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Zambia: Reorganising Health Care Financing – Part I

[By Brian Muwanei Kabika]

Introduction

In today’s article, I will endeavour to explain how the Zambian government has been financing its health care delivery system. In doing so, I will look at the roles of the Ministry of Health (MoH), the Zambia Medicines and Medical Supplies Agency (ZAMMSA) which previously was known as Medical Stores Limited (MSL) and the National Health Insurance Management Authority (NHIMA).

I will also compare the roles of NHIMA and ZAMMSA in health care delivery system in Zambia. This will be followed by discussing the reasons and method of realigning the life of NHIMA for the betterment of public good and a conclusion will be made.
Health care financing

Since 1964 and maybe even before that, Zambia has been solely depending on taxpayers’ resources (including levies, fines, etc) to finance its health care delivery. The tax that citizens pay to the Zambia Revenue Authority (ZRA) is in turn channelled to the government to procure medicines, medical equipment, other medical supplies, build health facilities and train health personnel.

The church has also been a pillar in delivering health care to the people, especially in deep rural areas across the country where the Central Government may not have visible presence.
Cooperating Partners, Non-Governmental Organisations and some individuals have also a lion’s share in ensuring that citizens of this republic access decent medical care.

In a nutshell, the government, the Church, Non-Governmental Organisations, Cooperating Partners and some individuals have been the main players in the health care system for a very long time.

MoH

The Ministry of Health has many facets in the health care delivery system in Zambia. It formulates health policies, implements government directives and the annual budgets, and generally superintends overall health matters in the country.

The portion of the tax that government allocates to the health sector goes to MoH for spending. The most common spending in most cases relates to procurement of medicines, medical equipment and other pharmaceutical supplies.
ZAMMSA

As a way of background, ZAMMSA was previously known as MSL. The MSL was established in 1976 as a semi commercial, limited company under the Companies Act. It was wholly owned by the government, with the Ministry of Finance being the main shareholder (98 per cent) and the Ministry of Health the minor shareholder (2 per cent).

Although MSL was initially intended to play a role of manufacturing of pharmaceutical products to supplement on import of pharmaceutical products, this was not fully realised due to numerous reasons. The government in most cases used it for storage and distribution of medicines, medical equipment and other pharmaceutical supplies to health facilities.
The tradition has been that MoH would procure medicines, medical equipment and other pharmaceutical supplies and the role of MSL was to store and distribute these to government health facilities.

In 2019, government, after pressure from Cooperating Partners who provide budgetary support to the health sector agreed to enact a law, the Zambia Medicines and Medical Supplies Agency Act No. 9 of 2019 of the Laws of Zambia (ZAMMSA Act) to rename MSL to ZAMMSA and continued its existence.

Under ZAMMSA Act, ZAMMSA was empowered with authority to procure drugs among others. This was in addition to its mandate of storing and distribution of medicines and other pharmaceutical supplies to health facilities.

Section 5 of ZAMMSA ACT reads:
“The functions of the Agency (ZAMMSA) are to:
(a) procure, store and distribute medicines and medical supplies; (b) re-package and re-label medicines and medical supplies;
(c) develop, maintain and manage an efficient and cost-effective system of procurement, storage and distribution of medicines and medical supplies;
(d) ensure timely availability of medicines and medical supplies in public health facilities;
(e) establish and maintain strict inventory management systems and security protocols within the Agency and other storage facilities under the control and supervision of the Agency;
(f) facilitate the selection, forecasting, quantification and supply planning of medicines and medical supplies for health facilities;
(g) establish a network of storage, packaging and distribution facilities for the provision of medicines and medical supplies to health facilities;
(h) enter into agreements or establish frameworks with the government and other local and international institutions for purposes of manufacturing medicines and medical supplies as the Board may determine;
(i) provide information and regular reports on the status and cost-effectiveness of procurement, storage, distribution and value of medicines and medical supplies to the Ministry responsible for health in order to assist with appropriate planning and decision-making;
(j) cooperate and exchange information relating to medicines and medical supplies with relevant stakeholders at district, provincial, national and international levels; (k) establish and maintain an internal quality assurance system for efficient operations, compliance with regulations and quality of medicines and medical supplies;
(l) support health facilities to establish and maintain appropriate inventory management systems for medicines and medical supplies; and
(m) advise the Minister on policies relating to the procurement, storage and distribution of medicines and medical supplies.”

Mismanagement of public resources at MoH delayed the birth of ZAMMSA

Although the ZAMMSA Act was enacted in November 2019, this law could not become operational for reasons known to officials at Ndeke House, MOH. However, the delay in the operationalisation of the ZAMMSA Act could have been the desire by officials at MoH to continue procuring medicines, medical equipment and other pharmaceutical supplies for personal benefits. It is not a secret that in the last eight years, MoH has been engulfed with mismanagement and misuse of public resources. This information is in public domain through the Auditor-General’s Reports.

Notwithstanding the prolonged delay to operationalise the ZAMMSA Act, the scandals that rocked MoH relating to the distribution of substandard medicines and allied substances to public health facilities forced the government to bring ZAMMSA into existence. Thus, on Wednesday, 3rd February, 2021 through Statutory Instrument No.8 of 2021 (Commencement) Order, 2021 dated 3rd February, 2021 under Gazette Notice No. 125 of 2021, the MoH ceased to procure medicines and other pharmaceutical supplies, and the function moved to ZAMMSA.

This development entailed that a chunk of resources that was allocated to MoH under medicines, and other pharmaceutical supplies’ budget went to ZAMMSA, in addition to the cooperating partners’ support. However, it appears that procurement of medical equipment still remains with MoH.

Conclusion

I shall end here and wish to say that every Zambian deserves a decent health care regardless of their social status.

For any comments, please email: muwanei.kabika@gmail.com

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