Health care purchasing

Health care purchasing is the process that leads to a contract between a health insurer and a health care provider. That contract incorporates agreements about the health care that the provider is required to supply to the health insurer’s policyholders for the duration of the contract. That may involve agreements about the amount, type, price and quality of health care. The health insurer offers this package of contracted health care to its policyholders. The insurer does not need to do this, it could instead simply pay the costs detailed on the claims forms submitted by its policyholders and invest no time or effort in the contracting of health care. If it opts for the former course of action, then it is focusing on “sales” (of policies). If it opts for the latter, then its objective is “purchasing” (of health care). This represents a strategic choice for health insurers.