Making The Case for Open Contracting in Healthcare Procurement

Healthcare and public procurement both suffer from high levels of corruption and the point at which they converge, procurement within healthcare, is an acute vulnerability that is routinely exploited. But governments and civil society organisations are now taking action to protect the lives of citizens by implementing open contracting.

The proposition behind open contracting is that procurement reform requires a broad base of participation from outside government. Businesses must be able to compete for contracts and make sense of the market. The communities directly affected by procurement, and the groups and people that represent those communities, are often better placed than government to independently monitor the procurement process. To facilitate this participation, governments must publish useful, timely and accessible information about the procurement process.

Healthcare and anti-corruption efforts share a common principle: prevention is better than cure. In the long term, open contracting offers a route for governments to move from the procurement status quo of corruption, waste and inefficiency, to clean contracting, in which fairness, integrity and efficiency are the norms.

Open contracting is proving to be a positive force in healthcare procurement, reducing corruption and potentially saving lives around the world.

In several countries, including Honduras, Ukraine and Nigeria, corruption was significantly reduced throughout the healthcare procurement process following the implementation of open contracting, according to Transparency International’s Pharmaceuticals & Healthcare Programme (TI-PHP).

TI-PHP’s new report Making the Case for Open Contracting in Healthcare Procurement examines the utility of open contracting in healthcare procurement. The process relies on governments to disclose procurement information to businesses and civil society improves stakeholders’ understanding of procurement processes increasing the integrity, fairness and efficiency of public contracting.

The research also shows that to successfully implement open contracting in healthcare, it is not enough for governments to just make data transparent. They also need to engage with affected communities, civil society and business to ensure the needs of users are incorporated in both the procurement and data disclosure process from the outset.

As part of this research TI-PHP found evidence that the implementation of open contracting combats corruption, and importantly:

  • improves the healthcare procurement process
  • improves service quality and the functioning of health systems
  • helps to ensure that health systems are robust enough to withstand disease outbreaks such as Ebola or Zika
  • helps ensure competitive tendering processes, diversifying economies

Open contracting in healthcare reduces corruption, saves money, improves the business environment and allows for better monitoring of service delivery. Open contracting as an anti-corruption tool has the potential to dramatically improve procurement for health. Estimates suggest that up to one quarter of global spending on public medicine procurement is lost to corruption.

Ensuring that funds are correctly invested has the potential to significantly improve service quality and health systems functioning, and can lead to better health outcomes overall. This is particularly important to ensure that national health systems are robust enough to withstand major disease outbreaks. We’ve seen how open contracting can save lives.


This blog was originally published on the Open Government Partnership blog here

Author – Sophie Peresson, Director of TI’s Pharmaceuticals & Healthcare Programme