Current issues in health sector reform
The Institute endeavours to provide information on issues relevant to health sector reform and development. The primary focus of the Institute’s work is on the practicalities of initiating and managing sustainable organisational and financing reforms. Currently, areas of interest include:


The private sector

Health systems and public sector reform

Sector Wide Approaches (SWAps)

Experiences in the UK National Health Service

We invite contributions to and comments on these issues. Please contact:

Introduction Coming soon!
Other sources of information Practical support to countries

The IHSD approach to contracting is a practical one. Once a health care system has embarked upon separating funding from the provision of services by establishing more autonomous suppliers of services, then contracting becomes essential. The question is how to do it and how to manage the process for results.

The IHSD toolkit on health services contracting was published in 1997 (funded by DFID) in English, Spanish and Russian. It contained a model form of contract which was reproduced and used in several countries.

This publication has been updated and is now available as:

Contracting and Performance Management in the Health Sector: A Guide for Lower and Middle-Income Countries, (DFID HSRC, 2000).
This is a practical guide to starting and using a contracting process for health care services and includes a model contract that could be adapted for use anywhere. Available at:

There are now many papers and publications dealing with contracting. Most of these are academic in nature and provide little practical guidance on how to contract for health services in practice. Recent useful descriptions of contracting in practice include:

Contracting for Primary Care Medicines Management In Albania: Lessons Learned and Transferable Principles, (IHSD Issues Note, 1/2000).
In 1995 a new para-statal organisation, the Health Insurance Institute was established as purchaser contracting with doctors to provide primary care services, support an essential drug list through a system of patient co-payments, and contract pharmacies to provide the drugs. This paper describes the key interventions and lessons learned, and outlines a methodology that may be transferable to other transition and low income countries.
Download (PDF)

Successful Contracting of Preventive Services: Fighting Malnutrition in Senegal and Madagascar, Tonia Marek et al, Health Policy and Planning, 14(4): 382-389.
A description of contracting for nutrition services, what results were achieved and the prospects for replication.

Coming soon!
Several countries and organizations have expressed interest in a guide to setting up purchasing agencies to contract with autonomous and private sector providers. Constraints to doing this include:

public finance for services is currently fixed in most countries – 75% of it consists of direct government transfers to pay public sector staff salaries so significant reforms are necessary before a purchasing agency could contract for care
ministries of health are not technically equipped to undertake the purchasing function and usually have no incentive to develop this function
ministries of finance are not generally happy to see public finance flow in new ways.
In practice, countries are mostly experimenting with creating autonomous individual hospitals or other services on a small scale and whilst the internal management may have been improved in this way, few countries have put in place proper purchasing arrangements to ensure that funding of the service providers is linked to defined services and performance.

Some countries are happier to try to adopt a performance management approach within the public sector using contract-like documents between different levels of the service specifying what is expected in return for a given budget.

Other countries are looking to forms of national health insurance to pay providers of services – the NHI agency effectively becoming a purchaser – and are looking for guidance and support in how to contract pro-actively to get value for money. But many have yet to work out how government funding can be channeled through the NHI when it is already committed to public sector services.

IHSD is preparing a publication offering guidance on setting up purchasing functions and how they can be operated:

How to Purchase/Commission Health Care Services (IHSD, 2001).

Other sources of information
Some international agencies and educational institutions now working on aspects of contracting are listed below. Not all of this work may result in publications, some of the dates for publications referred to are target dates and some documents may not be available outside the institution concerned. Information can (sometimes) be obtained from the relevant institutional web sites or from the individuals mentioned. The IHSD web site will endeavour to post updated information as it becomes available.

Inter-American Development Bank

Latin America Database on Contracting, William Savedoff, IADB, 2000

Operational database for Task Managers in Latin America, Jerry La Forgia and Colleen Murphy, World Bank/IADB, 2000

Database on Contracting with Private Health Providers in the USA, Jerry La Forgia, World Bank/IADB, 2000

London School of Hygiene & Tropical Medicine

Contracting Out Primary Care, a three year research project funded by DFID, reports available late 2000 onwards, information from:

Various earlier publications mostly evaluating aspects of contracting out of services and cited in most papers on contracting (eg. the World Bank paper by Harding and Preker referenced below). Further information from:


Regional Case Study of Contracting with Non-Profit Providers in Latin America, Wendy Abramson, PHR/USAID, 2000

Primer on Contracting with Private Providers, Wendy Abramson, PHR/USAID, 2000

World Bank

Toolkit for Private Participation in Health: Contracting for Health Services, Background Paper, April Harding and Alex Preker, World Bank, 2000.

