[NOTE: Below are my submissions in individual capacity]
The Health Department with technical assistance of GIZ (German partner) carried out a costing study of provision of services in 4 District Headquarter Hospitals [study titled: Costing of Public Sector Hospital Services; A Provider’s Perspective: A case study of four target DHQs under SHP Program KP Pakistan], with the aim “to calculate the hospital costs under various cost categories of major illness in four specialities of the public sector hospitals of Khyber Pakhtunkhwa to serve as a base line for evaluation of cost structure which can be used for strategic planning at the policy level for other health care financing interventions.”
While its an elaborate study which comes out with some shocking variables too & while it does NOT take into account the cost of land originally procured for the health facility and what its market value is now to vector in that cost in the provider’s cost too, I as Secretary Health with a generalist cadre background, found 2 points disturbing me repeatedly – considering my 18 months or so experience in this multi-faceted sector. And those were:

(i) The study shows that normal delivery in DHQ Hospital Mardan, while followed with least Average Length Of Stay (ALOS) costs 3 times more to government than the normal delivery in DHQ Hospital Chitral despite the fact Chitral does have considerably more ALOS. 
While reasons for this would / could be the overkill of Gynaecologists in DHQ Mardan due to reasons – what the study didnt show (it was not its mandate), but what disturbed me, was the literal inundation of the Gynaecologists at a Category-A District Headquarter Hospital with “normal” deliveries. 
(a) Why were normal delivery cases coming here when we had converted even the lowly Rural Heath Centres into 24/7 for labour room by creating over 2000 doctors posts 
(b) why were people paying for more from Out Of Pocket (OOP) by coming to DHQ Hospitals when they could get the same for far less at RHC or Category D Hospital nearest to their home 
(iii) And why were we wasting Specialist Gynaecologists in normal deliveries when their expertise should get atleast C-Sections going instead of being referred to Peshawar
BUT most importantly, cost of provision of service would be far less – say $1 at RHC, $100 at DHQ and $1000 at tertiary care – so govt was actually losing huge money on treatment cost besides OOP for public. It was also losing on those facilities costing more in periphery but providing less services.
(ii) the study also brought out another perspective too – and that is hidden (from common man & some people at my level too) subsidy govt pays on diagnostic costs. 
For example, taking only 3 tests i.e. ECG, Ultrasound & X-Ray, the study showed that while an ECG costs government Rs 134.27 it actually charges Rs 60 as user charges (and that too from OPD patients, Emergency & Indoor patients get it free). 
Similarly one ultrasound costs the government Rs 1067 whereas user charges stand at 200 and one X-Ray costs the Government 153.25 and user charges are a measly Rs 35.
 So only on these tests, multiplying by total tests in one year under DHIS data (OPD, Emergency & Indoor) and subtracting only the user charges paid by OPD patients alone, Government is paying over Rs 3 Billion per year as subsidy or gap-filling.. Imagine !!
This brings me to my third point – that came out while dealing with sehat sahulat program. 
Beneficiaries are provided free treatment to a certain extent which is Rs 300,000 for tertiary care the program. Agreements with various private hospitals & negotiated cardiac procedures brought them down to that amount while the same private hospitals were charging more previously (and may be doing so now too for other patients).
Government hospitals, if they go down to that rate, will again be costing government for the gap between actual cost and subsidized.
And why is that – that is because our costing includes land cost, its escalation, building cost, its depreciation, overkill in human resource, less than satisfactory management which leads to higher utility bills (so more cost) and so on and so forth while private sector is surgical and mechanical, only spending which is necessary to spend etc,
[And by the way, that there is alone justification by Boards managing them on cost benefit lines]
So would it NOT have been better if in such procedures and treatments where private sector had an expertise we outsourced it to them
Our priority is regulated patient care, the roof under which it is done is inconsequential.
And so similarly, if an ECG is costing us more than the ECG installed by the private sector just in front of our hospital’s gate, why not outsource it (strictly regulated) through public private partnership to private sector within the premises. It will also save on m&r & replacement costs.
To take this forward, and some may not like it, our going for a state of the art Institute of Cardiology should also be based on costing per procedure
If it is more than the private sector and if the ‘regulated’ private sector has capacity to take care of number of patients coming out, why shouldnt the government PROCURE these services from the private sector at lesser cost than what it will have to pay per procedure. 
After all, like in sehat insaf  card beneficiary, patient doesn’t care who pays for it and how it is paid as long as he gets taken care of.
Just a touch upon that. We may have an institute at Peshawar but patients from DI Khan, Bannu, Kohat, Swat would not be able to reach it in case of any cardiac problem of serious nature – they require cath labs there 
And may argue that is more of a priority than having an Institute at Peshawar So if the government disencumbers itself from expenditure on some of the things which private sector can take care of, it will have resources to fill gaps like having cath labs atleast at Divisional Headquarter hospitals all around.
NOTE: I do get the Govt-Insurer-Hospital triangle as financer-purchaser-provider one but am deliberately intermixing purchaser with govt too- as in the end it pays for purchase of services even in government hospitals.
This brings me to the following questions & partial indication that we have the regulatory mechanism either in place, or atleast provided in law:
1.   Should government be interested in provision of best quality at reasonable cost to it, and least OOP to public; or provision of services per se from government hospitals ?
