Financial Sustainability Plan. of the National Immunisation Program. Albania

Transcription

1 Financial Sustainability Plan of the National Immunisation Program Albania July, 2004

2 Signatures of the members of the Government of Albania The Ministry of Health and Ministry of Finance assure their commitment for sustainable financing of National Immunisation Program according to the present Financial Sustainability Plan. We apply to other government structures and international donors to unite their efforts and support the immunisation programme through allocation of adequate resources to make it a success and contribute to the improvement of quality of life of Albanian children and promoting a healthy nation. MINISTER OF HEALTH LEONARD SOLIS MINISTER OF FINANCE ARBEN MALAJ TIRANA, July

3 Table of Contents Executive Summary 3 1. Impact of Country and Health System Context on Immunization 7 Program Costs, Financing and Financial Management 2. Program Characteristics, Objectives and Strategies Current Expenditures and Financing Future Resource Requirements and Program Financing / 19 Gap Analysis 5. Sustainable Financing Strategy, Actions and Indicators 24 Annex I. Acknowledgement and working group 28 Annex II. Albanian cost projection tool Annex III. Albanian gap analysis diagram 3

4 Executive Summary The key objectives of the NIP for the years are: o Achieving and maintaining 90% or higher vaccination coverage rates for each EPI antigen nationwide; o Introducing new antigens to the NIS, specifically Mumps and Hib-vaccines; o Maintaining effective cold chain system o Ensuring safe injection practices during immunization Assessment (diagnosis) of the key financing challenges and opportunities associated with the country and health system context o The government is projecting that economic growth will increase to 6% from , with inflation rates of 2-4%. The government plans to continue to implement a program aimed at increasing public revenues. Growth in public revenues will be driven by strong economic growth, and increases of collections of taxes and duties. Increases in social and health insurance contributions are also expected to rise with more contributors and continued growth in real wage levels. o The GoA has developed a Growth and Poverty Reduction Strategy (GPRS) to lower the level of poverty in the country. The main objectives of the GPRS for were: (i) real GDP growth of percent from ; (ii) reduction of number of people living in poverty; (iii) tangible improvement of infrastructure and related services; (iv) reduction of infant and maternal mortality rates and disease incidence; and (v) increase of level of elementary and secondary education enrollment. o One of the strategic priorities for public expenditures in the MTEF was to increase the share of GDP expenditures in health sector till 3% of GDP in The percentage of total public expenditures on health care is also projected to increase to 11% in 2004 from 7.4% in o While the Government is decentralizing key government functions, the transfer of funds from the central government to the local governments for funding primary health care did not go smoothly and funds for primary and public health services fell significantly in In 2004 the Government decided to allocate funds for financing primary and public health services as conditional grants to local government to ensure a more secure and appropriate financing of such services. Currently the best way to ensure adequate funding for primary health care is being discussed. o The most important donor assistance in will come from GAVI VF supporting the introduction of Hib-vaccine. GAVI will also continue its assistance in stabilizing Hepatitis-B vaccine procurement for the NIP, as will be UNICEF with its phase-out support for financing of routine EPI vaccines. o The mechanisms of budgeting, procurement, and fund disbursement for the NIP are well established and functioning. This is why the main efforts by the NIP managers will be directed at institutionalizing government commitment to NIP. Current program costs and sources of financing. o The total program costs constituted $4.61 million in

5 o Total program cost as a share of total government health spending in 2003 was 2.8%. o Vaccine costs in and 2003 constituted 5.3% of the total program cost. o Vaccine cost per fully-immunized child was $2.78 in o In 2003, internal (combined Institute of Health Insurance and MoH) financing accounted for 90% of programme funds. UNICEF provided 8.8% and GAVI/VF 1.9% of the total program financing. Projected gap in resources during and after the remainder of current Vaccine Fund commitment, including graph depicting the funding gap over time. o Total NIP cost will amount in 2004 to $5.15 million, will sharply rise to $6.43 million in 2005 and will continue growing moderately throughout o Total projected funding gap for the years 2004, 2005 and 2006 will constitute respectively $179,000, $298,000 and $359,000. Admittedly, the gap will be reduced thereafter throughout the years of GAVI s likely support for Hib-vaccine introduction: the gap is projected to be $252,000 for o Vaccine expenses are not expected to contribute to the total financing gap, as main unfounded line-items are capital expenditures for transport and auxiliary equipment. o The total projected funding gap is expected to reduce from $359,000 in 2006 (5.6% of programme cost) to $252,000 in 2009 (3.8% of total programme cost) and to $ in 2013 (2.5% of total program cost). o The gap will constitute 0.1% of total national healthcare public spending in 2004 and 0.2% in Strategic priorities for financial sustainability, based on a diagnosis of the key financing challenges o Increase Government Contribution for Vaccine Purchase o Increase government contribution for program operational costs o Increase government s contribution for capital costs o Reduce vaccine wastage o Increase attendance at vaccine sessions (extend out-reach services to risk groups) o Optimize vaccine combinations o Possible adjustment in program objectives due to unforeseen funding risks will consist in slowing down the substitution of MR for MMR vaccine and expanding the coverage for Hib-vaccine. Short- and medium-term actions to move toward financial sustainability o Specific steps to implement main strategies in will be: - Advocacy with MOH and MOF when GAVI funding ends and/or vaccine choice changes (2004) - Prepare presentation to MOH on unfunded operational costs (2004) - Advocate with MOF for higher funding for program (2004) - Advocate for funds for upgrading of cold chain, vehicles, incinerators, and power generators (2004) 5

