2016 Jamsos Askes Sesi 9 dan 10 LT Strategic Purchasing
Strategic
Purchasing
R
p
and
Contracting in
Universal
Health
Indonesian Case
Coverage
R
p
R
p
Laksono Trisnantoro and
Yulita Hendrartini
Universitas Gadjah Mada
1
Content:
Part I. Health Finance Functions
• The Concept
•The case of Indonesia health financing
•Group Work
Part II. The Growth of Private Hospitals and
Contracting
Group Work
Part III. Strategic Purchasing
•The concept
•What happened in strategic purchasing: Is there
any good contract? The case of Indonesia
•Group Work
2
Health Financing Functions and
Objectives
Functions
Revenue
Collection
Pooling
Purchasing &
Payment
Objectives
raise sufficient and sustainable
revenues in an efficient and
equitable manner to provide
individuals with both a basic
package of essential services
and financial protection against
unpredictable catastrophic
financial losses caused by
illness and injury
manage these revenues to
equitably and efficiently pool
health risks
assure the purchase and
payment of health services in
an allocatively and technically
efficient manner
Hsiao, 2010
Broad Definition of
Financing
Collect
Fund
Pool the Risk
Allocate
Resource
Paymen
t
Hsiao, 2010
The Indonesian Case
5
Health Financing in Indonesia
for SHI (2014)
Resource collection
Pooling
purchasing
Government contribution for poor
and near poor:
Rp. 19.225 (USD 1.5) PMPM
PHC public & private
providers: capitation
contributions Civil servant and
military 5% of monthly wages
2% from employee
3% from employer
Public and private
Hospitals : DRGs (INACBG) based payments
vary according to
region
Contributions Laborers – 5% of
monthly wages
1% from employee
4% from employer
Self funded / informal sector
From Rp 25.500 – 59.500 PMPM
(2.0 USD – 4.5 USD)
BPJS
as single
purchaser
3 rd class IP for poor
2 nd class IP for non
poor
1st class for non poor
(depends on premium)
Tax
Incom
e
Overall
Health Financing
Non-tax
Income
(simplified)
APB
N
(19.93 T)
MoH
Other
Ministries
489
( 72.9
T)
Pemda
Local Gov
Contribution
from
Workers
(67,5
T)
PBI
BPJ
S
Primary
Care
Self-Funded
Private
Insuranc
e
20
T
4T
Referral
Care
Out of pocket
NHA 2009 : (18
7
T)
Tax
Incom
e
Non-tax
Income
Revenue
Collection
APB
N
MoH
Other
Ministries
489
( 72.9
T)
Pemda
Local Gov
Contribution
from Workers
(67,5
T)
PBI
(19.93
T)
BPJ
S
Primary
Care
Self Funded
Private
Insurance
+20
T
4T
Referral
Care
Out of pocket
NHA 2009 : (18
T)
8
Tax
Incom
e
Two Big Pools:
MoH
BPJS: Insurer
Body
Non-tax
Income
APB
N
MoH
Other
Ministries
Pemda
Local Gov
Contribution
from Workers
(67, T)
PBI
BPJ
S
Primary
Care
Self Funding
Referral
Care
Privat
e
Insura
nce
Out of pocket
9
Tax
Incom
e
Purchasing
by BPJS for
UHC
Non-tax
Income
APB
N
MoH
Other
Ministries
+
PemdaLocal
SS
Local Gov
Contribution
from Workers
(67,5
T)
PBI
BPJ
S
Primary
Care
Self Funding
Private
Insurance
Referral
Care
Out of pocket
10
II
• Trend of Indonesian Hospitals
11
Trend of Hospital Growth
Non
Proft
Private
H
For Proft
Private
H
In the last 15 years:
More public finance
more private hospitals
Private hospitals: partner for
government of Indonesia
13
Public-Private
Mix
Providers
Budget Source
Public
Hospital
Private
Hospital
Public source 1
2
Private
source
4
3
14
Whether Government
using Contractual
Arrangement?
Providers
Budget Source
Public
Hospital
Private
Hospital
Public source 1
2
Private
source
4
3
15
Whether Government
using Contractual
Arrangement?
Providers
Budget Source
Public
Hospital
Private
Hospital
Public source 1
2
Private
source
4
3
Not an easy
16
A complex mechanism of
fund channeling from
government to private
hospitals:
Government budget for
poor family is channeled
through BPJS pool
BPJS purchase to private
sector.
