revenue
Srilanka Health System
Sri Lanka has a tax-based universal health care system that extends free healthcare to all citizens, which
has been a national priority.
- Srilanka has a pluralistic system of care with many people utilizing a combination of systems but by
far, the dominant system is the Western system of care.
- The health system in Srilanka consists of public and private health care services, but the government
plays the major role as the healthcare provider of the country.
Health Financing
- Srilanka's health financing strategy is financed through a combination of tax-based government
expenditure and private payments for care.
- Public sector funds are channeled through a combination of contributions from the Ministry of health,
provincial and local governments, and other government entities.
- The majority of private sector financing sources consists of out of pocket expenditure, insurance,
NGO and private employers' arrangements for health expenditure.
- Health services are available through comprehensive primary healthcare facility network. But a
substantial number of patients bypass these and seek treatment at secondary and tertiary health care
institutions.
- Department of Health services looks after the allopathic system of medicine while Department of
Ayurveda is responsible for provision of Ayurvedic Health Care.
- The Provincial Health Department is totally responsible for management and effective implementation
of health services within the Province, development of policies and guidelines for the Province and
also human resource management within the Province.
Strengths
- Srilanka’s health system is believed to be one of the most cost-effective health systems around the
world.
Weaknesses
- Despite decentralization, the health system is centrally dominated by ministry of health and since
most of the authority lies with the central government, it causes duplication and inefficient use of
public resources.
- Despite low expenditure, taxed based funding is insufficient to meet the needs rising health care
costs.

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- Because of lack of gate-keeping, substantial number of patients bypass primary health care and there
is overcrowding of secondary and tertiary health care institutions.
- Public health system has long waiting lists for specialized care and advanced procedures. So, there is
high reliance on private care.
Cuba Health System
- The Cuban health system beagn in the 1960s as a curative system based in hospitals but shifted
during the 1970s and 1980s to a primary health care system based in communities
- The Cuban National Health System is the only health system operating in the country, which is
comprehensive and decentralized.
- Cuban health system is universal and free for all Cubans without restrictions, as health care is
considered by Cuban government as one of the most fundamental Human Rights.
- Its model is based on family medicine and guarantees full and free access.
Health financing
- Health financing in Cuba is highly decentralized. More than 90% of expenditures are financed from
municipal budgets. In turn financed from the state budget.
- The out of pocket expenditure is very low, which are subsidized by state.
- There is a single health insurance program available in the country, which is administered through the
Ministry of Public Health, covering 100% population.
- Cuba's health system is strongly focused on preventive medicine, using low-tech means
extraordinarily effective.
- 'Medicine in the community' serves as the point of entry for patients.
- Neighbour based care (family physician program) provides comprehensive medical attention to
patients. More than 99% population is covered by family physicians.
- The Cuban health system covers all medical treatments, services as well as medicines.
Human Resources
- Cuba has one of the highest doctor patient ratio in the world with one doctor per 170 people.
- This country provides more medical personnel to the developing world than all the G8 countries
combined.
- The Public Health Ministry is in charge of directing, executing and controlling the state's and
government's health policy, as well as of developing medical sciences.
Strengths
- Government controlled system allows health laws and acts to be passed quickly without
interferences.
- Non-exploitative as it is all government financed.
- Relatively free of charge
- Closer to the community and relatively accessible (i.e polyclinics and family physician program)

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Weaknesses
- No provider competition and scarcity of resources has resulted in poor level of service.
- Low wage rate discourages health personnel and physicians from practicing.
- There is lack of choice for both patients and a doctor. Medical personnel do not have choice in where
they practice.
Cuba Cuban
National
Health
System
Mainly from
municipal
budgets
OOP subsidized
by the state
Primary care
services are
mainly provided
by family based
physicians and
polycilincs in the
community
Universal
coverage,
Free,
Accessible and
close to client
Lack of choice
for patients and
medical
personnel,
Low wage rates,
Lack of
competition
UNIT 3: HEALTH CARE DELIVERY SYSTEM
Critical Appraisal of the MOHP Organizational Structure
The Ministry of Health is one of the leading government ministries charged with the overall role to improve
the health of the people. This ministry is primarily responsible to make necessary arrangements and
formulate policies for effective delivery of curative services, disease prevention, health promotion
activities and establishment and regulation of overall health care system.
The organization of Ministry of Health is a complex structure comprising of several divisions, departments,
centers, foundations, councils, hospitals, health directorates, and offices
Key characteristics of organizational structure of MOH
- MOH currently consists of five divisions and twenty sections within its ministry. Three of the divisions
are headed by human resources from health sector.
 Personal Administration Division
 Policy planning & International Cooperation Division
 Curative Service Division
 Human Resource & Financial Management Division
 Public Health Administration, Monitoring & Evaluation Division
- The structure also includes three separate departments with specific roles and functions.
 Department of Ayurveda
 Department of Drug Administration
 Department of Health Services
The Department of Health Services operates its activities through its seven divisions and five centers.
Divisions Centers
 Child Health Division
 Family Health Division
 Epidemiology and Disease Control Division
 Primary Health Care Revitalization Division
 Logistic Management Division
 Management Division
 Leprosy Control Division
 National Health Training Center
 National Tuberculosis Center
 National Public Health Laboratory
 National Center for AIDS and STI Control
 National Health Education, Information
and Communication Center