6 - Improve stock management in districts and health centers: Conduct trainings for staff in district and health centers on stock management forms; Introduce forms (2004) - Assess feasibility and cost of introducing single-dose vials in areas where attendance at vaccine sessions is low; Conduct trainings on introduction of single-dose vials in areas (2005) - Improve management information system for immunization program (2005) - Improve implementation of multi-dose vial policy (2004) - Increase social mobilization in rural and suburban areas (2004) - Institute annual review of vaccine combinations in program (2005) Indicators to monitor progress toward the objectives set for financial sustainability are presented in Table 5.1 below. 6

7 Section 1 Impact of Country and Health System Context on Immunization Program Costs, Financing and Financial Management Introduction The objective of this section is to assess how the country and health system context is affecting the performance and financing of the immunization program. The subsections in this chapter include macroeconomic issues, civil and health sector reforms, expenditures on health, and factors that affect flow of funds. Macroeconomic Issues While economic growth in Albania has fluctuated during the last five years, it is now on a positive track for growth. In , economic growth fell due to the effects of the election campaign, energy crises and political uncertainty. The government is projecting that economic growth will increase to 6% from , with inflation rates of 2-4%. Table 1.1. Macroeconomic Indicators GDP Million 333, , , , , , ,974 lek Real Growth in % GDP Per capita GDP US$ ,191 1,086 1,386 1,557 1,950 Annual % Inflation Total Revenue Million 56,645 93, , , , , ,224 lek Total Million 100, , , , , , ,152 Expenditure lek Deficit/Surplus Million lek -44,085-48,109-58,186-39,978-40,410-37,922-33,928 Source: Progress Report 2003, Ministry of Finance The government plans to continue to implement a program aimed at increasing public revenues. Growth in public revenues will be driven by strong economic growth, and increases of collections of income and profit taxes, VAT and excise duties. Increases in social and health insurance contributions are also expected to rise with more contributors and continued growth in real wage levels. Government interest payments fell from a high of 8.4% of GDP in 1998 to 3.9% of GDP in 2001, due to a decrease in the budget deficit. Because of this, more funds were available to finance improvements in public infrastructure and services. Interest payments as a share of GDP are projected to remain low as 3.8% for

8 Objectives of the Growth and Poverty Reduction Strategy Despite the increase in economic growth, significant numbers of Albanians are impoverished. Some 25.4 percent of Albanians live below the poverty line of $2 per capita per day (Progress Report 2003); one in three households does not have access to adequate housing; infant and maternal mortality even is decreasing is still high relative to other countries in the region; and illiteracy is increasing. One of the problems facing Albania is high inequality in the nationwide distribution of income, which has been increasing. The GoA has developed a Growth and Poverty Reduction Strategy (GPRS) to lower the level of poverty in the country. The main objectives of the GPRS for are the following: (i) real GDP growth of percent from ; (ii) reduction of number of people living in poverty, particularly for the worst-affected social groups and areas; (iii) tangible improvement of infrastructure and related services, e.g. supply of potable water and electricity, particularly for the impoverished populations; (iv) reduction of infant and maternal mortality rates and disease incidence; and (v) increase of level of elementary and secondary education enrollment. Reductions in infant and maternal mortality are one of the objectives of the Strategy and it follows that the health sector is a priority sector for the plan. Health Sector The objectives of the health sector (under National Strategy for Social-Economic Development) include the following: 1) increased effectiveness and efficiency in use of resources; 2) increased access to quality health services nationwide; and 3) improvement of health indicators through specific targeted interventions. The increased effectiveness and efficient use of resources will be achieved through: (i) improvement of the process of planning and needs assessment, improved management and fairer distribution of resources; (ii) decentralization of management functions to the local institutions, including health regional authorities, and strengthening of the role of professional organizations; (iii) reduction in corruption; (iv) the gradual establishment of information systems; and (v) support for the privatization process in the health service and monitoring of the private sector. Improved access to services will be achieved through the following activities: (i) completion of the sanitary primary care map and meeting the needs of the communes for health centers by 100% and outpatient clinics in the villages by 50%; (ii) preparation of the master plan for the development of the health service in one pilot region; (iii) reorganization of the hospital service through the establishment of regional hospitals; (iv) adequate motivation of health personnel; and (v) improvement of procedures for licensing private activities in rural and remote areas. Health indicators will be improved through specific interventions including (i) improved health promotion, (ii) limitation and prevention of infectious diseases, tuberculosis, sexually transmitted diseases, (iii) improvement of maternal and child health care, and (iv) enhanced control of potable water and food. 8