17
Tax
Incom
e
Purchasing
by BPJS
Non-tax
Income
APB
N
MoH
Other
Ministries
Pemda
Local Gov
Contribution
from Workers
(67,5
T)
PBI
BPJ
S
Primary
Care
Self Funding
Referral
Care
Out of pocket
Private
Insurance
Public Providers:
Compulsory
Private Providers: by
contract
Is it by
contract
arrangeme
nt?
18
Contracting defined
• Contracting is a purchasing mechanism
used to acquire:
▫ from a specific
provider
▫ a specified service
▫ for an explicit
quantity
▫ of a known quality
▫ at an agreed-on price
▫ for a given period of time
• In contrast to a one-off exchange, the term
Contracting implies an on-going
relationship, supported by a contractual
agreement.
Ricardo Bitran and Ursula Giedion
19
Contracting defined
Example of purchaser-provider split from the
U.K.
• In 1991: NHS introduced “internal markets” in public
system.
– District authorities & “GP fund-holders “ buy services for
community from public hospitals (“NHS trusts”), which
compete for contracts.
• Results (Peacock, 1997)
– Quality: Non conclusive evidence on waiting times,
cleanliness, referral system, and clinical quality.
– Efficiency. Limited impact due to:
Existence of oligopolies (few providers with important market
power)
ii.
Competition focused more on marketing than on prices or quality
iii. Information asymmetries and
iv. Costs of contracting.
Ricardo
andConcerns
Ursula Giedion
– Bitran
Equity:
about potential risk selection by GP fundi.
20
holders.
Discussion: Is there a contracting
scheme for UHC in Indonesia?
Providers
Budget Source
Public
Hospital
Public source 1
Private
source
3
??
Private
Hospital
2
?
4
21
Discussion: Is there a contracting
scheme for UHC in Indonesia?
Providers
Budget Source
Public
Hospital
Public source 1
Private
source
3
??
Private
Hospital
2
?
4
Should be discussed using strategic purchasing concept22
Part III. Strategic
Purchasing
From:
Di McIntyre and Viroj
Tangcharoensathien
et al.
23
Passive vs. strategic
examples
Passive
• “Passive”
– resource allocation
based on historical
patterns and means
– little/no selectivity of
providers
– little/no quality
monitoring
– price and quality
taker
Strategi
c
• “Strategic”
– payment systems
that create
deliberate
incentives
– selective
contracting
– quality
improvement efforts
Adapted from Cashin: WHO Advanced course on health financing for UHC, Tunisia, June 2014
and rewards
Strategic purchasing
responsibilities
Know how much
money they have
and how much they
(can) spend
Project and manage revenue and
expenditures (including implications
for service entitlements)
Decide what to buy
and from whom to
buy
Select providers and enter into
contracts with them to deliver
goods and service entitlements in
line with population needs
Decide how and how
much to pay
providers
Develop and implement provider
payment systems and calculate
payment rates
Know and make
known how the
money is being used
Monitor provider performance,
service utilization & quality, and
publicly report on provider &
purchaser performance
Adapted from Cashin: WHO Advanced course on health financing for UHC, Tunisia, June
Strategic
Purchasin
…
to
g
achieve
• Equity in resource
distribution
• Efficiency in resource use
• Access to and utilisation
of services on the basis of
need
• Quality services that are
effective
• Financial protection
Strategic purchasing
actions
• To fulfil responsibilities, purchaser must
develop, manage and use information
systems:
– Population health needs
– Utilisation-related information, such as:
•
•
•
•
•
Patient demographics
Diagnosis & treatment (tests, medicines, procedures)
Referral
Length of stay (if inpatient)
Waiting list information etc.
– Financial management: Revenue and expenditure
Strategic Purchasing Action
Di McIntyre and Viroj Tangcharoensathien
et al. 2015
28
Di McIntyre and Viroj Tangcharoensathien
et al. 2015
29
Strategic purchasing
actions: Citizen purchaser
• Registration of beneficiaries (where
required)
• Active assessment of health needs of the
population, updated regularly
• Mechanisms for engaging with population
to determine values and preferences
• Using this information to assess if the
services purchased adequately meet
population needs
Di McIntyre and Viroj Tangcharoensathien
et al. 2015
Strategic purchasing
actions: Citizen purchaser
• Making population aware of
entitlements & responsibilities (e.g.
