RESYST research on strategic purchasing

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RESYST research on Strategic Purchasing
Kara Hanson
London School of Hygiene and Tropical Medicine
Bolton White Hotel, Abuja
22 March 2018
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PURCHASING - DEFINITION
= The process of allocating funds to healthcare providers to
obtain services for identified groups
Purchaser may be the Ministry of Health, an insurance scheme
or an autonomous agency
“Purchasing is the critical link between resources mobilised for
UHC and the effective delivery of health services”

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PURCHASING IS INTEGRAL TO
HEALTH FINANCING
People
Taxes
Mandatory
Insurance premiums
Voluntary
Insurance
premiums
Medical savings
accounts
Out-of-pocket
payments
Pooling
institutions:
National health
service,
Social insurance
scheme,
Private health
insurance fund,
etc
Individual
account
ProvidersPooled funds
AdaptedfromSavedoff2012

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3 KEY PURCHASING FUNCTIONS
1. Identify the interventions or services to be purchased, taking
into account population needs, national health priorities and
cost-effectiveness.
2. Choose service providers, giving consideration to service
quality, efficiency and equity.
3. Determine how services will be purchased, including
contractual arrangements and provider payment
mechanisms

Inform
ationPaym
entService entitlements
Governance
Services
Purchasers
engage
actively
across three
relationships:

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RESYST-APO PURCHASING STUDY
• Describe the purchasing mechanisms in each country
• Illustrate each of the selected purchasing mechanisms using a
framework of three core principal-agent relationships
• Critically assess the existing purchasing performance by
comparing it with what purchasers would be expected to do
under a strategic purchasing mechanism
• Identify factors that enable or hinder effective purchasing
• Draw lessons and make policy recommendations to promote
effective purchasing arrangements for universal coverage.

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10 COUNTRIES, 19 PURCHASING
MECHANISMS
General tax funded
service
Social Health
Insurance
Private / voluntary
insurance
China* √ (NCMS)
India (Tamil Nadu) √ √
Indonesia* √ √√
Kenya √ √
Nigeria √ √
Philippines* √
South Africa √ √
Tanzania √ √ √ (CHF)
Thailand √ √ (CSMBS)
Vietnam √
*Asia-Pacific Observatory

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Some findings
• Most purchasing is not very strategic!
• Benefit packages/service entitlements are selected “by default”
• Provider payment systems are often not aimed at influencing
provider behaviour; few other levers/tools for guiding
providers are adopted
• Accountability mechanisms - internal (audit, quality assurance)
and external (to communities) perform poorly
• Purchasing is rarely seen as an integrated function
• In tax funded, integrated systems, the need for strategic
purchasing is not recognised: MOH are unaware of the levers
they can use to influence provider behaviour and enhance
accountability

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Essential capacities for strategic
purchasing
• Resource – human and financial
• Technical – benefit package design, provider payment
mechanisms and rates, audit (financial and service
quality)
• Systems – regulation, health and financial information
systems
• Broader task network – HTA, accreditation

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10
MATURE STRATEGIC PURCHASING ENGAGES A
BROADER TASK NETWORK
Government:
Ministry of Public Health
Purchaser:
National Health Security
Office
Citizens
Providers
(Public and Private)
National Call Centre (to manage
information about entitlements
and complaints)
Healthcare Accreditation
Institute
Information
Services
Payment (capitation and DRG)Information
International Health Policy
Program
Health Intervention and
Technology Assessment Program
Evidence for policy
Governance
Accreditation
Service entitlements (PHC,
hospital care, health promotion)
Information
Example: Thailand’s purchasing functions and sub-functions form a system

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RESOURCES
www.resyst.lshtm.ac.uk

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Multiple Funding Flows
• Characterise the flows of funding to a facility in terms of their: magnitude,
provider payment method and level, services covered, population groups
covered, accountability and reporting requirements, and other contractual
arrangements
• Investigate provider responses to multiple funding flows: resource
shifting, patient shifting, cost shifting
• Analyse the likely impact of the overall funding mix on efficiency (including
cost-containment), quality, financial protection and equity
• Explore how these provider responses can be studied quantitatively,
• Make recommendations on how to improve coherence in funding
arrangements

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Strategic purchasing within the Formal
Sector social health insurance programme
(FSSHIP) and Government Budget(GTR) in
Nigeria
Enyi Etiaba , Ogo Ibe, Ayako Honda, Nkoli Ezumah, Obinna
Onwujekwe, Benjamin Uzochukwu
Health Policy Research Group, College of Medicine
University of Nigeria
Bolton White Hotel, Abuja, Nigeria; 22 March 2018
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Purchasing in health in Nigeria
Undertaken by: government at all levels through the;
• Ministries of Health and LG HA, National Health Insurance Scheme (NHIS),
• NPHCDA, Health Maintenance Organizations (HMOs),
• Private Health insurance (PHI), Community based health insurance (CBHI),
• Development partners, Non-governmental organizations (NGO) and
households.
The purchasers transfer funds to healthcare providers for the
provision of services.

