Strategic Purchasing — A Critical Path to UHC
By Nathaniel Otoo, Executive Director, Strategic Purchasing Africa Resource Center (SPARC)
The well-articulated aspiration that no one should go bankrupt when they get sick is an important bedrock on which Universal Health Coverage is predicated. While there is general agreement on the reasoning behind ensuring ‘Health for All’, the path to that goal remains complex, and is often dissimilar based on one’s context. However, in a world of scarce resources and competing priorities, a common approach to making UHC a reality is about making hard trade-offs and implementing deliberate policies that enable countries to get greater value out of existing and future spending on healthcare.
Indeed, this imperative resonates with health systems across Africa where, 11 million people continue to be pushed into poverty every year due to high out-of-pocket payments on healthcare. For all people to have equitable access to quality health services with the needed financial protection, a process for active decision-making about which health services to purchase, from whom, and how to go about paying for them in a cost-effective manner, is critical.
As an illustration, when a pregnant woman enrolled in a national health insurance program run by the government goes to see a doctor for a pre-natal check-up, the national health insurance agency (the purchaser) pays the doctor for this service (what’s being purchased). By virtue of the scale and reach of the purchaser, their purchasing power can be used to strategically shape how healthcare resources are used by creating incentives and engaging efficiency levers. This process can free up resources to expand financial protection and help improve quality services for the population.
In the absence of strategic purchasing, governments typically either provide fixed budgets to service providers or pay whatever is billed. Such purchasing decisions occur passively — i.e., not taking into account past performance in delivering good quality services. In this process of ‘passive purchasing’, even if more money were to be channeled towards delivery of healthcare services, the money is likely to gravitate towards expensive services that cater to the rich in urban areas.
While strategic purchasing might seem intuitive, apprehension of its adoption in health systems is common, especially among providers, pharmacies and medical suppliers. This may be mainly due to the revisions to the flow of funds and allocation of resources it brings about. However, it would appear that to most, the proposition to use health resources in the best possible way is a good one, but the challenge is the lack of knowledge of how to go about it.
For instance, Ghana’s National Health Insurance Scheme (NHIS) at a point enforced the ‘gatekeeper system’, under which patients can approach a higher-level facility only if deemed necessary by a lower-level facility. Prior to this, patients used to decide where to seek care, often visiting hospitals with conditions that could easily be treated at the primary level at a lower cost. While the change took some getting used to, it was necessary to prevent the cost escalations and pressure on health resources that were contributing to a constrained access to healthcare for part of the population.
Over the years, a number of knowledge resources, by way of short-term technical support, country case studies and learning platforms that offer step-by-step guidance on developing strategic purchasing instruments have evolved. Nonetheless, countries often struggle to translate and adapt these learnings and tools to their specific contexts. This is especially pronounced in countries of sub-Saharan Africa, where the challenge is not only technical in nature, but also political, as strategic purchasing is most successful where it has the requisite political buy-in, with stakeholders at all levels recognizing the need for greater efficiency in the purchasing of health care services and goods.
The Strategic Purchasing Africa Resource Center (SPARC) seeks to partner with sub-Saharan African countries to navigate the complexities of conceiving, developing and implementing strategic purchasing initiatives. SPARC’s approach is to build upon, connect, and share expertise and experience that already exists on the continent. This is supported by a coaching and mentoring program that leverages in-continent expertise to support individuals, institutions and countries working towards conceptualizing, implementing and institutionalizing strategic purchasing policies and initiatives. SPARC identifies and builds on successful best practices from the region and creates partnerships for adapting them to build capacity in strategic purchasing.
It is to be noted that no country in the world can achieve “Health for All” simply by just spending more. Equally as important as increasing spending on healthcare is the need to spend more purposefully. This calls for co-ownership at the country level of the challenges faced in spending efficiently. It also calls for co-production and leveraging local knowledge as well as the expertise of peers on the continent.
SPARC will be officially launched at the Africa Health Agenda International Conference in Kigali, Rwanda, March 2019.