follow referral route)
• Public reporting by purchaser(s) on
its/their performance
• Mechanisms for holding purchaser(s)
accountable for performance (e.g.
active civil society)
Di McIntyre and Viroj Tangcharoensathien
et al. 2015
Di McIntyre and Viroj Tangcharoensathien
et al. 2015
32
Strategic purchasing
actions:
Purchaser - provider
• Implies some ‘separation’ of purchasing &
provision responsibilities (even if done within
same organisation, at least some ‘separate
thought processes’/explicit ‘purchasing’
actions)
• Active decision-making on which providers to
purchase services from (e.g. accreditation):
– Meets core structural quality of care requirements
– Location relative to distribution of population
– Range of services (in line with entitlements)
Di McIntyre and Viroj Tangcharoensathien
et al. 2015
Strategic purchasing
actions:
Purchaser - provider
• Preparation of guidelines for providers
(some evidence-based decision-making
capacity):
– EDL/formulary
– Standard treatment guidelines (STGs):
• Diagnostic tests
• Drug treatment
• Supplies for surgical procedures (e.g. type of
stent that can be used)
• PHC gatekeeping and referral pathways
Di McIntyre and Viroj Tangcharoensathien
et al. 2015
Strategic purchasing
actions:
Purchaser - provider
• Contracting with providers,
specifying:
– Range of services required
– Compliance with STGs
– Quality expectations
– Payment issues
– Requirements for information submission
– Penalties for non-performance and rewards for
good performance
– No balance-billing permitted (financial
protection)
– Etc.
Di McIntyre and Viroj Tangcharoensathien
et al. 2015
Strategic purchasing
actions:
Purchaser - provider
• Influencing drug prices (e.g. reference
pricing)
• Determining provider payment
mechanisms and setting payment rates:
– Using mechanisms that create incentives for
efficiency and quality
– Assessment of how providers are responding to
incentives and what refinements needed
– Closed ended / budget neutral approaches
important (e.g. DRGs with global budget)
• Auditing of bills & timely payments to
providers
Di McIntyre and Viroj Tangcharoensathien
et al. 2015
Strategic purchasing
actions:
Purchaser - provider
• Monitoring provider performance:
– Clinical quality of care (e.g. diagnosis and
treatment in line with STGs, hospital infection
rates, etc.)
– Efficiency (e.g. compliance with EDL/formulary
and referral procedures; claims audits)
• Taking action on performance:
– Poor performance – e.g. quality improvement
plan, accreditation not renewed
– Good performance – nature of rewards
• Financial management (ensuring
expenditure in line with revenue)
Di McIntyre and Viroj Tangcharoensathien
et al. 2015
Di McIntyre and Viroj Tangcharoensathien
et al. 2015
38
Strategic purchasing
actions:
Government purchaser
• Establishing clear policy and regulatory
frameworks within which purchaser(s)
(and providers) will function, including:
– Explicit expectations of purchaser(s)
– Governance structures and mechanisms
– Autonomy for purchaser in day-to-day
management decision-making and operations
– Requirements for reporting by purchaser(s)
– Ability to take action on poor performance
– Protection of population (e.g. balance billing)
Di McIntyre and Viroj Tangcharoensathien
et al. 2015
Strategic purchasing
actions:
Government purchaser
• Specifying service entitlements for
population (e.g. ‘itemised’ benefit package,
or comprehensive services with some
exclusions)
• Influence over resource flows to purchaser(s)
– e.g. contribution rates to insurance
schemes; tax-funded allocations (including
extent to which government engages with
purchaser(s) over resource requirements to
meet needs of population)
Di McIntyre and Viroj Tangcharoensathien
et al. 2015
Wheter
Passive or strategic
examples?
