The NHF team was able to maintain financial stability and achieve a creditable financial performance for the year ended March 31, 2018 despite challenges arising from our mandate to assume responsibility for the management and delivery of pharmacy services within the public health sector and being subjected to an inadequate drug budget.
The Statement of Financial Position as at March 31, 2018 reflects a net asset position of $13.01B, which is a weakened position, by 7.14% ($999.64M), when compared to March 2017. The chart below provides further details.
The financial position is reflecting a current ratio of 4.30:1, and an acid test ratio of 3.55:1. Whilst these ratios exceeds acceptable standards the high level of receivables remain a concern. The current and acid test ratios for the comparable period were 4.56:1 and 3.97:1, respectively.
Income and Expenditure
The deficit for the year ended March 31, 2018 is $12.57M which is a weakened performance when compared to the surplus of $1.12B for the period ended March 31, 2017.
Total Revenue net of expenses for the year reflected an increase of 8.50% ($818.23M) when compared to March 2017. The increase is due to revenues from taxation sources (Tobacco Tax National Insurance and Special Consumption Tax) and other income increasing over prior year by 9.15% ($670.55M) and 457.65% ($1.86B), respectively. On the other hand, net revenue from pharmacy services reduced over prior year by 90.77% ($1.71B). The reduction in the net revenue from pharmacy services is owing to the Fund changing its billing mechanism from a mark-up regime to a cost plus 5% management fee methodology. The 5%management fee plus recoverable expenses ($1.98B) has been included in other income and is the main reason for the positive variance over prior period. Expenses for the year amounted to $10.45B which is an increase of $1.95B when compared to prior year. The main factors contributing the increase are as follows:
- There is an increase in the provision for impairment of receivables in the current period of $3.06B.
- Benefit Costs (NHF & JADEP Cards) of $4.80B represents 45.96% of Total Expenditure and an increase of 8.09% when compared to March 2017; this is due solely
to increased card utilization.
- Health Promotion and Public Relation expense of $166.17M accounts for 1.59% of Total Expenditure
- Staff Costs of $1.32 B represents an increase of 10.95% ($130.56 M) over the previous year. The increase is mainly due to NHF taking over the staff costs for all public sector pharmacy staff by January 2018; a 5% salary increase was also granted by the Government to public sector workers.
- Administrative and other expenses for the current year amounted to $1.10 B resulting in an increase of 46.09% ($347.99 M) over prior year.
The 2017-2018 financial year has been a rewarding one for NHF operations, marked with increases in all our enrolment and benefit programmes. Enrolment on the Individual Benefits Programmes continued on a growth path with the addition of 41,477 beneficiaries, reaching a total of 773,621 with 371,215. This represented a 4.1% increase over enrolment in the previous year.
Enrolment increased by 2.6% on the NHF Card Programme compared to that of the previous year, and there was an addition of 29,607 beneficiaries, resulting in a total of 471,722 NHF cardholders with 296,735 active members.The Jamaica Drug for the Elderly Programme (JADEP) enrolment grew by 7.9% over the performance of the previous year. With 11,870 new beneficiaries added to the programme thereby reaching a total of 301,899. Of this number, 74,480 JADEP beneficiaries were active.
The Fund also maintains the Government of Jamaica (GOJ) database which comprises 618,747 NHF and GOJ cardholders who are able to use their cards at public sector pharmacy facilities, as well as private pharmacies enrolled on the Public Sector Pharmacy Partnership Programme (PPP) to provide dispensing services to public sector patients.
Our card programmes would not be possible without the support of pharmacy providers. Expansion of the NHF’s participating provider network continued during the year with the addition of 30 new pharmacies. However, 19 pharmacies including 10 JADEP providers were terminated due to the closure of their operations. The year ended with a network of 463 NHF Card providers and 256 JADEP providers island-wide providing prescription services to beneficiaries, of which 87% are private sector pharmacies. An extensive network of providers offers the beneficiaries increased access and multiple options for filling prescriptions.
Grants & Projects
The National Health Fund (NHF) remains committed to the continued development of the Health Sector. During the year, $1.79 B was approved for 44 Institutional Benefits projects. $907M was approved for 37 new projects, while additional funding of $882.74M was approved for 7 existing projects.
Project Approval by Grantee
The Ministry of Health (MOH) and its affiliated institutions with 36 projects approved valued at $1.70 B, commanding the largest share of the budget for 2017-2018 financial year. Twelve projects were approved for the MOH valuing $1.0 B, eight for South East Region Health Authority (SERHA) valuing $241 M, three for Southern Regional Health Authority (SRHA) valuing $125 M, ten for the North East Region Health Authority (NERHA) valuing $116 M, two for the Western Regional Health Authority (WRHA) valuing $71 M and one under NHF for $140 M.