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- The Ministry of Health extends its preventive, promotive and curative health services from central to
grass-root levels through more than 4521 governmental health facilities and hospitals.
- Six central, three regional, three sub-regional and 10 zonal hospitals including all district hospitals are
included in the organizational structure.
- Another important feature in the organizational structure is the presence of District (Public) Health
Offices covering all 75 districts with more than 4000 peripheral health facilities responsible for
conducting public health activities up to the grassroot level.
Strengths in the organogram
- The organization of MOH is comprehensive involving different functional structures from central to
peripheral levels (division, departments, centers, councils, foundations, hospitals, health offices and
health centers.
- The organizational structure makes provisions for at least one health facility in each VDC/
municipality.
Weaknesses in the organogram
Some of the weaknesses of current organogram of MOH are listed as follows:
- The placement of health institution is based on political division and not population based.
- Relation between central, regional, zonal and district hospitals is not clearly defined.
- Similar roles given to different divisions and sections, those are likely to result in role conflicts.
- No clear hierarchical relationships exist in the organizational structure (especially at the central level).
Hierarchy between Divisions of MOH and its departments are not clear.
UNIT 4: HEALTH INFORMATION SYSTEM
Recording and Reporting (Information Management) System in Nepal
Health information is an integral part of a national health system. It is a basic tool of management and key
improvement for the improvement of health status in the country.
The primary objective of information system is to provide reliable, relevant, up to date, adequate, timely
and reasonably complete information for health managers at community, health facility, district and
national levels.
Some of the existing recording and reporting systems in health sector of Nepal are:
i. Health Management Information System (LMIS)
- HMIS has been implemented since 1994 with the support of EDPs.
- The current HMIS manages information on all health services mainly delivered through government’s
health facilities.
ii. Human Resource Management Information System (HuRDIS)
- This information system started in 1994 with the support of GIZ.
- HuRDIS is designed to provide information on HR situation of each health facility including public,
private and NGO sector in the country.
- Currently, official records of employees of MOHP are only maintained in this system.

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iii. Logistics Management Information System (LMIS)
- This system is designed to receive timely information (quarterly reports) from all health facilities on
supply, consumption and stock level of selected essential drugs and commodities.
- Information generated from this system is used for procurement and distribution planning.
- A web based LMIS upto the district level is in operation since 2008.
iv. Financial Management Information System
- Financial management information system is designed to provide timely financial information.
- Trimesterly (4 monthly) budget disbursement and expenditure records are maintained at district/
region and national level in more than 300 cost centers in the country.
- Disbursement and expenditure reporting is channelized through cost centers to district treasury and
to the Account Comptroller General’s Office.
- Cost centre also send the financial reports to the respective Regional Directorate and Departments.
- Financial information is available by budget heading and cost centers.
- However, dissemination of financial information is limited.
- The Health Economic and Financing Unit (HEFU) in MOHP has access to electronic data of 64
districts through ACGO.
v. Training Information Management System
- NHTC is trying to update the training information into electronically prepared data bank (Training
Information Management System).
- All the training information taken from different training site under national health training are being
updated and made available to each participant.
- NHTC has now plan to upgrade the training management system at central level and link with
regional health training centers and other clinical training sites into TMIS software.
- NHTC is also preparing trainers roaster on different discipline and training types.
vi. Drug Information Network
- Drug Information Network was established in 1991 under DDA to develop and disseminate
information on proper use of drugs, possible adverse reaction, contraindication, toxicity, drug
standards and efficacy, precaution and proper storage and handling, targeting to health care
professionals in the public and private sector and consumers.
- Further it provides information related to products, name of manufacturing company, retail and
wholesalers, and professionals registered in Nepal.
vii. Other Information Systems
- Health Infrastructure Information System (HIIS)
- Insurance Management Reporting System (IMIS)
- Ayurveda Reporting System (ARS)
Problems and constraints in health information system
- Significant gaps exist in information including but not limited to health status, management support
services, quality of health services for all public, private and NGO sectors.
- In some areas, data are collected excessively but not analyzed, used and disseminated.
- Data is often not reliable and consistent.
- Reporting is often delayed and incomplete.
- Information/ evidence based decision making is not yet a culture adopted in the health sector.
- There is a lack of skill among the health personnel to collect and use information systems.

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Health Sector Information System (HSIS) in Nepal
As outlined in the health sector information strategy, the health sector information system will operate in
the following way:
i. Information Generation
- Routine health service data will be collected at each service level and processed and use by all
health personnel.
- Administrative and financial data will be collected, processed and utilized by account and
administrative staff as prescribed.
ii. Information processing
- District Health Information Bank will serve as a center for all health and management data from health
facilities located in the district, regardless of their levels.
- District health information bank will function as a single repository in which data will be analyzed and
fed back to the facilities.
- MOPH, Departments and RHDs will receive reports from DHIB.
- A National Health Information Center will provide managerial and technical leadership for
development of health sector information system.
Figure: Health Sector Information System

