Regulation of the private health sector in India

The expansion of the private sector in India has forced the passages of a number of regulations to promote quality of care and protect consumers. This has expanded the role of government in developing and enforcing regulations in three areas of the health sector: drugs, medical practice, and health facilities. These regulations have been promulgated by both national and state governments. Three particular Acts are examined: the Consumer Protection Act, Medical Councils, and the Nursing Home Act. These Acts have provided basic guidelines for regulation of certain aspects of the health sector, but have also created new challenges, as consumers have become more involved in monitoring health service delivery. The challenge for the future will be to ensure the quality and efficiency of health services in both the public and private sectors through these regulatory mechanisms while seeking to promote national health objectives.     

Trade in health services

In light of the increasing globalization of the health sector, this article examines ways in which health services can be traded, using the mode-wise characterization of trade defined in the General Agreement on Trade in Services. The trade modes include cross- border delivery of health services via physical and electronic means, and cross-border movement of consumers, professionals, and capital. An examination of the positive and negative implications of trade in health services for equity, efficiency, quality, and access to health care indicates that health services trade has brought mixed benefits and that there is a clear role for policy measures to mitigate the adverse consequences and facilitate the gains. Some policy measures and priority areas for action are outlined, including steps to address the "brain drain"; increasing investment in the health sector and prioritizing this investment better; and promoting linkages between private and public health care services to ensure equity. Data collection, measures, and studies on health services trade all need to be improved, to assess better the magnitude and potential implications of this trade. In this context, the potential costs and benefits of trade in health services are shaped by the underlying structural conditions and existing regulatory, policy, and infrastructure in the health sector. Thus, appropriate policies and safeguard measures are required to take advantage of globalization in health services.     

Historic day for Malaysian consumers

The Malaysian Medical Association, the Malaysian Dental Association, the Malaysian Pharmaceutical Society, and the Federation of Malaysian Consumer Associations have introduced and endorsed the Charter for Patient Rights. The Charter recognized that health care is a basic human right, regardless of race, religion, social status, and ability to pay. Further, consumers have the right to seek medical care in both the public and private sectors. The Charter also includes the right to a second opinion, one's own medical records, and explanation before receiving any medical treatment and concerning the risks of treatment, compensation for negligence, and adequate information. Malaysia is the second Asian country to have such a charter, South Korea being the first. The UK also has a Patients Charter. The rest of Europe is also moving to adopt such a charter. The private sector, which serves only those who can afford them, provides most health care services in developing countries. Thus, a large private sector threatens the elderly, unemployed, rural poor, and the mentally ill in these countries. The supply of these services is a marketable commodity which physicians and health care professionals own and sell. The medical community has planned, formulated, implemented, and monitored health services in most of these countries. Therefore, the private sector is a major obstacle to health for all. The Charter helps to break down the barrier by informing both physicians and their patients of their rights and responsibilities.     

Promoting the private sector: a review of developing country trends

Two questions are addressed in this article: (i) How can itbe ensured that private sector resources promote national healthgoals? and; (ii) What can be learnt from the private sectorto enhance operations in the public sector? There is a surprisingdegree of private sector activity in both the finai icing andprovision of services, despite the fact that few countries haveadopted wide-reaching privatization programmes. In some countriespressure upon government budgets for health has led to privatesector expansion - in others rapid income growth accompaniedby increased demand for health care is a causal factor. A number of problems related to private for-profit providersare evident; often quoted are supplier-induced demand and excessiveinvestment in high technology equipment, the equity implicationsof private health care, and the availability of manpower forthe public sector. Governments have tried to tackle these problemsthrough a range of innovative interventions, however littleproper evaluation of these policies has been carried out. Whilesuch problems are less likely to arise with the private, not-for-profitsector, the financial sustainability of their activities ismore worrying. There is also a need to define more clearly therelationships between governments and not-for-profit organizations. The paper considers market-oriented reforms in industrializedcountries, and their implications for the health sector in developingcountries. The measures taken in industrialized countries appearto be of limited direct applicability in developing countries,due to factors such as the sparse coverage of health facilitiesin the latter. However the principles on which the reforms arebased are relevant, in particular the need for greater transparencyin the activities of public and private sector providers andin the use of con tracting out services. Finally it is suggestedthat too much research in this area has focused on defendingone or other side of the privatization debate. Not enough workhas considered the health sector as a whole, and the complicatedinteractions between public and private sectors as providers,buyers, financ ing agents and regulators of health care services.     

Privatization of health services in less developed countries: an empirical response to the proposals of the World Bank and Wharton School.