Passive
• “Passive”
– resource allocation
based on historical
patterns and means
– little/no selectivity of
providers
– little/no quality
monitoring
– price and quality
taker
Strategi
c
• “Strategic”
– payment systems
that create
deliberate
incentives
– selective
contracting
– quality
improvement efforts
Adapted from Cashin: WHO Advanced course on health financing for UHC, Tunisia, June 2014
and rewards
A Critical Analysis
of Purchasing
Arrangements
under BPJS in
Indonesia
Gadjah Mada
University
Yulita Hendrartini
Laksono
Trisnantoro
Gadjah Mada University,
Indonesia
iHEA, Milan; Tuesday 14 July,
2015
Tax
Incom
e
Purchasing
by BPJS
Non-tax
Income
APB
N
MoH
Other
Ministries
Pemda
Local Gov
Non-PBI ex
PT Askes
(67,5
T)
PBI
BPJ
S
Primary
Care
Non-PBI
Mandiri
Privat
e
Insura
nce
Referral
Care
Out of pocket
43
Di McIntyre and Viroj Tangcharoensathien
et al. 2015
44
Summary: Mechanism for
strategic purchasing
Principle
agent
relationship
on going proccess
Key Challenge
Purchaser government
• Organizational
structure
• Capacity building for
DHO
• Negociated budget
• Unclear Role of
stakeholder
• Lack of Data for
monitoring
• Updating
• Lack of health facilities
investment
Purchaser citizen
• Review benefit
package annualy
• Patient satisfaction
review
• Lack of Citizen voice
• Limitation of Custommer
right
Purchaser provider
• Prospective Payment
• Selection and
credentialing
• Capitation not effective
• DRG Tariff in adequate
• In equity provider
Di McIntyre and Viroj Tangcharoensathien
et al. 2015
46
Purchaser-Government
on going proccess
• Organizational structure
• Capacity building for
DHO
• Negociated budget
Key Challenge
• Unclear Role of
stakeholder
• Lack of Data for
monitoring
• Updating
• Lack of health
facilities investment
Gaps in government actions
to promote strategic
purchasing
• Unclear organizational roles
• Accountability lines between BPJS / purchaser and
the Ministry of Health (and District Health Office)
• Inadequte monitoring activities
• Data limitation and lack of DHO capacity to monitor
the program
• Problems in reducing the inequity of
services.
• Limited budget to developing new health service
infrastructure and deploy strategic human
resources
49
Purchaser-Citizen
on going
proccess
• Review benefit
package
annualy
• Patient
satisfaction
review
Key Challenge
• Lack of Citizen
voice
• Limitation of
Custommer right
Gaps in relation to role of
citizens and population in
strategic purchasing
• The needs, preferences and priorities of citizens
in determining service entitlements is not clear
in the policy design and implementation .
Many regions where community needs are not met
indicates that there is no mechanism to ensure
beneficiaries can access available services , especially
the marginalized groups
Lack of evidence on health needs no evidence that
citizens can participate in the process of determining health
needs and priorities
No representation in purchasing boards
Limitation of patients’ rights legislation
Remote areas citizen is lost in the big data.
Di McIntyre and Viroj Tangcharoensathien
et al. 2015
52
Purchaser-Provider
on going
proccess
Key Challenge
• Prospective
• Capitation not
Payment
effective
• Selection and
• DRG Tariff in
credentialing
adequate
• Setting indicator • In equity provider
distribution
• Lack of Quality
control
• Lack of Fraud
Gaps in relation to
providers in strategic
purchasing
• Purchaser (BPJS) has inadequate credentials and
capacity to contract especially in government
providers. There is no clear Contractual
Arrangement
• Poor monitoring mechanisms to control health
services moral hazard (potential fraud)
• No fraud regulation
• Provider response to prospective payment system
(capitation and DRG payment) problems:
Provider ability/capacity to respond to incentives
accept limitation
Lines of accountability detection potential Fraud
In Indonesian Case, the
position:
Passive
• “Passive”
– resource allocation
based on historical
patterns and means
– little/no selectivity of
providers
– little/no quality
monitoring
– price and quality
taker
Strategi
c
• “Strategic”
– payment systems
that create
deliberate
incentives
– selective
contracting
– quality
improvement efforts
Adapted from Cashin: WHO Advanced course on health financing for UHC, Tunisia, June 2014
and rewards
The Contractual arrangment is
not clear
Providers
Budget Source
Public
Hospital
Public source 1
Private
source
3
??
Private
Hospital
2
?
4
56
Can Indonesia achieve
strategic purchasing in the
context of UHC?
• Equity in resource distribution (Difficult if
there is no policy)
• Efficiency in resource use (Probably No)
• Access to and utilisation of services on the
basis of need (No)
• Quality services that are effective (No)
• Financial protection (Yes in well developed
areas)
Governme
nt
Group Work 2: Describe
the relationship
between purchaser(s)
and providers in your
country?
Purchaser(s
)
Providers
Citizen
Group Work 3:
Is there any contractual arrangement for UHC
in your country?
Providers
Budget Source
Public
Hospital
Public source 1
Private
source
3
??
