FINAL_REPORT_BY_BANDA_[1].pdf

7/22/2019

CLIENT: Ministry of Health

Lesotho

SUBMITTED BY: Banda Abdallah (MD)

CONTACT: +1-860-518-2342 / bandexwin@yahoo.com

Costs Analysis Associated with “Scaling up Voluntary Medical Male Circumcision for HIV Prevention 2018/2023”: Lesotho National Implementation Plan

JHPIEGO

Table of Contents

ABBREVIATIONS AND ACRONYMS

1 BACKGROUND AND INTRODUCTION

1.1 Terms of reference

1.2 Reason for this report

2. METHODOLOGY AND ASSUMPTIONS

2.1 Overview of Methodology

2.1.1 Objective

2.1.2 Financial costing

2.1.3 Cost Analysis Perspective

2.1.4 Costing Method

2.1.5 Development of costing model

2.1.6 Development of unit costs

2.2 Key assumptions

2.2.1 Implementation plan time frames

2.2.2 Facilities equipped to provide VMMC and EIMC

2.2.3 Number of outreach activities

2.2.4 Target Population number targeted to undergo VMMC and EIMC

2.2.5 Service Delivery Assumptions

2.2.6 Specific Costing assumptions

2.2.7 Unit cost of circumcision

3 RESULTS OF THE COSTING

3.1 Distribution of the Implementation costs

3.2 Analysis of total cost by cost category

3.3 Implementation plan cost analysis by activity

4 DATA LIMITATIONS AND CONSIDERATIONS

REFERENCES

Annex A: Summary of activity costs per annum

LIST OF TABLES

TABLE 1:YEARLY EXCHANGE RATE

TABLE 2: HOSPITAL AND HEALTH CENTER SITES OPERATIONAL

TABLE 3: NUMBER OF OUTREACHES TO BE UNDERTAKEN EACH YEAR

TABLE 4: TARGETS FOR ADULTS VMMC AND EIMC

TABLE 5: UNIT COST FOR MC ESTIMATE

TABLE 6: SUMMARY OF YEARLY IMPLEMENTATION PLAN COSTS BY OUTCOME AND OUTPUT

TABLE 7: COST SUMMARY BY COST TYPE

TABLE 8: TOTAL IMPLEMENTATION COST BY TOP 10 ACTIVITY

LIST OF FIGURES

FIGURE 1: TOTAL IMPLEMENTATION COST BY OUTPUT

FIGURE 2: COST DISTRIBUTION BY COST CATEGORY

FIGURE 3: TOTAL COST BY TOP 10 MAIN ACTIVITY

FIGURE 4: TOTAL ANNUAL COST DISTRIBUTION AMONG THE TOP 10 MAIN ACTIVITIES

Acknowledgments Dr. Banda Khalifa1, the author of this report would like to appreciate the efforts of key personnel and stakeholders for making this work successful. I would like to acknowledge the leadership of

Jhpiego, especially at the Baltimore office for offering me such a fantastic opportunity to put into practice skills I have acquired throughout my program. I would like to also thank the Lesotho team, especially the technical working group for their immense support and guidance.

Also grateful to the Ministry of Health of Lesotho for their cooperation in providing critical data for this work.

1 Intern @ Jhpiego & MPH/MBA candidate @ Johns Hopkins University

ABBREVIATIONS AND ACRONYMS

ABC Abstinence, Be faithful, Condomise

ACSM Advocacy communication and social mobilization

AIDS Acquired Immune Deficiency Syndrome

ART Anti-retroviral therapy

CBO Community based organization

CQI Continuous Quality Improvement

CHAL Christian Health Association of Lesotho

DGHS Director General of Health Services

EIMC Early Infant Male Circumcision

FBO Faith-Based Organizations

HIV Human Immune Deficiency Virus

HTS HIV Testing Services

IST/ESA Inter-country Support Team for Eastern and Southern Africa

IPC Interpersonal communication

LPPA Lesotho Planned Parenthood Association

MC Male Circumcision

VMMC Voluntary Medical Male Circumcision

M&E Monitoring and Evaluation

MOH Ministry of Health

NAC National AIDS Commission

NGO Non-Governmental Organization

OTH Online Training Hub

RCT Randomized Controlled Trial

SBCC Social Behaviour change communication

TWG Technical working group

UNAIDS Joint United Nations Programme on HIV and AIDS

VMMC Voluntary Medical Male Circumcision

WHO World Health Organization

LePHIA Lesotho Population-based HIV Impact Assessment

1 BACKGROUND AND INTRODUCTION

Data from the Lesotho Population-based HIV Impact Assessment (LePHIA) survey in 2017 indicates an HIV prevalence of 25.6%, making it one of the highest on the African continent. As a response to this alarming prevalence, the Lesotho government has initiated a series of interventions to help reduce the devastating effect of HIV infection.