9 Expenditures on the Health Sector Public spending on health is low compared to the average of 3.0% of GDP for lower middle income countries. As a consequence, one of the strategic priorities for public expenditures in the MTEF is to increase the share of GDP allocated to this sector. As can be seen in Table 2, the government planned to increase the share of GDP in The percent of total public expenditures is also projected to increase to 11% in 2004 from 7.4% in Table 1.2. Percent (%) of GDP and total expenditure allocated to the Health Sector % GDP 1.7% 2.4% allocated to health % of total expenditure 7.4% 9.3% 7. 89% 7.3% 9.7% 10.4% 11.0% Source: Progress Report 2003, Ministry of Finance Reforms The Government is implementing reforms, the most important of which is decentralization of key government functions. A substantial increase in spending allocations to local governments from the central government was introduced, beginning in However, the transfer of funds from the central government to the local governments for funding primary health care did not go smoothly and funds for primary and preventive health services fell significantly in Currently the best way to introduce this reform to ensure adequate funding for primary health care is being discussed. The Government also plans to increase the salaries of all public service personnel, with larger increases for staff working in the health sector since their remuneration has been lower than that of other sectors. Wages for health staff are projected to increase by an average of 8% annually in 2003 and 2004 and 6.7% in Health Insurance Fund The Health Insurance Fund administers two sets of programs. These include 1) contributor-financed benefits covering mainly general practitioner services and subsidies for prescribed drugs; and 2) health financing reform initiatives for which finance is channeled from the Budget through the HIF. Some pilot health financing reform initiatives are now being evaluated and the results will shape the future development of the health insurance system. 9

10 Section 2 Program Characteristics, Objectives and Strategies 2.1. Goals and objectives of the National Immunisation Program (NIP) Goals of the NIP Through instituting and maintaining an effective system of immunization, the NIP pursues the goals of improving the health status of Albanian children, reducing morbidity and mortality burden of EPI-targeted infectious diseases and eliminating some of these diseases. Objectives of the NIP 1. Achieving and maintaining 90% or higher vaccination coverage rates for each EPI antigen at all administrative units; 2. Introducing new antigens to the NIS, specifically Mumps and Hib vaccines; 3. Developing and implementing immunisation policies for high-risk groups; 4. Strengthening epidemiological surveillance and monitoring of EPItargeted diseases; 5. Maintaining effective cold chain system; 6. Reducing vaccine wastage rates to operationally possible levels; 7. Introduce presentation mix analysis for the vaccines supplies to ensure most efficient vaccine prices and combinations; 8. Strengthening political commitment to EPI; 9. Strengthening management and coordination of the EPI; 10. Ensuring immunisation safety and safe injection practices during immunization. Administrative and institutional structure of the NIP The following key functions are performed within the NIP to achieve the program goals and objectives: procurement and transportation of vaccines, biologicals and injection supplies; maintenance and development of the cold chain; NIP staff training; monitoring vaccination coverage; disease epidemiological surveillance and monitoring, R&D; data analysis; co-ordination of program-related activities with partner agencies, institutions, bodies, and care providers; supervision of vaccination process and injection safety; safe waste disposal; social mobilization; integration of preventive primary care initiatives with immunization policies. The backbone of the National immunisation system of Albania is formed by the Epidemiology, Hygiene and State Sanitary Inspectorate within the Directory of PHC in the MOH; Institute of Public Health; and Epidemiology, Hygiene and Sanitary Inspectorates (EHSI) within District PHC Directorates. They share the responsibility for organizing, maintaining, managing and supervising the system at its different levels. 10

11 Vaccination services are delivered by the PHC staff in the health centres, maternity and child healthcare centres and ambulatories. The NIP strategy is developed and overall management of the NIP is provided by the Institute of Public Health, specifically by EPI unit within the Control of Communicable Disease Department. The role of the MOH is to enforce and implement the immunisation policy and inform the Government about immunisation policies and practices. District EHSI organise and co-ordinate immunisation activities at local level based on national immunisation policies and regulations and report to the IPH and the MOH. The EHSI also inform the IHI on the quality of immunisation services provided by GPs who are being paid by the IHI according to the GP contract which includes deliveries of immunisation services and their report. Epidemiological units of the districts EHSI are responsible for the methodological guidance, monitoring, supervision and assessment of the immunization services delivered by primary health care and maternity care facilities. They are also responsible for planning and distribution of vaccines, surveillance of communicable diseases, epidemiological investigation of infectious diseases, outbreak response, organization of supplementary immunizations and other activities related to infectious diseases at district level in collaboration with IPH. Immunization services constitute an immanent part of the PHC. Urban population receives NIS vaccinations in the Mother and Child Health Consultant centres located at the town polyclinics and in maternity services in hospitals. Immunization services for rural residents are provided in the commune health centres and ambulances (health posts). Vaccine procurement in Albania is centralised which, in general, facilitates vaccine cost-efficiency and simplifies quality assurance procedures. The practice was backed by the agreement reached in 2001 between the Government of Albania and UNICEF on the assistance in stabilising the EPI vaccines supply to the country through a phased-out vaccine procurement process whereby the agency would pay for 100% of the country s need in the EPI vaccines in the first year of the scheme and for ever decreasing share of the annual vaccine supply thereafter while the government would phase-in with ever increasing contribution thus reaching 100% self-reliance in EPI-vaccine procurement in It has been decided by the Government that the process would stay centralised together with some other important public health functions and activities. It needs to be mentioned that the Government has been strictly adhering to the terms of the agreement thus demonstrating a strong ability to gradually take over the responsibility for the projects implemented with the assistance of multilateral and aid agencies. Vaccine procurement Institute of Public Health (IPH) is a focal point in the process of vaccine supply to Albania. There is a separate line item in the MOH budget for vaccine and injection supplies procurement. The amount of funds to be allocated to this end is annually negotiated between the MOH and the Ministry of Finance based on the needs assessment developed by the IPH. Once the annual budget is adopted, the IPH would submit to the MOH an order list for vaccines and supplies to be shipped by a supplier (currently UNICEF). Approval of 11

12 the order by the MOH means the money is transferred from the MOH account to the IPH account being earmarked for vaccine and injection supply purchasing. After the IPH receives the money, it pays UNICEF/Copenhagen for the vaccine shipment. Current characteristics of the NIP Currently used National Immunisation Schedule (NIS) for Albania is presented in the Table 2.1. Table 2.1 NIS for Albania Age Visit Vaccine BCG DTP OPV Hep-B Hib M(M)R At birth 1 BCG-1 Hep-B-1 2 months 2 DTP-1 OPV-1 Hep-B-2 Hib* 4 months 3 DTP-2 OPV-2 Hib* 6 months 4 DTP-3 OPV-3 Hep-B-3 Hib* 12 months 5 M(M)R** 24 months 6 DTP-3 OPV years 7 DT OPV-5 M(M)R** 14 years 8 Td * The Hib-vaccine is planned to be introduced to the NIS in 2005 with GAVI support. ** MR vaccine will be administered till the end of the year 2004 and substituted by MMR vaccine starting Official country estimates of coverage rates for the EPI vaccines are presented in the table 2.2. Table 2.2. Coverage rates (in %) for EPI antigens in Albania BCG DTP DTP Hepatitis-B Measles OPV Source: Vaccine coverage data, IPH, MoH. The Hib-vaccine, to be introduced in 2005, is expected to be administered to all eligible newborns immediately after being available in Albania and coverage rates are expected to reach 95% by the end of The same coverage is planned to be achieved for MMR vaccine which, in fact, will substitute currently administered MR vaccine. Management Detailed plan of action as well as annual activity work plan and injection safety plan for immunisation services are developed in Albania by IPH. Inventory of all cold chain equipment in the country is regularly performed (the last one in 2003). Reliable program financing is being ensured through separate line item in the national budget for both vaccines and injection supplies. 12

