Is strategic purchasing feasible in publicly funded health systems with integrated purchasing and provision functions? A case study of Tamil Nadu, India

Is strategic purchasing feasible in publicly funded health systems with integrated purchasing and provision functions: A case study of Tamil Nadu, India?

Professor Umakant Dash, Dept. of HSS, IIT Madras, IndiaiHEA, Milan; Tuesday 14 July, 2015

Background

• Health is a shared responsibility between the centre and the state (Implementation)

• Autonomy of the state government on provision of health care (e.g. services to be provided, risk protection)

• Limited fiscal space

• Low utilization rate: perceived low quality, access, long waiting time, unavailability of doctors

• High OOP

• Universal Health Coverage

Health system and fund flow

Actors in the PA framework

Findings: Purchaser-Government

• The integrated tax funded system of Tamil Nadu is progressing towards strategic purchasing though the pace of the movement is hindered by implementation challenges• Aligning health strategy with the poverty reduction strategy

and medium-term expenditure framework, increasing fund flow (Priority Sector)

• Ensure access (as per national norm) (PHCs, HSCs, Hospitals, Tertiary Care)

• Well intended policies to improve geographical equity, risk protection for the poor (CMCHIS: Chief Ministers Comprehensive Health Insurance Scheme, MRMBS: Dr. Muthulakshmi Reddy Maternity Benefit Scheme)

Purchaser-Government

• Issues/challenges:• Limited fiscal space• Stringent Public Finance Management Framework

• Factors (drive towards strategic purchasing): • The political commitment• Strong bureaucracy• Progressive attitude of the public• Continuity of programs

Findings: Purchaser-Provider

• Ensure adequate flow of funds, manpower and uninterrupted supply of drugs and equipment, guidance, support, and monitoring to health providers for health care service provision• Centralized Procurement of drugs (TNMSC, an autonomous

entity mandated by law) to increase efficiency, reduce cost because of bulk purchase and market power, ensure better quality, avoid stock outs

• Enforcement of Quality Assurance Circles• Mix of Public-Private Providers (CMCHI, vertical diseases)

• Flexi fund [PWS, untied fund, annual maintenance grants(AMG)] to improve efficiency and quality of service

Purchaser-Provider

Challenges/Issues:

•Implementation challanges due to the use of line-item budgets, shortage of manpower and requisite skill level limits the ability of the purchaser to engage in strategic purchasing

•Although the legislative reform environment is positive, providers lack implementation capacity

•No appropriate incentives for performance and penalties for non-performance

Findings: Purchaser-Citizens

• Though the purchaser is committed to providing quality services that reflect people’s needs and preferences, and formal mechanisms are in place to facilitate accountability between purchasers and citizens, many of the mechanisms do not currently function in line with government policy

Purchaser-Citizens

• Challenges/Issues:• Weak regulation, poor community participation in

the decision-making process• No Essential Health Package and needs are not

elicited from citizens• Lack of frequent communication, technical support

and resources• Resource allocation on the basis of utilization not

need-based

www.wpro.who.int/asia_pacific_observatoryhttp://resyst.lshtm.ac.uk@RESYSTresearch

The research is a collaboration between RESYST and the Asia Pacific Observatory on Health Systems and Policies.

RESYST is funded by UK aid from the UK Department for International Development (DFID). However, the views expressed do not necessarily reflect the Department’s official policies.

More information: http://resyst.lshtm.ac.uk/research-projects/multi-country-purchasing-study