Strategic purchasing can be applied to everyday life and personal finance in many ways, as well as to various sectors of the economy. For example, people use strategic buying when shopping by making a list of what they need, comparing prices from different vendors, and choosing the most cost-effective options. Even when making bigger and bigger purchases, individuals strive to get the most out of their financial resources through strategic purchases.
Additionally, strategic purchasing is a common practice in many industries, such as manufacturing, agriculture, and healthcare. It enables organizations to optimize their procurement processes, negotiate better deals with suppliers and ultimately reduce costs.
Since the publication of The World Health Report 2000, purchasers of health care – government organizations and private entities – in most countries have come to realize that financing for health involves more than just fundraising. Instead, it encompasses three essential roles: generating revenue, pooling resources, and making purchases. For low- and middle-income countries, procurement is critical and needs to be carefully considered, as public financing for health often does not keep pace with commitments to universal health coverage.
Strategic purchasing in health is the process of allocating resources to health service providers who can provide high quality care at a reasonable cost while ensuring that efficiency and equity are maintained. . It involves a continuous search for optimal ways to improve health system performance by deciding what interventions should be purchased, from whom they should be purchased, and how.
For example, if the government, as a buyer, is looking to purchase vaccines to prevent the spread of a particular infectious disease, it will need to determine which vaccines are most effective and efficient in preventing the disease. This would involve looking at the latest scientific evidence and consulting experts in the field – what to buy.
The government should then identify potential suppliers of this vaccine. This would involve carefully selecting different vendors, as well as considering factors such as price, delivery time, and availability of technical support – who to buy from.
Finally, the government will need to decide on the most appropriate procurement method for purchasing vaccines. This can be a competitive bidding process in which bids are solicited from multiple vaccine manufacturers and the vendor with the best value proposition is selected, or procurement through international organizations such as WHO or UNICEF at a lower cost. The government should also ensure that the procurement process is transparent and accountable and adheres to relevant regulations – how to buy.
Strategic purchasing is seen as a key function in achieving universal health coverage. Countries have found that using all available strategic purchasing tools can be very effective in maximizing the value of health spending.
In Nigeria, some states have introduced health insurance schemes that incorporate the gatekeeper system of care. Under this system, patients are required to attend a primary health care center first and be referred to a higher level or specialist facility if necessary. This approach aims to manage costs effectively, ensure that patients receive care in the right setting, and strengthen the primary health care system as a whole. In cases where patients wish to seek treatment directly from specialized institutions without referral, they have to bear a greater financial burden by paying more out of pocket. This arrangement strikes a balance between patient choice and strategic cost control.
The introduction of capitation payments revolutionized Ghana’s health insurance scheme, transforming the way providers were paid. Previously, providers were paid for every service rendered, regardless of its necessity or effectiveness, resulting in an alarming supply of unnecessary treatments solely intended to maximize profit. This dangerous practice has led to rapid cost inflation, undermining the overall financial viability of the NHIS. To illustrate further, a bill for a C-section could include a charge for up to 30 latex surgical gloves. This amount of gloves used varied widely from hospital to hospital, with no standardized requirement for the procedure. Recognizing the need for change, stakeholders decided to prescribe what was permitted, based on the information and evidence gathered from performing Caesarean sections. Therefore, hospitals have been given a standard guideline to follow, ensuring a more accountable and transparent system.
Strategic buying is a complex process that even where there is a desire to be more strategic, there is often a lack of knowledge on how to do it effectively. It also has many technical aspects, but a fundamental element is information — accurate and up-to-date information systems. To address this problem, more countries can leverage access to direct technical assistance from global partners such as the World Bank, the World Health Organization, and the United Nations Health Financing and Governance Project. USAID, where they can receive strategic procurement advice and expertise. These global partners have extensive experience in supporting countries in the development and implementation of strategic purchasing mechanisms. They can provide technical assistance in a variety of areas, such as designing payment models, conducting health technology assessments, establishing performance-based contracts, and strengthening information systems.
Additionally, extensive research, such as case studies conducted by the Resilient and Responsive Health Systems Consortium, provides insight into the results of strategic purchasing in low- and middle-income countries and can serve as a guide for other countries.
Finally, countries can learn from their own experiences by monitoring and evaluating the implementation of their health policies and programs, and making necessary adjustments to improve their strategic purchasing practices.
In summary, strategic purchasing is an important component of achieving universal health coverage. It provides a framework to optimize resource allocation, improve service delivery and bring us closer to the goal of universal health coverage. Policy makers should consider it as part of a comprehensive approach to improving health systems and ensuring access to quality health care for all.
Post views: 290