One of such evidence-based interventions is the adoption of the VMMC on a national scale. Three pivotal randomized controlled clinical trials in sub-Sahara Africa indicates that appropriate MC interventions have the potential to reduce new HIV infections by 60%.1-3 However, VMMC interventions move to supplement the other modalities of HIV infection prevention. It has also been established that one HIV infection is prevented by circumcising five sexually active men.4

There has been one strategic framework on VMMC to accelerate the number of males undergoing circumcision. The immediate past operational plan covered the period 2012 to first quarter of 2018 and has achieved significant demand creation and helped circumcise almost 200,000 Lesotho men.

The current five-year operation plan (2018-2023) is intended to continue from where the previous operational plan ended. The main intent is to bridge the gap of about 120,000 males eligible for circumcision to attain the national target of at least 80%.

With most structures already in place, the main take away of this implementation plan is to help build sustainability and encourage smooth takeover by the Lesotho government. The aim is to make it as cost-effective as possible to move the program from donor-funded to the government of Lesotho funded program.

1.1 Terms of reference

The previous operational plan implemented from 2012-2018 provided that the program would be donor-funded for the entire duration. Additionally, most of the structures required to support the program were non-existent as such; the services of external consultants were a key component.

This costing model is based on the premise that most of the structures necessary for accelerating the program are already in place and well capacitated. The terms of reference for this costing work included the following:

• To review the new operational plan on VMMC

• Develop a costing model that is cost-effective and sustainable

• Analyze the required targets based on the previous operational plan and its achievements

• Review the anticipated outcome and analyze each outcome based on main activities

• Complete costing the operational plan and disseminate to key stakeholders

1.2 Reason for this report

This report serves as a summary of the fundamental assumptions and methodology employed for the costing analysis. It also gives the highlights of the implementation cost necessary for planning purposes. Key to understanding this document is the detailed Excel workbook which must serve as an essential reference to this document.

2. METHODOLOGY AND ASSUMPTIONS

2.1 Overview of Methodology

2.1.1 Objective

The principal purpose of this costing analysis is to provide an estimate of the cost associated with the "Scaling up Voluntary Medical Male Circumcision for HIV Prevention 2018-2023: Lesotho

National Implementation Plan”. This is achieved by linking the various activities with its associated cost in the implementation plan. The results from this exercise will inform donors and the government of Lesotho on the amount of resources required to realize the plans intended outcomes. Apart from the main objective, other supplementary goals include:

▪ To identify prominent cost drivers in the implementation activities

▪ To align the costing with the results framework

▪ To better understand how cash flows in the planning period

▪ To involve the MOH in the implementation and planning process to build and ensure future capacity manage the program

▪ To identify the essential activities that are necessary to implement this plan to ensure sustainability

This analysis only focuses on the total resource requirements for the implementation program.

2.1.2 Financial costing

In assessing financial and budgetary requirements, cost of finances (COF) is mostly preferred.

Financial costs reflect the direct outflow of cash and other expenditures consumed by a program or an asset. Financial costing, therefore, takes into account the total amount expensed by a project or program. On the other hand, economic cost is a broader concept that includes opportunity costs in addition to monetary expense.

In this analysis, it was agreed with the Technical Working Group (TWG) that mainly explicit costs would be included in the costing and not opportunity costs. Critical financial expenses on capital expenditures will be indicated in the specific period in which the expense was incurred. However, in instances of an existing capital asset, a rental charge per circumcision will be included in the overhead contribution.

2.1.3 Cost Analysis Perspective

This costing analysis was done with the consideration that only the costs incurred directly by service providers will be included in the costing analysis. The costs incurred by clients and societal costs will not be included. Costs directly incurred by service delivery partners and other stakeholders in the implementation plan is the only cost taking into consideration.

2.1.4 Costing Method

The costing method utilized in this analysis is that of activity-based costing. The essence of this costing modality is to be able to capture the total cost incurred in the operationalization of the implementation plan and the various activities associated with the scaling up of the VMMC services. This will enable the full appreciation of the extent of resources required to scale up and sustain the program.

Additionally, this costing approach helps to give a comprehensive estimate of the total cost and the resource demands associated with the implementation plan. Other indirect costs associated with VMMC have been considered in the costing methodology.

2.1.5 Development of costing model

The costing model directly reflects the costing associated with the implementation of the main activities and the sub-activities in the results framework. This modality makes it easier to generate summary results for each outcome of the framework. Each outcome is linked to unique main activities that are, in turn, connected to several other sub-activities that reflects the implementation plan. In essence, the costing model utilized demonstrates the implementation.

The workbook used for the costing consists of two excel sheets essential to determining the cost associated with the implementation plan. Fundamental to this model is a list of unit cost items contained in one Excel sheet. The second Excel sheet includes a detailed implementation plan with its related activities and sub-activities with quantities for five (5) years. The first two years have been broken down into quarters while the third to fifth years are costed annually.

The government of Lesotho accounting system was used to allocate each input cost to an expense category.

An ingredient-based costing approach was used, which was reflected as follows.

Cost = Quantity × Price of one unit

Total Cost = Σ (all cost associated with each sub-activity)

2.1.6 Development of unit costs

One of the Excel sheets contains a list of unit costs. These unit costs were made available by the

Ministry of Health of Lesotho in collaboration with the procurement unit in Jhpiego. Some of the unit costs items were estimated from previous works adjusted using the appropriate discount factor. A VAT of 15% was added to items other than employee compensation and per diems as well as items that would not be acquired locally.

Estimation of unit cost for VMMC was done, taking into consideration the human resources, consumables, and the overhead cost associated with performing one surgical medical male circumcision. The unit cost for VMMC was arrived at using the information derived from the procurement unit.

All unit costs have been converted to US dollars after taking into consideration the inflation rates in Lesotho and the United States. It was agreed with the finance team that the current exchange rate that should be used in year one is M14.13 to the dollar. The inflation rate assumed for Lesotho was 5.9% according to the Central Bank of Lesotho. The assumed inflation rate for the United

States dollar is 1.8%. The differential of the inflation rates was used as a discount factor for the subsequent years. The exchange rate used from year one through year five is shown in Table 1.

Table 1:Yearly Exchange Rate

Period Maloti (M)

Year 1 14.13

Year 2 14.71

Year 3 15.31

Year 4 15.94

Year 5 16.59

2.2 Key assumptions

2.2.1 Implementation plan time frames

This costing model focuses on the five-year implementation plan for the Scaling up VMMC for

HIV prevention for the period 2018-2023. The idea for this time frame is to provide for continuous flow of the previous implementation plan, which came to an end in 2018. For operationalization purposes, it was agreed that this current plan takes into account the progress made by the just-ended 5-year plan. For costing purposes, year one for this operational plan is 2018. The first two years of this operational plan is analyzed quarterly using the national budgeting timelines for

Lesotho. The costing of years three to five is on an annual basis.

2.2.2 Facilities equipped to provide VMMC and EIMC

The number of facilities capable of providing VMMC services across the country will directly affect the resources required for the implementation of the program. Though some of these facilities are permanently established to provide VMMC services, some districts do not have well-established health centers earmarked for providing VMMC. Currently, 14 hospitals have VMMC facilities permanently attached, thus providing VMMC services continuously. It is assumed that this number is not likely to change throughout the lifespan of the implementation plan.

However, it is expected that several health centers across the country will be assessed and certified to provide VMMC permanently within each district (Table 2). These assumptions will contribute significantly to the magnitude of the total cost.

Table 2: hospital and health center sites operational

Period Year 1 Year 2 Year 3 Year 4 Year 5

Number of Hospital sites providing services

14 14 14 14 14

Number of Health Centres to be operational in each district

- - 10 15 20

Cumulative number of facilities providing service

14 14 114 164 214

2.2.3 Number of outreach activities

Outreaches will continue to be a pivotal component of this operational plan until health centers are well equipped and capacitated. Outreaches will be undertaken on a full scale in year 1 and 2 and scaled-down afterward in anticipation for equipped health centers as shown in Table 3.

Table 3: Number of outreaches to be undertaken each year

Period Year 1 Year 2 Year 3 Year 4 Year 5

Percentage of Capacity 100% 100% 25% 10% 10%

Number of outreaches 480 480 120 48 48

2.2.4 Target Population number targeted to undergo VMMC and EIMC

Another critical component of the costing model is the number of clients estimated to undergo male circumcision. While early infant male circumcision (EIMC) is a component of this implementation plan, the main focus is providing this service to the at-risk group. The group that will yield significant impact after undergoing VMMC have been determined to be the sexually active age group from 15 to 49 years who are HIV negative. As such, the targets for the EIMC is lower than that for adult male circumcision. The aim is to cater for all the eligible adult males by the end of the operation plan.

In Lesotho, the number of males aged 15-49 eligible for adult circumcision amount to 317,215.

Meanwhile, the previous operational framework resulted in successfully providing circumcision services for close to 200,000 eligible males. This means that there is a current gap of about

120,000, which this implementation plan must address. The yearly targets assumed for both adult and infant circumcision are indicated below in the table.

