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.     

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.     

Efficiency and quality in the public and private sectors in Senegal

It is often argued that the private sector is more efficient than the public sector in the production of health services, and that government reliance on private provision would help improve the efficiency and equity of public spending in health. A review of the literature, however, shows that there is little evidence to support these statements. A study of government and non-governmental facilities was undertaken in Senegal, taking into account case mix, input prices, and quality of care, to examine relative efficiency in the delivery of health services. The study revealed that private providers are highly heterogeneous, although they tend to offer better quality services. A specific and important group of providers--Catholic health posts--were shown to be significantly more efficient than public and other private facilities in the provision of curative and preventive ambulatory services at high levels of output. Policies to expand the role of the private sector need to take into account variations in types of providers, as well as evidence of both high and low quality among them. In terms of public sector efficiency, findings from the study affirm others that indicate drug policy reform to be one of the most important policy interventions that can simultaneously improve efficiency, quality and effectiveness of care. Relationships that this study identified between quality and efficiency suggest that strategies to improve quality can increase efficiency, raise demand for services, and thereby expand access.     

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.     

The consequences of health service privatisation for equality and equity in health care in South Africa

The trend towards the privatisation of health services in South Africa reflects a growing use of private sources of finance and the growing proportion of privately owned fee-for-service providers and facilities. Fee-for-service methods of reimbursement aggravate the geographical maldistribution of personnel and facilities, and the competition for scarce personnel resources aggravates the difference in the quality of the public and private services. Thus the growth in demand for these types of providers may be expected to increase inequality of access in these two respects. The potential expansion of medical scheme coverage is shown to be limited to well under 50% of the population, leaving the majority of the population without access to private sector health care. Even for members of the medical schemes, benefits are linked to income, thus clashing with the principle of equal care for equal need. The public funds needed to overcome financial obstacles to access to private providers could be more efficiently deployed by financing publicly owned and controlled health services directly. Taxation also offers the most equitable method of financing health services. Finally, attention is drawn to the dilemma resulting from the strengthening of the private health sector; while in the short term this can offer better care to more people on a racially non-discriminatory basis, in the long term, health care for the population as a whole may become more unequal and for those dependent on the public sector it may even deteriorate.     

Changes in health financing: the Chilean experience

This paper examines the organizational and financial changes experienced by the Chilean Health System in the last 20 years. The succession of widely different political and philosophical views sponsored by the governments of Frei, Allende and Pinochet and the marked economic fluctuations experienced in the last decade have affected the organization of health care financing and the allocation of resources among the population. The trend towards a completely state financed health care system was reversed in 1973. Pinochet's government explicitely included the private sector in the provision of public health services and assigned the State a subsidiary role. Several financing mechanisms created to coopt private capital into the health system are described as well as the evolution of private and public health care expenditures. The political and economic context that shapes the allocation of limited health care resources among a population with a highly unequal income distribution may endanger the access and the quality of health care services in the country.     

Synergies between veterinarians and para-professionals in the public and private sectors: organisational and institutional relationships that facilitate the process of privatising animal health services in developing countries

