Provider Purchasing and Contracting for Health Services_The Case

Policy implications and recommendations
Contractual arrangements: There is a need to develop a framework in which a clear legal and
administrative separation exists between providers and purchasers. This is essential to
facilitate accountability among the purchasers and providers.
Paying providers: The system governing the budgeting, planning, and reporting needs of the
contractual arrangement has to be integrated for purposes of service and management
performance evaluation. Ultimately, this should form the basis for paying providers.
Development of policy guidelines: The private sector in Zambia had grown rapidly since
reforms were implemented in 1991–1992. However, there is no legal and policy platform that
provides for collaboration between the government and private for-profit providers.
Considering the critical role that the private providers are playing, it is important that the
government, together with the private providers, come up with a policy to guide collaboration
and regulation.
Quality assurance and accreditation: All forms of contracting—public to public and public
to private—were intended to be overseen by the regulation of minimum standards that would
be the benchmark for quality assurance. These standards would be used to assess contracted
institutions, which would then be graded or accredited on the basis of the level of quality for
funding and determination of the type of services the institutions or districts were able to
provide. It is recommended that regulatory authorities utilize this important mechanism,
which has not been used so far.
Inventory of existing competencies in the private sector: According to the National Health
Strategic Plan 2006–2010, the government is not aware of the services that the private sector
provides that could form the basis of contracting or even partnerships. Thus, there is a need to
undertake an inventory of the existing services and competencies in the private sector and
ensure that District Health Management Teams and Provincial Health Offices include the
activities and programs of the private for-profit providers in the district plans and eventually
national plans.
Adequate funding of the fund holders: Contracting-out is largely constrained by inadequate
funding as the fund holders may not refer patients to the private sector providers that require
immediate payments. If contracting-out is to be considered, there is a need to adequately fund
the providers or indeed establish an insurance system that can facilitate timely and adequate
resource flow to enable providers deliver quality service.
Autonomy of providers/fund holders: The study shows that the contracting-in model based on
the referral system can easily be extended to the private for-profit providers if only the fund
holders are adequately financed and given the autonomy to purchase services strategically.
Reliable funding and autonomy could give them the leverage needed to effectively negotiate
with private for-profit providers and contract with them for services. Reducing the risk of
default to the private sector can encourage it to take up contracts from semi-autonomous
government fund holders by scaling up private sector participation.
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