location: nan, 'Thailand 
year: 2008 source: HSRI 
title: A Study and proposal for developing vertical health services purchasing arrangement for the national health security office 
abstract:Since its establishment, the National Health security Office (NHSO) has been developing a variety of systems and mechanisms for purchasing health care. The purchasing operations vary by types of  health services with differing advantages and limitations. They affect access to care, quality of care and resource efficiency.
	This study, therefore, aimed to examine current concepts, models, along with problems and obstacles off vertical purchasing arrangements of NHSO. In addition, it intended to explore reasons behind health care purchasing initiatives and criteria for selecting conditions suitable for vertical purchasing arrangement from foreign experiences published in academic journals or other sources. The study purposes also included developing recommended purchasing models comprising appropriate selection criteria, disease or service groups, requirements for health services and organizations, systems and mechanisms framework, and systems and mechanisms for monitoring and evaluation for vertical health care purchasing arrangement. And, Finally, it planned to assess feasibility of the recommended model. The 11-month study period was from June 2007 until April 2008, and could be divided into two phases:
	Phase 1 Collection of preliminary data and details of operating vertical health care purchasing arrangement of NHSO by document review, stakeholder interviews and system analysis.
	Phase 2 Assessment of systems and mechanisms of NHSO, as well as contracted providers, according to a proposed “Disease management” purchasing model in order to explore results and adjust the models and requirements proposed using results from the phase 1 of the project. 
	The study findings suggest that NHSO has many health care purchasing approaches. They can be organized into two major systems:
1.	Basic care purchasing
2.	Vertical purchasing arrangement (VPA), comprising purchasing contracts  that are separately done from basic care purchasing by well-defined customer groups, service provider requirements, payment mechanisms, billing and system administration operated by the central office of NHSO.
Findings from the phase 1 and 2 of this study show three groups of problems and obstacles in vertical purchasing systems:
•	Principle-level and conceptual problems of the health care purchasing systems unclear and inconsistent principles or concepts applied by NHSO teams and staffs lead to inconsistent planning and decision making, as well as problems and obstacles in operations.
•	Problems in designs of systems and mechanisms of health care purchasing: Unclear and defective system design and mechanisms, particularly practice guidelines, budgets, payment mechanisms, communications and information systems. These adversely impact actual practices. 
•	Deployment problems: problems in deployment and implementation of design systems to inconsistent planning and decision making, as well as problems and obstacles in operations.
•	Problems in designs of systems and mechanisms of health care purchasing: Unclear and defective system design and mechanisms, particularly practice guidelines, budgets, payment mechanisms, communications and information systems. These adversely impact actual practices.
•	Deployment problems: problems in deployment and implementation of design systems and practice guidelines. These were caused by limitations of internal management systems of NHSO, inadequate supports from information systems, providers or other external factors, such as beneficiaries’ behaviors.
Taking into account all study findings, therefore, the systems purposes for developing health care purchasing may include:
•	Increase ability to access services
•	Create care standards
•	Improve continuity of care 
•	Stimulate and promote disease prevention, delay disease progression and complications 
•	Respond to specific requirements of target populations
•	Enhance efficiency in resource utilization
•	Increase management efficiency using information systems
Considering characteristics of health services and purposes of purchasing systems, health care purchasing can be divided into five systems:
		1)  Disease management system for chronic diseases
		2)  Disease management for acute diseases and high-cost procedures
		3)  Vertical purchasing arrangement for health–risk control projects
		4)  Purchasing systems for health promotion and disease prevention services provided by health care providers
		5)  Purchasing systems for emergency medical services

Management  of the vertical purchasing arrangement should emphasize proactive services to reach target populations, application of clinical practice guidelines and health services guidelines, provider standards, strong networking and referral systems, information system linkages, attractive payment which also provides incentives for efficiency, monitoring and performance reviews, economy of scale, responses to local needs, and participation. All may differ by systems.

	Selection criteria for suitable conditions, disease groups and service types for vertical purchasing arrangement consist of three categories:
1)	Criteria related to burden of diseases, including high-cost care, diseases with high probability for emergency care in care of controls, diseases with high utilization of inpatient services or extended length of stay, chronic diseases or conditions that need ling-term care, diseases that outcomes or complications can significantly affect quality of life, preventable high-burdening diseases, diseases with high community impacts which require special attention and management
2)	Criteria related to national opportunities for improvement, including diseases that quality care can control disease progression or cure, prevent or reduce service utilization, including emergency services and inpatient care, which can decrease cost of patient care, disease groups that require multi-disciplinary team and networks of care to increase access and quality of care, disease groups with significant practice variations, diseases or health conditions that community participation in health care can enhance effectiveness and significantly reduce requirement for medical resources, diseases that standardized treatment approaches can increase resource efficiency, access and effectiveness, and diseases or procedures with cost-increasing new technology which requires close monitoring and evaluation against existing ones before becoming standard practices.

The study team, therefore, propose the prototype model for vertical health care purchasing arrangement that consists of five major steps, including (1)  Need assessment and selection of services suitable for vertical purchasing arrangement, (2) Design and contracting for purchasing services, (3)  Development of management systems and service networks,  (4) Piloting and preliminary assessment of the systems, and  (5) Performance review and implementation as normal operations. Details of all steps are shown in following picture: