Monday, March 1, 2010

Can Oil Filters Improve Health Care?

For millions of people across Africa, motorcycles can be a key to effective health care. A well-maintained fleet of vehicles and motorcycles to connect patients, medical expertise, and medicine is sometimes the most vital link in the health delivery supply chain. A new case written for the Stanford Global Supply Chain Management Forum describes one successful program.

STANFORD GRADUATE SCHOOL OF BUSINESS—For millions of people across Africa, motorcycles can be a key to effective health care. Vaccines, HIV counseling and treatment, and other public health expertise are out of reach—with access obstructed by shortages, poverty, geography, and lack of transportation. Well-maintained vehicles and motorcycles are often a crucial missing link in the health delivery supply chain. Understanding how keeping transport machines running affects health is of interest to Hau Lee, Thoma Professor of Operations, Information, and Technology at the Stanford Graduate School of Business. He and Lesley Sept, associate director of the Stanford Global Supply Chain Management Forum are involved in a project to study the direct impact that keeping a fleet running has on health worker productivity, health intervention coverage, and fleet logistics efficiencies. Lee and Sept are working with Riders for Health, a social enterprise that manages vehicles and motorcycles used to deliver health care and other services vital to rural communities in seven African countries. The organization manages vehicle fleets using planned, preventive maintenance to assure that they are consistently reliable, enabling health care delivery and health worker outreach. In November 2008 the Bill and Melinda Gates Foundation awarded Riders a grant to scale up operations. As part of Lee and Sept's work with the group, the Global Supply Chain Management Forum has published a case study, written by Sonali Rammohan, assistant director of the forum's Socially and Environmentally Responsible Supply Chains Program, examining the evolution of Riders' work in The Gambia on a comprehensive vehicle management model called Transport Asset Management, or TAM. When the national vehicle fleet is fully rolled out, The Gambia will become the first African country to have sufficient delivery vehicles to service its population given the structure of its health system. The TAM program has been well received so far. The governor of The Gambia's Upper River region reported that, "Prior to Riders, we used to have a lot of difficulties in transporting patients from health facilities to hospitals. Since Riders, that has been reduced considerably." The cornerstone of Riders' fleet management is the technique of running vehicles and motorcycles on a consistent "zero breakdown" basis. Riders describes this component as "preventive maintenance," a system involving driver training, regular maintenance, and placement of repair shops near health centers as opposed to urban locations. TAM is a leasing model that incorporates financing purchases of vehicles and keeping them in good running order, allowing local health ministries to spread fleet purchase and running costs over a number of years. As part of the TAM contract, assets are replaced at an economically optimal point, which can provide a reliable fleet for the long term and reduce the overall supply chain complexity. The financing of the TAM fleet in The Gambia involved a pioneering arrangement between Riders, Africa-based GT Bank, the U.S.-based Skoll Foundation, and The Gambian Ministry of Health. The TAM fees that Riders charges the government include a fleet replenishment component. By the time Riders purchases a third generation of the fleet for the ministry in about 10 years, Riders should be able to purchase it without using bank financing. This will simplify the arrangement for both Riders and the ministry, and will ultimately eliminate bank interest rates from the fees charged to the ministry. Replicating TAM in other countries may face several challenges. The first, and largest, challenge is likely to be securing the funding or financing to purchase a fleet and pay for setup and infrastructure costs. Funding a sustainable outsourced leasing model such as this would mean a different way for global health funders to allocate grants to governments. A second challenge is that TAM involves a long-term contractual commitment from the government. Governments may at first perceive TAM as involving a higher degree of risk than existing methods of requesting one-time vehicle donations and finding a way to fund maintenance annually on an ad-hoc basis. Third, while TAM's introduction in The Gambia benefited from Riders' long-standing reputation and track record working with the ministry of health, in a new territory Riders must engage a larger network to encourage the ministry to approve TAM. As is the case with any managed system, those who benefit from unregulated use of vehicles may be reluctant to approve TAM since it restricts personal use. And additional evidence should be developed supporting existing data on cost-effectiveness of the Riders system in comparison to unmanaged systems. Given the high satisfaction that The Gambian government and citizens have felt with Riders' services, the opportunity for implementing TAM in other countries seems favorable. Donor partners could collectively advocate for TAM and, in lieu of donating physical vehicles, they could contribute to one pot of funding within the ministry's annual budget to cover Riders' monthly cost-per-kilometer charge. In addition, the government can piece together the various health budget components that already fund transport. Finally, the financing mechanism for a TAM fleet in another country could be modeled on The Gambian example. When asked about the TAM model, former Gambian health minister Malick Njie said, "I think we were the only ones bold enough and reasonable enough to believe in the concept that outsourcing actually solves problems." If government approval, financing partners, and funders of an ongoing cost-per-kilometer charge can be secured, Riders is poised to expand high-quality health transport management, and in turn, increase the equity and volume of health interventions delivered in Africa in the future.