Case Study

Health systems strengthening, India Better procurement, better health

Helping Indias rural poor
The health of Indias population has improved significantly over the decades since independence. However, a high proportion of the population, in particular those in rural areas, continue to suffer and die from easily preventable diseases and childbirth-related complications. Every year in India approximately 2.4 million children and about 136,000 women die due to poor health services and infrastructure systems. These numbers represent about one fifth of the global total. In line with the Millennium Development Goals and the recognition of health as being key to economic and social development, the government of India launched the National Rural Health Mission (NRHM) in 2005 with a strong commitment to reduce maternal and infant mortality and provide universal access to public health services. The Mission has been receiving support through a fund pool of World Bank and DFID funds with the aim of implementing sustainable changes to the health delivery system that will ensure access to and quality of health services. Crown Agents, in partnership with the Ministry of Health & Family Welfare (MoHFW) and DFID, is working towards reforming public procurement and addressing gaps in the logistics and supply chain system through the government flagship, Reproductive & Child Health (RCH) programme. RCH I has had encouraging results in reducing infant, child and maternal mortality and one of the aims for RCH II was the creation of an Empowered Procurement Wing (EPW) within the MoHFW to consolidate, streamline, and strengthen procurement activity in order to professionalise procurement of health sector goods. Under DFID Technical Assistance in India commencing from April 2006, two phases of support to EPW have been commissioned. Crown Agents won both phases through international competitive bidding and has been responsible for supporting the EPW in promoting transparency and efficiency in the procurement systems of the MoHFW. With better procurement systems, more of Indias population, particularly the marginalised and rural poor will have access to quality healthcare.

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Facing the challenges with specific solutions

Improved data collection leading to better health systems - one of the key bottlenecks identified by Crown Agents during the diagnostic phase of the assignment was the unavailability of computerised procurement data. The lack of data meant procurement and eventual despatch of drugs and equipment to states and districts was based on estimates leading to overstocking of some drugs and equipment and shortage of others. This had a direct impact on end users with implications for drug availability, wastage, and long term treatment as well as emergency care. Crown Agents alongside a local IT firm developed a Procurement Management Information System, ProMIS, to address these issues and an I.T road map to ensure effective design and implementation. ProMIS captures procurement and inventory data for the Ministry and generates reports at the central, state and district level for analysis and planning. ProMIS offers information to the end user to forecast requirements, monitor inventory at various levels, plan and finalise procurement, monitor supplier performance and manage complaints. ProMIS is also Above: Training on Drug Management for officials designed to support online tendering and processing bids. It of state and central government has a provision to upload technical results of bid evaluation, allow financial evaluation of bids, process supply orders, generate invoices and process payments. Moreover, it is flexible enough to handle specific procurement rules for the MoHFW where they have both the GoI procurement rules (for procurement using government funds) and the World Bank procurement guidelines (for procurement using donor funds). Databases for Quality Assurance and Testing, Complaints Management, Supplier Performance and a UNSPSC coding system have also been completed and incorporated into ProMIS. Crown Agents has ensured that ProMIS has been tested for reliability by an independent agency. It is now in the process of being piloted in all Government Medical Store Depots (GMSDs) and three pilot states. Data for these three states and the GMSDs is being captured by ProMIS and reports are now been generated. The success of ProMIS has encouraged the Ministry to extend its implementation gradually to all the states of India. With other stakeholders such as the World Health Organisation showing interest in upgrading ProMIS to capture data related to procurement of vaccines in the country, it stands a great chance of emerging as a single IT solution for health procurement in India. ProMIS is helping to streamline procurement, reduce bidding failure, improve the capacity to plan and forecast effectively and ultimately get the right amount of drugs or equipment to the right place at the right time. This system is an integral step towards the objectives of the Millennium Development Goals. Managing Change and Governance: Crown Agents support enabled the EPW to establish itself with functional space, resources and specific roles in the procurement functions of the ministry. The first phase of Crown Agents assistance to the EPW lasted three years and led to considerable progress in streamlining the procurement system. In addition to developing a business plan and vision for the EPW in order to provide clear goals, we reviewed staffing and training needs, helped implement procedures and systems for procurement and supply chain management, including storage, quality assurance and information management. Integrating the EPW into the ministry has been successful and allows for better co-ordination with other teams which improves its overall effectiveness. Procurement and Management of Drugs and Medical Equipment: Crown Agents led the production of a procurement manual with standard bidding documents and templates. This operational manual brings together existing resources in a manageable framework and aims to fill major gaps in the body of materials available for those responsible for public health procurement.

