Provider Purchasing and Contracting for Health Services_The Case

In terms of incentives, all mangers interviewed stated that the boards offered better incentives
for staff compared with the Ministry of Health. However, the incentives were a source of
conflict between the staff employed by the boards and those employed by the Ministry of
Health.
Capitalization of public health facilities
According to the managers, most of the hospital infrastructure is in a deplorable state. Very
little capitalization of health facilities took place during the board era. The condition has not
improved under the Ministry of Health, although some managers expressed some optimism.
In 2005, the capital expenditure budgets under the Central Board of Health represented 26
percent of total expenditures by District Health Boards, and only 17 percent (with a variance
of -12 percent) of this amount was met. Under the Ministry of Health in 2007, capital
expenditures were pegged at 35 percent, and only 19 percent was met with a variance of 11
percent. The facilities most affected by underfunding of providers include buildings, laundry
facilities, utility vehicles, and kitchen facilities.
Reporting procedures
The institutional reforms that occurred after the dissolution of the boards have had a negative
impact on service delivery. According to some managers, the management and control of
both the Central Board of Health and Hospital Management Teams currently fall under the
Ministry of Health through the Provincial Health Offices. Thus, all communications with the
center have to go through the Provincial Health Offices. Managers stated that this has
introduced a lot of red tape in accessing supplies and assistance from the Ministry of Health’s
head office. The delays in decision making associated with the post-2005 reforms make it
difficult to execute functions at provider level. Efficiency and, eventually, the quality of
service delivery suffer.
Creation of an internal market
Pursuant to decentralization of the provisioning of health care services in Zambia, an internal
contracting market has been created within the public sector and mission hospitals.
Contracting-in among the public health providers remains the largest market in Zambia’s
health system. This is followed by contracting between the mission hospitals and public
hospitals. The data obtained from the mission facilities show that about 30 percent and 37
percent of their total incomes in 2005 and 2007, respectively was from public hospitals that
contracted them to provide health services on their behalf. . This percentage excludes the
income grant from the government channeled through their host District Health Management
Team. Anecdotal evidence (mostly based on the 20–40 percent internal contracting
arrangement) holds that over 35 percent of the resources disbursed to District Health
Management Teams flows through the contracting-in arrangements.
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