Academics and World Bank officials argue that, by reducing out-of-pocket expenditures, expanded private insurance may improve access to needed health services in less developed countries. In this empirical response, the authors examine this recommendation through observations from their research on privatization of health services in the United States, Argentina, Chile, and Mexico. Privatization, either through conversion of public sector to private sector insurance or by expansion of private insurance through enhanced participation by corporate entrepreneurs, generally has not succeeded in improving access to health services for vulnerable groups. Although the impact of privatization has differed among the Latin American countries studied, expansion of private insurance often has generated additional co-payments, which have increased rather than decreased out-of-pocket expenditures, thereby worsening access to needed services. Privatization usually has improved conditions for private corporations and has led to higher administrative costs. To address the devastating problems of access to services worldwide, we must find ways to enhance the delivery of public sector services and must move beyond conventional wisdom about market-based policies such as privatization.     

Household utilization and expenditure on private and public health services in Vietnam

The private provision of health services in Vietnam was legalized in 1989 as one of the country's means to mobilize resources and improve efficiency in the health system. Ten years after its legalization, the private sector has widely expanded its activities and become an important provider of health services for the Vietnamese people. However, little is known about its contribution to the overall objectives of the health system in Vietnam. This paper assesses the role of the private health care provider by examining utilization patterns and financial burden for households of private, as compared with public, services. We found that the private sector provided 60% of all outpatient contacts in Vietnam. There was no difference by education, sex or place of residence in the use of private ambulatory health care. Although there was evidence suggesting that rich people use private care more than the poor, this finding was not consistent across all income groups. The private sector served young children in particular. Also, people in households with several sick members at the same time relied more on private than public care, while those with severe illnesses tended to use less private care than public. The financial burden for households from private health care services was roughly a half of that imposed by the public providers. Expenditure on drugs accounted for a substantial percentage of household expenditure in general and health care expenditure in particular. These findings call for a prompt recognition of the private sector as a key player in Vietnam's health system. Health system policies should mobilize positive private sector contributions to health system goals where possible and reduce the negative effects of private provision development.     

"Make or buy" decisions in the production of health care goods and services: new insights from institutional economics and organizational theory

A central theme of recent health care reforms has been a redefinition of the roles of the state and private providers. With a view to helping governments to arrive at more rational "make or buy" decisions on health care goods and services, we propose a conceptual framework in which a combination of institutional economics and organizational theory is used to examine the core production activities in the health sector. Empirical evidence from actual production modalities is also taken into consideration. We conclude that most inputs for the health sector, with the exception of human resources and knowledge, can be efficiently produced by and bought from the private sector. In the health services of low-income countries most dispersed production forms, e.g. ambulatory care, are already provided by the private sector (non-profit and for-profit). These valuable resources are often ignored by the public sector. The problems of measurability and contestability associated with expensive, complex and concentrated production forms such as hospital care require a stronger regulatory environment and skilled contracting mechanisms before governments can rely on obtaining these services from the private sector. Subsidiary activities within the production process can often be unbundled and outsourced.     

Evaluation of immunization knowledge, practices, and service-delivery in the private sector in Cambodia

A study of private-sector immunization services was undertaken to assess scope of practice and quality of care and to identify opportunities for the development of models of collaboration between the public and the private health sector. A questionnaire survey was conducted with health providers at 127 private facilities; clinical practices were directly observed; and a policy forum was held for government representatives, private healthcare providers, and international partners. In terms of prevalence of private-sector provision of immunization services, 93% of the private inpatient clinics surveyed provided immunization services. The private sector demonstrated a lack of quality of care and management in terms of health workers' knowledge of immunization schedules, waste and vaccine management practices, and exchange of health information with the public sector. Policy and operational guidelines are required for private-sector immunization practices that address critical subject areas, such as setting of standards, capacity-building, public-sector monitoring, and exchange of health information between the public and the private sector. Such public/private collaborations will keep pace with the trends towards the development of private-sector provision of health services in developing countries.     

The political process and the private health sector's role in Vietnam

Vietnam has experienced a period of economic and political transition from a command economy to one of market socialism. This transition has precipitated a shift in the policies concerning the private sector, as well as increased demand for services from the private health sector. The private sector has evolved, though more rapidly in the Ho Chi Minh City area, with the passing of laws and regulations concerning private practice. The policy maker's concern is to maintain the equity gains realized under the public health system while using the private sector growth to make improvements in the system's efficiency. The political process enabling expansion of the private health sector has been slow, and will continue to be measured as it seeks to create a national health system with a rational integration of the public and private sectors.     