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Health Management Information System (HMIS)
HMIS is a system that disintegrates data collection, processing, reporting and use of the information
necessary for improving health service effectiveness and efficiency through better management at all
levels of health services. - WHO, 2000
- The current HMIS uses 50 forms for recording and reporting with 290 indicators being regularly
monitored
Key Features of HMIS
- Addresses the needs of Nepal Health Sector Program, policy and programs.
- Enables selected indicators to be disaggregated by caste/ ethnicity
- Enables health facility level data reporting
- Integrates vertical reporting systems: EOC, Aama, CB-NCP, TB, HIV, etc.
- Enables electronic data entry at district and hospital level and web-based reporting to central level.
- Ensures all public and non-public facilities report to HMIS.
Relevance of HMIS
i. Relevance at central level
- It supports annual planning and program implementation.
- It helps assessing (evaluating) progress towards goals and targets.
- It helps to monitor the achievement, coverage, continuity and quality of health services.
- It links data/ information to MOHP, all departments, divisions/centers on time.
ii. Relevance at District level
- It helps to identify the health problems and to solve them.
- It assists in assessing the coverage of different district health services.
- It assists in planning, monitoring and evaluation of logistics distribution.
- It helps in implementing social security programs with special emphasis on free health services.
iii. Relevance at Grass-root level
- To evaluate the continuity of services to be taken by different patients.
- To find out the percentage of people utilizing the health services from the target population.
- To prepare monthly and quarterly work activities.
- To review the work progress.
Mechanisms to maintain the quality of HMIS
i. Data Verification and follow- up meeting.
ii. Feedback System (Manual & IT enabled)
iii. Supervision/Monitoring
iii. Training
iv. Involvement of Beneficiaries /Civil Society- Annual reports
Challenges and Weakness of HMIS
- Due to various reasons, there is irregular, incomplete and inconsistent reporting.
- The service data of private and non-government sectors are not adequately covered.
- HMIS has been used merely for collection and reporting of data to higher level without proper
utilization of available data.

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- There are large discrepancies between data reported to HMIS and recorded in registers in the health
facilities.
- There is a weaker practice of evidence based planning, monitoring and evaluation.
- Disaggregation of data is not done to identify health needs of specific groups.
- Reliance on non-technical staffs for data entries with greater likelihood of errors.

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Early Warning and Reporting System (EWARS)
- Early Warning Reporting System (EWARS) is a hospital-based sentinel surveillance system currently
operational in 60 hospitals (out of 81) throughout Nepal (EWARS Weekly Bulletin, Nov 2016).
- It was established in 1997 first in 8 sentinel sites and expanded to 24 sites in 1998, 28 sites in 2003
and 40 sites in 2008.
- EWARS is designed to complement the country’s Health Management Information System (HMIS) by
providing timely reporting for the early detection of six priority diseases/syndromes- malaria, kala-
azar, dengue, acute gastroenteritis, cholera and severe acute respiratory infection (SARI) and other
epidemic potential diseases like enteric fever.
- The Vector-borne Disease Research and Training Center (VBDRTC) in Hetauda serves as a focal
point for EWARS by receiving and analyzing all immediate and weekly reports directly from the
sentinel hospitals.
- VBDRTC then consolidates the reports and forwards weekly summaries to the Epidemiology and
Disease Control Division (EDCD). EDCD in turn issues a weekly bulletin summarizing case totals and
information on completeness and timeliness of reporting
Objectives of EWARS
- To monitor and describe trends of infectious diseases through a sentinel surveillance network of
hospitals followed by public health action and research.
- To receive early warning signals of disease under surveillance and to detect outbreaks
- To instigate a concerted approach to outbreak preparedness, investigation and response.
- To disseminate data/information on infectious diseases through an appropriate feedback system
Reporting System in EWARS
Immediate reporting
- The sentinel hospitals prepare immediate report within 24 hours of confirmation of diagnosis of all
EWARS reportable diseases except Kala-azar.
- EWARS focuses on immediate reporting of one confirmed case of Cholera, and severe and
complicated Malaria and one suspect/clinical case of Dengue as well as 5 or more than 5 cases of
AGE and SARI from the same geographical locality in a one week period.
Weekly reporting
- The sentinel hospitals prepare weekly reports on the basis of epidemiological week calendar.
- The weekly reports consist of the number of cases and deaths of reportable disease in a particular
week including those reported in immediate reports.
Strengths of EWARS
- Ministry of Health has grown to accept the need and importance of EWARS.
- EWARS has created awareness at the district level of what an early warning system is, how it
functions and why it is vital.
Weakness
- The diseases included in EWARS are not all prone to epidemic outbreaks (e.g. Neonatal tetanus and
kala-azar)
- There is overlap in the reporting of VDPs with the Polio Eradication Nepal (PEN) surveillance system
that has a much more extensive network of reporting sites.
- A hospital based system cannot provide early warning. It is too late once a patient is admitted to a
hospital.

