Examining healthcare purchasing arrangements for strategic purchasing in Nigeria: a case study of the Imo state healthcare system

BACKGROUND: Strategic healthcare purchasing (SHP), as a critical function of health financing, enhances the optimal attainment of health system goals through the efficient use of financial resources. Countries committed to universal health coverage (UHC) have made progress towards strategic purchasing through relevant reforms in their healthcare financing systems. This study examined the purchasing arrangements and practices in the Imo state healthcare system to track progress towards SHP committed to UHC. METHODS: A critical review and analysis of healthcare financing schemes in Imo state, south-eastern Nigeria, was undertaken to assess their purchasing practices based on a descriptive qualitative case study approach. Relevant documents were collected and reviewed including in-depth interviews with stakeholders. Information was collected on external factors and governance, purchasing practices and other capacities of the state’s health financing schemes. The analytical framework was guided by comparing purchasing practices of the financing schemes with the ideal strategic purchasing actions (SPAs) developed by RESYST (Resilient and Responsive Health Systems), based on the three pairs of principal–agent relationships. RESULTS: Healthcare purchasing in the state is dominated by the State Ministry of Health (SMOH) using a general tax-based and public health system, making government revenue a major source of funding and provision of healthcare services. However, purchasing of health services is passive and the stewardship role of government is significantly weak, characterized by substantial insufficient budgetary allocations, inadequate infrastructure and poor accountability. However, the health benefit package significantly reflects the needs of the population. As an integrated system, there is no purchaser–provider split. Provider selection, monitoring and payment processes do not promote quality and efficiency of service delivery. There is very limited institutional and technical capacity for SHP. However, the state recently established the Imo State Health Insurance Agency (IMSHIA), a social agency whose structure and organization support SHP functions, including benefit packages, provider selection processes, appropriate provider payment mechanisms and regulatory controls. CONCLUSION: Healthcare purchasing in Imo state remains mostly passive, with very limited strategic purchasing arrangements. The main challenges stem from the entrenched institutional mechanism of passive purchasing in the government’s health budgets that are derived from general tax revenue, lack of purchaser–provider split, and poor provider payment and performance monitoring mechanisms. The establishment of the social insurance agency represents an opportunity for boosting SHP in the state for enhanced progress towards UHC. Building capacity and awareness of the benefits of SHP among policy-makers and programme managers will improve the efficiency and equity of health purchasing in the state.