ASEAN health systems have been hit hard by COVID-19 – especially countries with already-constrained resource bases. Even before the pandemic, Lao PDR and Myanmar spent less than USD 100 per person a year on healthcare; Indonesia, the Philippines, Vietnam and Cambodia spent less than 200.
Southeast Asia also has high out-of-pocket (OOP) spending on health, with 8 out of 10 countries having an OOP ratio of over 30% of total health spending. In order to maximise health system efficiency and ensure that populations are adequately covered, governments must make the right decisions on where to allocate resources.
Over the course of a two-year project (2022-2023), the SEARCH (Southeast Asia Regional Collaborative for Health) network is working to build capacity for strategic health purchasing in ASEAN – supporting countries to set priorities, maximise cost-efficiency and deliver stronger health outcomes. SEARCH is a regional learning network housed at the Saw Swee Hock School of Public Health, National University of Singapore (NUS) and supported by the Bill & Melinda Gates Foundation. SEARCH aims to enhance knowledge and capacity for Universal Health Coverage (UHC) in Southeast Asia.
The first step of the project – the Southeast Asia Strategic Health Purchasing Registry – is now complete and will be shared at a launch event on February 17th.
What is strategic purchasing?
In healthcare, purchasing refers to the process of allocating funds to health service providers to obtain goods and services on behalf of an identified group (RESYST 2014). This could include medicines and vaccines; medical equipment and consumables; healthcare services (e.g. surgeries and consultations); or healthcare support services (e.g. facilities management, hospital laundry, ambulances).
There are two types of purchasing: passive purchasing and strategic purchasing.
In passive purchasing, a health service provider is offered a predetermined budget or simply reimbursed for the bills that they produce. This leads to a poorly-defined package of services and low system efficiency.
Strategic purchasing involves a continuous effort to maximise the efficiency of purchasing decisions within a set budget. This is achieved by actively allocating budgets: data on the health needs of a population, health service provider performance and other factors is used to inform decisions on resource allocation.
Strategic purchasing involves three core questions:
WHAT TO PURCHASE? This involves specifying the services, interventions or medicines that are to be purchased.
FROM WHOM TO PURCHASE? This involves selecting the providers from whom services will be purchased.
HOW TO PURCHASE? This involves designing appropriate provider payment methods, and designing incentives & contractual obligations to improve provider performance.
How is strategic purchasing relevant to UHC?
Through strategic purchasing, a set health budget can be translated into better coverage for a population. This produces health system efficiency gains and even contributes to improved health outcomes.
Strategic purchasing can ‘stretch the dollar’ of a country’s healthcare budget. In resource-constrained contexts, it is an important building block to cost-efficient primary care services and ultimately, to UHC. Strategic purchasing is therefore a tool to support health systems strengthening in the region.
What are the aims of this research?
The objectives of SEARCH’s strategic health purchasing project are two-fold:
1) To produce up-to-date knowledge on healthcare financing and health purchasing initiatives in ASEAN;
2) To convene a regional network of individuals, organisations, researchers and Ministries involved in the strategic purchasing space.
As part of the first objective, the research team has surveyed the landscape of strategic purchasing in ASEAN through a Strategic Purchasing Registry. The Registry is openly accessible from February 17th 2023, and will enable cross-country comparisons of health purchasing systems in ASEAN. Building on the knowledge gathered for this Registry, the research team is developing policy recommendations at the national and regional level to be shared in a policy report later this year.
For the second objective, we seek to become a point of gathering for experts in healthcare financing and strategic purchasing. Relevant stakeholders are being engaged through interviews, informal discussions, webinars, roundtables and other events. This will facilitate networking, capacity-building and information exchange, seeking to overcome the currently-limited levels of regional collaboration on public health in ASEAN.
Author: Capucine Barcellona, Saw Swee Hock School of Public Health, National University of Singapore