Glossary
The Association of Southeast Asian Nations — a regional grouping of 10 states in Southeast Asia that aims to promote economic and security cooperation among its members. The current members of ASEAN are Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand, and Vietnam, with Timor-Leste due to become a member in the near future.
A payment system where a set fee is paid to a healthcare provider for each enrolled person under their care for a specified time period. This fee is intended to cover all care for the enrolled population. It is independent of the amount of service actually provided — i.e., whether or not all enrolled persons seek care within the defined time period.
The total amount spent on health goods and services within a given period (typically one year). This includes personal and collective healthcare (i.e., public health services, curative care, preventative care, long-term care) but excludes capital investments.
The transfer of power and responsibility from a central, higher authority to lower authorities, such as regional or district governments. In devolution, these lower authorities are given autonomy and decision-making power over health with the aim of aligning healthcare provision with local needs and preferences.
A classification system (primarily used for inpatient stays) where patients with similar clinical characteristics and treatment pathways are grouped together. Healthcare providers are reimbursed based on a patient’s DRG rather than the individual services provided. This system assumes that patients within the same DRG require a similar level of hospital resources (e.g., procedures, length of stay) based on their diagnosis and characteristics.
A prospective payment system whereby a healthcare provider is given a fixed amount to cover the cost of services rendered to a population for a specified time period. As funding is provided for a population group, rather than specific inputs, it offers considerable flexibility in allocating resources.
Also known as primary care physician or family physician. A doctor who treats all common medical conditions and refers patients to hospitals or other health services for more specialised care. In most health systems, GPs are intended to function as gatekeepers to secondary & tertiary care services.
The total amount spent by government (including central and local budgets) on healthcare within a given time period. In most health systems, Government Health Expenditure corresponds to only a percentage of Current Health Expenditure (CHE), or the total spending on health including both public and private funds.
Also known as public procurement. The formal process by which government agencies and state-owned enterprises (e.g., Ministries, Departments, organs of state, statutory boards) acquire goods and services. The term “tendering” refers to an invitation from governments to suppliers to bid for a project.
A list of medicines that is intended to meet a population’s priority health needs, comprising the medicines deemed most efficacious, safe and cost-effective. The World Health Organization’s “Model List of Essential Medicines” presents a list of minimum medicines which should be available in all basic healthcare systems. Generally, countries develop their national EMLs based on the WHO Model List.
A payment method where healthcare providers are paid a specified amount back for each service they have provided. Each service is billed and paid for individually, rather than through lump sum payments. This may incentivise providers to offer more services to maximise profits.
The accumulation of prepaid funds to pay for healthcare services, intended to spread out the financial risks of healthcare usage rather than individualizing these risks. Pooling may take place through insurance contributions, government taxation or a mix of both.
A system to collect, store, process and analyse information related to health. This often includes Electronic Medical Records (EMRs) which collect data on individual patients. HIMs aim to enhance patient outcomes by facilitating information exchange and by improving the efficiency, quality and integration of care.
A financial tool that provides financial coverage for healthcare expenses. An insurance company agrees to pay for some, or all, of an enrolled patients’ medical expenses in exchange for a monthly or yearly premium payment. Health insurance may be provided as part of a national health insurance scheme, as a workplace scheme or purchased individually. Insurance contributions (premiums) may be paid directly by individuals or by a higher entity (e.g., governments, employers).
A core function of health systems that enables progress toward Universal Health Coverage by providing adequate funding for health services whilst ensuring that everyone has access to quality care without facing financial hardship. Health financing includes raising funds for health, pooling resources and purchasing health services.
A system designed to raise funds, pool resources and purchase services for health. A health financing scheme refers to how a country or health system decides to carry out these functions, with the ultimate aim of providing Universal Health Coverage to a population.
The process of acquiring goods, services and equipment for healthcare services. This may include everyday medical supplies, high-cost medical equipment, healthcare support services (e.g., laundry services) and medicines, as well as the construction of healthcare facilities. The process of procurement involves identifying needs, sourcing suppliers, negotiating a contract and managing the supply chain.
Health procurement differs from health purchasing, as the latter refers to the purchasing of health services for a population through the use of pooled funds.
The allocation of pooled health funds to healthcare providers to deliver services on behalf of a population. Purchasing is a core function of health financing. It involves three key questions: what to purchase, from whom to purchase, and how to purchase.