The delivery of veterinary services in most developing countries was, until recently, considered to be the responsibility of the public sector. However, over the past four decades, economic constraints and the imposition of structural adjustment policies (SAPs) have led to a gradual decline in public sector investment in real terms and thus a reduction in the quality and quantity of services available to livestock keepers. Many governments acknowledged that they were no longer able to provide services that were essentially of a 'private good' nature and introduced radical policy changes which sought to introduce the concepts of a market orientated approach towards agriculture and livestock production in particular. The role of government, in the future, would be to provide a reduced range of essential 'public good' services and to create a favourable environment in which the private sector could become established as a provider of 'private good' services and at the same time act as a partner in carrying out certain public functions under contract or 'sanitary mandates'. In almost all developing countries, however, these policy changes were not accompanied by appropriate development strategies. The reasons for this are complex. Firstly, SAPs may be considered to have been foisted upon governments by donors and are thus perceived by many policy-makers as the cause of financial problems, rather than a solution to them. Secondly, most animal health senior policy-makers in the public sector have been trained as veterinarians and lack the required management skills to plan change effectively. Furthermore, as regards clinical veterinary service delivery, especially in rural or more remote areas, the solution fostered by donor investment, which involves deregulation and the deployment of privately operating para-professionals, is often perceived as a threat to the veterinary profession and might result in limiting access to international markets for the trade of livestock and livestock products. An informal delivery system has gained a foothold in many developing countries in the absence of a well-planned strategy for the privatisation of animal health services. Most governments would now acknowledge that this presents a greater risk than the deployment of well-regulated and effectively supervised para-professionals. This paper explores some of the principal challenges facing policy-makers in their efforts to bridge the transition from full state provision of animal health services to the formation of a partnership with the private sector. Governments and donors need to take active steps to facilitate the process of privatisation of animal health services, especially those targeting the poorer rural subsistence and pastoralist farming systems. This would entail an initial investment in developing the necessary management skills at all levels in the delivery system. Thereafter, further investment would be required to allow the changes to be managed using tools such as the strategic planning cycle. Should sufficient resources be made available to allow the full participation of all stakeholders in the delivery of animal health services, appropriate institutions and effective organisational relationships addressing all the more important issues will have to be identified. The paper then proceeds to describe how different livestock production systems determine the level of demand for animal health services. If these services are to be provided on a financially sustainable basis, they must be tailored to meet actual rather than perceived demand. Identifying an appropriate model for animal health service delivery thus requires careful analysis of the production system to be targeted. Governments and donors can play a useful role in providing resources for this type of study as well as for appropriate market studies, business planning, training and access to soft loans. Finally, as regards regulation, as the law stands today, many activities currently practised by para-professionals are classified as 'acts of veterinary medicine or surgery' and may only legally be performed by qualified and registered veterinarians. The concept of 'principal' and 'subsidiary' legislation provides the necessary flexibility in the regulation of the delivery of animal health services to accommodate the rapid changes taking place in this environment today. Deregulation involves the delegation of responsibility for the performance of a defined range of veterinary interventions to para-professionals under the 'supervision' or 'direction' of a registered veterinarian. The author illustrates how the experiences of a number of projects in Tanzania were used to propose a definition of 'supervision' in law. The definition offers an opportunity to overcome the fear of compromising standards of delivery of animal health services through the deployment of para-professionals. In addition, such functioning provides employment opportunities for private veterinarians in rural areas where access to formal primary animal health services would otherwise be denied and may contribute to the process of quality assurance of national veterinary services in developing countries.     

Health Resources in a 200,000 Urban Indian Population Argues the Need for a Policy on Private Sector Health Services

Background:

There are limited primary data on the number of urban health care providers in private practice in developing countries like India. These data are needed to construct and test models that measure the efficacy of public stewardship of private sector health services.

Objective:

This study reports the number and characteristics of health resources in a 200 000 urban population in Pune.

Materials and Methods:

Data on health providers were collected by walking through the 15.46 sq km study area. Enumerated data were compared with existing data sources. Mapping was carried out using a Global Positioning System device. Metrics and characteristics of health resources were analyzed using ArcGIS 10.0 and Statistical Package for the Social Sciences, Version 16.0 software.

Results:

Private sector health facilities constituted the majority (424/426, 99.5%) of health care services. Official data sources were only 39% complete. Doctor to population ratios were 2.8 and 0.03 per 1000 persons respectively in the private and public sector, and the nurse to doctor ratio was 0.24 and 0.71, respectively. There was an uneven distribution of private sector health services across the area (2-118 clinics per square kilometre). Bed strength was forty-fold higher in the private sector.

Conclusions:

Mandatory registration of private sector health services needs to be implemented which will provide an opportunity for public health planners to utilize these health resources to achieve urban health goals.     

