FRAMING THE CONVERSATION ON STRATEGIC HEALTH PURCHASING Why Is Strategic Purchasing Critical for Universal Health Coverage in Sub-Saharan Africa?

To make progress toward universal health coverage (UHC), most countries need to commit more public resources to health. However, countries can also make progress by using available resources more effectively. Health purchasing, one of the health financing functions of health systems, is the transfer of pooled funds to health providers to deliver covered services. Purchasers can be either passive or strategic in how they transfer these funds. Strategic purchasing is deliberately directing health funds to priority populations, interventions, and services, and actively creating incentives so funds are used by providers equitably and aligned with population health needs. Strategic purchasing is particularly important for countries in sub-Saharan Africa because public funding for health has often not kept pace with UHC commitments. In addition, there is wide variation in progress toward UHC targets and health outcomes on the continent that does not always correlate with per capita government health spending. This paper explores the critical role strategic purchasing can play in the movement toward UHC in sub-Saharan Africa. It explores the rationale for strategic purchasing and makes the case for a more concerted effort by governments, and the partners that support them, to focus on and invest in improving strategic purchasing as part of advancing their UHC agendas. The paper also discusses the promise of strategic purchasing and the challenges of realizing this promise in sub-Saharan Africa, and it provides options for practical steps countries can take to incrementally improve strategic purchasing functions and policies over time. ARTICLE HISTORY Received 4 October 2021 Revised 8 February 2022 Accepted 7 March 2022


Introduction
Universal health coverage (UHC)-equitable access to quality, essential health services without causing financial hardship-is a policy objective widely endorsed by governments globally, including across sub-Saharan Africa. African governments have made commitments to UHC in the African Union's Africa Health Strategy 2016-2030 and through international and regional declarations such as the Sustainable Development Goals (SDGs) and UHC resolutions made as UN member states. [1][2][3][4][5] However, UHC is more than a stated political commitment-it requires governments to make a fiscal commitment to allocating public resources with redistributive mechanisms to protect the poor. 5,6 The commitment to UHC also requires governments to ensure that public funds are used effectively. These government health financing responsibilities are the health financing functions of revenue raising and pooling and health purchasing. 7 Although UHC is broader than health financing and requires all components of the health system to work in unison, health financing is a key enabler of UHC. 8 While the governments of sub-Saharan Africa have made political commitments to UHC, their fiscal commitments have not kept pace. Domestic government health expenditure per capita remains low, at an average of 109 international dollars, or purchasing power parity (PPP) dollars, but a median of only 29 international dollars in 2019. 9 Government health spending makes up only 36.3% of total health spending on average across sub-Saharan African countries, compared with 44.4% for all low-and middle-income countries, and 69.7% for high-income countries. 9 Furthermore, higher spending does not automatically translate into progress on UHC goals and health outcomes. Some of the highestspending African countries (such as Botswana) perform worse than or on par with countries on the continent that spend far less per capita (such as Mauritius, Namibia, and South Africa), according to indicators such as the UHC Service Coverage Index and infant and maternal mortality rates. 10 At the same time, countries such as Rwanda, Malawi, and Uganda have made progress on UHC coverage and outcomes while spending even less per capita.
The slow pace of progress toward making adequate public funds available for UHC in many African countries and the considerable variation in outcomes make it critical to use existing funds more effectively. Strategic purchasing-using evidence and information about population health needs and health provider performance to make decisions about which health services should have priority for public funding, from which providers those services should be accessible, and how and how much providers should be paid to deliver these services-is generally accepted in the global health community as a critical lever to facilitate progress toward UHC, 11-13 within fiscal constraints. [11][12][13][14][15][16][17][18][19][20][21][22][23] Strategic purchasing is mentioned explicitly in national policy documents and plans across the African continent. 19 In practice, however, most governments in sub-Saharan Africa continue to purchase health services without making effective use of the full range of strategic levers available. These strategic levers include a welldefined benefit or essential services package that targets the country's health priorities, contracts with public and private providers that specify and enforce quality standards, provider payment methods that disburse flexible funds to frontline providers and create incentives that are aligned with health system objectives, and performance monitoring with accountability. [24][25][26] This paper explores the rationale and makes the case for a more concerted effort by country governments in Africa, and the partners that support them, to focus on and invest in improving strategic purchasing as part of advancing their UHC agendas. The paper also offers practical steps that countries can take to improve their strategic purchasing functions and policies.