Health services financing in Greece: a role for private health insurance

Private health insurance can play a significant role in the financing and delivery of health services in relatively undeveloped health systems which suffer from limited public expenditures, resource shortages, and quality of care problems. Research results, however, indicate that private health insurance in Greece has not yet assumed that role. The rapid increase of private health insurance was the result of underfinancing by the public sector and restrictive policies for the private sector. The private sector, however, largely financed by private health insurance, found alternative investment and profit opportunities, which, unfortunately, did not improve health system microeconomic efficiency. In this paper we propose that a way of cooperation could exist between the public sector and private health insurance, which would improve public health services provision and the overall technical, allocative and dynamic efficiency of the health system.     

Have out‐of‐pocket health care payments risen under free health care policy? The case of Sri Lanka

Compared to its neighbors, Sri Lanka performs well in terms of health. Health care is provided for free in the public sector, yet households' out‐of‐pocket health expenditures are steadily increasing. We explore whether this increase can be explained by supply shortages and insufficient public health care financing or whether it is rather the result of an income‐induced demand for supplementary and higher quality services from the private sector. We focus on total health care expenditures and health care expenditures for specific services such as expenses on private outpatient treatments and expenses on laboratory and other diagnostic services. Overall, we find little indication that limited supply of public health care per se pushes patients into the private sector. Yet income is identified as one key driver of rising health care expenditures, ie, as households get richer, they spend an increasing amount on private services suggesting a dissatisfaction with the quality offered by the public sector. Hence, quality improvements in the public sector seem to be necessary to ensure sustainability of the public health care sector. If the rich and the middle class increasingly opt out of public health care, the willingness to pay taxes to finance the free health care policy will certainly shrink.     

Health care in China: the role of non-government providers

While China's health services are primarily financed by out-of-pocket spending (private financing), health care providers, especially the hospital industry, are still dominated by state ownership and government control (public provision). Even though the private sector plays an increasing role in the ambulatory sector, private services are not included in the social insurance benefit package, and thus, it primarily serves self-paying patients. The ambiguity of the government policy toward private provision stems from concerns that an increasing private sector would drive up costs and its services may be of questionable quality. This paper tries to gather evidence on the relative performance of private and public sector in China. Neither literature review nor our primary data analysis provides any support for the notion that the private sector charges a higher price and they serve primarily the better-off people. Quite on the contrary, available data seem to suggest that not only the private sector tends to serve disproportionately the low-middle income groups (this may well be due to its relative lower direct and indirect costs), consumer satisfaction also seems to be higher with regards to certain dimensions of the private than public sector.     

Working with the private sector for child health

Private sector providers are the most commonly consulted source of care for child illnesses in many countries, offering significant opportunities to expand the reach of essential child health services and products. Yet collaboration with private providers presents major challenges - the suitability and quality of the services they provide is often questionable and governments' capacity to regulate them is limited. This article assesses the actual and potential contributions of the private sector to child health, and classifies and evaluates public sector strategies to promote and rationalize the contributions of private sector actors. Governments and international organizations can use a variety of strategies to collaborate with and influence private sector actors to improve child health - including contracting, regulating, financing and social marketing, training, coordinating and informing the public. These mutually reinforcing strategies can both improve the quality of services currently delivered in the private sector, and expand and rationalize the coverage of these services. One lesson from this review is that the private sector is very heterogeneous. At the country level, feasible strategies depend on the potential of the different components of the private sector and the capacity of governments and their partners for collaboration. To date, experience with private sector strategies offers considerable promise for children's health, but also raises many questions about the feasibility and impact of these strategies. Where possible, future interventions should be designed as experiments, with careful assessment of the intervention design and the environment in which they are implemented.     

Risks and benefits of private health care: exploring physicians' views on private health care in Ho Chi Minh City, Vietnam

As in a number of other low- and middle-income countries, the health sector in Vietnam is transforming with a rapid shift from fully state run and financed health care towards more private financing and delivery of health care. This development has been particularly noticeable in the largest city in the country, Ho Chi Minh City, where a majority of physicians now are practising in private clinics and where the private health care sector is an increasingly popular option for people. While the private sector is an important part of the health care system in Vietnam, few data are available on the characteristics and quality of private health care services. This case study describes some aspects of the re-emerging private health care sector in Ho Chi Minh City, Vietnam, from the view of 27 private and non-private physicians. The paper explores physicians' reasons for going private, physicians' notions of patients' health care preferences, and physicians' views on potential influence of financial incentives on characteristics of private health care. The characteristics of private health care are discussed in relation to a context of private health care characterised by a fully patient-financed fee-for-service payment system, weak regulatory mechanisms, and a public health care system (government-run and-financed health care) that operates under resource constraints. Issues to consider when attempting to steer private health care in Vietnam in a direction where it can optimally contribute to public health, are discussed while considering the interplay between authorised private practitioners, private pharmacies, the informal private sector, and the public health care sector.     

