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And so, taking a system perspective, we demonstrated the application of strategic
                             purchasing to primary care services that align with system-wide efforts to tackle a key
                             population health challenge, namely the growing burden of chronic conditions. We also
                             explored the potential for leveraging capacity of the private sector through PPPs as a
                             purchasing instrument for integrated products of partnership between the public and private
                             healthcare systems. We anticipate our demonstration to provide insights for further
                             applications of strategic purchasing in tackling key health system gaps and combatting
                             health system inefficiencies. Finally, looking beyond our specific application of strategic
                             purchasing to primary care services, we put forward a framework on health systems
                             strategic purchasing that positions this mechanism as a key policy lever for the
                             transformation of Hong Kong’s health system to become truly fit-for-purpose.

                                Box B

                                    Definition of “Public-Private Partnership”

                                    Public-private partnership (PPP) is defined as “an agreement between the
                                    government and one or more private partners (which may include the
                                    operators and the financers), according to which the private partners deliver
                                    the service in such a manner that the service delivery objectives of the
                                    government are aligned with the profit objectives of the private partners and
                                    where the effectiveness of the alignment depends on a sufficient transfer of
                                    risk to the private partners.”

                                    Positioned as a purchasing instrument, PPPs are split into two major modes:
                                    supply-side financing (incentives and payment guarantees), as well as
                                    demand-side financing (financial assistance and incentives to individuals).
                                    In Hong Kong, purchasing often takes the form of PPPs, although the
                                    development of these initiatives is yet to be governed by a systematic tool
                                    and are not implemented in accordance with strategic purchasing principles.
                                    Coupled with the need to overcome compartmentalisation of funding,
                                    purchasing and service delivery throughout the local health system,
                                    Hong Kong needs to consider a more strategic way of purchasing that will
                                    propel the provision of integrated care and help the system achieve set
                                    strategic goals.

                             Sources: Bowser et al., 2016; OECD, 2008

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