Changing and refining provider payment mechanisms (PPM) to encourage more efficient and responsive service delivery is part of the roadmap to Universal Health Coverage in many low‐ and middle‐income countries. It is also an important element of strategic purchasing: actively determining which services will be included in benefit entitlements and how they should be delivered, which providers, and how they will be contracted and paid for – in other words, changing from purchasing inputs to purchasing services. 

PPM reform is both a technical and a political process. It is complex and riddled with potential “roadblocks” that can arise from technical or political constraints, or misalignment between provider payment objectives and other policies such as public financial management or decentralization. In addition, there are likely to be important sequencing issues – if certain systems are not in place obstacles can arise that can cause steps in the implementation process to stall. Whatever the current PPM or stage of reform, there are several key strategies that can help put countries on the right track to a more strategic PPM. 

Drawing on the experiences of a range of countries in Africa and Asia, this brief provides strategies to avoid or overcome obstacles to implementing strategic PPM to advance Universal Health Coverage. 

It is based on discussions at a workshop on strategic PPM held in Kenya in November 2018, jointly organized by JLN (Joint Learning Network for Universal Health Coverage), RESYST (Resilient and Responsive Health Systems Research Consortium) and SPARC (Strategic Purchasing Africa Resource Centre). The workshop brought together policymakers and researchers from: Ghana, Kenya, Malaysia, Mongolia, Nigeria, Rwanda, South Africa, Sudan, Tanzania and Vietnam.