Bridging public and private sector quality assurance

Just as the private sector has emerged as the predominant force the greater efficiency in the delivery of health care services, so too is the private sector gaining importance as a source of quality oversight strategies. Public reliance on private sector quality assurance efforts is being fueled by such developments as the growth in the number and diversity of private health care accrediting agencies, and the increase in consumer and purchaser-driven demands for comparative information about the quality of health care providers.     

From life insurance to safer sex--reflections of a marketing man

Much of the writing on health in developing countries focuses on the public sector rather than the private market, and on providers rather than on consumers. A more consumer-oriented perspective would regard the transactions by which most people in most poor countries buy healthcare as the norm, just one among many purchases of a personal service which all of us, as consumers, have to make. This paper contends that asymmetric information is not confined to health and medicine, but is a common problem for consumers whatever the GDP of the country they live in, and however rich and poor they may be. Understanding how consumers overcome these problems yields insights into the ways in which providers have to market their services, and into what, if anything, governments and donors can do to extend, improve or regulate the private healthcare market.     

Gaining strategic advantages through partnerships with public health departments

Public health officials have advocated in public health and public policy journals for collaboration with private sector health care organizations for nearly a decade. There has been little written in the management literature on this topic, however. There are several important areas in which public health departments have expertise that could be valuable to private sector health care organizations, including health maintenance organizations (HMOs). These include the delivery of services in some geographic areas and to some special populations, provision of preventive and health promotion services to HMO members, performance of epidemiology services, assistance in accreditation, and repair of the damaged image of HMOs. HMOs and local health departments in many parts of the country are already entering into contracts for these purposes. Such partnerships between HMOs and local health departments can improve the health of the members of HMO plans and contribute to improving the health of the community.     

Private health care provision in developing countries: a preliminary analysis of levels and composition

While the importance of the private sector in providing health services in developing countries is now widely acknowledged, the paucity of data on numbers and types of providers has prevented systematic cross-country comparisons. Using available published and unpublished sources, we have assembled data on the number of public and private health care providers for approximately 40 countries. This paper presents some results of the analysis of this database, looking particularly at the determinants of the size and structure of the private health sector. We consider two different types of dependent variable: the absolute number of private providers (measured here as physicians and hospital beds), and the public-private composition of provision. We examine the relationship between these variables and income and other socioeconomic characteristics, at the national level. We find that while income level is related to the absolute size of the private sector, the public-private mix does not seem to be related to income. After controlling for income, certain socioeconomic characteristics, such as education, population density, and health status are associated with the size of the private sector, though no causal relationship is posited. Further analysis will require more complete data about the size of the private sector, including the extent of dual practice by government-employed physicians. A richer story of the determinants of private sector growth would incorporate more information about the institutional structure of health systems, including provider payment mechanisms, the level and quality of public services, the regulatory structure, and labour and capital market characteristics. Finally, a normative analysis of the size and growth of the private sector will require a better understanding of its impact on key social welfare outcomes.     

The private/public mix in health care in India

Private hospitals and private medical practitioners play a significantpart in delivering health care services in India. As the demandfor health care has increased, institutions in this sector haveexpanded widely in both urban and rural areas. The relationshipbetween patient and private practitioner considerably influencesthe perceived and actual needs about health care. This relationshipis expected to play an important role in the control of diseasepatterns and management. However, the developments in this sectorhave prompted concern about the efficiency of resources, equityand access to facilities, and the availability of financingmechanisms to support private health care. Also, the efficiencywith which the resources are used in this sector has directbearing on the cost and quality of services. The existence ofthese health care institutions therefore has profound implicationsfor the present character of the Indian health care system,and its future course. The objectives of the present study are to review the role ofthe private health care sector in India and the policy concernsit engenders. The discussion suggests that policy makers inIndia should take serious note of the growing influence of theprivate sector in providing health care in India. Policy interventionsin health should not ignore their existence and this sectorshould be explicitly involved in the health management process.It is argued that regulatory and supportive policy interventionsare inevitable to promote this sector's viable and appropriatedevelopment.