13 Surveillance A national mandatory surveillance system is in place. This system is mainly hospital based, monthly reporting and includes 73 infectious diseases divided as A,B and C according to their public health importance. A syndrome-based system of infectious disease surveillance has been implemented in the country that uses electronic data exchange between the IPH on the one hand, and GPs, Emergency care departments and hospitals on the other hand. The information is received by the Institute weekly either by (40% of reports) or by fax (60% of reports) with the balance gradually shifting in favour of reporting. The maintenance of the system is being financed through the central (i.e. MOH allocating to IPH) budget. Sub-national levels receive quarterly feedback from the national level on epidemiological monitoring and surveillance data, including coverage rates, disease cases, as well as annual retrospective hospital record reviews done for NT, measles and polio/afp. Zero reporting surveillance has been implemented for NT, polio, and measles as well as active surveillance for measles and polio nationwide and for Hepatitis and Hib meningitis in some districts covering almost 45% of the population. Vaccination coverage reporting system has been established within directories of primary health care in the districts and EPI unit in IPH. The national office of EPI at IPH annually estimates national vaccination rates for all antigens used for routine immunization. The estimates are based on quarterly EPI reports on target population and number of vaccine doses administered as recorded by PHC district offices. Recently efforts are made to improve the vaccine coverage reporting form by improving reports on target population as well as administration of different vaccine antigens and stock. Injection safety The 2000 multi-dose (open) vial policy has been adopted and implemented nationwide in Albania. Injection safety is also ensured through providing 100% of districts with AD syringes for all injected vaccines, delivering safety boxes with all vaccine deliveries to peripheral levels and wastage disposal. Adverse events following immunisation are monitored all over the country and a surveillance of AEFI is in place with the data-base in IPH Cold chain Massive support provided to Albania by donors and aid organisations after the civil crisis of allowed to fully restore the cold-chain capacity and infrastructure. The role for the government in the projected years would be to maintain the cold chain, improve its administration and to replace the equipment once it fully depreciates. Perceived problems of the NIP While the National Immunisation Program has been successfully regaining its strength during the last 5 years, there still are some problems that need to be addressed. One of such problems is correctly measuring and reporting population base figures (denominator) for vaccination coverage. The task is complicated by the widespread 13

14 and frequent population migration, both within the country and across the border. Efforts must be applied therefore to develop reporting forms that would effectively trace the flows of vaccination-eligible cohorts and improve the system capacity to access them. A new reporting form has been designed and activities to introduce it are ongoing. Reaching migrant and Roma population within main cities or their suburbs is yet another facet of this problem. Intensified out-reach activities and modified social mobilization efforts are seen as the necessary elements in addressing the issue. Also some rural areas are far from the nearest health posts and special programs are needed to be designed for them. Albania has been trying to reach a very high vaccination coverage adopting an open vial policy in a rural country with a poor infrastructure and high internal mobility which left scarce population in many areas. Reduction of vaccine wastage rates should be mentioned as the third major problem. Improving stock management and management of EPI program at local level as well as better planning approaches would be required to bring down the wastage rates to the lowest technically possible levels. A single dose policy has to be taken into account for some areas. Specific improvements to be achieved in It is planned that in the years the system will maintain high coverage by traditional six antigens (BCG, DTP, Measles, OPV) and relatively new antigens (Rubella and hepatitis-b) and will introduce into the regular national immunisation schedule two new antigens: vaccine against mumps and Hib-vaccine. The coverage rates for the newcomers are expected to reach 95% of eligible population within one year of their introduction in the year Apart from routine immunisation, supplementary immunisation activities for polio, measles/rubella, DTP are planned to be conducted in , and for hepatitis-b in for the population groups aged 11 to 14. These activities will target possible pockets of non-vaccinated and/or non-immunised populations. Taking into account supplementary nature of these activities it could and would be possible to adjust their scope and timing, should financing problem arise. The wastage rates for the mentioned vaccines are expected to be maintained at the levels not higher than: BCG - 70%; DTP - 25%; OPV - 35%; MR - 35%, MMR - 35%; Hep-B - 15%; Hib - 15%. The idea of conducting annual presentation-mix analysis for the vaccines to be supplied through UNICEF was discussed and supported at the recent National ICC meeting. The goal of the analysis would be to identify the most efficient mix of vaccine combinations and vial sizes to be supplied to the country based on currently available prices and prevalent wastage rates. As the national system of immunisation has a good track record in organising and delivering out-reach services (e.g. to remote populations), improvements in out-reach vaccination services for migrant and Roma population are seen to be largely dependent on improved registration of these groups. Once the new tools used by the management information system allow to correctly identifying the groups, the vaccination services are standing by ready to deliver to them quality services. 14

15 Possible change in program objectives in light of financial constraints The NIP of Albania is widely seen by the national stakeholders as fully recovered from the civil crisis of the 90-ies and capable thanks to demonstrated government commitment to take over financing of routine vaccines and supplies, of sustainable financing of EPI activities. Should the level of financial support be for any hard to predict and to provide for reason inadequate to meet the planned program expansion objectives, namely replacement of MR with MMR vaccine and introduction of Hibvaccine, the replacement and introduction would be slowed and/or coverage targets for Hib-vaccine would be made temporarily less ambitious. 15