Differences between public and private hospital care in Spain: the realities of health care or a numerical fallacy?

OBJECTIVE: To give an example of the misleading interpretations of the concepts "public and private" when dealing with simple data from hospital resources and activities in Spain. MATERIAL AND METHODS: Data comes from the survey of hospitals (EESCRI) for the year 2002 in Catalonia. Using the figures corresponding to resources (number of centers and beds) and activities (discharges, stays, mean stay, occupancy, and rotation) comparisons are made among different variables (managing authority and funding source) reclassified, according to the concepts of public and private. RESULTS: The figures on resources and activities offer a very different portrait about the public or private nature of the care provided, according to the variables being used for classification. CONCLUSIONS: It is necessary to specify the concepts and variables to be used when analyzing the performance of health services and to improve the information sources in order to adapt them to the new management forms of the health services.     

The preventive-curative conflict in primary health care

Approximately 80% of the rural population in developing countries do not have access to appropriate curative care. The primary health care (PHC) approach emphasizes promotive and preventive services. Yet most people in developing countries consider curative care to be more important. Thus, PHC should include curative and rehabilitative care along with preventive and promotive care. The conflict between preventive and curative care is apparent at the community level, among health workers from all levels of the health system, and among policy makers. Community members are sometimes willing to pay for curative services but not preventive services. Further, they believe that they already know enough to prevent illness. Community health workers (CHWs), the mainstays of most PHC projects are trained in preventive efforts, but this hinders their effectiveness, since the community expects curative care. Besides, 66% of villagers' health problems require curative care. Further, CHWs are isolated from health professionals, adding to their inability to effect positive change. Health professionals are often unable to set up a relationship of trust with the community, largely due to their urban-based medical education. They tend not to explain treatment to patients or to simplify explanations in a condescending manner. They also mystify diseases, preventing people from understanding their own bodies and managing their illnesses. National governments often misinterpret national health policies promoting PHC and implement them from a top-down approach rather than from the bottom-up PHC-advocated approach. Nongovernmental organizations (NGOs) and international agencies also interpret PHC in different ways. Still, strong partnerships between government, NGOs, private sector, and international agencies are needed for effective implementation of PHC. Yet, many countries continue to have complex hierarchical social structures, inequitable distribution, and inadequate resources, making it difficult to implement effective PHC.     

The use of private-sector contracts for primary health care: theory, evidence and lessons for low-income and middle-income countries

Contracts for the delivery of public services are promoted as a means of harnessing the resources of the private sector and making publicly funded services more accountable, transparent and efficient. This is also argued for health reforms in many low- and middle-income countries, where reform packages often promote the use of contracts despite the comparatively weaker capacity of markets and governments to manage them. This review highlights theories and evidence relating to contracts for primary health care services and examines their implications for contractual relationships in low- and middle-income countries.     

Perceptions and utilization of primary health care services in Iraq: findings from a national household survey

Background

After many years of sanctions and conflict, Iraq is rebuilding its health system, with a strong emphasis on the traditional hospital-based services. A network exists of public sector hospitals and clinics, as well as private clinics and a few private hospitals. Little data are available about the approximately 1400 Primary Health Care clinics (PHCCs) staffed with doctors. How do Iraqis utilize primary health care services? What are their preferences and perceptions of public primary health care clinics and private primary care services in general? How does household wealth affect choice of services?

Methods

A 1256 household national survey was conducted in the catchment areas of randomly selected PHCCs in Iraq. A cluster of 10 households, beginning with a randomly selected start household, were interviewed in the service areas of seven public sector PHCC facilities in each of 17 of Iraq's 18 governorates. A questionnaire was developed using key informants. Teams of interviewers, including both males and females, were recruited and provided a week of training which included field practice. Teams then gathered data from households in the service areas of randomly selected clinics.