2.   Should there be a considering of costing on provision of services and government let it flow as free market based competition. 
   Whoever among them (Government Hospital or private sector) provides the best cost to government (under strict regulations for patient benefit), government should ‘purchase’ services from it to save upon extra cost. 
   Isn’t the same thing happening under the social health insurance, where any government hospital like Hayatabad Medical Complex is competing with private sector hospitals – and now it is upto the beneficiary to choose where he wants to go. One may ask whats benefit to government hospital to compete. well insurer is paying it same way as a private hospital so it is getting that money OVER AND ABOVE its normal budget – It is paying share to its staff including doctors, so MORE beneficiaries, MORE money and MORE share of staff. All the ingredients for it to IMPROVE its services, staff to IMPROVE their intercommunication with patients and so on. 
     Only in fair competition do prices come down and quality improves;
3.   We do have the Health Care Commission law which regulates standards of service delivery both in government and private sector – we can in any case not take care of all patients and hence require a strengthened, more regulated private sector. 
    Its spread to periphery, if encouraged, will augment government’s efforts to reduce OOP for the deserving public.
4.   We do have the Health Foundation law mandating it with contract management on public private partnership for service delivery or management in health sector. Private sector can be enticed to bring in even CT Scans and MRIs and again government will save on cost – ensuring competition and fair least possible price for public also besides again reducing OOP. They already did so when such initiatives were launched previously.
5.   So, if the above happens, wouldn’t government be freer to look after health regulation, health education, health emergencies, preventive health with MORE resources to again benefit public by reducing communicable and non-communicable diseases. Even generate more resouces from human resource development through improved, targeted health education accredited courses.
6.   If it goes towards preventive health care, reducing chance of communicable diseases, it has all preventive programs in place & in its ambit which desperately need to be improved upon;
7.   if it goes towards efforts on reducing non-communicable diseases, apart from vigorous communications strategy, it has programs providing free medicine which could be augmented to cover more and more population;
8.   if it wants to go to Human Resource Development it has Medical University, Medical Colleges – but also the Provincial Health Services Academy looking after nurses and paramedics education too. That could be strengthened to bring in market-oriented short and long courses with accreditation.
9.   It can still provide accidents and emergencies cover free of cost.
10.        It has already tried taking care of 69% of population through social health insurance with treatment costs upto 300,000 for tertiary care – there are added groups like transgenders – its vying to add groups at their own cost like civil servants, journalists, artists etc. 
   These are all ingredients towards universal health coverage. A product on that account can be launched if the service standards and cost is attractive enough – people at the highest strata of income will readily buy such insurance.
So that brings me to what i would like to leave behind whenever I go (as an idea) to this Department:
1.   A Government Policy concentrating ONLY on Universal Health Coverage in next 5 years
2. This should include essentially government being less of a provider and more of a purchaser/financer, even from its own hospitals – purchaser to the extent of services committed to people – cost will automatically go down with competition;
3. A government owned limited company which takes care of insurance and procurement of services to save upon profits etc given to other insurance firms;
4. Legislation which makes social health insurance cover (to whatever monetary limit government wants) mandatory for all $2 and below income per day families registered under such a program. Survey can be BISP or any other credible survey in future;
5. Through the Health Care Commission identify and standardise Health Services Delivery Packages into categories. Thenclassify public and private sector facilities as well as practitioners under those.
  These would not only regulate the sectors and remove less than par performers but also provide base for purchase/financing of services by government;
6. Through the Health Care Commission have intervallic inspections to ensure standards are maintained, enhanced to get a notch above rating etc. Private sector should be encouraged (and even provided resources especially in periphery) to improve to the higher notch.
7. Strengthen Provincial Health Services Academy (PHSA) towards making it an accredited Services Academy both for paramedic and nurses training AND also for health managers on management courses – these should be market need assessment based courses so that those graduating should get absorbed in public or private sector, abroad or in country.
8. Have state of the art Accidents & Emergency Departments at all Districts – these technical people tell me we can have 60 % reduction in referrals and indoor patients with proper management at A&E Department
9. Proper referral system based on IT tools and starting from BHUs – ideally this will be best with Family Physicians at BHUs or a BHU at the heart of a cluster – an initiative already nodded to by WHO – coupled with audit on WHY patient was referred – to discourse avoidable referrals; 
[Govt has recently loaded periphery by adding over 3000 posts of doctors to the existing 2500 (increasing strength by 100% is no mean achievement) – and also putting in process procurement of equipment worth 3 Billion rupees for these peripheral hospitals – with an investment in medicine (which is affected by district governments delay-releasing funds & that too gone down too 30% of what they were 3 years back) 
I think government is on way to complete a 100% turnaround in the system within next 3-5 months in periphery atleast.
10. Concentration on preventive health, communicable and non-communicable diseases through strengthened vertical programs most of whom are funded by federal govt and funds sometimes coming at end of financial years – this should be coupled with robust, sustained communication strategy as prevention is better that cure – and ensure again OOP reduction and reduction in government spending too.
[List is not exhaustive and there are experts out there far better – ENDS]