What is strategic purchasing for health?

Ever since the publication of the 2000 World Health Report, there has been a growing awareness that health financing is not simply about raising money. Instead, there are three key functions of health financing: revenue generation, pooling and purchasing. Nevertheless, global debates tended to continue to focus on the revenue generation function. More recently, the 2010 World Health Report on financing for universal coverage noted that: “Raising sufficient money for health is imperative, but just having the money will not ensure universal coverage. Nor will removing financial barriers to access through prepayment and pooling. The final requirement is to ensure resources are used efficiently.” This pointed to the importance of the purchasing function of health financing; purchasing is the critical link between resources mobilised for universal coverage and the effective delivery of quality services. Although the key role of purchasing is being recognised gradually, there remains considerable confusion about what purchasing entails. There is an even greater lack of understanding of what is required for strategic or active purchasing. This brief attempts to fill this gap by providing an overview of the key activities that a strategic purchaser should undertake. It draws on the limited literature on strategic purchasing, and RESYST (Resilient and Responsive Health Systems) consortium members’ experience and understanding from involvement in supporting the development of purchasers. This conceptual model of strategic purchasing underpins an ongoing analysis of purchasing arrangements in 10 countries across members of RESYST and the Asia Pacific Observatory on Health Systems and Policies