Rationale for Strategic Purchasing in Sub-Saharan Africa
Given limited public funding for pursuing UHC goals, it is critical that countries in sub-Saharan Africa make better use of existing funds. The wide variations in service coverage and health outcomes do not always correlate with per capita government health spending indicating that there is considerable room to use those funds more effectively in many African countries. 9,10 Even incremental improvements in purchasing could lead to meaningful improvements in access to quality essential services and financial protection.

Persistent Low Public Spending on Health
Achieving UHC often requires more public resources. However, the capacity to expand fiscal space for health in sub-Saharan Africa is limited due to a combination of low per capita national income or gross domestic product (GDP), inefficiency translating economic activity into government revenue through tax collection, and inadequate priority for health in public budgets compounded by under execution of health budgets.
African countries accounted for only 1.9% of global GDP in 2020, with an average GDP of 1,564 USD per capita in 2020. 27,28 Furthermore, in 2019, tax revenue stands at only 16.6% of GDP on average-far below the 33.8% average among Organization for Economic Cooperation and Development (OECD) member countries -due to low market formalization, leakages, and weak tax administration. 11,29,30 Low allocation of government budget funds to health (an average of only 6.7% in 2019) and under-execution of health budgets (with an estimated 10% to 30% of health budgets remaining unexecuted across Africa) also contribute to persistent underspending on health by governments in Africa. 9,31 While there are no magic targets when it comes to health spending, 11,32,33 government spending on health in Africa is low relative to global trends, averaging $109 per capita (in 2019 international dollars reflecting purchasing power parity) ( Figure 1). 9 There is wide variation in per capita government health spending, with 21 countries spending under $30 per capita and four countries spending more than 400 USD per capita. Only nine African countries have a rate of public health spending at or above the recommended 86 USD per capita, which is estimated to be adequate to provide a priority package of primary health interventions. [34][35][36] Low public spending on health is directly linked to high out-of-pocket spending, which can impoverish households or lead to catastrophic health spending. [37][38][39][40] While out-of-pocket payments in the Africa region have declined from a median 47% of total health expenditure in 2000 to 37% in 2019, 9 the level of out-of-pocket spending has grown in a number of countries over that period. 27 Impoverishing and catastrophic spending affects all income groups, but it disproportionately affects lowincome groups, for which low but frequent out-ofpocket spending can easily trap people in poverty. 19,25,41

High Variability of Service Delivery and Health Outcomes
A higher level of health spending is generally associated with better health outcomes. 22,42,43 In Africa, however, results vary considerably across countries, with some of the highest-spending countries performing worse, or not significantly better, than much lower-spending countries. Several countries have achieved better outcomes at significantly lower expenditure levels. The UHC Service Coverage Index developed by the World Health Organization and the World Bank is one measure of progress toward UHC service delivery objectives. The index defines service coverage as a composite measure of intervention need, use, and quality across a spectrum of services-promotion, prevention, treatment, rehabilitation, and palliation-over the life cycle. 44 Figure 2 shows the performance of sub-Saharan African countries on the UHC Service Coverage Index for reproductive, maternal, newborn, and child health against per capita public health expenditure. Botswana, Equatorial Guinea, and Gabon are outliers, with service coverage below or near the average for sub-Saharan Africa, but with per capita government health expenditure well above most other countries in the region. Eswatini, Mauritius, Namibia, and South Africa are on the high end of service coverage but spend several times more per capita on health than other countries with similar performance, such as Kenya, Lesotho, and Zambia. On the other hand, Ghana, Kenya, Rwanda, and Zambia all perform above the regional average on service coverage with per capita government health expenditure of less than 100 USD; service coverage in these countries also translates to lower-than-average infant and maternal mortality rates. 28 Malawi and Uganda achieve similar results for under 40 USD per capita. All of the countries in the left quadrant of the graph have significant room to improve their performance relative to other countries at the same expenditure level, and strategic purchasing is one tool available to them (and all of the other countries) to make better use of existing funds.

