Private Provider Contracting Cross-Learning Session Key Messages

Countries: Ghana and Ethiopia

Date: 17th February 2023


SPARC conducted a capacity-development session where it brought together researchers, policymakers and experts in private provider contracting from Ghana, Kenya and Ethiopia to share their experiences to assist those beginning the journey of private provider contracting to overcome institutional, political and technical barriers towards successfully contracting private providers.

On 17th February, SPARC hosted a second cross-learning session on private provider contracting between Ghana (which has already implemented private provider contracting) and Ethiopia which plans to do the same. The session also involved an expert in private provider contracting who built on the previous session where an overview of contracting was discussed by sharing background information and lessons on the frameworks and general requirements for private provider contracting.

The goal of this activity was two-pronged and delivered through two presentations: 1) to provide Ethiopia with the frameworks and requirements for private provider contracting and 2) to enable the Ethiopia team to hear experiences from the NHIA Ghana on private provider engagement.

Requirements for private provider contracting

This session provided an overview of the requirements for private provider contracting. It clarified the requirements a country should meet for effective private provider contracting. The key points from this section are highlighted below.

The legal requirements for contracting providers include:

The contracting of private providers by public payers should be enshrined in law. This requires a law/health act/regulation allowing the agency to contract private providers. A public-private partnership act which stipulates how a public purchaser should engage private providers, is also necessary for contracting providers as this outlines the roles of the purchasers and providers. Furthermore, a regulation or act that specifically stipulates the contracting of private providers, including the contents of the contract, will be necessary to design the actual contractual agreements. Having all three legal requirements provides a legal basis and set of guidelines for how purchasers and private providers should engage with each other.

Political considerations for contracting private providers

There is a need for consideration of political interference and different interests that may affect the contracting of private providers. Civil rights organizations, private provider groups, etc., may have their own interests, which may differ from the objectives of the health system. The engagement of private providers in planning and developing the contracts is crucial to establishing shared understanding and buy-in from providers. Additionally, the goals and priorities of existing governments that may not prioritize private provider contracting as part of their tenure should also be considered when contracting private providers.

Socioeconomic considerations for contracting private providers

The capacity to regulate or monitor private providers is crucial to effective partnerships between the purchaser and private providers. Purchasers should therefore assess their ability to monitor provider performance. The availability of funds to both reimburse providers as per the established payment mechanisms and facilitate provider monitoring should be a key consideration to ensure trust between purchasers and providers.  Additionally, the sustainability of contracting providers should be considered, especially in terms of varying payment rates between private and public providers. Other considerations for the contracting of private providers include cost and administrative capacity, the history and culture of the contracting institution, the existence of civil rights bodies or organized community and the level of trust between the public purchaser and private provider.

In summary, contract development requires public purchasers to consider defined contract objectives, negotiated contract terms, contract preparation and implementation, and monitoring and evaluation of contracts and performance of providers to ensure an effective contracting process and good purchaser-provider relationship. Regulations such as accreditation, enforcement of standards and quality assurance, and information systems for performance monitoring such as programmatic information, financial information, etc., are vital to ensuring contracts are implemented to the satisfaction of both parties.

Overview of private sector contracting in NHIA Ghana

The Ghana team provided an in-depth description of the private-sector contracting conducted by NHIA Ghana. The key messages from this session are highlighted below.


Ghana’s health sector is governed by the MOH and includes the Ghana health service, faith-based organizations, quasi-government facilities and private facilities. Ghana runs a three-tier health delivery system; the primary, secondary and tertiary levels. The national health insurance scheme was launched by an established act of parliament in 2003. The scheme is financed by earmarked funds, enrolment is mandatory by law, the benefit package covers 95% of disease conditions and providers are contracted from public, private and faith-based sectors. The scheme is managed by the administrative arm of the NHIA, the NHIA. About 54% of the population is covered and the NHIA reimburses 100% of the charge for services covered. Resource mobilization is gotten from sources indicated in the NHIA act, including 2.5% of consumption tax, 2.5% of payroll contributions, road accident funds, premiums from the informal sector, donors, etc. Payment is made directly to providers. These funds also pay the administrative and general expenses of NHIA and support to the MOH. About 92% of the inflows comes from consumption tax and social security tax.

The Benefit Package

The benefits package is implicit in the law, and exclusions are explicitly stated. It covers most of the internal and external care services and is reviewed based on evidence and in a systematic process. Recent additions include clinical family planning methods and four childhood cancers. There are also vertical programs such as immunization, family planning, mental health, etc. are covered by the MOH directly.

Provider Payment Mechanisms and Costing

Provider payment methods used include fee for service, diagnostic-related groupings, and capitation piloting was used between 2012-2017. Costing for tariffs uses financial data from different health facilities. Costing is based on the treatment pathways in STG and by clinical experts, also units of health commodities utilized in the provision of care. The bases of tariff differentials consider the probability of complicated cases, quantum overheads and government support for HR and infrastructure. Costing is based on the most cost-effective and efficient use of resources. Considerations for strategic reforms to improve services include prioritization, evidence use, use of health technology for cost-effectiveness, and monitoring for service quality.

Quality Assurance Procedures

  • Credentialing: this is mandated by the NHIA Act and done based on credentialing modules; the credentials are valid for 4 years subsequent credentials are valid for 2 years. The credentials are facility and location, specific and non-transferrable to branches or affiliates. Pre-requisites for credentialing include; facility being registered with a regulatory body, be in existence for at least 6 months, seeking to provide service to NHIA or PHIS, NHIA needs to inspect premises and records, facilities can submit an online request to NHIA. The required documentation is the same for private and public providers; however, private providers have to show active regulatory body certificates and active CHAG certificates if applicable. There are incentives within this process to promote quality in facilities, including desk-top renewals for high-scoring facilities.
  • Clinical audits are also used as quality assurance which is mandated by the NHIA Act. This process seeks to improve patient care and outcomes. A systematic retrospective review process is used. The care is compared against best clinical practice and standards, and the tools used include the NHIA Act, and the NHIA tariff operations guidelines, among other acts.

Key lessons from Private Provider Contracting with the NHIA

  • Bi-partisan political will and commitment are necessary for private provider contracting.
  • An enabling legislation is also needed, as is an innovative financing model to pool resources.
  • A level playing field for public and private providers helps to build trust with private and public providers and leveraging on the member numbers to negotiate strategically.
  • Stakeholder engagement is also very important to engage public and private providers efficiently.

To get more details on this session, click here to assess the session video.

Private Provider Contracting Cross-Learning Session Key Messages

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