Policy Brief: Purchasing arrangements with the private sector to provide primary health care in underserved areas, June 2014

Ensuring an equitable supply of primary health care services to entire populations is a challenge for governments of low- and middle-income countries in the Asia Pacific, particularly for populations in remote or rural locations. The health systems of most countries in the region are characterized by the provision of services through both public and private providers, often in parallel or in competition with each other. This has raised the option for governments to purchase services from the private sector, to address gaps in services particularly for the poor and underserved. This policy brief, written by the Nossal Institute for Global Health at the University of Melbourne, reviews the evidence base of government purchasing primary care services from the private sector. It aims to provide guidance to policy makers on the contextual factors that need consideration, as well as reviewing different purchasing mechanisms.

Systematic reviews have identified contracting and vouchers as the two most common purchasing mechanisms which have been used in the region, and for which there is some evidence of effectiveness. More in-depth examination of the literature using a realist evaluation methodology identified a number of contextual factors, and implementation issues, which influence the effectiveness of these mechanisms. Contextual factors relate to the roles of key actors, including the government, development partners, public and private providers, and proposed users of the services. Implementation issues include: the complexity and extent of provider discretion required in provision of the specific services; the availability and extent of competition between public and private providers; and the extent of community demand and capacity to purchase the services. Vouchers appeared to be more suitable for less complex services for which there is already community demand; while contracting could be used for more complex services, and where more investment is required to generate community demand. Overall, the importance of governance arrangements in clarifying accountabilities, and the capacity of government to provide stewardship of the purchasing process, emerged as key determinants of effectiveness.

The Policy Brief finally provides a set of structured recommendations as guidance to policy makers in deciding:

  • whether to purchase services from the private sector, and / or the public sector;
  • and, if so, how to select an appropriate purchasing mechanism in consideration of contextual factors, service type and community demand, and implementation capacity.
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