Provider Purchasing and Contracting for Health Services_The Case

managers observed that most of the private facilities provide primary and first-level care
which is well covered in government and mission facilities. In some rural districts, such as
Choma and Mazabuka, the managers observed that the private for-profit facilities were
nonexistent, and contracting-out was therefore limited.
Furthermore, one of the respondents observed that investing in government and mission
hospitals instead of contracting with the extremely expensive private for-profit providers
could be more cost-effective.
Some contractees (in the private for-profit sector) complained that District Health
Management Teams and public hospitals do not often honor their payments in full and
suggested that compliance mechanisms need to be put in place. Moreover, some respondents
observed that increased interaction with the government through contracting could merely
increase government regulations and stifle the development of the private sector.
Potential model for private sector contracting
Despite the above constraints, almost all managers agreed that contracting-out could give
patients the right to choose their preferred provider and decongest the overcrowded public
hospitals. In this regard, respondents observed that the health board model offered more
flexibility to managers that could be exploited to enter into strategic contracting with the
private for-profit providers. They emphasized the need for autonomy at the provider level for
effective and efficient decision making. The merging of providers into the public service
mainstream has introduced bureaucracies that could militate against effective contracting-out.
Some managers argued that if providers are sufficiently funded and are given autonomy,
contracting-out to private for-profit providers can still be successful under the current
arrangements.
However, policymakers observed that the government, through the Ministry of Health, is
developing a social health insurance scheme that presents a huge opportunity for contractingout
if well funded. Accordingly, institutions in both the public and private sectors will have to
be accredited to qualify as providers under this scheme.
Performance assessments
As action plans are implemented, contractors follow up to assess the extent to which
providers are abiding by the contractual agreements. The contracts provide for the following:
Quarterly Performance Audits. These service and quality control audits were and are
intended to measure or assess the extent to which minimum standards in the provision of
health care are maintained. They assess all aspects of service delivery, both in terms of
clinical and nonclinical functions. These include the diagnosis, equipment, financial, and
human resource factors as inputs into the process of service delivery. While the Central
Board of Health system adhered to this provision, the Ministry of Health is not consistent
with performance audits. All managers described the current audits as being very erratic and
inconsistent, taking place only once or twice a year.
Quarterly Financial, Administrative, and Management Reports and Status. Financial
performance as a basic input into the provision of health care is supposed to be assessed
quarterly so as to gauge aspects relating to transparency, effectiveness, and efficacy of
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