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Finding Answers to Systemic Questions Around Strategic Purchasing

Our project teams work collaboratively across countries to challenge the status quo and explore bold yet practical ideas around strategic purchasing. We harvest and disseminate transformative learnings to answer key questions in the sector.

These include: how each country’s purchasing eco-system is prioritizing primary health care (PHC) or incentivizing increased access or improved quality to PHC services, or how strategic purchasing can improve efficiency in the delivery of PHC services and can be used to improve the value proposition for private providers. These critical issues require nuanced, synergetic, and context-driven solutions.

On this page, you will find learning products that tackle these over-arching questions, drawing on evidence across the five SP4PHC countries and highlighting the key similarities and differences across contexts. This page features several cross-country topics, such as purchasing in decentralized settings or from community health workers (CHWs), under which there have been multiple learning products developed.

If you would like to learn more about our work in specific countries, please take a look at our individual country pages.

Implications of Decentralization for Health Financing and Public Financial Management

Many countries around the world have decentralized health system functions from central governments to subnational authorities, who now manage a large share of public financing for health. How they do so is governed by the public financial management (PFM) rules and processes of the country. Hence, the alignment between decentralization, health financing arrangements and PFM processes in the health sector impacts health system performance. Exploring the nexus between decentralization, health financing arrangements, and PFM processes in the health sector was the focus of a multi-country learning initiative implemented jointly by World Health Organization and ThinkWell.

We examined the state of play in seven countries – Burkina Faso, Indonesia, Kenya, Mozambique, Nigeria, the Philippines, and Uganda – through country-specific case studies, which we are delighted to release as a series below.

In addition, we analyzed common patterns and pinpointed divergent pathways, which are captured in two synthesis reports: one examining how devolution influences health financing arrangements and a second exploring how decentralization has shaped PFM processes in the health sector.

 

Synthesis Reports

A Balancing Act: Health Financing in Devolved Settings

How devolution has impacted the three main health financing functions of revenue raising, pooling, and purchasing is the focus of this synthesis report by ThinkWell and the World Health Organization. Across seven countries, we find that subnational governments rely heavily on transfers from central governments to finance their budgets. Consequently, it will need to be central governments that drive increases in government health spending as part of universal health coverage strategies. We also find that subnational governments have limited discretion and capacity to function as strategic purchasers of health services. Related, most primary and secondary care facilities under the jurisdiction of subnational governments have limited financial autonomy. For purchasing reforms to succeed, decentralized countries need to grant facilities greater autonomy, potentially including through legislation, as well as update their PFM rules.

Is Decentralization Friend or Foe to Agile Public Financial Management in Health?

In this synthesis report, ThinkWell and the World Health Organization explored how decentralization has shaped PFM processes in the health sector and identified challenges arising from the misalignment of decentralization and PFM reforms in eight countries. We find that decentralization has complicated health budgeting, and countries need to better align budget structures across government levels to facilitate more coherent planning. In addition, decentralization has not necessarily enhanced the managerial or spending autonomy of service providers, who in turn cannot respond flexibly to evolving needs. In response, several countries have introduced mechanisms to put more money under facilities’ direct control. Nor has decentralization delivered on its promise of greater transparency and accountability for public spending in health, largely due to lagging PFM reforms. Harmonized reporting structures and practices can enable better financial analysis, management, and accountability.

Burkina Faso: Burkina Faso’s 1991 Constitution set the stage for the transfer of decision-making authority for several social sectors, including health, from the central government to communes, the lowest local government unit in the country. Yet, three decades after the introduction of decentralized governance the process still needs to be fully implemented. This case study describes the roles of the central government and communes, with a particular focus on health financing, and identifies opportunities to improve the balance of decision-making powers between these two levels.

Indonesia: Indonesia passed a series of laws in May 1999 to establish the current decentralized system of the government. Although decentralization allowed provincial- and district-level governments autonomy in setting budgets and implementing public programs, the roles of subnational governments are still often unclear. This is a problem that persists today. This trend is particularly seen in the health sector, where multiple agencies within and across the various levels of government must interact with each other for service delivery. This case study details the considerable progress Indonesia has made in implementing decentralization in the health sector and reflects on how to further strengthen subnational governments’ capacity for financing of health services and PFM.

Kenya: Kenya transitioned to a devolved system of government in 2013. The national government transferred a range of government functions to 47 newly created county governments, and health was one of the main sectors to be devolved. County governments are the main purchasers of primary and secondary health services. While the national government leads the development of health policies and plans, county governments now drive much of their implementation. This case study explores how devolution has transformed the organization of health financing functions in Kenya, and, within that, PFM policies and practices in the health sector.

Mozambique: In Mozambique, the decentralization process began in the early 1990s with the opening of the political arena and the end of the civil war. While the structure and organization of local state organs were defined in 2003, decentralized bodies at provincial level were created under the 2018 Constitution. The decentralization process is yet to be completed as districts are expected to be decentralized in 2024. This case study describes the implications of the ongoing decentralization process for health financing arrangements and PFM processes in the health sector.

Nigeria: Decentralization in Nigeria predates independence and every constitution since 1960 has included some form of devolved government. Today, health sector responsibilities are both fragmented and overlapping across the federal, state, and local government levels. There is also an extensive PFM regime at the federal level, while state systems are much less developed. This case study highlights the interplay among devolution, health financing, and PFM in Nigeria and reveals several challenges the country must overcome to progress toward universal health coverage.

Philippines: The Local Government Code of 1991 reshaped the centralized health system of the Philippines into a highly decentralized system. Several major policy reforms have since been enacted to better facilitate the flow of funds for health across the different government levels. However, financing of health services continues to face considerable challenges brought about by the devolved structure. This case study aims to provide a current snapshot of the PFM processes in the Philippines and how three decades of devolution have shaped health financing reforms.

Uganda: Uganda has formally embarked on decentralization with constitutional reforms in 1995 that transferred responsibility for primary health service delivery to local governments. Even with the strong institutional and policy framework outlining roles and responsibilities of government levels , questions remain about whether the full potential of decentralization has been realized. This case study analyzes health financing and health-related PFM processes in Uganda, with several key takeaways on how the country can improve and deliver upon PFM reforms.

 

How Countries Can Purchase from Community Health Workers

ThinkWell partnered with Last Mile Health to develop a conceptual framework and tool that explores how countries can contract and purchase from community CHWs to incentivize better system integration, improve quality, and increase access to poor and rural populations. Data was collected for this tool in Bihar, India, and Liberia and will be applied in Burkina Faso in 2022. This report, which was developed jointly by ThinkWell and Last Mile Health in 2021, synthesizes the framework, tool, and its initial applications.

SP4PHC aims to improve how governments purchase primary health care services, with a focus on family planning and maternal, newborn, and child health. SP4PHC is supported by a grant from the Bill & Melinda Gates Foundation.

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