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Box C

                   Definition of “Strategic Purchasing”

                   Strategic purchasing was discussed in OHKF’s 2018 policy paper as an effective financing
                   lever that can inform the allocation of resources throughout the health system, leading to a
                   more cost-effective provision of healthcare services whilst maximising population health
                   (OHKF, 2018). It is an iterative process also known as “active purchasing”, cyclical in
                   nature involving needs assessment, planning and monitoring, and consistently evaluated in a
                   system-wide manner characteristic of the active process. Recognised by the WHO as an
                   effective financing lever in achieving UHC, the strategic purchasing process entails six core
                   decisions to be made for implementation, including “whether to provide or purchase”,
                   “who to purchase the targeted services” , “for whom to purchase services”,
                   “what services to purchase”, “from whom to purchase services”, and “how to purchase”
                   that is considered across macro-, meso- and micro- levels of the health system.

                                                        •  Who to purchase
                     interventions and                  •  For whom to   •  What to monitor
                     services based on    To provide or    •  What to purchase   •  How to monitor
                     population needs,     purchase                      •  How to resolve
                       priorities and                   •  From whom to    disputes
                                                        •  How to purchase

                     Strategic Purchasing Decisions
                     Whether to        The Government should decide whether it would provide health services
                     provide or        themselves or purchase services from other provider organisations.

                     Who to purchase   The Government should identify an appropriate purchaser that is equipped to
                                       focus on the type and level of health services of interest and define its role in the
                                       health system.
                     For whom to       When designing a strategic purchasing-oriented programme, the purchaser
                     purchase          should identify a target group with needs that would benefit from the purchasing
                     What to purchase  The Government should assess what service gaps exist in the health system and
                                       which health goals may be met through the services purchased.
                     From whom to      The purchaser should carefully select service providers based on their capacity,
                     purchase          availability, accessibility, and the appropriateness of the services they provide
                                       relative to the population health goals set out by the Government.
                     How to purchase   To draw participation in the purchasing programme, the purchaser should utilise
                                       demand-side and supply-side instruments, contractual terms and agreements,
                                       and provider payment mechanisms that effectively incentivise providers to meet
                                       system health goals.

            Source: WHO, 2000

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