Address by the Regional Director at the Fourth SEAR-WPR Health Financing Policy Workshop: Implementing Strategic purchasing in Asia

10-13 June 2019, New Delhi, India

Distinguished participants, ladies and gentlemen,

A very good morning to you.

On behalf of the Regional Director of WHO Western Pacific, Dr Takeshi Kasai, and myself, I welcome you to the WHO South-East Asia Region, to Delhi and to the fourth Bi-Regional Health Financing Policy Workshop.

It is an honor to host this event, and I am pleased we have such a strong showing from both regions.

I thank colleagues from the Western Pacific and South-East Asia regional offices for organizing this workshop.

I also recognize and appreciate the efforts of our partners at the Asian Development Bank and World Bank. Your collaboration and support are vital to achieving the health financing reforms needed across Asia.

The first three bi-regional meetings – held in Manila, New Delhi and Ho Chi Minh City – were a great success. This was especially so with regard to peer-to-peer learning.

In each workshop we strived to put the most relevant health financing topics on the agenda, from introducing the concept of ‘strategic purchasing’ to addressing funding for primary health care.

This year we will again cover strategic purchasing, however we will explore challenges related to implementing it, particularly through purchasing agencies or schemes.

Before we proceed, however, let me reiterate what exactly ‘strategic purchasing’ means.

‘Purchasing’ refers to the way funds are allocated to health care providers.

It involves making three sets of decisions.

First, deciding what services governments or social health insurance should pay for.

Second, identifying who will be paid to deliver those services.

And third, figuring out how service providers will be paid.

Of course, every health system already purchases services. But the question is, are they actively deciding the ‘what’, ‘who’ and ‘how’?

Which leads to the next question: What do we mean by ‘strategic’?

To be strategic is to identify and pursue a long-term goal.

In the context of health system purchasing it means taking a systems perspective and defining the mix and volume of services a health system requires, selecting the appropriate providers, and designing payment mechanisms that maximize the efficiency and equity of health services.

Notably, implementing strategic purchasing using purchasing schemes or agencies might be easier than via government budgetary systems.

This is because scheme managers can pay providers based on outputs and even outcomes. Doing so, however, still depends on the ability of the scheme or agency to do two things.

First, ensure that managers are accountable for policy goals and are therefore accountable within governance structures.

And second, ensure a scheme’s architecture is strong, thereby enhancing the performance of all functions.

These two areas are the focus of the first and second days of this workshop.

Importantly, as part of implementing strategic purchasing, we must look at how to deal with the private sector.

As you know, across Asia we have large private sectors. It is widely recognized that progress towards UHC will be hampered if we do not harness the sector’s potential.

Many purchasing schemes already buy services from the private sector. Others even outsource some of the scheme’s core functions to them.

But are we really utilizing the private sector to maximum effect? Is this relationship helping our systems progress towards UHC?

We will spend a full day grappling with these questions. I look forward to your keen engagement.

Distinguished participants,

Strategic purchasing is fundamental to achieving UHC. Access, equity and efficiency are all dependent on strategic purchasing.

By setting prices and reimbursements, for example, financial risk protection can be improved.

By using appropriate incentives, the consumption of high-cost treatments can be limited.

By linking payment to performance, the quality of services can be made more consistent.

And by negotiating the price of medicines, access to their benefits can be enhanced.

I think each of us here understands the impact small adjustments in purchasing can have. But to what extent are these tools being used?

Countries in both of our regions have taken important steps to introduce more strategic purchasing.

In Thailand, for example, services to be reimbursed from the Universal Coverage scheme are explicitly defined following a Health Technology Assessment procedure. The conditions to be studied are selected by a board where civil society has a strong voice.

In the Philippines, Philhealth sets reimbursement rates and forbids providers from asking any additional payment from members who are less well off.

One additional point I would like to make is that strategic purchasing also helps health systems adapt to new challenges. What’s being referred to as Asia’s slow-motion NCD disaster, for example, can only be mitigated through revised service delivery.

Primary health care providers must be able to detect NCDs early, as well as manage them in the long-term.

Current purchasing arrangements do not encourage that, meaning millions of people still do not get the services they need to stay healthy.

Distinguished participants,

Let us turn to our objective, which is to share knowledge and experience in implementing strategic purchasing in countries across Asia.

To help us meet this objective we have mobilized experts from across Asia and around the world. I take this opportunity to thank them in advance for their contributions and for facilitating discussion on how best to move forward.

My hope is that each of you takes two or three messages from this workshop that you then act on when you return home, and which bring you closer to our joint goal of achieving UHC.

WHO is, as always, committed to supporting your endeavors.

I wish you an informative and engaging meeting and a comfortable stay in New Delhi.

Thank you.