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Our Concerns(Objective)
• To better understand how two purchasing mechanisms
(Government Budget {GTR} and FSSHIP) are operating
in Nigeria using a strategic purchasing (SP) lens.

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Description of the GTR and FSSHIP
GTR (Govt. Budget) FSSHIP
Who is the
purchaser?
The SMoH is responsible for the transfer
of resources to primary, secondary and
state tertiary health care providers
Multiple (HMOs). They receive funds
from the national government through
the NHIS to purchase healthcare
packages. NHIS also purchases some
services directly
Government House of Assembly, Ministry of Budget
and Planning Commission, Ministry of
Economic Planning Commission
National government
Services
purchased
Defined minimum package of care
covering promotive, preventive and
curative care at all levels
Defined minimum package of care
covering promotive, preventive and
curative care at all, with some partial
and total exclusions
Service
Beneficiaries
All residents in the state who desire to
use the services
Federal civil servants and their families
Providers Mainly public providers. A mix of public, private and faith-based
organisations
Provider
payment
Facilities receive material resources
from the MoH;
Health workers receive a monthly salary
Primary health services are reimbursed
through capitation; secondary and
tertiary care are paid fee-for-service.
Public providers also receive salaries.

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What we did…

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What we found…
We report on three (3) SP relationships in both mechanisms:
-Purchaser-Provider
-Purchaser- Government
-Purchaser- Citizens
Using such levers of SP that promote quality and efficiency:
Monitoring and accountability; Provider payment;
Selection and Accreditation of HMOs, Measures to make citizens aware of
their rights

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GTR Purchaser-Provider
Monitoring and Accountability
Ideal (Policy) Actual
Various tools; M&E frameworks
and supportive supervision exist
in policy to ensure optimal
provider performance and
improve quality of service
• Weak and inconsistent monitoring of
provider performance;
• Limited implementation of M&E tools
partly due to financial constraints and
weak human resources capacity in MoH
“We are supposed to be doing it [monitoring] monthly but we have not done it
this year. No fund, if you allow the workers to do the work and you don’t go and
supervise them, of course they can do whatever they like[…]But because of
fund, we can’t move (IDI Purchaser)”

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FSSHIP: Purchaser-Provider
Monitoring and Accountability
Ideal Actual
The NHIS develops a framework for
the operation of HMOs and oversees
the work undertaken by HMOs.
HMOs are required to provide
quarterly visits to healthcare providers
to ensure quality and efficiency in
healthcare service provision.
• Visits by HMOs are ad-hoc rather
than regular quarterly as stipulated
and sometimes covert; informal
interviews of enrolees present at
facilities during their visits;
“That’s why I said that you cannot ask a provider whether he is giving quality
care and he will tell you no; he will always admit that he’s giving a quality care.
So how do you find out? It’s from the patients” (HMO4)

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GTR-Purchaser-Provider
Provider Payment
Ideal/Policy Actual
Providers do not receive direct funds
from MoH but material resources
drugs and equipment, part of funds
accrued through user fees are again
reverted back to MoH leaving limited
funds for running facilities
• Salaries, as a provider payment
mechanism, are not linked to
performance and does not send
specific signals for efficient, quality
health service delivery
“I think the ministry or the local government […] should play their own part in
allocating certain funds for the running of the facility. Its only because we are
getting enough clients here that we able to do certain things, otherwise there
are facilities you will visit and the environment will look so untidy because there
is no source of fund” (IDI Provider)

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FSSHIP: Purchaser-Provider
Provider Payment
Ideal Actual
• NHIS receives funding from the Federal
Government and subsequently transfers
quarterly payments to HMOs.
• HMOs make capitation payment to
providers and reimburse fee-for-service
claims.
• HMOs send monthly and annual financial
and service provision reports to NHIS.
• Capitation and fee-for-service payments
from HMOs to providers are often delayed;
partly due to a lengthy verification process.
• Provider dissatisfaction with payment rates,
• These and re-imbursement ceiling can
potentially discourage providers from
treating members optimally;
“Well, for a private individual, they may not break even; but for this hospital, because of the
number of enrolees [in FSSHIP], that is the reason why we are breaking even. The capitation
fee is not adequate, (IDI with a public provider 2)
“…..there was once an asthmatic patient came to the hospital, we had to nebulise; so we
charged for nebulisation. An officer.. with one of the HMOs , flew down to Enugu, to find out
what is going on, that their doctor said that there is nothing like nebulisation [on the service
list]. So, … you will not withhold that service because it is not listed. Our main focus is to save
life, first of all.” (IDI with a private provider 4)

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GTR: Purchaser-Government
Regulation
Ideal Actual
Robust frameworks exist
in the policy for the
government to monitor
and regulate purchasers
and providers
• Monitoring and regulation of purchasers is weak and
inadequate and existing tools are not being used
effectively;
• Monitoring concentrates of fiscal accountability more
than actual services delivered;
“The key challenge is that there has been weak supervision …, of course implementing
regulations will also be weak. Those that are supposed to supervise do not have the
logistics to go for supervision …. Thus, there is a serious challenge in terms of the
implementing the regulatory mechanisms at the Ministry of Health level and the
providers" (IDI, GT Policy maker, 01).
“In the last two years that we have done this….. it has been useful, because the ministry
now knows that on quarterly basis they have a reporting format by which they report to
the Economic Planning Commission as well as the house of assembly on the progress of
the implementation of the budget” (IDI Tax funded policy maker, 01).

