This chapter discusses the concept, design, implementation challenges and emerging models of successful strategic purchasing (SP) in low- and middle-income countries (L&MICs). The purchasing function is concerned with allocation and use of funds to ensure more value for the existing money by setting the right financial incentives to providers and ensuring that all individuals have access to needed health services. There is a marked difference across countries in terms of how they purchase health care. Passive purchasing implies following a predetermined budget or simply paying bills when presented. In contrast, SP involves a continuous search for the best ways to maximize health system performance by proactively answering questions such as – for whom to buy, what to buy, from whom to buy, how to pay and what impact. There are enablers and choke points for implementation of provider payment systems that need consideration. For L&MICs to do SP effectively, calls for building technical capacity in provider payment, greater policy coherence, institutional relationship between government and purchasers, and a step-by-step approach allowing countries to move towards SP.

This introductory chapter conceptualises the absence of universal health care as a policy problem which requires a problem-solving approach if it is to be addressed. It develops the theoretical framing of the book: a policy design approach to health care. The chapter presents five challenges (governance; provision; financing; payment; and setting standards) that governments need to meet in their efforts to achieve universal health care, and the types of policy tools (stewardship and coordination; ownership and management; risk pooling; retrospective and prospective payments; and regulations) available to them. The chapter summarises the core argument around the importance of ownership and management of public hospitals, and the need for regulatory frameworks to manage private providers.

This chapter presents a comparative portrait of the policy tools employed in health care in Asia, the effects they trigger, and how they affect the achievement of universal health coverage. It examines the design and implementation of key health policy tools in China, Hong Kong, India, Korea, Singapore, and Thailand shows improvements along all main dimensions of health policy design. It also points out the continued under-emphasis on regulation of privateproviders, which is especially vital in health systems dominated by private provision and financing.

Thailand is widely acknowledged as a successful case of achieving universal heath care at modest costs. In this chapter we show that the success is based on a simple system under strong government stewardship: most health services are provided at publicly owned and operated hospitals, and paid for by the government through tax revenues. Layered to the combination of public ownership and funding, is a purchaser-provider split and frequent changes in policy settings based on data on utilisation and costs. The combination of these tools enable the government to monitor quality of services while maintaining a watchful eye on costs. The only tool that Thailand does not use extensively is regulation which, as we will see in this chapter, is not necessarily damaging due to the other tools in place. Public ownership and funding offers sufficient levers to the government to create incentives for healthcare providers to control costs, promote responsiveness, and improve quality of services without the need for extensive regulations.