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Crown Agents has also helped with a review of laboratories controlled by the Central Drug Control Standards Organisation, with the creation of a list of Approved testing laboratories to be used by the MoHFW for all their testing requirements. Furthermore, we have helped in the preparation of drug specifications, packaging, model inserts and quality assurance requirements and a catalogue of generic vaccine specifications has also been completed. This database/compendium of generic technical specifications for medical equipment covers around 800 items of capital equipment and is being used to improve quality from suppliers. Patient safety is critical in the drive to improve national health and by setting standards for equipment and quality drugs, Crown Agents is striving to deliver important progress in this field. The improvements to quality throughout the system with the standardisation of drug/ medical equipment specifications has been central as it has a direct bearing on the delivery of health services to end users. The use of the compendium of specifications for the medical and cold chain equipment has been further promoted by wider dissemination among agencies involved in health procurement both at central and state level. Crown Agents approach included reference/guideline material, quality assurance and training as well as the revision of drug formularies according to India Pharmacopeia and regulatory compliance within Drug Controller of India.

Above: A typical warehouse, which will be upgraded and equipped with ProMIS during CAs support

Developing a reliable and robust logistics and supply chain: This has been crucial to the success of both phases of the assignment. Crown Agents focus is to improve the capacity and understanding of supply chain management and how it should be supervised combined with improving the understanding about the function in other vertical programmes. Greater understanding will also be achieved through improvement of communications and cooperation between the programmes and the medical stores. This effort will be supported by the design of a rational transport policy and the creation of a state-of-the-art storage infrastructure for health commodities all supported by improved record keeping and information systems.

Providing for a sustainable future

The second phase which began in April 2009 aims to introduce further reforms as well as institutionalise existing ones. Central Procurement Agency (CPA) Crown Agents will set up this autonomous body which will carry out all procurement activities for the Ministry. We will focus on strengthening policies and procedures and creating a transparent, recognised, professional procurement body. This will serve as a powerful advocate of best practice guidelines and spread the message of effective procurement. Communication strategy This strategy will explain why change is desirable. It will garner support from key players to energise the system and facilitate behaviour change. This will include the creation of an EPW website, developing EPW, ProMIS and CPA as brands and promoting e-learning. E-learning tools will be important especially in the dissemination of the compendium of specifications and the procurement manual. This strategy will serve to institutionalise and market reforms as well as educate others thus leading to better awareness of the connections between procurement systems and the health service received by the poor.

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Capacity development and training Crown Agents will provide further capacity development through formal training and on the job support to ministry officials imparting best practices in health sector procurement, the use of ProMIS and the development of generic specifications of drugs and medical equipment. In order to identify future needs, Crown Agents will perform a comprehensive assessment of staff at the CPA and targeted state agencies. This will be key for establishing further institutional memory, allowing for our partners to take ownership of the procurement process and contribute to long term effective strategies to tackle deep seated issues in health systems infrastructure. Future innovations in IT and knowledge management Crown Agents has been instrumental in the development and adoption of ProMIS which is a huge step in improving health procurement systems in India. The IT team will now be aiming at developing the EPW website and ensuring the roll out of ProMIS across all other states of the country. Crown Agents recognises the importance of knowledge management under the assignment, as it is imperative that we create an institutional memory for the reforms and the processes adopted to institutionalise change. Specific long term objectives include:

Simplifying storage systems by introducing a rational storage, warehouse and distribution system Upgrading cold storage infrastructure and management systems Improving communication and cooperation between health programmes and supply chain entities Developing a smart transport system Improving drug quantification processes Accelerating implementation of ProMIS, which would also improve the management of supply chain.

Above: A formal training session on implementation of ProMIS for the Ministry

Crown Agents in India Crown Agents is an international consulting company with a firm commitment to global growth and development. We have been working in India for over three decades initially through a liaison office and currently through a fully owned subsidiary, Crown Agents (India) Pvt. Ltd. We are based in Delhi and have been working closely with multilateral, bilateral and government agencies in the field of public procurement, public finance, capacity development and programme management. Crown Agents delivers interventions with a commitment to international best practices and specific local context. We take pride in being recognised by our clients as partners with the highest standards of transparency and integrity.
For more information, contact:

Mr. Devashish Banerji Country Manager Crown Agents (India) 615-616, International Trade Tower Nehru Place, New Delhi-110016, INDIA Tel: +91 (11) 40766666 Fax: +91 (11) 41688367 devashish.ca@crownagentsindia.com

Ms. Bijoya Banerjea Programme Director St. Nicholas House, St. Nicholas Rd Sutton, Surrey SMI IEL UNITED KINGDOM Tel: +44 (0) 20 8643 3311 Fax: +44 (0) 20 8643 8232 bijoya.banerjea@crownagents.co.uk

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