Also referred to as healthcare provider. An entity that delivers healthcare services. This may be an individual (e.g., a General Practitioner) or an organisation/facility (e.g., a hospital or clinic). Health service providers are licensed to provide preventative, diagnostic and/or curative services to patients.
The extent to which a health system is meeting its overall objectives. These objectives may include improved population health, cost-effectiveness, accessibility, quality or other related goals.
An assessment that seeks to monitor, evaluate, and communicate the extent to which a health system is meeting its key objectives (such as improved health, quality, efficiency etc.). Specific performance indicators may be used to measure the extent to which goals are being met; for example, indicators on maternal mortality or hospital readmission may be a measure for the quality of care provided.
A systematic, multidisciplinary evaluation of health technologies (e.g., medicines, devices) and interventions. A health technology assessment is usually carried out to determine the value of a new technology/intervention and to inform whether, and how, it should be used in a health system. HTA considerations may include clinical effectiveness, cost-effectiveness, safety, ethical implications or other elements.
A payment method whereby a fixed amount is prospectively allocated to a healthcare provider to cover specific line item (input) costs. Usually, line-item budgets specify amounts for each line item (e.g., salaries, medicines, supplies) according to the previous year’s costs.
A direct payment made by an individual for healthcare goods or services, at the point of purchasing said good/service. Out-of-pocket payments come directly from the patient’s or family’s personal funds and are not covered by health insurance or other third parties.
One of the core functions of health financing. The act of raising money for health through domestic and/or external sources — including government budgets, compulsory health insurance schemes, individual contributions, donor aid and more. Revenue raising seeks to generate sufficient financial resources to support healthcare delivery.
The practice of funding of healthcare providers using fixed budgets or line-item payments, without the active monitoring of provider performance or incentives to improve quality. In passive purchasing, providers are allocated a budget regardless of their performance and the needs of the population they serve. Data collection on performance is limited — contrasting with the evidence-driven approach characteristic of strategic purchasing.
Also known as value-based payments or performance incentives. Rewards (financial or non-financial) given to healthcare providers when specific goals are met in relation to quality, efficiency, patient outcomes or other indicators. This is intended to align provider behaviour with desired outcomes and to incentivise good performance.
The basis for Universal Health Coverage globally. An approach that brings healthcare closer to communities through disease prevention, basic healthcare services, care integration and other mechanisms. Primary healthcare seeks to meet the essential health needs of a population and acts as the first point of contact in a health system.
The mechanism used to transfer funds from a purchaser of health services to a healthcare provider. Payment methods may be prospective (in advance) or retrospective (after services are provided), and may focus on inputs (e.g., salaries, medicines) or outputs (e.g., services provided). Common types of provider payment methods include fee-for-service payments, line-item budgets, capitation and pay-for-performance, among others.
The payment method for a healthcare provider, combined with broader functions like contracting, accountability mechanisms and information systems that support provider payment. Provider payment systems therefore contribute to strategic health purchasing and accomplish more than simply transferring funds to providers.
An entity that has been authorised to pay for services from healthcare providers on behalf of a population. Who the purchasing agency is, and what their responsibilities are, varies depending on the health system. The purchaser may be the Ministry of Health, an autonomous or semi-autonomous agency, a subnational authority, a compulsory or voluntary health insurance agency or other.
More specialised levels of care in a health system, to which patients are referred when their more complex needs cannot be met by primary healthcare service. Secondary care is usually provided in general hospitals, whereas tertiary care may involve more specialised facilities and expertise.
The efficient, evidence-driven allocation of healthcare resources to achieve health system goals. In strategic purchasing, a purchaser considers population health needs, provider performance, cost-effectiveness and other evidence when making decisions. This involves continuous monitoring & evaluation, aiming to achieve the best outcomes within a set budget and to make health systems more efficient.
An entity that provides health goods, services or materials — generally to a health organisation such as a hospital or clinic. Suppliers may provide day-to-day medical equipment, medical devices, diagnostic equipment, medications, software solutions or other instruments that support the functioning of a healthcare facility.
A system focused on improving patient outcomes by allocating resources efficiently and improving the patient experience. This often involves value-based payments/pay-for-performance models, whereby providers receive incentives based on the quality of care and patient outcomes achieved.