Table 4: Targets for Adults VMMC and EIMC

Target Population Year 1 Year 2 Year 3 Year 4 Year 5 Total Target

No. of VMMC 15-49 40000 45000 15000 15000 5000 120000

No. of EIMC 1000 1500 3500 2500 2000 10500

2.2.5 Service Delivery Assumptions

To estimate the unit cost of training personnel and the unit cost associated with providing one male circumcision. It was assumed that the service delivery would be at a static site. These static sites may be established at existing hospitals or set in each of the district health centers that will be earmarked for MC.

Each established site will utilize a disposable surgical kit using the dorsal slit circumcision technique to minimize complications. Currently, almost all the circumcision cases are handled by trained nurses. Each certified facility will have a team made of two nurses trained to provide

VMMC services as well as one counselor providing HIV testing and counseling. Other supporting staff will include a receptionist. To establish a unit cost for MC, an assumption has been made that each service delivery point is capable of providing about 4800 cases a year. This assumption is necessary to allocate indirect capital and non-consumable costs.

2.2.6 Specific Costing assumptions

Consumable Costs

The procurement unit provided most of the consumable unit costs at Jhpiego. The essential consumables included in this costing work are the costs associated with performing male circumcision, especially the disposable kit and other pharmaceuticals that are used for the circumcision. The cost of one disposable kit set at $17.64, which includes 24% for transport, housing, and distribution to various facilities. The average cost for the total cost of consumables, which consists of the disposable kits and the pharmaceuticals is $28.66. However, total consumables estimate for performing infant circumcision is assumed to be about 60% the cost of adult circumcision.

Capital costs

The unit cost of capital expense was obtained from the MOH procurement unit. Only the capital equipment that will be required for this implementation plan was taking into consideration. The equipment costs are included in the period in which they were purchased. The depreciation of the equipment over their useful shelf lives was not considered in this analysis.

The main capital expenditure is the purchase of two additional mobile clinics at an amount of

$233,546 per unit. This is to boost the operations of the outreach sites. Other expenditures on capital goods include ten medical tents at a unit cost of $687 with a purchase of ten complementary trailers at a unit cost of $1,628. One unit of laptop computer was to be purchased for $2,345.

Personnel costs

Personnel costs for the success of the implementation plan were derived from the government's payroll. Currently, all the providers are on the government payroll as such a provision of 20% of their salary has been made to take care of their direct role-specific to VMMC. Other personnel anticipated to contribute to this operational plan were doctors mainly serving in the capacity of supervisors of the facilities. The focus is now shifted to capacitating nurses to be able to provide

VMMC services at all centers.

Training costs

The highest training cost is the training of qualified health cadres to provide VMMC services facilitated by Jhpiego and the TWG. By the end of the five-year implementation plan, a total of

214, including hospital and health centers, will be equipped to provide VMMC services continuously. Each site team will include two nurses and one counselor. The estimated cost for 14 days of residential training for each site team has been calculated to be $5,740.

Additionally, the cost of several training workshops to capacitate managers, support staff, supervisors, and data clerks for various facilities have been added.

Communication campaign costs

Creating demand by increasing awareness of the VMMC services is a pivotal aspect of this implementation plan. Annual communication campaign cost contributes significantly to the overall cost of the program. The yearly cost of the communication campaign is $226,468. The communication campaign will last for the entire period of this implementation plan.

Overhead costs

Estimates of overhead costs were based on previous works with similar assumptions. These costs are mainly associated with program management and supervision, taking into account inflation.

Utilization

MC facility utilization determines the magnitude of the unit cost. A number of fixed cost assumptions were made based on the number of average circumcisions done in a day.

An assumption has been made that an equipped facility with the necessary demand creation will be able to carry out an average of 20 circumcisions a day, five days a week. At these consistent rates for 48 weeks, a total of 4800 circumcisions will be undertaken. At the static sites, it is assumed that the efficiency of the circumcision team is 90% to help calculate the hourly rate.

2.2.7 Unit cost of circumcision

The unit cost of circumcision without taking into account training, monitoring, and other related activities are depicted in the table below. This summary utilizes the information from previous works that are based on similar assumptions and the values adjusted for depreciation and other factors such as inflation. The total cost of uncomplicated MC is $49.55.

