As countries around the world respond to the COVID-19 pandemic, their attention is focused on organizing and reconfiguring health care delivery, e.g., testing measures, home care, and increases in Intensive Care Unit (ICU) bed capacity, to meet the changing needs of the population. At the same time, they must ensure the provision of health care services for patients not affected by COVID-19. WHO has developed technical guidance on COVID-19, which can be found here. A key challenge is that the healthcare sector faces rising costs, yet it cannot absorb them on its own. Governments should prioritize and provide additional funding for the Ministry of Health and other purchasers of health services, such as health insurance funds, to respond to additional and urgent health care needs.
Purchasing arrangements play an important role in facilitating and supporting service delivery reconfigurations by translating funds and budgets into needed COVID-19 and non-COVID-19 health services, as well as in ensuring the financial viability of health care providers during the pandemic. It is important to note that any changes in purchasing agreements should be carried out in alignment with the particular service delivery strategies.
By the Health Financing Team at WHO Headquarters and Regional Offices
In this blog, we propose 5 critical procurement actions to support the response to the COVID-19 crisis.
1. Ensure that public funds are effectively translated into the provision of common health goods through appropriate purchasing agreements.
Public functions and population-based services such as comprehensive surveillance (including laboratories), data and information systems, regulation, and communication and information campaigns must be ready, prioritized, and expanded to respond to the pandemic crisis. Sufficient public funding for the health commons must be guaranteed. The critical issue is to translate these resources into actual delivery and implementation of these assets. Above all, these resources need to get safely and quickly to the relevant agencies and actors in charge of these functions and activities. The predominant purchasing arrangements within the stewardship function, in laws, regulations, monitoring and similar functions, are budget allocations to public institutions, and any barriers to budget execution should be removed. In turn, this means that the effective functioning of public financial management systems is a key factor.
For basic infection prevention and control, health facilities require additional payments. Other services, such as contact tracing and laboratory testing, can be provided by a variety of providers, including private sector providers and NGOs, as well as local (health) authorities. This requires context-specific purchasing arrangements and payment methods to enable and establish appropriate incentives for providers to deliver these services. Finally, performance-based contracts can be useful for setting targets and accountability mechanisms are essential to complement purchasing agreements.
2. Clarify and expand the benefits and inform the population with clear messages.
The benefit package may need to be refined or expanded to ensure that individual health services related to COVID-19 are covered, for example, by adjusting the positive list of services, as it relates to diagnostics and treatment. These changes are ideally made mandatory through legal provisions such as a decree.
As we discussed above regarding priorities for the health financing response to COVID-19, to ensure financial access to COVID-19 care, all co-payments/user fees, for all patients should be suspended for a defined period of time. This should also apply to voluntary health insurance coverage. For example, in Vietnam, COVID-related treatment19 is paid for by the government budget and testing is free for all. In South Africa, COVID-19 testing is free of charge in public hospitals. Additional resources are needed to compensate providers for user fee revenues not received to keep them operational. Waiver of seeking care or underfunded health facilities undermine public health measures taken in response to stop COVID-19.
Communication and public information efforts are absolutely critical to this action. Health care workers and the general public should know their rights (in relation to COVID-19). The government, Ministry of Health, health insurance funds or health purchasers should clearly specify and include in their risk communication strategy, public announcements or social networks, which benefits are guaranteed and free of charge to avoid confusion.
3. Adjust payment methods and rates to the new service delivery arrangements and ensure continuity in funding flows to healthcare providers.
When providers, and in particular hospitals, are paid by output-based payment methods (e.g., pay-per-act or case-based payment), they could suffer severe cash flow problems and revenue losses due to, for example, the postponement of elective and other non-urgent medical care. At the same time, health facilities face increased expenses and costs (e.g., higher input prices, purchase of additional equipment and supplies, disruption of international supply chains, increased staffing needs, etc.), which cannot be financed from regular revenues.
First, there is a need to quickly provide additional funds to hospitals as well as primary care facilities to be used, in a flexible manner, to offset losses and adapt to health care needs. Where facilities were remunerated retrospectively, based on reimbursement through fee-for-service or case-based payments, a shift to prepayments (e.g., budget allocations for expected claims based on some increase over historical utilization levels) is required. For example, in the Philippines, PhilHealth has prefunded an equivalent of 90 days of historical daily benefits, which are paid to accredited hospitals and other healthcare facilities. In Hubei Province, China, insurance funds have made advanced cash payments to healthcare facilities. More details on how to budget for the response to COVID-19 and adjustments related to public financial management rules can be found here.
Second, purchasers should modify payment methods and fees to incentivize new care arrangements, such as home or out-of-hospital care, new locations and forms for testing, and particularly teleconsultation. In several countries, payment methods for teleconsultation were introduced practically overnight. For example, the Belgian National Institute for Health and Disability Insurance has introduced two new service codes for teleconsultation of physicians with respect to COVID-19. Related to this, it is useful to encourage the acquisition of the respective technology for teleconsultations needed by providers, e.g. online appointment software and videoconferencing, through financial incentives.