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Figure: Information flow in EWARS
Human Resource Information System (HURIS)
HURIS is a computer-based system used to acquire, store, manipulate, analyze, retrieve, and distribute
pertinent information regarding human resources for health. HURDIS can also be defined as a systematic
procedure for collecting, storing, maintaining, retrieving, and validating data needed by MOH about its
human resources, personnel activities, and organization unit characteristics.
Status of HURIS
- HURIS was developed by DOHS in 1994 with the support of GTZ.
- Since 2004, the system is in operation at the Health Sector Human Resource Information Centre
(HURIC), MOH.
- HURIS, which is located in the MOH, was upgraded to enable districts to enter data by remote data
capture using the internet.
- This is a very widely used standard, international database, which is particularly suited to a huge HR
database for a large number of employees.
- The database includes all employees of the MOH. It does not include healthcare staff working in
army, police and civil service hospitals, or those employed in the private sector.
- HURIS is networked to the District Health Office, where trained operators are expected to keep it the
HR date up-to-date.
The database holds an extensive amount of information including:
- Personal details
- Education and training
- Posts
- Institutions, locations and resources (numbers of beds)

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Importance of HURIS in Nepal
- HURIS as a whole mainly improves information sharing and communication between the MOHP and
DOHS and its subordinate bodies.
- The Human Resource Development Information System reduces cost and time spent on manual data
consolidation regarding HRH information.
- The system hopes to give the Human Resource Information Centre (HURIC) of MOHP more strategic
role, as the information taken from HURIS can be the basis for employee training schemes and work
efficiency projects.
- The basic advantage of a HURIS is to not only computerize HRH records and databases but to
maintain an up to date account of the decisions that have been made or that need to be made as a
part of an HRH management plan.
- HURIS in Nepal being an IT enabled system, data entry, update and retrieval are all significantly
faster. Redundant data can be easily replaced.
- A computerized system can greatly reduce fragmentation and duplication of data. All data can be
stored in a single system to enable retrieval of complete picture of each HRH. Moreover, depending
on the requirement, reports can be generated in different ways that provide an accurate picture.
Verification of data and error rectification are also relatively easy in computerized systems.
- The skill mix and distribution of HRH at different regions, districts and health institutions can be
determined based on the HRH information available through HURIS.
UNIT 5: INFRASTRUCTURE AND LOGISTICS MANAGEMENT
Logistics Management
How health logistics management differ from that of other sectors?
Basis of difference Health sector logistics management Other sector logistics management
Strategic goals - Minimize the loss of life and
alleviate health problems
- Usually to produce high quality
products at low cost in order to
maximize profitability and achieve
customer satisfaction
Criticality - Health logistics are very critical
and are directly concerned with the
health and life of the people.
- Managing health logistics requires
critical considerations in terms of
handling, transport, storage and
distribution. E.g. Cold-chain is a
critical factor in vaccine
management
- Although the management of any
logistics holds particular
importance, this is relatively less
critical as compared to health
logistics.
Demand pattern - Demand is generated from
occurrence of health
problems/events which are
unpredictable in terms of timing,
type and magnitude.
- Demands are estimated based on
past consumptions trends, which
may not always be accurate.
- Demand is relatively stable and
predictable
- Demands for logistics occur at
fixed locations in set quantities

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Basis of difference Health sector logistics management Other sector logistics management
Inventory control - Inventory control is challenging
due to high variations in lead
times, demands, and demand
locations.
- Uses well-defined methods for
determining inventory levels based
on lead time, demand and target
customer service levels.
Agility - In health logistics management,
agility is highly essential. Rapid
development of critical supplies
and services is of utmost
importance in the face of
unpredictable demand and
uncertain supply.
- Although both types of logistics
management should be agile,
other sector logistics management
is relatively stable
Quality - Quality assurance is the most
critical aspect of logistics
management.
- Health care logistics without
appropriate quality can
directly jeopardize health of
many people
- For e.g. vaccines not stored
under required temperature
- Quality assurance is a core
function in any logistic
management.
- However, the poor quality of other
logistics may be specifically linked
to productivity and financial loss.

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Logistics Cycle
What are the Key Components of Logistics Management?
A logistics management includes a number of activities that support the six rights (. Over the years, a
model has been developed to illustrate the relationship between the activities in a logistics system; called
the logistics management cycle.
Major activities/components in the logistics Management Cycle:
i. Serving customers
- Everyone who works in logistics management must remember that they select, procure, store, or
distribute commodities to meet customer needs.
- Storekeepers provide customer service when they issue logistics to the health facility, and the central
medical stores provide customer
service when they issue commodities to
the region and district
ii. Selection
- In any health logistics system, health
programs must select drugs and
commodities.
- Selection of products is made on the
basis of national list of essential
medicines.
- In a health logistics system, a national
formulary and therapeutics committee,
pharmaceutical board, board of
physicians, or other government-
appointed group may be responsible for product selection.
iii. Quantification
- After logistics have been selected, the required quantity and cost of each item must be determined.
iv. Procurement
- Procurement of health logistics is the responsibility of procurement unit at LMD.
- After a supply plan has been developed as part of the quantification process, quantities of logistic
items must be procured.
- Health systems or programs can procure from international, regional, or local sources of supply; or
they can use a procurement agent for this logistics activity
v. Inventory management: storage and distribution
- After the logistic items have been procured and received by the health system or program, it must be
transported to the service delivery level where the client will receive the products.
- LMD is responsible for the distribution of medicines from its central and regional stores to the district
stores. DPHO is responsible for sub-district level distribution and storage.

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Logistics Management System of Nepal
- Prior to 2003, the Ministry of Health relied entirely on a ‘Push System’ to allocate health commodities
based on historical consumption patterns and equitable rationing of national drug stocks.
- Logistics Management Information System of Nepal is currently based on hybrid push and pull
system.
Push System of Logistics Management
- A push system is a supply based approach in which logistics are supplied to lower based on
decisions from higher levels.
- Push system exists from central (Logistic Management Division & Central Medical Store) and regional
level (regional medical stores) to district levels.
Pull System of logistic management
- A pull system of logistic management is a demand based approach for ensuring the reliable
availability of health commodities at all service delivery points within a health system.
- Pull system exists below district level.
- Half the annual estimated consumption of a health facility is dispatched directly to the facility. The
remaining half is stored at district level for demand-based supply
- The supply of health commodities to health facilities are made based on demands from peripheral
health facilities.
- Regional medical store maintains buffer stocks of key essential drugs to supply district stores as per
need.
Figure: Logistic Management System of Nepal

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Merits and Demerits of pull system
Merits Demerits
D(P)HO - Pull system brings improvement in over and under
stock situations
- Ensures year round availability of drugs and
commodities
- Repeated packaging and supply
of commodities may incur
greater costs.
Peripheral
Facilities
- Helps to emergency order of essential drugs.
- Facilitates availability of health commodities round
the year.
- Field level health personnel are empowered
because of decentralized logistics decision making
- There may be problem in supply
if particular drugs are demanded
by many health facilities at the
same time
Store Management
Because health commodities are stored at every facility in the pipeline; almost everyone working in the
supply chain is responsible for store management.
- Store management ensures the physical integrity and safety of products and their packaging,
throughout the various storage facilities, until they are dispensed to clients.
- An important goal in store management of health products is the correct staging of health products to
ensure that orders can be filled and distributed.
Key activities in store management
i. Product receiving and incoming inspection
- This activity occurs during the unloading of vehicles and includes the visual inspection of delivered
packages to ensure that products were not damaged during transport.
- It is also important during this activity that storekeeper verify the quantities of products received
against the packing slip or shipping invoice.
ii. Storage
- This process includes moving products from the receiving area, after they are released for storage;
and assigning them to their designated storage area (rack, shelf, floor, etc.).
- Appropriate guidelines must be followed for storage.
- It is important that every product moved into or out of the racks, shelves, or any storage area is
correctly recorded on the stock-keeping records; an inventory control system helps to manage them.
iii. Picking and packing
- To fill distribution requests (or picking lists), products must be located, pulled from inventory, and
prepared for distribution.
- In some cases, products need to be packed or palletized and sometimes, bundled with other products
into kits before being transported.
iv. Shipping
- To guarantee good distribution accuracy, the list of products and their quantities must be checked
against product orders, or requests.
Guidelines for store management
- Storeroom should be cleaned and disinfected regularly.
- Supplies should be stored in a dry, well-lit, and well-ventilated storeroom, out of direct sunlight.
- The storeroom should be secured from water penetration.

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- It is necessary to ensure that fire safety equipment is available and accessible, and that personnel
are trained to use it.
- Condoms and other latex products should be stored away from electric motors and fluorescent lights.
- Cold storage, including a cold chain should be maintained for commodities that require it.
- Flammable products should be stored separately using appropriate safety precautions.
- Cartons should be stacked at least 10 cm (4 in) off the floor, 30 cm (1 ft) away from the walls and
other stacks, and no more than 2.5 m (8 ft) high.
- Medical supplies should be stored separately, away from insecticides, chemicals, old files, office
supplies, and other materials.
- Cartons should be arranged with arrows pointing up, and identification labels, expiry dates, and
manufacturing dates should be visible.
- Supplies should be stored in a manner accessible for FEFO, counting, and general management.
- Damaged or expired products should be separated and disposed off without delay.
Organization structure and functions of logistics management division
Organization Structure
- The Logistics Management Division (LMD) was established under the Department of Health Services
(DoHS) in 1993.
- LMD has nearly 200 staff members, of which 70-80 are based in Teku, and the remainder are at
regional and local warehouses/store facilities.
- LMD has three main groups of staff members at Teku who are directly involved in the logistics
activities: Procurement Officers, Bio-Medical Engineers and Warehouse Officers.
• The procurement team’s responsibilities include needs assessment, the actual procurement
activities, contract drafting arranging for advanced payments, payments on shipment, final
payments, and general contract management.
• Warehouse staff are responsible for receiving goods, managing warehouse stock and ensuring
delivery to the third party distributor or arranging transport by LMD’s and MoHP’s own vehicles.
• Recommendation for acceptance of delivered goods is the responsibility of the Bio-Medical
Engineer(s).

