Between 2000 and 2008, the Kenya Medical Supplies Agency was going through tough times, coupled with challenges such as: inadequate funding from the government; overall lack of confidence in transparency, accountability and performance at KEMSA; lack of timely disbursement of procurement, and operational budgets. These challenges were a great impediment to the Agency’s efforts to demonstrate improvement in its overall performance. This scenario triggered a new thinking by the Government and its development partners on the need for deeper, focused and integrated reforms at the Agency. These reforms commenced in 2008, guided by the need for institutional reforms to create appropriate organisational structures, attract the right human resource to provide leadership and the desired new strategic direction, management plans and direction, as well as streamline operational processes.
From 2008 to 2013, KEMSA and its partners gradually started assembling a team of professionals for leadership and managerial roles with the aim of building capacity to effectively and efficiently deliver on its mandate. This included competitively recruiting people with strong commercial sector experience in healthcare, financing and logistics industries, and not the usual civil servants or career bureaucrats. These individuals brought a different working style and culture to KEMSA.
According to the Third Medium Term Plan 2018-2022, KEMSA has improved its order fill rate of Health Products and Technologies (HPT), thanks to implementation of the automated business process through the use of Enterprise-wide Resource Planning (ERP) system and Logistics Management Information System (LMIS) from 50 percent in 2013/14 to 86 percent in 2015/16. The use of LIMIS has enabled KEMSA to inject and enhance efficiency in the supply chain. The plan also reports improvement in order turnaround time, which reduced from 12 days in financial year 2013/14 to nine days in 2015/2016, guaranteeing uninterrupted HPT supply to counties. Another automated system in use at KEMSA and positively impacting on service delivery is the eMobile service. According to KEMSA, the eMobile service is aimed at easing service provision to local hospitals and enhancing efficiency and effectiveness in the distribution of essential medical supplies in Kenya. Basically, the eMobile service aims to support public health facilities by affording them smooth communication with KEMSA electronically in a seamless way. The eMobile system is a smartphone application available in Android’s Google Play Store, as well as other smartphones through web browsers.
New business model
The introduction of a devolved system of government in Kenya in 2013 and subsequent devolution of the health function to counties, informed KEMSA on the need to develop a new business model to guarantee public health facilities timely access to high quality HPTs. In order to efficiently and effectively implement its expanded mandate, KEMSA had to review all its systems, structures and business model, and align their operations to the devolved system of government.
The new business model is aimed at ensuring a self-sustainable supply system. According to KEMSA, the new business model works as follows: KEMSA is responsible for procurement of HPTs with its own funds. The county health facilities submit orders and make appropriate payments to KEMSA according to their own needs; KEMSA processes the orders and dispatches commodities to the respective facilities. It is important to note that the county health facilities only order and pay for medical commodities on demand-driven basis. The Authority then uses the funds received from sale of medical commodities to restock, depending on market demand.
KEMSA’s transformation was initially supported by capitalisation from the World Bank through its Health Sector Support Project (HSSP) to deal with working capital needs linked to the new devolved health sector system of financing.
KEMSA already has the requisite transport system in place, which includes outsourced transport, courier service and own fleet. This ensures timely dispatch of all commodities ordered by county health facilities.
Old business model
Unlike the new business model; the old one relied on the budget KEMSA received from the Ministry of Health to procure health commodities. It then stored the procured commodities from national and international suppliers in warehouses in Nairobi, and later distributed them to over 4,000 health facilities across the country − some located in far-flung areas across Kenya. Distribution of these commodities to rural-based health facilities was done on quarterly basis, while hospitals and urban health facilities received replenishment more frequently. Transportation of the health commodities was done by contracted private entities. The transporters would collect a Proof of Payment (POD) to verify successful and timely delivery, which was used as a basis for payment.
Coping with devolution
KEMSA has had to re-strategise on how to cope with its expanded mandate by ensuring timely supply of quality and affordable medical commodities to county hospitals and county rural health facilities. The Authority has warehouses in Nairobi and regional storage depots, which accommodate the overflow of commodities when the warehouses in Nairobi are full, or health facilities have insufficient storage space.
The Authority has also embarked on building partnerships with not only counties, but also other organisations. For example, KEMSA entered into a partnership contract with the Postal Corporation of Kenya (PCK) for countrywide delivery of HPTs using their wide and well-established distribution network at Ksh. 120 million per year on performance basis. PCK has the capacity to do this, considering its large fleet of vehicles, motorcycles and warehouses in each region, thus enabling KEMSA to deliver HPTs to the last mile. According to KEMSA, this partnership will augment its preparedness to support UHC in all counties through building capacity to supply essential HPTs countrywide.
KEMSA has divided the country into five regions, namely; Coast and North Eastern, Nairobi and its environs, Nyanza and Western, Rift Valley, and Central and Eastern for ease of sales and marketing. Each region is headed by a sales and marketing executive, while county clusters are headed by county sales and marketing officers.