Private
Hospital
2
?
4
59
Purchasing
R
p
and
Contracting in
Universal
Health
Indonesian Case
Coverage
R
p
R
p
Laksono Trisnantoro and
Yulita Hendrartini
Universitas Gadjah Mada
1
Content:
Part I. Health Finance Functions
• The Concept
•The case of Indonesia health financing
•Group Work
Part II. The Growth of Private Hospitals and
Contracting
Group Work
Part III. Strategic Purchasing
•The concept
•What happened in strategic purchasing: Is there
any good contract? The case of Indonesia
•Group Work
2
Health Financing Functions and
Objectives
Functions
Revenue
Collection
Pooling
Purchasing &
Payment
Objectives
raise sufficient and sustainable
revenues in an efficient and
equitable manner to provide
individuals with both a basic
package of essential services
and financial protection against
unpredictable catastrophic
financial losses caused by
illness and injury
manage these revenues to
equitably and efficiently pool
health risks
assure the purchase and
payment of health services in
an allocatively and technically
efficient manner
Hsiao, 2010
Broad Definition of
Financing
Collect
Fund
Pool the Risk
Allocate
Resource
Paymen
t
Hsiao, 2010
The Indonesian Case
5
Health Financing in Indonesia
for SHI (2014)
Resource collection
Pooling
purchasing
Government contribution for poor
and near poor:
Rp. 19.225 (USD 1.5) PMPM
PHC public & private
providers: capitation
contributions Civil servant and
military 5% of monthly wages
2% from employee
3% from employer
Public and private
Hospitals : DRGs (INACBG) based payments
vary according to
region
Contributions Laborers – 5% of
monthly wages
1% from employee
4% from employer
Self funded / informal sector
From Rp 25.500 – 59.500 PMPM
(2.0 USD – 4.5 USD)
BPJS
as single
purchaser
3 rd class IP for poor
2 nd class IP for non
poor
1st class for non poor
(depends on premium)
Tax
Incom
e
Overall
Health Financing
Non-tax
Income
(simplified)
APB
N
(19.93 T)
MoH
Other
Ministries
489
( 72.9
T)
Pemda
Local Gov
Contribution
from
Workers
(67,5
T)
PBI
BPJ
S
Primary
Care
Self-Funded
Private
Insuranc
e
20
T
4T
Referral
Care
Out of pocket
NHA 2009 : (18
7
T)
Tax
Incom
e
Non-tax
Income
Revenue
Collection
APB
N
MoH
Other
Ministries
489
( 72.9
T)
Pemda
Local Gov
Contribution
from Workers
(67,5
T)
PBI
(19.93
T)
BPJ
S
Primary
Care
Self Funded
Private
Insurance
+20
T
4T
Referral
Care
Out of pocket
NHA 2009 : (18
T)
8
Tax
Incom
e
Two Big Pools:
MoH
BPJS: Insurer
Body
Non-tax
Income
APB
N
MoH
Other
Ministries
Pemda
Local Gov
Contribution
from Workers
(67, T)
PBI
BPJ
S
Primary
Care
Self Funding
Referral
Care
Privat
e
Insura
nce
Out of pocket
9
Tax
Incom
e
Purchasing
by BPJS for
UHC
Non-tax
Income
APB
N
MoH
Other
Ministries
+
PemdaLocal
SS
Local Gov
Contribution
from Workers
(67,5
T)
PBI
BPJ
S
Primary
Care
Self Funding
Private
Insurance
Referral
Care
Out of pocket
10
II
• Trend of Indonesian Hospitals
11
Trend of Hospital Growth
Non
Proft
Private
H
For Proft
Private
H
In the last 15 years:
More public finance
more private hospitals
Private hospitals: partner for
government of Indonesia
13
Public-Private
Mix
Providers
Budget Source
Public
Hospital
Private
Hospital
Public source 1
2
Private
source
4
3
14
Whether Government
using Contractual
Arrangement?
Providers
Budget Source
Public
Hospital
Private
Hospital
Public source 1
2
Private
source
4
3
15
Whether Government
using Contractual
Arrangement?
Providers
Budget Source
Public
Hospital
Private
Hospital
Public source 1
2
Private
source
4
3
Not an easy
16
A complex mechanism of
fund channeling from
government to private
hospitals:
Government budget for
poor family is channeled
through BPJS pool
BPJS purchase to private
sector.
