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5.4 STRATEGIC PURCHASING SHOULD BE

INCORPORATED INTO THE GOVERNANCE
OF HEALTH SYSTEMS TO MAKE THEM
FIT-FOR-PURPOSE

The concept of strategic purchasing is applicable beyond simply facilitating the design of
specific healthcare programmes, and can act as a critical policy lever for health system
transformation toward becoming primary care-led, integrated, person-centred, and
ultimately, fit-for-purpose. Systems transformation can only be achieved by the essential
health system governance functions of i) formulating strategic goals and the corresponding
policies and plans required; ii) generating the intelligence to inform decision making; iii)
choosing and implementing the policy instruments for the strategic plans; iv) creating
mechanisms to ensure accountability; and v) ensuring structures and processes for
collaboration (WHO, 2014).

Despite the substantial investments and plethora of policies and programmes, including
PPPs, for engaging the private sector in providing primary care and preventive care, Hong
Kong’s health system remains highly fragmented, with the public sector under increasing
pressure to meet escalating demands arising from an increasing prevalence of chronic
diseases. An integrated, primary care-led, person-centred health system is the only way to
successfully manage chronic disease and address the challenge of chronic disease in health
systems. The Government’s strategic goals are to improve primary care, recalibrate the
public-private sectors, and relieve pressure on the public system. “Integrated patient
care”, which has been omitted in these stated goals, is crucial towards informing the
appropriate recalibration to meet population health needs and decrease demands on the
public sector. Achieving this is fundamental to optimising the resources allocated and
invested in healthcare towards generating returns on population health. Integrated healthcare
aims to enable timely access to a full spectrum of preventive, curative, rehabilitative, and
palliative care needed and appropriate for the individual across primary, specialist secondary
and tertiary levels of care, settings and types of care, as well as between and within the
public and private sectors. This will minimise unnecessary duplication of healthcare and
bridge gaps in provision and care. Hence, a key policy lever for the system transformation
is the instrument of strategic purchasing.

The decisions in strategic purchasing for health systems need to be considered in the
context of the interconnected objectives and goals, together with accountability mechanisms
at all three levels of the health system: governance, healthcare delivery purchaser-provider
system, and person journey of healthcare delivery (WHO, 2012). Furthermore, health systems
strategic purchasing comprises four key integrated components, governance, policy
parameters to guide strategic purchasing decisions for purchasing agents, collaboration,
and oversight and accountability mechanisms (Figure 5.5).

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