Strategic purchasing is a significant part of any health policy and health financing reform, which theoretically may have an impact on optimization of cost-effective provision of health care services while simultaneously maximizing population health. The payment model has a direct impact on the delivery of health services. In Latvia, adoption of new purchasing procedures and criteria is one of the challenges that should be faced. The goal of this article is to identify the key determinants of the Latvian university ‘tertiary’ hospitalbehavior and, based on the international experience, propose a strategic purchasing model. In the paper, the authors use comparative analysis, empirical analysis, statistical data processing including the deductive and synthesis methods. The main proposals for future reforms and policy include decisions on selective contracting and the role of public and private service providers in the Latvian health care, with redefined access criteria based on population needs rather than historical supply, which aim at ensuring more equal access of providers. To ensure that university, quality service hospitals, are transparently rewarded with the capacity to provide appropriate research and education, re-invest in infrastructure and to reduce negative impact of fund allocation polic y on treatment compliance, access and equity. Lessons for health policy reforms include a patient-purchaser interaction model with defined rights for patients and responsibilities for purchasers, a specific financing model to facilitate access to knowledge and provider decision autonomy. Analysis of strategic purchasing in several European counties demonstrates that the countries adopt various approaches thereto. However, there are certain clearly identifiable common tendencies. Various approaches to strategic purchasing used across Europe indicate that reforms should be mainly focused on strengthening purchase ability to respond to consumer needs and establish more Cost -efficient contract with provider.