17
Tax
Incom
e
Purchasing
by BPJS
Non-tax
Income
APB
N
MoH
Other
Ministries
Pemda
Local Gov
Contribution
from Workers
(67,5
T)
PBI
BPJ
S
Primary
Care
Self Funding
Referral
Care
Out of pocket
Private
Insurance
Public Providers:
Compulsory
Private Providers: by
contract
Is it by
contract
arrangeme
nt?
18
Contracting defined
• Contracting is a purchasing mechanism
used to acquire:
▫ from a specific
provider
▫ a specified service
▫ for an explicit
quantity
▫ of a known quality
▫ at an agreed-on price
▫ for a given period of time
• In contrast to a one-off exchange, the term
Contracting implies an on-going
relationship, supported by a contractual
agreement.
Ricardo Bitran and Ursula Giedion
19
Contracting defined
Example of purchaser-provider split from the
U.K.
• In 1991: NHS introduced “internal markets” in public
system.
– District authorities & “GP fund-holders “ buy services for
community from public hospitals (“NHS trusts”), which
compete for contracts.
• Results (Peacock, 1997)
– Quality: Non conclusive evidence on waiting times,
cleanliness, referral system, and clinical quality.
– Efficiency. Limited impact due to:
Existence of oligopolies (few providers with important market
power)
ii.
Competition focused more on marketing than on prices or quality
iii. Information asymmetries and
iv. Costs of contracting.
Ricardo
andConcerns
Ursula Giedion
– Bitran
Equity:
about potential risk selection by GP fundi.
20
holders.
Discussion: Is there a contracting
scheme for UHC in Indonesia?
Providers
Budget Source
Public
Hospital
Public source 1
Private
source
3
??
Private
Hospital
2
?
4
21
Discussion: Is there a contracting
scheme for UHC in Indonesia?
Providers
Budget Source
Public
Hospital
Public source 1
Private
source
3
??
Private
Hospital
2
?
4
Should be discussed using strategic purchasing concept22
Part III. Strategic
Purchasing
From:
Di McIntyre and Viroj
Tangcharoensathien
et al.
23
Passive vs. strategic
examples
Passive
• “Passive”
– resource allocation
based on historical
patterns and means
– little/no selectivity of
providers
– little/no quality
monitoring
– price and quality
taker
Strategi
c
• “Strategic”
– payment systems
that create
deliberate
incentives
– selective
contracting
– quality
improvement efforts
Adapted from Cashin: WHO Advanced course on health financing for UHC, Tunisia, June 2014
and rewards
Strategic purchasing
responsibilities
Know how much
money they have
and how much they
(can) spend
Project and manage revenue and
expenditures (including implications
for service entitlements)
Decide what to buy
and from whom to
buy
Select providers and enter into
contracts with them to deliver
goods and service entitlements in
line with population needs
Decide how and how
much to pay
providers
Develop and implement provider
payment systems and calculate
payment rates
Know and make
known how the
money is being used
Monitor provider performance,
service utilization & quality, and
publicly report on provider &
purchaser performance
Adapted from Cashin: WHO Advanced course on health financing for UHC, Tunisia, June
Strategic
Purchasin
…
to
g
achieve
• Equity in resource
distribution
• Efficiency in resource use
• Access to and utilisation
of services on the basis of
need
• Quality services that are
effective
• Financial protection
Strategic purchasing
actions
• To fulfil responsibilities, purchaser must
develop, manage and use information
systems:
– Population health needs
– Utilisation-related information, such as:
•
•
•
•
•
Patient demographics
Diagnosis & treatment (tests, medicines, procedures)
Referral
Length of stay (if inpatient)
Waiting list information etc.
– Financial management: Revenue and expenditure
Strategic Purchasing Action
Di McIntyre and Viroj Tangcharoensathien
et al. 2015
28
Di McIntyre and Viroj Tangcharoensathien
et al. 2015
29
Strategic purchasing
actions: Citizen purchaser
• Registration of beneficiaries (where
required)
• Active assessment of health needs of the
population, updated regularly
• Mechanisms for engaging with population
to determine values and preferences
• Using this information to assess if the
services purchased adequately meet
population needs
Di McIntyre and Viroj Tangcharoensathien
et al. 2015
Strategic purchasing
actions: Citizen purchaser
• Making population aware of
entitlements & responsibilities (e.g.
follow referral route)
• Public reporting by purchaser(s) on
its/their performance
• Mechanisms for holding purchaser(s)
accountable for performance (e.g.