Contracting Primer for Population and Reproductive Health, Sadia Chowdhury and Joanne Epp, World Bank, 2000

Contracting with Private Providers to Improve Child Health, April Harding et al, World Bank/WHO/USAID, 2001.

World Health Organization

Plans to set up a web site with case studies on contracting. Contact Jean Perrot:

Practical support to countries
The Institute is able to provide a sub-contracted ‘turn-key’ service to set up and manage purchasing functions for governments or national health insurance organizations. A specialist team is able to:

work with government to establish clear goals for purchasing services
prepare a detailed services plan based on needs assessment
undertake the purchasing function, preparing contracts, accrediting providers and negotiating contractual arrangements
establish systems for monitoring and payment
train designated national staff to take on these functions.
Enquiries to:

The private sector

An introduction to some current issues can be found in:

Getting Value for Money and Equity from the Private Sector. IHSD Issues Note, 5/2000
Download (PDF)

An example of a recent approach can be found in:

The Belize Health Sector Reform Programme: an approach to improving the private sector. IHSD Issues Note, 4/2000
Download (PDF)

A recent workshop report provides a summary of some of the main issues and the current state of knowledge about working with private sector providers:

Making the Most of the Private Sector
A workshop organised on behalf of the UK Department for International Development, May 11-12th 2000, DFID Health Systems Resource Centre and the London School of Hygiene & Tropical Medicine (Health Economics and Financing Programme). Available at:

Health systems and public sector reform

An IHSD Issues Note is being prepared as an introduction to current developments in improving health systems and in structural reforms of the public sector.

In June 2000, the World Health Organization published the World Health Report 2000, Health Systems: Improving Performance. Apart from some initial reactions to the report’s ‘league tables’ that ranked 191 countries by their health performance, there has been remarkably little published comment on what must be seen as an important statement by the ‘new WHO’ at this time. What does this report actually say, what is it based on, is it valid and is it useful? An IHSD Issues Note offers an introductory guide, see:

Improving Health Systems by Measuring Health Status: is WHO serious?
IHSD Issues Note, 2/2000.
Download (PDF)

Our principle concern is that despite its claims, WHR2000 does not actually measure health system performance in the sense of measuring how systems impact on health status. It is of no practical use in helping us understand how to change our systems to get better results. Moreover, because there are methodological weaknesses in the WHO model, the whole exercise risks being counterproductive. Countries cannot use the methodology to identify specific opportunities for improving their health care systems and at the same time, there is significant resentment of the ranking their systems have been given. The result is that countries are focusing their attention on the flaws in the methodology instead of the flaws in their health systems. Meanwhile, WHO is now driving excessive efforts to generate better data for this model (already, pressure is building for the hasty completion of national health accounts for this purpose) when, in fact, the methodology itself is not useful. We saw a similar thing occurring with Burden of Disease studies after the WDR 1993 with lots of country efforts expended for no appreciable practical gain.

There are other major concerns with the methodology of the WHR2000, with the heroic assumptions made to assemble data for it and with the lack of openness to scientific criticism. See for example:

Oswaldo Cruz Foundation, Brazil. Views on the WHO 2000 Report. (Prepared by a group of FIOCRUZ researchers, in alphabetical order: Alicia Ugá (ENSP), Célia Landmann Szwacwald (CICT), Célia Almeida (ENSP), Cláudia Travassos (CICT), Francisco Viacava (CICT), José Mendes Ribeiro (ENSP), Nilson do Rosário Costa, (ENSP), Paulo Buss (ENSP) and Silvia Porto (ENSP).

Braveman P et al. Scientific Concerns Regarding the World Health Report 2000. January 6, 2000. Unpublished.

These and other reviews can be seen on:

Please send us your views:

Sector Wide Approaches (SWAps)

A discussion of key issues, opportunities and problems in practice with current sector wide approaches to the development of the health sector is provided in:

Sector Wide Approaches in Health: Concerns and Prospects. IHSD Issues Note, 3/2000
Download (PDF)

Experiences in the UK National Health Service

The UK embarked on a major reform process in the late 1980s – a process that is still evolving. Two IHSD publications commissioned for the DFID Health Systems resource Centre provide background to the UK National Health Service reforms:

The History and Development of the UK NHS 1948-1999 (1999)
A description and review of the major changes and reforms of the NHS throughout its existence but with more detail on the reforms of the 1990s

The Development of the UK NHS in the Last Decade of the 20th Century (1999)
A bibliography of some of the better documentation produced within the NHS since 1989 including the introduction of Primary Care Groups

Both are available as hardcopy from the DFID HSRC and can be ordered from: