Using family planning supply chain costing for decisionmaking in Guatemala

Public health supply chain costs are often difficult to estimate. Yet, not understanding the real costs of supply chains can result in under-budgeting, which can lead to stockouts of contraceptives and other critical health commodities. As in many countries, the supply chains for public health commodities in Guatemala are a complex combination of varying procurement, storage, and distribution systems. This study analyzed supply chain costs for four health programs:  family planning, immunization, nutrition, and essential medicines.

To estimate costs for each of the four supply chains, analysts used the Supply Chain Costing Tool (SCCT), an activity-based approach developed by the USAID | DELIVER PROJECT. From January–March 2013, teams collected data from 60 sites in six of Guatemala’s 29 health regions, including hospitals, health centers, health posts, and district and regional warehouses. The team also collected information from various central Ministry of Health (MOH) units; national family planning, nutrition, and immunization programs; and international partners. They then extrapolated sample results to estimate a total national supply chain cost of U.S.$19.8 million, which is equal to 34 percent of the value of the MOH’s public health commodities. The study disaggregated costs by tier, facility, supply chain functions, and average cost—the cost per value, weight, and volume of the commodity.

For each of the four programs, the team also calculated costs by program. The MOH used the findings from the study—the cost estimates—to:

• generate scenarios for improving the supply chain performance
• identify cost savings
• budget and plan for performance-based funding agreements.