The hospital as an enterprise: management strategies

After introducing the context in which health systems exist in developing as well as in industrialized countries, the author describes the role that hospitals are expected to play as 'enterprises'. The rationale behind such a role is explored and the experience so far available discussed. Evidence from several developing countries suggests caution and tends to discourage radical and indiscriminate introduction of market‐oriented reforms, which international donors seem to be spearheading in Africa's health systems. It is likely, however, that a limited, gradual introduction of selected elements of these reforms (such as some aspects of contracting out, managerial decentralization, the split between purchasing and providing functions) may find its place and eventually have a positive impact on the performance of the health systems. But the 'mystique of markets' must not be allowed to deprive public hospitals of the sense of social utility and of the caring ethos which are essential requisites of a meaningful and effective public health system.