Table 5: Unit cost for MC estimate

Cost Item Value in USD

MC kit + Other Consumables 28.66

Non-consumable costs 0.76

Personnel costs 15.57

Overhead Contribution 4.56

Total $49.55

3 RESULTS OF THE COSTING

3.1 Distribution of the Implementation costs

Table 6 and figure 1 on subsequent pages under this section elaborate the total resources required for the implementation plan by outcome and outputs as well as yearly costs. The estimated total cost for the implementation plan is $17,241,512 over five years without taking into account the 5% contingency. A contingency of 5% of the total amount will be $862,076.

The total cost with 5% contingency sums up to $18,103,587. The total cost for years 1 and 2 is $9,062,514 constituting about 52.6% of the total implementation cost. This may be explained by the increased number of activities in those years. Years 3-5 requires $8,178,998 for that period of implementation. The relatively low value in years 3-5 is explained by the fact that activities and target circumcisions tend to decrease towards the end of the program. This is to make the transition from donor to the government of Lesotho less resource-intensive.

The highest cost driver per outcome is outcome number two (2), which is to increase the capacity of the country to offer safe VMMC across the country. This outcome requires an amount of $10,896,861, making up 63.2% of the entire cost before providing for the contingency of 5%. The finding is not surprising, giving the fact that most of the activities under this outcome requires making significant financial commitments. The highest output contributor to this outcome is increasing the capacity of health facilities to provide minimum

VMMC package.

The second highest cost contributor is associated with strengthening institutions and structures to support VMMC implementation (outcome one). It will cost stakeholders $4,348,906 before providing for a 5% contingency to strengthen institutions and structures to support VMMC implementation over five years. The most significant cost driver under this outcome is to make sure VMMC plans/strategies and programs are guided by evidence through continuous monitoring, evaluation and research.

The least cost per outcome is associated with increasing capacity to offer safe infant circumcision (outcome 3). This outcome will require $645,776 over five years. This was expected because of the low number of male infants targeted for circumcision over the five years. Increasing capacity to provide safe EIMC services will constitute less than 5% (3.75%) of the total implementation cost before providing for contingency over the five years.

Figure 1 shows the total cost by output. The highest value among the ten (10) outputs is developing the capacity of health facilities to provide a minimum package of VMMC. This output constitutes more than half of the overall implementation cost for five years. The lowest cost specific output is increasing the knowledge and commitment of leaders to male circumcision for HIV prevention.

Table 6: Summary of yearly implementation plan costs by outcome and output

Y1 USD Y2 USD Y3 USD Y4 USD Y5 USD Total 5Y USD YEAR 3-5 USD

1. Institutions and structures strengthened to support VMMC implementation 118,237 259,998 979,259 1,328,906 1,662,506 4,348,906 3,970,670

1.1 Relevant policies and legislations for conducive environment to implement VMMC available 63,033 - - - - 63,033 -

1.2 Increased knowledge and commitment of leaders to male circumcision for HIV prevention 2,979 - 1,007 - - 3,986 1,007

1.3 Established and capacitated structures to coordinate VMMC at all levels 13,620 128,183 279,521 341,685 369,732 1,132,741 990,938

1.4 VMMC plans/strategies and programs are evidence informed through M&E and research 38,605 131,815 698,731 987,221 1,292,774 3,149,145 2,978,725

2: Increase capacity of the country to offer safe, voluntary medical male circumcision services in both the urban and rural parts of Lesotho

3,762,225

4,201,446

1,332,954

1,190,201

410,035

10,896,861

2,933,190

2.1 Facilities mapped, assessed and equipped for delivery of minimum package of VMMC readiness 494,862 28,402 - 29,393 - 552,657 29,393

2.2 Capacity of health facilities developed and health facilities providing VMMC minimum package 3,266,670 4,172,303 1,327,589 1,044,455 399,258 10,210,275 2,771,302

2.3 Facility, district and national Quality Assurance Systems have VMMC integrated 693 741 5,365 116,353 10,777 133,929 132,495

3: Increase capacity of the country to offer safe male infant voluntary medical male circumcision services in both the urban and rural parts of Lesotho

101,637

122,951

154,959

137,131

129,097

645,776

421,187

3.1 Facilities assessed and equipped for delivery of EIMC readiness 1,790 10,259 - - 27 12,075 27

3.2 Increase the capacity of human resource teams skilled to provide EIMC services 99,848 112,692 154,959 137,131 129,071 633,700 421,161

4. Increase the number of males registered to receive male circumcision services from 4000 in 2018 to 120,000 in

2018/2022 leveling at 45,000 in 2016/17

244,986

251,033

255,374

334,296

264,281

1,349,970

853,951

4.1 Increase percentage of population aged 10–59 years with correct knowledge of male circumcision 234,314 231,435 235,437 239,508 243,649 1,184,342 718,594

4.2 Increase the capacity of facility-based and community health workers in IEC for VMMC 7,134 15,998 16,275 16,556 16,842 72,805 49,673