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Objectives of LMD
• To plan and carry out the logistics activities for the uninterrupted supply of essential medicines,
vaccines, contraceptives, equipment, HMIS/LMIS forms and allied commodities (including repair and
maintenance of bio-medical equipment) for the efficient delivery of healthcare services from the
health institutions of government of Nepal.
Strategies
• Logistics planning for procurement, storage and distribution of essential health care commodities.
• Introduce effective and efficient procurement mechanisms like Multi-Year Procurement (MYP), e-
bidding, e-submission.
• Use of LMIS information in the decision making at all levels.
• Strengthen physical facilities at the central, regional, sub-regional and district level for the storage and
distribution of health commodities.
• Promote web-based LMIS and Equipment/Expendable Items Inventory System in districts and
regions.
• Repair and maintenance of bio-medical equipment, instruments, cold-store and transportation
vehicles.
• Capacity building of required human resources on logistics management at all levels.
• Implement effective Pull System for year round availability of Essential Drugs and other health
commodities at all levels (Central, Regional, District and Health Facilities).
• Improvement in procurement and supply chain of health commodities through procurement reforms
and restructuring of LMD.
Functions of LMD
• Plan for the efficient management on procurement, storage, distribution and transportation of health
commodities required for the delivery of healthcare services to all health institutions of government of
Nepal in the country.
• Develop tender documents as per public procurement rules and regulations and procure essential
medicines, vaccines, contraceptives, equipment, different forms including HMIS/LMIS and allied
commodities.
• Store, re-pack and distribute medicines, vaccines, contraceptives equipment and allied commodities.
• Conduct health logistics management trainings/orientation in collaboration with NHTC up to regions,
districts and other stakeholders.
• Support on implementation and functioning of web-based LMIS, web-based Equipment Inventory
System and Inventory Management System software.
• Manage to maintain the bio-medical equipment, machineries and transport vehicles.
• Implement and monitor Pull System for contraceptives, vaccines and essential drugs in the districts.
• Coordinate with all development partners supporting health logistics management.
• Supervise and monitor the logistics activities of all region (RMS) and district levels (DPHO/DHO).
• Implement Telemedicine program in the hill and mountain districts.
• Procure, store and distribute various health commodities for Program Divisions of the DoHS.

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Quality Assurance and Inventory Control System
Quality Assurance
Existing quality assurance provisions in logistics management of Nepal
- The Department of Drug Administration (DDA) has finalized a draft on “Good Distribution Practices”
for pharmaceutical warehousing.
- The DDA regulates medicine production, import, export, storage, supply, sales, distribution, quality
assessment, regulatory control, rational use of drugs and information flow.
- The LMD has draft standard operating procedures for procurement with some sections still to be
completed.
- For the warehousing at central and regional level, standard storage guidelines have been
developed and used.
Quality Assurance activities in Logistics Cycle
i. Selection:
- The selection of products is made on the basis of the national list of essential medicines.
- Although the divisions are best placed to choose the medicines they need, the strength, exact
composition, primary pack size, form and other pharmaceutical elements should be verified by a
pharmacist to avoid procurement of inappropriate products.
ii. Technical specifications
- The LMD maintains a technical specifications bank that is regularly updated.
- Compliance with national pharmaceutical standards: Formally all the imported pharmaceutical
products have to be registered at the DDA for market authorization.
- Products procured with donor funds have to be prequalified by WHO, SRA or other authority.
iii. Procurement
- The procurement unit at the LMD works with prequalification of manufacturers and the pro ducts
where possible.
- The procurement done by the districts is currently not subject to a specific quality assurance policy.
- All medicines the districts purchase must be DDA registered.
iv. Pre-shipment inspection
- Inspection are done on a regular basis and includes review of the manufacturer’s internal quality
control documents, random sample taking and the appropriate laboratory tests to ensure compliance
with the requirements of the specifications.
- This is done through an international independent third party inspection agency and the quality testing
is done in an ISO 17025 accredited laboratory.
v. Post-shipment inspection
- Post-shipment inspection is conducted on all shipments when it is delivered to the first receiving
warehouse/store.
- This is done by the warehouse personnel.
- It includes quantity checks and physical verification of the products as well as drawing samples from
all batches as reference samples.

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vi. Reception and storage management
- There is no traceability of batch numbers and no reception and storage operating procedures.
- There is no DDA involvement in the inspection of the government managed pharmaceutical
warehouses.
vii. Distribution
- LMD is responsible for the distribution of medicines from its central and regional stores to the district
stores. While the stores are responsible for preparing the packages for distribution, a private
transporter is employed to deliver it to the district stores on a regular basis.
- The transportation of medicines to the peripheral health facilities is done by the resp ective
DHO/DPHO.
- There is no SOP on transport conditions.
Logistics Management Information System
A logistics management information system (LMIS) is the system of records and reports that is used to
collect, organize, and present logistics (drugs, vaccines and other health commodities) data gathered
across all levels of the system.
- LMIS was developed in 1994 and expanded nationwide in 1997.
- It is designed to receive timely information (quarterly reports) from HFs on supply, consumption and
stock of selected essential drugs and commodities.
- Information generated from this system is used for procurement and distribution planning.
- A web-based LMIS up to DPHO is in operation since 2008.
- LMIS is monitored effectively by LMIS unit at LMD.
- This system tracks more than 206 items at District level.
Components of LMIS
1. Logistic types
- A well-functioning LMIS should clearly define the types of logistics to be tracked by the information
system.
- LMIS in Nepal is an integrated system tracking 206 items at the district level, including family
planning, maternal and child health, vaccines, cold chain accessories, and surgical and
miscellaneous items from nine different programs.
2. Logistic Records
- Twelve types of tools are used for maintaining logistics management information from central to
peripheral levels.
- These tools include stock keeping records, transaction records and consumption records.
• Stock Ledger (expendable and non-
expendable)
• Requisition form
• Transfer form
• Entry report
• Purchase order
• Stock inspection form
• Annual stock balance report
• Stock elucidate form
• Substock ledger
• Personal ledger
• Quarterly LMIS report