Non-Government Organizations (NGO) combined with Other Government Agencies (OGA) not in the health sector had eight projects approved valuing $90 M.
Project Approval by Type
The category “Other” which includes miscellaneous projects, received a total of $836 M for four projects and represents the largest share of the funding approved. The Infrastructure Category which takes in new construction and renovation projects, received $526 M for 21 projects. Medical & Non-Medical Equipment Category received $285 M for seven projects, Health Promotion and Protection received $28 M forthree projects while Training received $39 M for four projects, Transportation received $21 M for two projects and Research received $54 M for three projects.
Projects Managed by the NHF
The NHF implemented and managed infrastructure projects valued at approximately $2.5 B island-wide, including completing projects approved for the MOH and RHAs in the previous year.
The year marked another milestone in the life of the NHF with the full transfer of all public sector pharmacies to the agency. NHF now operates pharmacy service in a total of 105 locations consisting of hospitals, full week and scheduled health centre services.
Approximately 2.2 million prescriptions are generated in the public health system annually and our mandate is to improve pharmacy services offered to public patients. NHF aims to provide the highest quality service with emphasis on improving access to quality pharmaceuticals as well as improved organizational efficiency and enhanced customer satisfaction.
Number of Prescriptions Filled
A total 1,507,766 prescriptions were processed by 32 Drug Serv pharmacies where the Pharmacy Information Management System (PIMS) was in operation. This represented an increase of 21 percent when compared to the last financial year. Of this number, 255,735 (17%) was in-patient treatment, while 1,252,032 (83%) was out-patient treatment. The out-patient figure was achieved, in part, by the 193,877 prescriptions processed using the Drop off/Pick up Service (DOPUS) that is offered at all locations. This represents 15.5 percent of total out patients’ prescriptions filled.
Clinical interventions continued with a total of 9,702 drug related problems being documented during the year, related to effectiveness of drug therapy; Drug Selection; Dosage form selection and Drug toxicity. The interventions made by pharmacists resulted in medication safety, changes in therapy and better patient’s outcome.
Other notable achievements in the wider service delivery were the implementation of the Quick Prescript application, introduction of Mobile Dispensing Units for bedside care in hospitals, the expansion of the Public Sector Pharmacy Partner Programme (PPP) and retrofitting and branding of a coaster bus for dispensing medication to distant underserved communities.
Pharmaceutical Supply Chain
In playing their part in breaking down the barriers to quality health care for more Jamaicans, the Pharmaceutical Warehouse and Procurement and Import teams worked assiduously to maintain adequate stocks of VEN list items according to budgetary allocation.
Improving Availability of Pharmaceuticals In Stock Medical Supplies for 2017-2018
This year, marked progress was made in increasing the medical supplies available to Jamaicans. A minimum stock level of 85 percent of VEN list items was defined by the NHF and an annual average stock level of 86 percent was achieved. This was done by the timely payment of supplier’s invoices which ensured there were no stock outs resulting from supplier’s hold due to non-payment of invoices, and despite many challenges in procuring supplies.
A total of 107 contracts to procure 1,089 pharmaceuticals and medical supplies were managed during the period. An estimated $4.75B was spent to procure pharmaceuticals and medical supplies, an increase of 3.3 percent when compared to the previous financial year.
In an effort to maintain continued improvements, efficiency and effectiveness of the Imports Department, the NHF has completed and submitted the Authorized Economic Operator (AEO) application to Jamaica Customs Agency for review. We now await the validation and audit process, which is the next step in attaining this status. The AEO system is designed to reward compliant importers, allowing them to have cargo arrive and delivered on the same day, resulting in expedited clearances.
Service Level for VEN List Items
The annual average service level for VEN List items was 87 percent which represents a seven percent increase over the 2016-2017 financial year, while the service level for drugs used in the treatment of chronic illnesses was 82 percent the same as the preceding year. Likewise, we were able to achieve an 86 percent, adherence to delivery schedule for orders that were submitted on time.
Improving Warehouse Efficiency
The NHF continued its move towards a modern and efficient warehouse with the full implementation of a new Warehouse Management System (WMS). Since its implementation, there have been significant improvements in warehouse operations such as inventory receival, picking and packing, inventory management and auditing. This has in turn resulted in improved order fulfilment and delivery rates.