The Promise of Strategic Purchasing
Similar to UHC, strategic purchasing is not a new idea. In its current form, strategic purchasing can be traced at least as far back as reform efforts in the UK's National Health Service (NHS) in the 1980s that aimed to improve efficiency by introducing a "purchaserprovider split" and an "internal market." 45 Since that time, the idea of strategic purchasing has evolved to be less of an ideological position and more of a general set of approaches to improving the effectiveness of government health spending that are not limited to marketbased principles and objectives. 46,47 Some researchers argue that although the promise of strategic purchasing is intuitively powerful, large-scale implementation of the full range of approaches remains elusive, even in high-income countries with wellfunctioning publicly funded health systems. 45,46 This is especially true if strategic purchasing is viewed through the lens of market-oriented solutions with high expectations for purchasing alone being able to shape service delivery and health outcomes.
But if health purchasing is viewed as a set of functions carried out through policy instruments (such as benefit packages or provider payment systems) that can be applied more or less strategically toward UHC objectives, progress can be assessed more incrementally. This reveals more examples of effective purchasing approaches across all types of health system organizations and levels of capacity. Evidence from countries such as Argentina and Thailand show that using the full range of strategic purchasing levers can be instrumental in achieving UHC goals despite a country's financing constraints. 20,23,48,49 Many other countries have also shown that more incremental progress is possible. [49][50][51][52][53][54] In Argentina, the coverage scheme Programa Sumar uses performance-based contracting between the central government and provincial governments and between provincial governments and health care providers to ensure access to a package of services for the population not covered under the social health insurance system. 49 The federal Ministry of Health transfers resources to the provinces through performance-adjusted capitation payments, and the provinces, in turn, transfer funds to health care providers through fee-for-service payments for delivering the services in the package to the enrolled population. 55 The contracted public providers have a high degree of autonomy over the use of Programa Sumar payments, including the ability to reinvest in their facility and make capital improvements for better service delivery. Although Programa Sumar accounts for only about 2% of provincial health spending, the program has led to significant improvements in birth outcomes and reduced neonatal mortality. 49 In Thailand's Universal Coverage (UC) Scheme, strategic purchasing has been crucial to achieving improved access to services and reduced catastrophic spending for households, while keeping the costs of the system under control. 20,56 The UC Scheme's purchasing agency uses a full range of strategic purchasing levers to direct service utilization toward the appropriate level of care, create provider incentives for high-quality and efficient service delivery, negotiate pharmaceutical prices, and cap total expenditure in the system. This has made it possible for the UC Scheme to offer a benefit package comparable to the scheme covering civil servants, but reportedly at 25% of the cost. 20 Examples can also be found in sub-Saharan Africa of strategic purchasing helping to advance UHC goals. In Ghana, for example, the comprehensive benefit package of the National Health Insurance Scheme (NHIS) has improved financial risk protection, as reflected in improved access to essential services and lower incidence of catastrophic health spending. 1,57-59 Coverage of malaria services and medicines by the NHIS was associated with a 65.5 percentage point increase in the likelihood of children with suspected malaria seeking formal medical treatment, and an almost 72 percentage point increase in the likelihood of them receiving malaria medication. 60 Service delivery standards in NHIS contracts with providers have led to improvements in the quality of malaria services and reduced expenditure on poor clinical practices and inappropriate medicines. 59,61 While strategic purchasing functions and policies can be institutionally demanding and technically complex, steps can be taken in any health system to improve purchasing decisions. 62 For example, the fundamental steps of defining a package of priority services and channeling funds to frontline providers with flexibility and accountability to deliver those services has led to tangible improvements in a number of countries, even without larger-scale purchasing reforms. In Kenya, the Health Sector Services Fund (HSSF), which channeled funds directly to primary health care facilities, has led to upgrades in infrastructure and equipment and overall strengthening of service delivery and quality of care. 63,64 In Nigeria, a small amount of flexible funding (1.74 USD per enrolled patient) transferred directly to frontline providers to deliver a specified package of maternal and child health services with accountability requirements led to a 20 percentage point increase in immunization coverage, as well as smaller increases in the utilization of other maternal and child health services. 65

Challenges to Implementing Strategic Purchasing in Sub-Saharan Africa
Although strategic purchasing has been on the policy agenda of African countries in one form or another for more than two decades and examples exist of its successful use, many challenges to more widespread and effective use of strategic purchasing on the continent remain. Structural health system challenges, such as a high degree of fragmentation across multiple health financing schemes, weak regulatory and governance arrangements, and lack of institutional capacity have all been identified as inhibitors to more widespread uptake of strategic purchasing approaches in African countries. 24,66,67 Furthermore, purchasing reforms change how funds flow through the system and to whom, so they often involve political trade-offs and negotiations that can weaken or stall their implementation. 33,45 The global development community has provided significant technical and financial resources, but this assistance has had little widespread impact on improving strategic purchasing capacity and results. 68,69 Many investments have been short-term projects (2 to 5 years) with a donor-driven agenda. 70 The proposed solutions have often been designed to bypass the perceived weaknesses of country health financing systems and have established new schemes-such as performance-based financing (PBF) schemes or community-based health insurance (CBHI)rather than strengthening existing systems. Different donors can push different and sometimes conflicting solutions in the same country. 24 The result in some cases has been the fragmentation of health financing arrangements and further politicization of strategic purchasing policy agendas in African countries. 24,64

