Kenya Medical Supplies Authority : A Case Study of the Ongoing Transition from an Ungainly Bureaucracy to a Competitive and Customer-Focused Medical Logistics Organization

Abstract

The Kenya Medical Supplies Authority (KEMSA) is a state-owned health logistics service company with the core mandate to procure, warehouse and distribute healthcare commodities to public sector health facilities and other public sector customers. Since the inception of KEMSA in 2000 there have been multiple projects and initiatives to improve the performance of KEMSA. However, despite these efforts, and until recently KEMSA had struggled to effectively demonstrate any sustained improvements in performance. In the last 3-4 years, KEMSA under its new leadership has shown sustained improvements in performance, accountability and transparency. In the last year, the Government of Kenya has embarked on the devolution of health financing to the counties to ensure that services are delivered effectively and efficiently to communities. The devolution has resulted in a significant change in the way KEMSA receives monies for carrying out its activities. Of particular relevance is that the devolution has led to ordering and payment for drugs and health commodities by counties. This required KEMSA to reconfigure its business model to serve the 47 counties in Kenya as its customers. The World Bank, through its Health Sector Support Project (HSSP), capitalized KEMSA in order to meet working capital needs that would arise under the new devolved system of financing. Competitive pressures arising from devolution and the new business model, a new management structure with strong leadership and governance, technical support from development partners such as the World Bank and United States Agency for International Development (USAID), and greater flexibilities arising from KEMSA s change of status to a public authority together are converging to create a new KEMSA. It is an opportune time to study the state of reforms at KEMSA, highlight the successes, and develop ideas for meeting the challenges ahead. The ongoing transformation of KEMSA from a bureaucratic state-run medicines supply agency to a more independent and competitive medical logistics authority is an important milestone and it presents opportunities for other countries to learn from the successes and failures at KEMSA.