16 Section 3 Pre-Vaccine Fund and Vaccine Fund Year Program Costs and Financing The total cost of the NIP was around $4.86 million in 2001 and around $4.61 million in P2003 (Table 3.1). observed high cost is explained by massive supplementary immunisation campaign against measles that took place in The irregular allocations to vaccines in the observed period are mostly due to uncoordinated vaccine supply by humanitarian organisations after the civil crisis in Ensured disposal of vaccines with expired shelf life resulted in considerable wastage rates that cannot and should not be attributed to vaccination process management problems. Stock management tools and techniques currently implemented in the NIP as well as social mobilisation tactic allow reduce in vaccine wastage rates to the levels foreseen for the projected period of (see below). Table 3.1. Pre-vaccine and vaccine years NPI costs (US$ thousand) Cost Category Routine Recurrent Cost US$ US$ US$ Vaccines (routine vaccines only) Traditional Vaccines New and underused vaccines Injection supplies Personnel Transportation Maintenance and overhead Short-term training IEC/social mobilization Supervision, Monitoring and Disease Surveillance Subtotal Recurrent Costs Routine Capital Cost Vehicles Cold chain equipment Other capital costs Subtotal Capital Costs Supplemental Immunization Activities Measles Campaigns Hep-B Campaigns Subtotal Supplemental Shared cost and other optional information Shared Personnel Costs 3, , ,762.6 Other optional information Subtotal Optional 3, , ,767.6 GRAND TOTAL 4, , ,610.7 The lion s share of the cost shared labour cost, was met by the national payer, namely Health Insurance Institute. Coupled with the national government s contribution, the internal financing amounted to around 80% in 2001 and to 90% in 2003 (Chart 3.1). Contribution by donors accounted in 2001 for 19.6% (UNICEF) of the total program financing and in 2003 for 8.8% (UNICEF) and 1.9% (GAVI/VF) of the total program financing. 16

17 As was mentioned above, UNICEF assisted Albania in stabilizing vaccine procurement for the EPI needs with the National Government, where the last one was strictly obeying the terms of the agreement and paying for ever increasing percentage of these vaccines supplies. Moreover, after the stock of MR vaccine supplied in the end of 90- ies by aid agencies came to the end, the Government has completely taken over the responsibility for the purchase of MR vaccine. Fig NIP cost profile in the pre-vaccine and vaccine years (US$ millions) $6,000 Trend in Past Financing by Source (US$ Millions) $5,000 Health Insurance Institute UNICEF $4,000 GAVI - Vaccine Fund $3,000 $2,000 Sub-national Government National Government $1,000 $ Fig NIP financing profile (shares in %) in the pre-vaccine and vaccine years Financing Profile (Shares in %) 100% 90% 80% 70% 60% 50% 40% 30% Health Insurance Institute UNICEF GAVI - Vaccine Fund Sub-national Government National Government 20% 10% 0% The Government performance in financing EPI-vaccine and injection supply procurement gives reasons to believe that the Government will also successfully phasein for Hepatitis-B vaccine procurement currently financed by GAVI Vaccine Fund. The total cost of the program as a percentage of total government spending on health constituted 4.9% in 2001 and 2.8% in 2003 which demonstrates, first, increasing 17

18 government allocations to health and, second, considerable potential for the government to support NIP improvement and expansion. Vaccine costs constituted for the years 2001 and 2003 respectively 6.1% and 5.3% of the total program cost. Vaccine cost per fully-immunized child was $2.63 in 2001 and $2.78 in

19 Section 4 Future Resource Requirements and Program Financing / Gap Analysis 4.1. Projected resource needs Projected resource needs for implementing the NIP in is presented in the table 4.1 and on the Fig When projecting cost of vaccine procurement in , it was taken into account that the MR vaccine is going to be used till the end of 2004 and will be substituted with MMR vaccine starting January The resource need increase resulting from the substitution will amount to roughly $200,000 per year. The highest increase in resource need though will be caused by the planned introduction of Hib-vaccine. It would cost $660,000 in 2005 taking into account the need to set up a buffer stock of the vaccine, and around $540,000 thereafter. No inflation was taken into account when calculating the vaccine costs for the projected period. The observed moderate increase of vaccine costs in the years is explained by the increase of target population. As can be seen from the table 4.1, labour cost will remain the biggest single line-item, accounting for 76% of the total program cost in 2003 and 2004 while falling down to 64% in 2005 because of introduction of MMR and Hib-vaccines with considerable implications for the total program costs. It should be noticed that the vaccine costs are calculated for the wastage rates cited in the section 2 of this document. If however, vaccine price and presentation mix analysis allows identifying more efficient combination of vaccine procurement, the cost may expect to go down a little bit. Apart from increased allocations for vaccines resulting from the introduction of MMR and Hib-vaccines discussed above, a considerable increase in required resources in the years 2004 and 2005 is explained by a few other factors. First, in 2004 the increase in capital cost should be associated with purchasing power generators and voltage stabilisers to address the perennial problems with power shortages and blackouts and to make cold chain less vulnerable to these adversities. Second, massive supplemental immunisation campaigns for polio, MR, and DTP are planned to be conducted annually during and for Hepatitis-B in