Modified payment arrangements are also required to allow for and increase the number of ICU beds, along with clarification on how hospitals should be contracted and paid for these services. In Germany, a fixed bonus payment of €50,000 is provided to incentivize the conversion of hospital beds to intensive care beds. In addition, reimbursement to hospitals and other providers must be adjusted for decreased demand in other areas, i.e., by keeping ICU beds empty for COVID-19 patients and postponing non-urgent care. Finally, countries with payment systems that include pay-for-performance mechanisms may need to review and adjust performance targets to ensure that appropriate care is provided and that incentives are adapted to the new service delivery arrangements.
Additional funds will also be needed to ensure and incentivize the availability of medical personnel and to reward their dedication to working in a high-risk environment and working longer shifts. For example, in France, a special bonus, in addition to overtime pay, was introduced to compensate staff for their dedication and the risk they take in responding to the COVID-19 crisis. On the other hand, in some countries certain groups of individual surgeons and healthcare professionals face reduced income due to postponed elective care, and ways may have to be found to compensate them.
4. Utilize private sector capabilities where needed.
The participation of the private sector, both for-profit and not-for-profit, in the provision of care is broad and very diverse in many countries, both in diagnostics and in outpatient and inpatient care. As countries seek to increase COVID-19 response capacity, the potential contribution of private providers should be explored, including their potential roles and responsibilities as part of the national effort. Further guidance on collaboration with private service providers can be found here. This may require the rapid (simplified) development of procurement protocols and the adjustment of public financial management rules. It also requires the specification of registration and enrollment criteria, payment arrangements and fees, as well as accountability mechanisms to ensure that private providers comply with treatment protocols, standards and no-payment policies. Of course, there must also be mechanisms in place to ensure that private providers are equally responsible as public providers. In Nigeria, for example, private (and public) providers can provide treatment to COVID-19 patients after they have been assessed by the COVID-19 Accreditation Committee under the Federal Ministry of Health. In Estonia, the capacity to administer tests in the private sector has been rapidly contracted to expand the total screening capacity.
5. Establish governance arrangements for accelerated decision making and set clear reporting standards.
Expedited procurement decisions for the COVID-19 response require effective governance arrangements. It is crucial to establish clear rules and mandates for decision making within government agencies, as well as between different levels of government during emergency response, and it may also be necessary to modify procedures to expedite decision making.
It is of utmost importance to ensure a coordinated and harmonized response to the crisis between purchasers and government actors (Ministry of Health, Social Health Insurance, Voluntary Health Insurance, etc.), as well as with respect to private providers. This may require the establishment of a coordinating body. The goal is to minimize and avoid COVID-19-related benefit disparities and extend benefits to uncovered population groups. Decisions will need to be made about which funding streams will cover which services as part of the response, about care coordination and referral rules, pricing and harmonization of payment rates. State emergency laws or public health laws will provide such rules, or else countries should introduce them by giving a key role to the ministry of health.
Unified databases with up-to-date information on buyers, such as the number of suspected and confirmed cases, as well as details on care pathways and treatments provided, are essential for coordinating and adjusting the response to COVID-19. However, data collection is often fragmented and poorly coordinated. For population-based planning, governments should harmonize or establish clear reporting and recording standards among different purchasers to ensure consistency in reporting, monitor service provision, and have relevant and sufficient information to make decisions related to pandemic response procurement. This also requires data collection across all services and all population groups, including those without any explicit health coverage.
In conclusion, a strategic approach to procurement is crucial as it contributes to the COVID-19 response by keeping providers financially viable, including those providers of services that are postponed during the pandemic, while balancing the need to continue to provide urgent non-COVID-19 services. Measures related to purchasing cannot be carried out in isolation and must go hand in hand with other financing and health system measures. Procurement adjustments must also be aligned with, among other things, service standards and procurement measures to ensure minimum technical criteria for drugs, devices and other technologies. This can also help prevent counterfeiting. In addition, health insurance plans must find ways to manage delays in the payment of contributions so that individuals do not lose their coverage.
The purchasing function also provides room for innovation by adapting to changing needs and constraints on patient movement during the crisis. It may also lead to greater efficiency and patient responsiveness of the healthcare sector in the future, e.g. by incentivizing the adoption of new service delivery arrangements such as teleconsultation. These innovations should be evaluated after the COVID-19 crisis to inform, for the long term, how to make purchasing more effective.
This product reflects a collective effort of the World Health Organization funding team and the Regional Offices for Africa, the Americas, Eastern Mediterranean, Europe, Southeast Asia and Western Pacific. Specific contributors were: Inke Mathauer, Triin Habicht, Tomas Roubal, Valeria de Oliveira Cruz, Aurelie Klein, Fahdi Dkhimi, Camilo Cid, Tamás Evetovits, Joseph Kutzin, Bruno Meessen, Juliet Nabyonga, Claudia Pescetto, Agnès Soucat, Susan Sparkes, Tsolmongerel Tsilaajav, Helene Barroy and Hui Wang.