How to Advance Strategic Purchasing in Africa
Countries can take these practical steps to improve purchasing incrementally, in a way that can be scaled systemwide, and is not limited to marginal innovations or schemes: • Conduct a systemwide mapping of existing health purchasing arrangements • Identify entry points and foundational steps • Learn, adapt, and build toward more sophisticated purchasing approaches

Conduct a Systemwide Mapping of Existing Health Purchasing Arrangements
Policy dialogue has been accelerated in some countries through the use of a mapping exercise that provides a complete picture of purchasing functions across all health financing arrangements to identify fragmentation and overlaps as well as areas of progress to build on. The Strategic Purchasing Progress Tracking Framework is one such mapping tool that can provide useful information for analysis, policy dialogue, and prioritizing actions and investments for continued incremental progress on strategic purchasing for UHC. 71

Identify Entry Points and Foundational Steps
Experience from many countries shows that some entry points and foundational steps can create the conditions for ongoing progress and for purchasing arrangements to become more sophisticated over time. Establishing clear institutional roles and relationships to carry out the purchasing functions makes it possible to identify who has the authority for which strategic purchasing policies and is accountable for implementing them. Unclear governance and institutional relationships-particularly between a ministry of health and a separate purchasing agencycan create inertia and sometimes conflict, both of which can stall the implementation of strategic purchasing policies. 72 Establishing a health benefit package linked to available resources and purchasing mechanisms to pay providers to deliver those services has been an important first step in some countries. It enables immediate improvement in prioritization and resource allocation and creates the conditions for taking other steps toward more strategic purchasing, such as contracting and output-based provider payment. 71,73 Allocating flexible funds to frontline providers and giving those providers autonomy and flexibility to deliver the benefit package has been a feasible, and powerful, next step in many countries. 65,74,75 Putting in place even rudimentary monitoring systems can improve data availability and quality, especially when the data are used to inform provider payment.

Learn, Adapt, and Build toward More Sophisticated Purchasing Approaches
Achieving more strategic purchasing that leads to progress toward UHC is a journey. Countries make gradual progress, overcoming challenges with incremental changes. By starting more simply and learning and adapting over time, countries can gradually build toward more sophisticated purchasing arrangements that evolve with their systems as capacity grows and objectives change. 76,77 Learning networks and platforms such as the Strategic Purchasing Africa Resource Center (SPARC) and the Joint Learning Network for Universal Health Coverage (JLN) can be important sources of practical knowledgesharing that can help accelerate progress, by bringing together policy makers and practitioners from different countries who are facing similar challenges. 78

Conclusion
Strategic purchasing is not another buzzword; rather, it is a policy instrument for advancing toward UHC goals. With the added burden of the COVID-19 pandemic, it is more important than ever for the governments of African countries to invest wisely in health and to commit to increasing government health spending. 6,79 However, as is evident from the African experience, increasing health spending without making deliberate improvements in how resources are used does not automatically lead to better access to higher-quality services, reduced financial burden on vulnerable households, and improved health outcomes. To continue progress toward UHC, African governments must simultaneously commit more public resources to health and use available resources more efficiently. They must deliberately direct health funds to priority populations, interventions, and services and actively create incentives, so funding is used equitably and efficiently through strategic purchasing. They also need to address fragmentation of schemes so purchasers can improve resource allocation, provider incentives, and provider accountability for resources and good-quality care.
Africa has many examples of "low-hanging fruit" where purchasing functions can be made more strategic even before large-scale system reforms are undertaken. 71 The initial step of mapping existing health purchasing arrangements can provide an objective view of where there is progress that can be built on and identify gaps to address. This can inform where there may be entry points or foundational steps that can put the country on the path to more strategic purchasing that can evolve over time. As countries chart their course toward UHC, bold decisions are required to examine the best route to raising and pooling resources and purchasing health services to achieve UHC goals. Rather than creating new systems that worsen fragmentation and dilute purchasing power, countries can do more within existing schemes and government budgets to create system change. 75,80,81