Provider Purchasing and Contracting for Health Services_The Case

Following independence in 1964, the health sector in Zambia was managed centrally through
the Ministry of Health Headquarters. Health care financing and resource allocation were
supported through the annual plans within the ministry’s headquarters. District Health
Management and Hospital Management Teams had no financial autonomy. They prepared
district and hospital plans that were then centrally funded. At most, they could hold “imprest”
or advances of cash, which were retired through the usual financial accounting procedures of
expenditures supported by appropriate documentation. Accountability was undertaken
principally through the provincial accounting structures, which, in general, were also
responsible for government sectors in addition to health.
Health care personnel were employed and deployed through the Public Service Commission
and on the payroll of the Ministry of Finance. The Central Statistical Office managed
monitoring and evaluation, and it seconded officers to the Ministry of Health to assist in
managing the monitoring and evaluation component. Essentially, there were virtually little or
no known contracting efforts in existence in the public or private sectors. Moreover, district
and hospital managers did not have authority to plan and manage financial or human
resources. They could not plan or set priorities based on prevailing health needs in their
districts. Consequently, plans developed centrally did not reflect or address the health needs
of the respective districts.
Among the institutional reforms of the mid-1990s was the separation of political and
executive functions of the Ministry of Health. The national government policy emphasized
the role of ministries in policy development, resource mobilization, and monitoring of
performance. The implementation role was delegated to semi-autonomous institutions. The
thrust of the reform agenda was to establish a clear separation between the purchaser and the
provider. In the health sector, the government passed the implementation role to the Central
Board of Health, a body originally established under the 1930 Public Health Act and
recognized again in the 1995 National Health Services Act. Until 2006, the Ministry of
Health was responsible for policy formulation, strategic planning, and overall coordination,
legislation, budgeting and resource mobilization, and external relations. Decentralization of
the health services entailed the unbundling of the public sector to create internal markets,
which allowed contracting at various levels of health (Lake et al. 2000).
Thus, two parallel, but complementary, organizational structures were introduced, namely,
popular structures for public involvement and participation in the decision-making process,
and the technical and management structures, designed to ensure that health services were
implemented and managed in a manner that was technically sound and in keeping with best
practices. Apart from the Central Board of Health at national level, Hospital Management
Boards, District Health Boards, and the Neighborhood Health Committees and Health Centre
Committees, at the community level, were also created. On the other hand, the technical
structures established included the management teams at the Ministry of Health and the
Central Board of Health at the national level; Hospital Management Teams at the hospital
level; and District Health Management Teams at the district level.
Generally, the performance of the Zambian health sector has been tied to economy-wide
developments since the early 1980s. During the late 1970s, economic growth in Zambia
stagnated at an average of 1 percent per annum and started to deteriorate in the late 1980s to
the early 1990s until 2000. The weak performance of the centrally planned economy resulted
in a move toward plural politics and market-oriented economic policies.
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