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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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