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3. Essential Data for decision making
- If data are to be collected for decision-making, it is necessary to know what data to collect and in
what frequency.
- To make logistics decisions, there are three essential data items in LMIS.
• Stock in hand: The quantities of usable stock available
• Consumption: The quantity of stock dispensed to users or used during a particular time period.
• Losses and adjustment: Quantity of stock removed from the pipeline for any reason other than
consumption by clients or use at the service delivery point.
4. Reporting system
- An important component of LMIS is a well-defined reporting system with flow of information from
peripheral to central level and dynamic feedback system.
How does LMIS help for assessing logistics supply for health facilities?
With the insertion of data elements like Authorized Stock Level (ASL), Emergency Order Point (EOP), and
Quantity to Order in the LMIS form, the system can easily generate ASL and EOP for the health facilities
and districts and calculate the stock needed for resupply.
Importance of LMIS
- It monitors the national pipeline and stock level of key health commodities.
- It maintains quality of drugs and commodities.
- It estimates annual requirements of program commodities including contraceptives, vaccines and
essential drugs.
- It helps to make demand and ensure supply of drugs, vaccines, contraceptives, and essential medical
supplies at all levels.
- It helps in determining the stock level and additional stock for health facilities and hence manages
logistics supply.
- Ensures year round availability of drugs and commodities.
Strengths of LMIS
- A nationwide LMIS producing reliable logistics data for decision making at all levels.
- Policymakers accept LMIS data as credible and use it to make nationwide policy and operational
decisions.
- Improvement in storage practices, thus reducing the waste and expiry of commodities.
- LMIS made possible and successful introduction of the pull system for essential drugs.
Problems and constraints of LMIS
- Web-based LMIS and inventory management system are not updated regularly.

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UNIT 6: ORGANIZATIONAL DIAGNOSIS AND MANAGING CHANGE IN ORGANIZATION
Health Sector Reform (HSR) Strategy
- Health sector reform is a sustained process of fundamental change in policies and institutional
arrangements of the health sector, usually guided by the government.
- The process lays down a set of policy measures covering the four main core functions of the health
system, viz., governance, provision, financing and resource generation.
- It is aimed at improving the functioning and performance of the health sector and, ultimately, the
health status of the population.
- Health sector reform deals with equity, efficiency, quality, financing, and sustainability in the provision
of health care, and also in defining the priorities, refining the policies and reforming the institutions
through which policies are implemented.
- Health sector reform process started in Nepal since 2002 with the formulation of Nepal Health Sector
Program: An agenda for reform (2002-2015). The health sector reform process in Nepal is currently
guided by the Nepal Health Sector Strategy, 2015-2020 and NHSP-III.
Need for health sector reforms in Nepal (Why is health sector reform essential in Nepal?)
i. Need for Health sector financing reforms
- When we analyze the health sector investment in Nepal, it can be seen that the situation over the
past few decades has not changed with regard to low investment in health.
- The total health expenditure in Nepal remains around 5.8% of GDP. The proportion of government
contributions as a percentage of total health expenditure is about 76 percent
- About 5-7 percent of total health expenditure in Nepal comprises of external assistance.
- Therefore appropriate strategies are necessary on how to mobilize financial resources within the
health sector or improve the use of existing resources. This requires reforms in existing health care
financing system.
- Alternative health financing reforms such as subsidized payment schemes, contracting services,
public private joint ventures, social insurance schemes, etc. are some of the examples.

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- The fundamental principle of financing reforms is that health care funds are raised from the people
according to their ability to pay, and not according to health need. It is also equally important that
funds are spent according to health need, and not according to ability to pay.
ii. Need for service reforms
- In the current global context and commitments to Universal Health Coverage, it is necessary for
Nepal to look at what type of service reforms are necessary to ensure universal access to care.
- It is very much essential that the country determine what essential public health package should be
available at various levels of the health system which can be universally accessible and affordable.
iii. Need for Governance Reforms
a. Need for reorientation and restructuring of health system
- The present structure of the public health sector may require reorganizing to implement the
forward-looking aspirations of the National Health Policy 2071 and emerging developments in the
global health agenda.
- The recent restructuring of the country through federal structure systems also provides an
opportunity to restructure and rebuild health systems better.
- In this context, various health sector reforms such as making the ministry smaller and less
hierarchical, re-distribution of staffs with skill mix at each local level, introducing new pay scale
and grading structure as well as decentralization efforts are essential.
b. Decentralization
- As a part of political reform with recent federal system of governance, Nepal's health sector is
also essential to move towards its decentralized functions.
- This entails putting greater focus towards decentralized (local level) planning and resource
allocation.
Nepal's Health Sector Strategy (2015-2020)
Vision: All Nepali citizens have the physical, mental, social and emotional health to lead productive and
quality lives.
Goal: The goal of NHSP III is improved health status of all people through accountable and equitable
health service delivery system.
Principles
- Universal health coverage
- Right based approach (equity)
- Quality
- Health in all policies/ Health as a development agenda
Strategic Directions:
i. Equitable access to health services
ii. Quality health services for all
iii. Health systems reforms
iv. Multi-sectoral collaboration
i. Equitable access to health services