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GTR: Purchaser-Government
Regulation
Ideal Actual
Robust frameworks exist in
the policy for the government
to monitor and regulate public
providers
• Conflicting reports from government and providers as
to how effectively these tools are used;
• Monitoring concentrates of fiscal accountability more
than actual services delivered;
The key challenge is that there has been weak supervision …, of course implementing
regulations will also be weak. Those that are supposed to supervise do not have the
logistic to go for supervision …. Thus, there is a serious challenge in terms of the
implementing the regulatory mechanisms at the Ministry of Health level and the
providers" (IDI, GT Policy maker, 01).
“In the last two years that we have done this….. it has been useful, because the ministry
now knows that on quarterly basis they have a reporting format by which they report to
the Economic Planning Commission as well as the house of assembly on the progress of
the implementation of the budget” (IDI Tax funded policy maker, 01).

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FSSHIP: Selection & regulation of
HMOs and providers
Ideal Actual Practice
HMOs-NHIS is responsible for accreditation and
registration of HMOs and is required to provide
quarterly operation monitoring visits to HMO
Providers-NHIS is responsible for the
accreditation and annual re-accreditation of
healthcare providers
• Inadequate financial and human resource
constrain NHIS overseeing HMOs.
• Dual role of NHIS as purchasers and
regulators constrain effective regulation
• Other political reasons conflicts with their
regulatory role;
“In a year we were supposed to carry out monitoring and accreditation of about three thousand
facilities per zone, You’d find out that you can’t go to some facilities even once…..The same NHIS
wants to be regulating the private health insurance. They want also to be regulating social health
insurances [including HMOs] and they also want to be the one dictating the quality assurance and
they don’t have the means” ….” (NHIS purchaser 01).
“Many of the big shots in the country have their HMOs. How do you want to tell them that their
HMO is not functioning? You can’t say that. They will ask you why you think you are there, and they
will remove you…in fact, at a time the chairman of our NHIS, appointed by the president, was an
HMO owner…” (IDI with a NHIS staff member 1)

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GTR: Purchaser- Citizen
Awareness and Satisfaction
Patients rights and
obligations are stipulated
in the Patients service
charter
The Drug Revolving Fund
to ensure access to drugs
• The MoH took steps to identify citizens’ needs but gaps in
engaging with citizens on their health needs in terms of
the flow of information on identified needs due to
bureaucratic protocols
• Citizens feel that their needs have not been adequately
met and their voices are not heard
“There was what the government did in 2009….. set up a committee of people with
different professional background … with assistance of a consultant that also provided the
lead… they visited 472 autonomous communities in the state with a view to help them
identify their needs and also prioritize those needs” (IDI, Government purchaser, 06)
“ …there was a program that was held not quite long ago that is called community
meeting. This took place in almost all the local governments. … There were up to 15
points that were raised and at the end they made a promise and that was the end” (P9,
FGD Adult men );

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FSSHIP: Purchaser- Citizen
Awareness and Satisfaction
HMOs are expected to;
• Organize seminars (at least once a
quarter) for enrolees in each of the six
geopolitical zones and;
• Continually sensitize and educate the
enrolees of their entitlements and
obligation
• Conduct survey on enrolee satisfaction
• Enrolees aware of their entitlements but there is
low satisfaction due
• to delays in services,
• inadequate handling of complaints and feedback.
• Beneficiaries are occasionally denied services or
offered sub-optimal services as a result of providers
not having been adequately reimbursed and in a
timely manner
“… Yes. They came to our office, told us to say what we don’t like about the services under NHIS…, so I filled what I
don’t like about them and gave back to them. So….. they now improved in their drug style writing…” (P8, FGD,
FSSHIP female group Enugu)
“…There is something they [providers] are doing now when you go to the hospital…, they will ask you to wait while
they go to call the HMO to get approval to treat that illness… There was a day, I was there till evening, and I didn’t
get the go ahead, and they asked me to go…” (FGD, female FSSHIP enrolee 8).

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Key Messages/Recommendations
GTR FSSHIP
• Purchasing of health services is passive at
present
• MoH needs to utilize existing tools ( policy
frameworks; patients’ charter) to motivate
healthcare providers to improve performance
• Strategic purchasing need to be promoted
using a range of tools outlined (Monitoring
and accountability; Provider payment;
Measures to make citizens aware of their
rights)
to positively influence provider behaviour and
performance;
and ultimately produce better health outcomes
• Current arrangements between the NHIS and
HMOs do not foster strategic purchasing.
• The self-regulatory role of the NHIS, the
intermediary role of the HMOs has attendant
conflicts which adversely affects regulatory
functions. This needs to be addressed.
• Provider payments need to be reviewed
regularly and adjusted for inflation

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RESYST is funded by UK aid from the UK
Department for International
Development (DFID). However, the views
expressed do not necessarily reflect the
Department’s official policies.
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