active civil society)
Di McIntyre and Viroj Tangcharoensathien
et al. 2015
Di McIntyre and Viroj Tangcharoensathien
et al. 2015
32
Strategic purchasing
actions:
Purchaser - provider
• Implies some ‘separation’ of purchasing &
provision responsibilities (even if done within
same organisation, at least some ‘separate
thought processes’/explicit ‘purchasing’
actions)
• Active decision-making on which providers to
purchase services from (e.g. accreditation):
– Meets core structural quality of care requirements
– Location relative to distribution of population
– Range of services (in line with entitlements)
Di McIntyre and Viroj Tangcharoensathien
et al. 2015
Strategic purchasing
actions:
Purchaser - provider
• Preparation of guidelines for providers
(some evidence-based decision-making
capacity):
– EDL/formulary
– Standard treatment guidelines (STGs):
• Diagnostic tests
• Drug treatment
• Supplies for surgical procedures (e.g. type of
stent that can be used)
• PHC gatekeeping and referral pathways
Di McIntyre and Viroj Tangcharoensathien
et al. 2015
Strategic purchasing
actions:
Purchaser - provider
• Contracting with providers,
specifying:
– Range of services required
– Compliance with STGs
– Quality expectations
– Payment issues
– Requirements for information submission
– Penalties for non-performance and rewards for
good performance
– No balance-billing permitted (financial
protection)
– Etc.
Di McIntyre and Viroj Tangcharoensathien
et al. 2015
Strategic purchasing
actions:
Purchaser - provider
• Influencing drug prices (e.g. reference
pricing)
• Determining provider payment
mechanisms and setting payment rates:
– Using mechanisms that create incentives for
efficiency and quality
– Assessment of how providers are responding to
incentives and what refinements needed
– Closed ended / budget neutral approaches
important (e.g. DRGs with global budget)
• Auditing of bills & timely payments to
providers
Di McIntyre and Viroj Tangcharoensathien
et al. 2015
Strategic purchasing
actions:
Purchaser - provider
• Monitoring provider performance:
– Clinical quality of care (e.g. diagnosis and
treatment in line with STGs, hospital infection
rates, etc.)
– Efficiency (e.g. compliance with EDL/formulary
and referral procedures; claims audits)
• Taking action on performance:
– Poor performance – e.g. quality improvement
plan, accreditation not renewed
– Good performance – nature of rewards
• Financial management (ensuring
expenditure in line with revenue)
Di McIntyre and Viroj Tangcharoensathien
et al. 2015
Di McIntyre and Viroj Tangcharoensathien
et al. 2015
38
Strategic purchasing
actions:
Government purchaser
• Establishing clear policy and regulatory
frameworks within which purchaser(s)
(and providers) will function, including:
– Explicit expectations of purchaser(s)
– Governance structures and mechanisms
– Autonomy for purchaser in day-to-day
management decision-making and operations
– Requirements for reporting by purchaser(s)
– Ability to take action on poor performance
– Protection of population (e.g. balance billing)
Di McIntyre and Viroj Tangcharoensathien
et al. 2015
Strategic purchasing
actions:
Government purchaser
• Specifying service entitlements for
population (e.g. ‘itemised’ benefit package,
or comprehensive services with some
exclusions)
• Influence over resource flows to purchaser(s)
– e.g. contribution rates to insurance
schemes; tax-funded allocations (including
extent to which government engages with
purchaser(s) over resource requirements to
meet needs of population)
Di McIntyre and Viroj Tangcharoensathien
et al. 2015
Wheter
Passive or strategic
examples?