Results

Iraqi participants are generally satisfied with the quality of primary care services available both in the public and private sector. Private clinics are generally the most popular source of primary care, however the PHCCs are utilized more by poorer households. In spite of free services available at PHCCs many households expressed difficulty in affording health care, especially in the purchase of medications. There is no evidence of informal payments to secure health services in the public sector.

Conclusions

There is widespread satisfaction reported with primary health care services, and levels did not differ appreciably between public and private sectors. The public sector PHCCs are preferentially used by poorer populations where they are important providers. PHCC services are indeed free, with little evidence of informal payments to providers.     

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.     

Equity in adherence to and effect of prenatal food and micronutrient supplementation on child mortality: results from the MINIMat randomized trial, Bangladesh

Background

Information on health seeking behavior and beneficiaries’ perception of the quality of primary care can help policy makers to set strategies to improve health system. With scarcity of research on this particular field in Iraqi Kurdistan region, we sought to explore the patterns of health seeking behavior and perception of the quality of primary care services of a sample of population.

Methods

This explorative study was carried out in Erbil governorate, Iraq. Data were collected using the novel approach of Q-methodology for eliciting subjective viewpoints and identifying shared patterns among individuals. Forty persons representing different demographic and socioeconomic groups and living in different areas of Erbil governorate sorted 50 statements reflecting different aspects of health-seeking behavior and primary care services into a distribution on a scale of nine from “disagree most” to “agree most”. By-person factor analysis through centroid factor extraction and varimax rotation of factors were used to derive latent viewpoints.

Results

Four distinct patterns of health seeking behavior and viewpoints toward the primary care services were identified. People in factor 1 are extremely critical of the services at primary health care centers and are regular users of the private health sector. People in factor 2 positively recognize the services at primary health care centers but mainly turn to inappropriate health seeking behavior. People in factor 3 have satisfaction with the services at primary health care centers with minimal use of these services, but mainly turn to the private sector. People in factor 4 are slightly satisfied with the services at primary health care centers but mainly rely on these services.

Conclusions

This study highlighted the typical characterizations that were associated with each uncovered factor. Informing on the beneficiaries’ concerns about the primary care services can help to improve the system through further exploring the issues raised by the respondents and directing particular action on these issues. The characterizing and distinguishing statements can be used as a set of questions to conduct community-based survey on this important aspect of health services.     

Public policy and private sector provision of health services

Public sector policies often try to extend access and redirect public resources, depending on private sector actions. These strategies focus on reducing demand, improving efficiency, and generating increased revenues in the public sector. In order to provide incentives for efficiency, acquire capital, and redirect limited public resources to public priorities, there must be an expanded role for the private market in the provision of health services. This presents opportunities to improve the focus of resources on high-priority health activities in the public sector and to make more effective and efficient use of the resources of the private sector. The authors discuss the form that such policies may take. However, while the overall set of options available to policy makers can be identified, what is an effective strategy in one country may be neither appropriate nor feasible in another. The challenge to policy research is not to identify what works, but rather to understand the conditions that make a policy effective in some settings but not in others. The objective is not to prescribe the actions to take but to understand the factors that create the current experience in a specific setting.     

The quest for wholeness: health care strategies among the residents of council-built hostels in Cape Town

The 1980s in South Africa have witnessed an extraordinary interest by health care professionals in the relevance of health care and healing systems outside the dominant biomedical system. The debate centres around the most effective way of incorporating "these other forms" of healing into the dominant system in the best interest of the patient. It is essentially a debate amongst professionals based on their perceptions of "the best interest" without any significant input from the "patients" who are the object of their concern. This paper attempts to bring into focus "patients" perceptions of different health care systems, their access to them and the rationale behind their choice of therapy. The experience of acute symptoms, especially pain, identifies an illness episode and initiates therapeutic action. Biomedical services are, most often, the first choice of the hostel dwellers. Hostel dwellers, although poor, are often prepared to pay for the services of the private biomedical practitioner. In some cases they have no other biomedical option, the lengthy delays encountered at the local government hospitals and clinics are costly for poorly paid unskilled labourers. The local government services, unlike the private practitioner, are not available at times convenient to working people.     

