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30th May 2017

HANSHEP April 2017 Knowledge Exchange: Strategic Purchasing

There is a growing awareness that health care financing is essential for Universal Health Coverage (UHC). As it has risen to the centre of global policy debate, there has been increasing acknowledgment that this means more than just revenue generation. Purchasing is the essential link between the resources pooled and the delivery of quality services for universal coverage. The 2000 World Health Report describes strategic or active purchasing as “a continuous search for the best ways to maximize health system performance by deciding which interventions should be purchased, how, and from whom.” Strategic purchasing, if done correctly, could help countries achieve UHC by improving health system performance, quality, efficiency, equity and responsiveness.

Despite the evidence supporting the importance of strategic purchasing, there is confusion and a lack of evidence on how to obtain the correct service-mix, volume and provider-mix. Given this uncertainty, HANSHEP Members chose to focus on this key area for their April quarterly meeting.

Today we will be taking a closer look at the strategic purchasing maturity model currently being developed within Bill & Melinda Gates Foundation (BMGF), presented by Jack Langenbrunner and Michelle Wen.

BMGF Strategic Purchasing explorations

Within BMGF, strategic purchasing is seen as a powerful tool to harness the private sector to improve quality and pro-poor health outcomes. Understanding the mechanisms which will allow it to achieve better health coverage for the poor is a high priority.

Both Jack and Michelle made a clear distinction between passive purchasing and strategic purchasing:








Strategic purchasing has a track record of integrating public and private providers because it allows for contracting with good performers – regardless of whether it is public or private sector. Examples include Indonesia, Philippines, Ghana, Kenya, and Chile.

Strategic purchasing can provide a powerful tool to leverage parallel systems such as family planning and HIV/AIDs to move into a more integrated model of care through the alignment of the benefits package, contracting, and payment incentives, as well as development of accountability measures.  This will become more important as donors phase out programs over the coming years.

The Bill and Melinda Gates Foundation are part-way through a process to design a program in the strategic purchasing space which aims to improve the purchasing of Primary Health Care (PHC) to sustainably increase coverage of effective and affordable health care services for the poor via public and private sector providers.  The nascent strategic purchasing maturity model depicted below provides an example of how this Gates Foundation programme aims to help countries improve the impact of their financial flows as they “graduate” up and improve their health purchasing function.










Strategic purchasing, however, is complex and requires a network of institutions, functions, and data in order to succeed:












During their consultation with countries, the Gates Foundation found there was a need for advocacy and raising awareness of strategic purchasing, a potential for “twinning” and technical assistance between purchasing agencies, need for support to ensure an enabling “political economy” for purchasing and implementation support across decentralised systems.