The role of contractual arrangements in improving health sector ...

Pakistan
services. The specialized services may include communication and advocacy (e.g.
communication strategy and material development for tuberculosis and malaria control
programmes), systems analysis and development (e.g. tuberculosis control programme for
microscopy quality control), development and conduct of training (e.g. women’s health
project), third-party monitoring and evaluation (e.g. routine immunization programme) etc.
Provider
Changes in the focus or management of purchasers over time may pose threats to the
agreed set of provider’s activities. The purchaser may also fail to provide the agreed support,
including timely release of payments, during the project development and implementation.
The purchaser may have a tendency to put the blame on the provider for delays in progress
that are mainly due to purchaser-related factors.
The non-availability of committed human inputs from outside the organization, due to
delays in scheduled activities or other changed circumstances, may affect the provider’s
ability to deliver the agreed outputs. Similarly, the non-availability of required material
resources, due to changes in the market or in other circumstances including pricing, may
affect the provider’s ability to fulfil commitments in terms of quantity and quality of services.
Exceptional changes in physical environment, such as those resulting from disasters and
emergencies, may also affect the provider’s commitment.
The providers’ failure to deliver the expected outputs, due to purchaser- or environment-
related factors, may affect goodwill towards the organization which would in turn affect its
prospects for future work. The client response deviation, i.e. difference from the anticipated or
assumed response, may result in the provider’s failure to deliver the outputs.
The main incentives for the provider include achievement of organizational goals and
objectives, enhanced size and scope of work, enhanced recognition by public and private
sector partners and communities, and enhanced capacity and sustainability. An example of
enhanced size and scope of work is the National Rural Support Programme expanding into
more communities and districts as well as new areas of work. An example of enhanced
recognition and capacity is the Marie Adelaide Leprosy Centre, working with the government
in AJK and the Northern Areas.
Payment arrangements
Contracting in, contracting out and service contracts are the main types of contractual
arrangements used in the country. There are occasional examples of social franchising and
concession contracting between the public sector purchaser and a private sector provider.
The most common mode of payment in contractual arrangements in Pakistan is block
payment, made against an agreed set of activities and outputs. However, there are examples of
payments to private sector providers on the basis of fee-for-service, indemnification and
prepayment.
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