20 Table 4.1. Projected program costs in Cost Category 2004 US$ 2005 US$ 2006 US$ 2007 US$ Routine Recurrent C. Vaccines (routine only) Traditional 6 antigens New and underused Injection supplies Personnel Transportation Maintenance and overhead Short-term training IEC/social mobilization Monitoring & disease surveillance Subtotal Recurrent Costs Routine Capital Cost Vehicles Cold chain equipment Other (Incin, office equip) Subtotal Capital Costs Supplemental Immunization Activities Polio NID-SNID MR Campaigns Hepatitis-B Campaigns DT, Td Campaign Subtotal Supplemental Shared cost and other optional information Shared Personnel costs Shared Transport Cost Other optional inform Subtotal Optional GRAND TOTAL US$ 2009 US$ 2010 US$ 2011 US$ 2012 US$ 2013 US$ 20

21 Fig Projections of Future Resource Needs by Cost Categories (US$ million) $8 Projections of Future Resource Needs by Cost Categories (in million USD) $7 $6 Traditional vaccines New Vaccines $5 Injection supplies Transportation Personnel Other recurrent costs $4 Vehicles Polio b Cold chain equipment MR Campaign $3 Other SIA Other capital costs Other optional information Shared personnel costs $2 $1 $ Fig. 4.2 presents estimation of secured and probable financing for the NIP in the years as well as projected financing gap. Fig Projections of Secure and Probable Financing by Source and Funding Gap (US$ million) Projections of Secure and Probable Financing by Source and Funding Gap (in 10 6 USD) Funding Gap National Government (Probable Financing) GAVI-VF (conditional support) Health Care Insurance Institute UNICEF GAVI-VF Sub-National Government National Government (Secured Financing)

22 When estimating the gap between resources required and available, it was assumed that financing of labour cost will be secure, as this function will be performed by the IHI regardless of how the NIP is progressing. Also, budgetary allocations by government to purchase traditional vaccines were considered equally secured because the government has been adhering to the terms of agreement with UNICEF and in the year 2006 it will completely take over the purchase of traditional vaccines. Until that time, however, UNICEF will pay for (i.e. supply in kind) 40% of traditional vaccines in 2004 and 20% of traditional vaccines in The funds to be allocated for the new and underused vaccines were judged as probable financing by the government based on the following consideration: drastic increase (around $860,000) in the projected vaccine costs in the year 2005 results from (a) the shift from MR to MMR vaccine (cost increment around $200,000) and (b) introduction of Hib-vaccine (cost increment around $660,000), for which a conditional approval by GAVI has already been received. Both these decisions were taken with the government approval which implies the government fully realised the implications of the decisions for the NIP budget and implicitly agreed to take over financing the new vaccines once the donor s support shrinks. When introducing the new vaccines, the government will be assisted by two factors: first, expected steady economic growth will allow painless takeover of the cost of MMR-for-MR substitution in 2005, while the cost of newly introduced Hib-vaccine would be shouldered by GAVI up till the year 2009 when government has enough capacity to take over the vaccine financing. Financing by the national government of capital expenditures for purchase of cold chain equipment was also considered secured based on the government commitment to support functional immunisation system and cold chain is an indispensable part of it. The assumption was also supported during the draft projection discussion in the MoH of Albania. The plans by Government to increase the salaries of staff working in the health sector are not expected to negatively impact the sustainability of program financing since, first, the increases will be possible only as a result of, and supported by, the increased public revenues, and, second, the major burden of salary payment in primary health care sector is held by the Institute of Health Insurance, whose revenues are only partly supported by government contributions and are growing in line with general rise in wages and salaries. Throughout the projected period, the gap between secured plus probable financing and the estimated program cost will constitute from 5.6% at its highest level in 2006 down to 2.5% in of total program cost. 22

23 Table 4.2. Projected Financing Gap (US$ thousand and as % of program cost) Gap without probable funding % of total program cost Gap with probable funding % of total program cost 735 1,814 1,546 1,634 1,378 1,388 1,272 1,225 1,237 1,249 14,3% 28,2% 24,2% 25,0% 20,7% 20,7% 18,7% 17,6% 17,2% 16,9% ,5% 4,6% 5,6% 5,3% 4,4% 3,8% 3,0% 2,5% 2,5% 2,5% The NIP line-items without secured or probable financing are presented in the table 4.3. As seen from the table, purchase of vehicles and power back-up equipment account for the lion s share of unsecured funding. Table 4.3. NPI line-items without secured or probable financing (in US$) Short-term training IEC/social mobilization Vehicles Other capital costs Other optional costs Assuming total national health care spending will stay at 3% of GDP throughout , the financing gap for the NIP will constitute 0.1% of total national health care spending. 23