Passive
• “Passive”
– resource allocation
based on historical
patterns and means
– little/no selectivity of
providers
– little/no quality
monitoring
– price and quality
taker
Strategi
c
• “Strategic”
– payment systems
that create
deliberate
incentives
– selective
contracting
– quality
improvement efforts
Adapted from Cashin: WHO Advanced course on health financing for UHC, Tunisia, June 2014
and rewards
A Critical Analysis
of Purchasing
Arrangements
under BPJS in
Indonesia
Gadjah Mada
University
Yulita Hendrartini
Laksono
Trisnantoro
Gadjah Mada University,
Indonesia
iHEA, Milan; Tuesday 14 July,
2015
Tax
Incom
e
Purchasing
by BPJS
Non-tax
Income
APB
N
MoH
Other
Ministries
Pemda
Local Gov
Non-PBI ex
PT Askes
(67,5
T)
PBI
BPJ
S
Primary
Care
Non-PBI
Mandiri
Privat
e
Insura
nce
Referral
Care
Out of pocket
43
Di McIntyre and Viroj Tangcharoensathien
et al. 2015
44
Summary: Mechanism for
strategic purchasing
Principle
agent
relationship
on going proccess
Key Challenge
Purchaser government
• Organizational
structure
• Capacity building for
DHO
• Negociated budget
• Unclear Role of
stakeholder
• Lack of Data for
monitoring
• Updating
• Lack of health facilities
investment
Purchaser citizen
• Review benefit
package annualy
• Patient satisfaction
review
• Lack of Citizen voice
• Limitation of Custommer
right
Purchaser provider
• Prospective Payment
• Selection and
credentialing
• Capitation not effective
• DRG Tariff in adequate
• In equity provider
Di McIntyre and Viroj Tangcharoensathien
et al. 2015
46
Purchaser-Government
on going proccess
• Organizational structure
• Capacity building for
DHO
• Negociated budget
Key Challenge
• Unclear Role of
stakeholder
• Lack of Data for
monitoring
• Updating
• Lack of health
facilities investment
Gaps in government actions
to promote strategic
purchasing
• Unclear organizational roles
• Accountability lines between BPJS / purchaser and
the Ministry of Health (and District Health Office)
• Inadequte monitoring activities
• Data limitation and lack of DHO capacity to monitor
the program
• Problems in reducing the inequity of
services.
• Limited budget to developing new health service
infrastructure and deploy strategic human
resources
49
Purchaser-Citizen
on going
proccess
• Review benefit
package
annualy
• Patient
satisfaction
review
Key Challenge
• Lack of Citizen
voice
• Limitation of
Custommer right
Gaps in relation to role of
citizens and population in
strategic purchasing
• The needs, preferences and priorities of citizens
in determining service entitlements is not clear
in the policy design and implementation .
Many regions where community needs are not met
indicates that there is no mechanism to ensure
beneficiaries can access available services , especially
the marginalized groups
Lack of evidence on health needs no evidence that
citizens can participate in the process of determining health
needs and priorities
No representation in purchasing boards
Limitation of patients’ rights legislation
Remote areas citizen is lost in the big data.
Di McIntyre and Viroj Tangcharoensathien
et al. 2015
52
Purchaser-Provider
on going
proccess
Key Challenge
• Prospective
• Capitation not
Payment
effective
• Selection and
• DRG Tariff in
credentialing
adequate
• Setting indicator • In equity provider
distribution
• Lack of Quality
control
• Lack of Fraud
Gaps in relation to
providers in strategic
purchasing
• Purchaser (BPJS) has inadequate credentials and
capacity to contract especially in government
providers. There is no clear Contractual
Arrangement
• Poor monitoring mechanisms to control health
services moral hazard (potential fraud)
• No fraud regulation
• Provider response to prospective payment system
(capitation and DRG payment) problems:
Provider ability/capacity to respond to incentives
accept limitation
Lines of accountability detection potential Fraud
In Indonesian Case, the
position:
Passive
• “Passive”
– resource allocation
based on historical
patterns and means
– little/no selectivity of
providers
– little/no quality
monitoring
– price and quality
taker
Strategi
c
• “Strategic”
– payment systems
that create
deliberate
incentives
– selective
contracting
– quality
improvement efforts
Adapted from Cashin: WHO Advanced course on health financing for UHC, Tunisia, June 2014
and rewards
The Contractual arrangment is
not clear
Providers
Budget Source
Public
Hospital
Public source 1
Private
source
3
??
Private
Hospital
2
?
4
56
Can Indonesia achieve
strategic purchasing in the
context of UHC?
• Equity in resource distribution (Difficult if
there is no policy)
• Efficiency in resource use (Probably No)
• Access to and utilisation of services on the
basis of need (No)
• Quality services that are effective (No)
• Financial protection (Yes in well developed
areas)
Governme
nt
Group Work 2: Describe
the relationship
between purchaser(s)
and providers in your
country?
Purchaser(s
)
Providers
Citizen
Group Work 3:
Is there any contractual arrangement for UHC
in your country?
Providers
Budget Source
Public
Hospital
Public source 1
Private
source
3
??
Private
Hospital
2
?
4
59