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16th May

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 (SP), 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 SP, 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. Over the next few weeks, we will be sharing some of the innovations and case studies showcased during the HANSHEP Knowledge Exchange.

Dr Leizel Lagrada, an Independent Health Specialist and former Head Executive Staff for PhilHealth and Dr Ibu Becky Soewondo, the Head of the Policy Working Group on Health Insurance at the Government of Indonesia, presented case studies and highlighted how SP had been implemented in their countries.

PhilHealth was created in 1995 in order to achieve UHC. Dr Lagrada outlined the complex, decentralised system which PhilHealth operates in, sometimes causing difficulties in financial flow. Despite having the largest network, health expenditure is still predominantly driven by the private sector and out of pocket payments (OPP):

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While the National Health Insurance Programme covers 91% of the population, the majority of the health services bought by PhilHealth do not have a primary care benefit:

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Similar to the Philippines, the Indonesian health system is largely decentralised and fragmented. Dr Soewondo outlined how in January 2014 the Indonesian government established a mandatory national health insurance system, the Jaminan Kesehatan Nasional (JKN). It currently covers 68% of the population and contracts both public and private health providers. The benefits package is comprehensive which often means that health facilities struggle to fulfil all services listed. There is insufficient and inequitable distribution of health facilities across the country and a lack of consistent quality.

While the government is committed to increasing the health budget, there exist huge variations across districts in local government health spending. The majority of health expenditure is still sourced from the private sector and OOP constitutes 45% of expenditure. As was the case with the Philippines, the budget is not necessarily focused on the delivery of primary care with only 20% allocated of the total budget.

Both country perspectives demonstrate that while the implementation of SP methods has led to improvement in health coverage and a decrease in OOP, health systems are complex and implementation face barriers in the form of political economy, capacity, and resources.