The impacts of decentralization on health care seeking behaviors in Uganda

This paper examines the impacts of a public sector decentralization program on health care seeking behaviors in Uganda in the 1990s. Shifting priorities by local governments in Uganda's decentralized health system away from provision of primary health care, in particular the provision of public goods or goods with substantial consumption externalities, and toward provision of private health goods such as curative care are linked to shifts in individual-level care utilization behaviors. This analysis finds that, while the country has been undergoing a multitude of changes in recent years, decentralization appears to have led to increases in the use of curative services with largely private benefits, perhaps at the expense of the use of primary health care services and services with consumption externalities. A longer period of analysis is required to determine the persistence of these effects.     

Private initiatives and policy options: recent health system experience in India

In the recent past the impact of structural adjustment in the Indian health care sector has been felt in the reduction in central grants to States for public health and disease control programmes. This falling share of central grants has had a more pronounced impact on the poorer states, which have found it more difficult to raise local resources to compensate for this loss of revenue. With the continued pace of reforms, the likelihood of increasing State expenditure on the health care sector is limited in the future. As a result, a number of notable trends are appearing in the Indian health care sector. These include an increasing investment by non-resident Indians (NRIs) in the hospital industry, leading to a spurt in corporatization in the States of their original domicile and an increasing participation by multinational companies in diagnostics aiming to capture the potential of the Indian health insurance market. The policy responses to these private initiatives are reflected in measures comprising strategies to attract private sector participation and management inputs into primary health care centres (PHCs), privatization or semi-privatization of public health facilities such as non-clinical services in public hospitals, innovating ways to finance public health facilities through non-budgetary measures, and tax incentives by the State governments to encourage private sector investment in the health sector. Bearing in mind the vital importance of such market forces and policy responses in shaping the future health care scenario in India, this paper examines in detail both of these aspects and their implications for the Indian health care sector. The analysis indicates that despite the promising newly emerging atmosphere, there are limits to market forces; appropriate refinement in the role of government should be attempted to avoid undesirable consequences of rising costs, increasing inequity and consumer exploitation. This may require opening the health insurance market to multinational companies, the proper channelling of tax incentives to set up medical institutions in backward areas, and reinforcing appropriate regulatory mechanisms.     

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.     

The economics of hospitals in developing countries. Part II. costs and sources of income

In recent years, the attention of policy-makers and researchershas been directed at primary health care, with little noticetaken of hospitals except to observe that they take a disproportionateshare of health sector resources. However, it is precisely becausehospitals are large consumers of resources that more attentionneeds to be paid to them by policy-makers and researchers. Itis conventional and traditional to describe developing-countryhealth systems as hospital-dominated, with the great majorityof reources allocated to hospitals in urban centres. Casualinvestigation and observation certainly suggest this to be thecase. Yet the higher levels of a health system have an importantsupportive role in terms of supervision and referrals. Thusrelevant questions should be, ‘what mix of facilitiesis desirable, how can these be most economically provided andhow should resources be shared between the different levelsof facility?’ This paper presents the currently available data on the financingand economics of hospitals in developing countries. Part I (publishedin Volume 5:2 of this journal) first discussed Some of the problemsof data availability and comparability, and then reviewed dataon the hospital share of heatth sector resources, the extentto which hospital expenditure is distributed equitably, andwhether the hospital share of expenditure has been changingover time. Part II reviews the cost structure of hospitals,in particular the functional breakdown of hospital expenditure,hospital factor mix and unit costs. Patterns of hospital incomeare then considered, with particular attention being paid tothe potential for shifting the burden of hospital financingaway from governments, thtough cost-recoveiy in the governmentactor or greater use of nongovernment or private sector services.The second part ends by outlining a possible research ptogrammein the field of Hospital financing and economics.