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- NHSS and NHSP-III re-emphasizes the importance of the equitable provision of basic health care for
all as the backbone strategy for government and development partners.
- It focuses on achieving greater health equity by such measures as
• Mitigating both demand and supply side barriers to promote access to health services
• Focusing on strengthening service delivery and demand generation to underserved populations
and improving social health protection schemes.
• Establishing services to reach underserved, both in terms of population and geography and
focusing on health care of both urban and rural populations.
• Focusing on harmonization and alignment of social protection schemes and delivering services in
cost effective manner.
ii. Quality health services for all
- Advancing the quality of systems and services is ingrained in all strategies and actions of NHSP-III.
- Proposed strengthening of procurement, supply chain management, human resource management,
sector financing, as well as other core systems are all driven by the ultimate goal of improving quality
of services.
iii. Health systems reform
- NHSS prioritizes good governance to ensure clear lines of authority and decision-making and to instill
the understanding that all levels of the health system are accountable, ultimately to the people that
they serve.
- NHSS also focuses on strengthening district health systems through various mechanisms as:
 Restructuring health sector and rebuilding health systems
 Decentralized planning and budgeting
 State and non-state partnerships
 Regulation across the public and private health system
 Strengthening research and promoting the use of evidence
 Application of modern technologies
i. Multi-sectoral coordination
- NHSS prioritizes multi-sectoral collaboration to improve health lifestyles and healthy environment.
- Encourages engagement of the MoHP with other Ministries involved in areas such as urban planning,
roads, education, water, and environment.
Outcomes of NHSP III
 Outcome 1 Strengthened health systems: HRH, Infrastructure, Procurement and Supply chain
management
 Outcome 2 Improved quality of care at point-of-delivery
 Outcome 3 Equitable utilization of health care services
 Outcome 4 Strengthened decentralised planning and budgeting
 Outcome 5 Improved sector management and governance
 Outcome 6 Improved sustainability of health sector financing
 Outcome 7 Improved healthy lifestyles and environment
 Outcome 8 Strengthened management of public health emergencies
 Outcome 9 Improved availability and use of evidence in decision-making processes at all levels

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Sector Wide Approaches
- A SWAp is an approach which involves a different type of relationship between government and
development partners
- It is a means of improving aid effectiveness- by improving the efficiency and effectiveness with which
all resources are used and accounted for in the sector.
- Under the SWAp, project funds contribute directly to sector-specific umbrella and are tied to a defined
sector policy under a government authority.
- The Sector Wide Approach came into effect in Nepal in 2004.
There are six core elements that are commonly accepted as the key building blocks for the SWAp:
1. Government leadership of the sector through sustained ownership.
2. A clear, nationally-owned, sector policy and strategy that is derived from broad- based stakeholder
consultation with the support of all significant funding agencies.
3. A (medium term) budget and expenditure framework which reflects sector policy.
4. Shared processes and approaches for planning, implementing and managing the sector strategy.
5. A sector performance framework monitoring against jointly agreed targets.
6. Commitment to move to greater reliance on government financial manageme nt and accountability
systems.
In addition to the above six core elements, cross-cutting issues such as institutional capacity building and
decentralization also tend to be included in the SWAP framework.
Advantages of SWAp
- Harmonizes sector policy development, planning, budgeting, execution, and monitoring and
evaluation;
- Increases the efficiency of resource use by deepening consultation in the prioritization of activities
and resource allocation, compared to when each spending agency operates independently;

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- Makes funding clearer and more predictable. Stand-alone projects are not set within an overall
expenditure framework. Overall funding flows, therefore, tend to be unclear and can be highly
unpredictable. When there is a single expenditure plan all stakeholders can clearly see where their
money is going;
- Reducing transactions costs. Projects often make significant demands on the time of senior policy
makers through project review missions, evaluations, and so on;
- Improving transparency through a single expenditure plan that allows all stakeholders to assess
whether the allocation of resources is consistent with stated national priorities. Under projects this is
not the case, so there is little clarity on overall funding flows – nor is it possible to compare overall
funding flows with priorities;
- Yielding greater visibility of traditionally marginalized sub-sectors such as sanitation;and
- Assisting government and development partners to agree on a better Division of Labour (DOL)
among donors, and between donors and government.
Weaknesses of SWAp
- SWAPs have proved time- and energy-consuming and difficult to negotiate, such that management
costs are perceived to have increased rather than fallen with the SWAPs
- Governments are still finding it difficult to answer the most contentious of sector problems, for
example, how to respond to the fact that they cannot afford to provide free universal access to
services (all health SWAPs);
- Donors are still too involved in the detail of implementation and monitoring, and some donors have
been unable to harmonize their procedures;
Stewardship in health sector
The world health report (2000) broadly defined stewardship as “the careful and responsible management
of the well-being of the population”, and in the most general terms as “the very essence of good
government”.
- The essence of stewardship in health sectors is that government guides the health system in contrast
to managing it directly.
- In precise term, stewardship can be understood as the responsibility of government and is concerned
with how government takes responsibility for the health and well-being of the population and for
guiding the health system as a whole.
- Stewardship in health sector has been considered as one of the key building blocks of health system.
Thus, understanding the function of stewardship allows health systems to attain appropriate and
measurable outcomes and cost efficiency.
- This ultimately influences the ways that other health system functions (i.e. finance, resource
generation, service delivery) are undertaken, embedding the health system into a wider society.
Tasks of Health Sector Stewardship
WHO has identified three main tasks of stewardship as
- formulation of health policy to define the vision and set strategic direction;
- exerting influence through regulations, and
- collecting and using intelligence

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