4.3 Civil Society participation in implementation of VMMC strategy is increased 3,539 3,600 3,662 78,232 3,790 92,822 85,683

Grand Total 4,227,086 4,835,428 2,722,545 2,990,533 2,465,919 17,241,512 8,178,998

Contingency (5%) 211,354 241,771 136,127 149,527 123,296 862,076 408,950

Grand Total Including Contingency 4,438,440 5,077,200 2,858,672 3,140,060 2,589,215 18,103,587 8,587,948

Figure 1: Total implementation cost by output

3.2 Analysis of total cost by cost category

From Table 7, the total implementation cost has been classified according to cost category and arranged in order of decreasing cost. These categorizations will direct the efforts of stakeholders and managers towards specific areas that are huge determinants of costs. The category with the highest value is the expenses incurred under health products and equipment's contributing

$4,217,871 of the total implementation cost before accounting for contingency over the five years.

Planning and administration category is the second highest contributor to the full implementation cost of about $3,479,936. Compensation of employees, Training, and capacity building, travel and transport, monitoring and evaluation, and communications are the next significant cost contributors for the five years. Technical assistance contributed only about $85,697 over five years. The technical assistance cost observation may be explained by the fact that in this operational plan, the services of external consultants was drastically reduced due to the relatively capacitated personnel.

63,033

3,986

1,132,741

3,149,145

552,657

10,210,275

133,929

12,075

633,700

1,184,342 72,805

92,822

TOTAL COST BY OUTPUT

1.1 Relevant Policies and Conducive

environment

1.2 Increase Knowledge and Commitment of

leaders

1.3 Established and Capacitated Structures

1.4 Evidence through M & E and Research

2.1 Facilities assessed and Equipped for VMMC

delivery

2.2 Develop Capacity to Provide MC

2.3 Q&A Systems well Integrated with VMMC

3.1 Facilities assessed and Equipped for EIMC

3.2 Increase Human resource Capacity to

provide EIMC

4.1 Increase Percentage of 10-59 with

Knowledge of MC

4.2 increase Capacity of health workers in EIC for VMMC

4.3 Increased CSO participation

Table 7: Cost summary by Cost type

COST CATEGORY Sum of Y1 Total

Sum of Y2 Total

Sum of $ - Y3 Sum of $ -

Y4

Sum of $ -

Y5

Sum of $ - Total

5Y

Health Products and Health Equipment 1,659,249 1,339,058 512,589 505,878 201,098 4,217,871

Operating costs - Planning and Administration 1,404,777 1,372,481 368,667 166,414 167,598 3,479,936

Compensation of employees 24,377 62,071 589,168 847,943 1,115,490 2,639,049

Operating costs - Training and capacity building 81,061 859,719 456,989 549,739 95,540 2,043,048

Travel and Transport 613,366 622,285 158,450 71,920 65,747 1,531,768

Operating costs - Monitoring and Evaluation (M&E) 14,229 82,714 291,995 392,283 502,620 1,283,841

Operating costs - Communication 226,469 231,594 235,598 239,672 243,816 1,177,149

Operating costs - Overheads 184,873 212,449 94,419 100,355 58,802 650,896

Operating costs - Other 10,771 10,857 11,045 85,742 11,456 129,871

Operating costs - Technical Assistance 7,913 39,817 3,626 30,588 3,753 85,697

Non-financial assets - 2,384 - - - 2,384

Grand Total 4,227,086 4,835,428 2,722,545 2,990,533 2,465,919 17,241,512

Figure 2: Cost distribution by cost category

As shown in figure 2, the top 5 contributors of cost are health products and equipment, planning and administration, compensation of employees, training and capacity building, travel and transport arranged in decreasing order of value.

Health products and health equipment: This category constitutes the highest cost. Within the health products and equipment category, procurement of MC kits for adult MC is the major contributor to the total cost in this category. Purchase of MC kits and consumables constitutes $3,509,651 of the total cost in this category, making up 83.2% of the entire category cost. The high figure is also explained by the fact that the target numbers determine the number of MC kits required for MC.

The second highest value within this category is the procurement of two (2) mobile VMMC units at a total value of $467, 091. Other cost contributors in this category are the procurement of MC kits and consumables for infant circumcision, ten medical tents, and ten medical trailers.

Planning and administration costs: About 20% of the total implementation cost falls under this cost category. The total cost under this category is $3,479,936 before making room for contingency. The most significant contributor to cost within this category is the planning of outreaches to various districts. A total of 480 outreaches will be undertaken in year 1 and year 2, followed by 25% in year 3 and 10% in year four and five respectively. Outreach cost contributes

$3,245,998, making up 93.3% of the total category cost. Among other significant cost drivers in this category include several planning meetings both at the district level and national level.