24 Section 5 Sustainable Financing Strategy, Actions and Indicators In the previous sections, various opportunities and constraints facing the immunization program have been identified. Meanwhile in this section, these are linked with specific strategies, actions and indicators to improve the financial sustainability of the program. Program Opportunities and Constraints The program has opportunities to improve its performance due to the country s positive macroeconomic situation and the GoA s objective of increasing funding to the health sector, as noted in Section 1 of this document. Increased funding to the program can be used to strengthen the program s financial sustainability. The GoA has already committed to phasing-in financing of its vaccines. It can use additional funding that is projected to become available to the program to phase-in in funding for other program resource requirements that it is not currently financing. Since some of the operational costs of the program are not adequately funded (e.g. maintenance and overhead, training), additional funding can be allocated to these activities. In addition, the program has relied on donors to finance many of its capital costs (e.g. cold chain equipment and vehicles) in the past. It can increase its financial sustainability by phasing-in purchase of these capital costs. While the immunization program has high coverage, some constraints to efficient management of the program have been identified. Stock management in district-level facilities and heath centers is not sufficiently documented, leading to vaccine oversupply at times. In addition, target population estimates are sometimes inaccurate, due to high migration within the country and women giving birth away from their homes. This information leads to inaccurate coverage estimates, poor planning and vaccine wastage. Vaccine wastage is also high in remote areas of the country since multi-dose vaccine vials are opened when only a few children need to be immunized. Financial Sustainability Strategies Table 5.1 includes strategies that have been developed to improve the financial sustainability of the immunization program. The first set of strategies concern strategies on resource mobilization for the program. The first strategy is to increase the government contribution for vaccine purchase. The government plans to increase its contribution to 100% for routine vaccines by It will also begin paying for Hepatitis B vaccine by the end of 2006 when GAVI support ends for this antigen. If GAVI agrees to fund Hib vaccine as well (conditional approval has already been given), the government plans to phase-in paying for this vaccine as well after GAVI support ends probably in The second strategy is for the government to increase its support for immunization operational costs since some of these are not currently funded. The actions here include developing a presentation to present to the MOH to outline the need for additional financing for maintenance and overhead and training. The third resource mobilization strategy is for the government to gradually phase-in funding for capital costs such as upgrading of the cold chain and purchase of vehicles. 24

25 Table 5.1. Financial Sustainability Strategies, Actions and Indicators Main Strategy Actions Responsi bility Start Date Progress Indicator Increase EPI Government program/ Contribution IPH for Vaccine Purchase Increase government contribution for program operational costs Increase government s contribution for capital costs Advocacy with MOH and MOF when GAVI funding ends and/or vaccine choice changes Prepare presentation to MOH on unfunded operational costs Advocate with MOF for higher funding for program Advocate for funds for upgrading of cold chain, vehicles, incinerators, and power generators IPH 2004 MOH 2004 IPH; MOH 2004 Strategies to improve efficiency of resource use Reduce vaccine wastage Improve stock management in districts and health centers: Conduct trainings for staff in district and health centers on stock mngt forms; Introduce forms IPH; MOH; Local govrnmt; District Public Health Directora tes 2005 Program-specific recurrent expenditures paid for with national resources within the past fiscal year divided by total programspecific expenditures National expenditure on immunization program-specific operational costs as a share of GDP after adjustment for debt service Program-specific capital expenditures paid for with national resources with the past fiscal year divided by total programspecific capital expenditures 2004 Trends in wastage rates over time, by antigen Current Value of Indicator 60% for routine vaccines; 0% for Hepatitis B vaccine (100% in 1999) 0.021% (2004) 0% BCG-70% DTP 25% TT 25% OPV- 35% DT -25% Td 25% Hep B 20% MR 35% 25

26 Increase attendance at vaccine sessions Assess feasibility and cost of introducing single-dose vials in areas where attendance at vaccine sessions low; Conduct trainings on introduction of singledose vials in areas Improve management information system for immunization program Improve implementati on of multidose vial policy Increase social mobilization in rural and suburban areas IPH; MOH; local governm ent IPH; MOH IPH 2004 IPH; Albanian Red Cross; local governm ent 2004 Average % of expected attendees at vaccine sessions 50% Optimize vaccine combinations Institute annual review of vaccine combinations in program EPI program/ IPH 2005 Average Vaccine Cost per child immunized Note: IPH=Institute of Public Health; MOH = Ministry of Health; MOF=Ministry of Finance The strategies to improve program efficiency include reducing vaccine wastage, improving attendance at vaccine sessions in rural and suburban areas, and optimizing vaccine combinations. To reduce vaccine wastage, four types of actions are envisioned: 1) improve stock management at the district and health center levels; 2) introducing singledose rather than multi-dose vials in remote areas where attendance at vaccine sessions is low; 3) improve management information on size of target populations in catchments areas; and (4) improve implementation of multi-dose vial policy. If the stock management system is improved at the district and health center levels, vaccine wastage due to overstocking should decrease. Forms for stock management introduced at 26