Training on Strategic Purchasing and Provider Payment Reform (Capitation, DRGs, and Performance-Based Models)

Health systems worldwide are under pressure from rising costs, inefficiencies, and uneven quality of care. Traditional input-based financing and fee-for-service models often incentivize higher service volumes rather than better health outcomes. Strategic purchasing transforms health financing by actively deciding which services to buy, from whom, and how to pay aligning financial incentives with quality, efficiency, and equity.

Provider payment reforms such as capitation, Diagnosis-Related Groups (DRGs), bundled payments, and performance-based financing aim to improve cost control, accountability, and service integration. Global institutions including the World Health Organization and the World Bank emphasize strategic purchasing as a core pillar of sustainable health financing and universal health coverage reforms.

This 10-day course provides a comprehensive and practical framework for designing and implementing strategic purchasing systems. Participants will explore payment mechanisms, risk adjustment methods, contracting strategies, provider incentives, claims management, fraud control, performance monitoring, and data systems required for reform. The course also addresses political economy considerations, stakeholder engagement, and phased implementation strategies.

Through case studies, simulations, and applied exercises, participants will gain hands-on experience in designing payment models, analyzing financial risks, aligning incentives with service delivery goals, and strengthening accountability mechanisms.

By the end of the program, professionals will be equipped to lead provider payment reforms that enhance efficiency, improve quality of care, and ensure long-term financial sustainability in health systems.

Duration

10 Days

Who Should Attend

• Health financing and insurance officials

• Policymakers and planners

• Hospital and provider managers

• Health economists and analysts

• Purchasing agencies and payers

• Monitoring and evaluation professionals

Individual Impact

• Understand strategic purchasing concepts
• Gain provider payment design skills
• Improve health financing analysis
• Strengthen reform implementation capacity
• Enhance evidence-based decision-making

Organizational Impact

• Improve health system efficiency
• Control healthcare costs
• Enhance service quality
• Strengthen accountability
• Support universal health coverage goals

By the end of this course, participants will be able to:

• Explain strategic purchasing frameworks
• Design provider payment mechanisms
• Implement capitation and DRG systems
• Monitor provider performance
• Support health financing reform processes

Module 1: Introduction to Strategic Purchasing in Health Systems

• Health financing functions and flow of funds
• Concept of strategic vs passive purchasing
• Purchasing objectives and tools
• Stakeholder roles
• Practical Exercise: Mapping current purchasing arrangements

Module 2: Provider Payment Methods Overview

• Fee-for-service, capitation, DRGs, and bundled payments
• Strengths and weaknesses of each model
• Incentive effects on providers
• International experiences
• Case Study: Payment reform impacts on efficiency

Module 3: Designing Capitation Payment Systems

• Capitation concepts and formulas
• Risk adjustment methods
• Service package definition
• Managing provider incentives
• Practical Exercise: Building a basic capitation model

Module 4: Implementing DRG-Based Payment Systems

• DRG classification systems
• Cost weights and tariffs
• Hospital data requirements
• Claims processing
• Case Study: Transitioning to DRG payments

Module 5: Performance-Based and Blended Payment Models

• Pay-for-performance principles
• Quality indicators
• Blended payment approaches
• Avoiding unintended consequences
• Practical Exercise: Designing performance incentives

Module 6: Data Systems and Information Requirements

• Health information systems for payments
• Claims management platforms
• Cost and utilization data
• Monitoring dashboards
• Case Study: Digital payment management systems

Module 7: Contracting and Provider Engagement

• Service contracts and agreements
• Negotiation strategies
• Provider accreditation
• Managing disputes
• Practical Exercise: Drafting a provider contract framework

Module 8: Monitoring, Evaluation, and Fraud Control

• Performance monitoring tools
• Utilization review
• Fraud detection methods
• Continuous improvement
• Case Study: Strengthening payment oversight

Module 9: Managing Transition and Change

• Stakeholder communication
• Phased implementation strategies
• Capacity building
• Risk mitigation
• Practical Exercise: Developing a reform implementation plan

Module 10: Scaling and Sustaining Payment Reforms

• Policy alignment
• Long-term financing sustainability
• Continuous system refinement
• Learning from global best practices
• Practical Exercise: Creating a sustainability roadmap