4,217,871

650,896

2,639,049

2,043,048

3,479,936

1,283,841

85,697 129,871

1,177,149

2,384

1,531,768

TOTAL VALUE BY COST TYPE IN USD

Compensation of employees: The third most expensive cost category is the compensation for employees contributing $2,639,049 of the total implementation cost. Within this category, the most significant cost driver is compensation for employed data clerks in each of the health facilities providing VMMC to aid in monitoring and evaluation. The compensation for data clerks amounts to $1,865,370. Its worthy to note that compensation for personnel directly involved in providing

VMMC services are not included. A provision of 20% of their basic salary was made to compensate for their managerial and supervisory role in the various VMMC facilities. It was agreed that for sustainability purposes, actual remuneration of doctors, nurses, and counselors would be taking care of within the central government of Lesotho annual budget.

Training and Capacity building: Training and capacity building contributes about $2,043,048 of the total implementation cost before making up for contingency. The most prominent cost driver in this category is the expenses incurred in training VMMC teams for the entire 214 centers. These centers will be capacitated to provide VMMC services in the course of the five-year plan. Training a group of 2 nurses and one counselor for the 214 sites contributed $1,264,956 of the total cost within this category, making up 61.9% of the total cost under this category. The next major contributor to cost under this category is the training of nurses and counselors that have already been trained to provide EIMC services in the 14 hospital sites. The retraining of nurses and counselors make up $415,978 of the total cost within this category.

Travel and transport: The fifth-highest cost category for the five-year implementation plan is travel and transport constituting 8.9% (1,531,768/17,241,512) of the total implementation cost. Under this category, the expenses incurred for providing travel and transportation for outreach activities make up 99.3% (1,521,561/1,531,768) of the total value within this category.

3.3 Implementation plan cost analysis by activity

Table 8 and Figure 3 shows the cost contributions by main activity. The top 10 main activities contribute $16,474,249 of the total implementation cost over the five years. As discussed in the previous section, outcome two (2) constituted the highest fraction of the total cost. It is therefore not surprising that the top 10 cost contributors by main activity are dominated by an activity in outcome two. Providing VMMC to eligible clients constitutes $8,887,719 of the total implementation cost making up 51.5% of the total cost and 54% of the top 10 costs by main activity. The high cost under this activity is explained by the fact that significant expenses were incurred under this main activity.

The next most costly activity to undertake is monitoring, evaluation, and research. M&E and research contribute $3,029,662 of the total implementation cost. The next high-cost drivers by main activities include training human resource teams and build capacity to provide minimum

VMMC package. The training of human resources includes training of nurses and counselors to offer VMMC services across the 214 sites across the country.

Table 8: Total implementation cost by top 10 activity

TOP 10 MAIN ACTIVITY YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5 Total

Provide VMMC to Clients 3,265,732 3,491,209 1,016,842 728,597 385,339 8,887,719

M&E and Research 38,605 102,739 669,131 957,088 1,262,099 3,029,662

Train HR and Build Capacity 938 681,094 310,746 315,859 13,919 1,322,556

Population exposed to VMMC knowledge

234,314 231,435 235,437 239,508 243,649 1,184,342

Support Management of VMMC - 103,480 254,391 315,082 343,726 1,016,679

Equip Sites to deliver minimum

Package of VMMC

494,862 - - - - 494,862

Provide EIMC to Clients 19,480 30,935 71,788 52,521 42,998 217,722

Ensure VMMC acc with Research - 29,076 29,600 30,133 30,675 119,484

QA/QI Activities for VMMC - 36 - 108,365 - 108,401

Facilitate CSO Part 3,539 3,600 3,662 78,232 3,790 92,822

Figure 3: Total cost by top 10 main activity

Figure 4 shows the yearly cost distribution by main activities. In year 1 and 2, the main cost driver is providing VMMC to clients contributing more than $3million each in year 1 and 2. The cost associated with this main activity decreases over the rest of the implementation period. Another significant cost driver in year one is equipping VMMC sites to provide VMMC services.

In year 2, the second-highest contributor by main activity is monitoring and evaluation and research. The cost associated with M and E and research increases steadily from year three onwards.

54%

18%

8%

7%

6%

TOTAL COST BY TOP 10 MAIN ACTIVITY

Provide VMMC to Clients

M&E and Research population exposed to VMMC knowledge

Support Management of

VMMC

Equip Sites to deliver minimum Package of VMMC

Train HR and Build Capacity

Provide EIMC to Clients

QA/QI Activities for VMMC

Ensure VMMC acc with Research

Facilitate CSO Part

Figure 4: Total Annual cost distribution among the top 10 main activities

3,265,732

3,491,209

1,016,842

728,597

385,339

8,887,719

38,605

102,739

669,131

957,088

1,262,099

3,029,662

0 2,000,000 4,000,000 6,000,000 8,000,000 10,000,000 12,000,000 14,000,000 16,000,000 18,000,000

YEAR 1

YEAR 2

YEAR 3

YEAR 4

YEAR 5

Total

ANNUAL COST BY TOP 10 MAIN ACTIVITIES

Provide VMMC to Clients M&E and Research

Train HR and Build Capacity population exposed to VMMC knowledge

Support Management of VMMC Equip Sites to deliver minimum Package of VMMC

Provide EIMC to Clients Ensure VMMC acc with Research

QA/QI Activities for VMMC Facilitate CSO Part

4 DATA LIMITATIONS AND CONSIDERATIONS

The following considerations and limitations with regards to the primary data should be noted.

▪ Several unit cost items were a constellation of many cost items. However, because of the lack of timely data source on the constituents of the unit cost item, some of the unit costs are lump-sum costs. One such example is the unit cost used for communication campaigns. A detailed breakdown of the constituent's items was not readily available;

hence, an estimate was made. It will be prudent to adjust the cost for communication campaigns once a detailed breakdown becomes available.

▪ The total cost for the implementation plan did not take into account the estimated expenses that will be incurred for disposing of waste associated with VMMC services.

The most significant of these is the disposal of the MC kits, which according to sources it is usually taken to South Africa for safe disposal. When reliable data become available, it will be necessary to factor in these costs since the primary device being used for the VMMC services is the disposal kits.

▪ The cost analyses do not analyze the source of the funding for the implementation. The assumption made is that the government of Lesotho should be in a position to sustain the program in the absence of donors.

▪ The 5% contingency (5% of the total cost) is the allowance made to return to daily operations as quickly as possible after an unforeseen event.

ANNEX A: SUMMARY OF MAIN ACTIVITY COSTS PER ANNU

Row Labels Sum of Y1 Total

Sum of Y2 Total

Sum of $ - Y3 Sum of $ - Y4 Sum of $ - Y5 Sum of $ - Total

5Y

Provide VMMC minimum package to eligible clients 3,265,732 3,491,209 1,016,842 728,597 385,339 8,887,719

Ensure VMMC services are adequately monitored and evaluated 38,605 102,739 669,131 957,088 1,262,099 3,029,662

Train human resource teams and build their capacity to provide VMMC minimum package services 938 681,094 310,746 315,859 13,919 1,322,556

Ensure that population is adequately exposed to VMMC information. 234,314 231,435 235,437 239,508 243,649 1,184,342

Support the management of VMMC services in all 10 districts within the country - 103,480 254,391 315,082 343,726 1,016,679

Equip sites to deliver minimum package of VMMC 494,862 - - - - 494,862

Train human resource teams providing neonatal EIMC 80,368 81,758 83,171 84,609 86,072 415,978

Provide EIMC services 19,480 30,935 71,788 52,521 42,998 217,722

Ensure that VMMC services are accompanied by/ supported by appropriate operational research activities - 29,076 29,600 30,133 30,675 119,484

QA/QI activities for VMMC are conducted at all levels - 36 - 108,365 - 108,401

Facilitate the participation of civil society organizations (including traditional structures) in VMMC activities 3,539 3,600 3,662 78,232 3,790 92,822

Train human resource teams in IEC materials for VMMC 7,134 15,998 16,275 16,556 16,842 72,805

Finalize VMMC Policy, strategy and implementation plan 63,033 - - - - 63,033

Assess and establish suitable VMMC sites throughout Lesotho - 28,402 - 29,393 - 57,795

Establish and support the functionality of VMMC TWG at district level 516 12,376 12,590 12,808 13,029 51,319

Ensure adequate funding is available and secured for VMMC services in the country 8,684 8,834 8,987 9,143 9,301 44,949

Develop and implement waste management linkages and function 693 705 5,365 7,989 10,777 25,528

Ensure support for VMMC scale up by traditional leadership 3,507 3,492 3,553 3,692 3,677 17,921

Strengthen capacity for the provision of EIMC services at facilities 1,790 10,259 - - 27 12,075

Develop orientation and advocacy packages 2,979 - 1,007 - - 3,986

Strengthen referral mechanisms with up to date SOPs 912 - - 960 - 1,873

Grand Total 4,227,086 4,835,428 2,722,545 2,990,533 2,465,919 17,241,512

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