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Unhealthy partnerships: Karnataka Public Private Partnership, India By Dr. Sylvia Karpagam

The Rajiv Gandhi super-speciality hospital, in Raichur, Karnataka, has been celebrated as an example of a successful public-private partnership (PPP). The Planning Commission of India described it as a ‘possible model for replication and up-scaling’, while the National Institute for Transforming India (NITI) Aayog has been active in promoting PPPs across the health sector in India, with the World Bank as the technical partner. The Confederation of Indian Industries (CII), which has submitted a report to the NITI Aayog on options for PPP for select Non Communicable Diseases, hails this as a successful model. The fact that this PPP has been a complete failure and has led to the termination of the contract as early as 2012, figures nowhere in any of these discussions. This calls into question the agenda behind the promotion of hospital PPP models.

The Rajiv Gandhi Super-speciality hospital was set up in 1997 to provide tertiary care with Rs 600 million (US$150,000) in financial aid from the Organisation of Petroleum Exporting Companies as a one-time grant and as a PPP between the state government and Apollo Hospitals Enterprise Limited . The government was to pay a monthly Rs. 10 million on top of providing the 73 acre campus land, hospital building, staff quarters, roads, power, water and infrastructure. A one-off government grant covered building and civil works, medical equipments, furniture and fitting, non medical equipment, computers and software, vehicles, pre-operative expenses and working capital. Moreover the government agreed to pay Rs. 95 million for re-equipping the hospital and Rs. 101 million for administrative expenditure.

One of the key objectives of establishing this PPP was to provide quality healthcare to patients below the poverty line (BPL) in the districts of the Gulbarga division where the BPL population has been identified to constitute the majority (67%) of the population. However, data on the utilisation of the hospital services reveals that of the 340 hospital beds, only 154 were operational, of which only 40 (25.9% of operational beds and 11.4% of total beds), were available to BPL patients.

Figure 1 and 2 of the utilization of In-patient and Out-patients services show failure to achieve the hospital’s primary objective of providing services to BPL patients.

Figure 1: Rajiv Gandhi Super-speciality hospital: Utilization of In-patient services by BPL and Above Poverty Line (APL) 2002–2003 to 2010–2011 (Feb 2011)

 

India PPP- Apollo Hospital-Fig1

(Source: Government of Karnataka, 2011)

 Figure 2: Rajiv Gandhi Super-speciality hospital: Utilization of Out-patient services by BPL and APL 2002-2003 to 2010 -2011 (Feb 2011)

India PPP- Apollo Hospital-Fig1

(Source: Government of Karnataka, 2011)

The evaluation report of the government of Karnataka states that “this sub-optimal capacity utilisation has seriously affected the sustainability of the hospital, thereby leading to serious question on the commitment towards the PPP model of functioning”. The report has also found this model to have poor governance and accountability, with poor maintenance of records and failure to deliver on many fronts.

On May 31, 2012, the state government terminated the contract with Apollo and the hospital went into a ‘coma’. In August 2016, hospital equipment was seized by the Principal District and Sessions court for defaulting on payments. According to S.K. Purohit, the lawyer for the company that supplied laboratory items to the hospital “The material seized is nothing as compared to the outstanding. This is just a warning to the hospital authorities. We will hand over the seized material to Court which will auction them. If the Hospital does not pay the remaining amount, the court may again order for further action for recovering the remaining dues. ”

The government has handed the hospital from the Ministry of Health to the Ministry of Higher Education to set it up as a teaching hospital. This was widely protested for fear of adversely affecting poor communities and employees.

It is unacceptable that a failed hospital is being promoted as a successful example of a PPP. Why is this model being called successful in spite of no documented evidence of the success? As Dr. Sujatha Rao, Former Union Secretary, Ministry of health says ‘The NITI Aayog has an obligation and a duty to consult, listen, collect evidence, analyse, understand and reflect, not prescribe based on the advice of the World Bank and a few interested corporate houses.’

The writer is a public health doctor and researcher who has studied the PPP models in Karnataka and works with urban marginalised communities.

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It failed in the UK so why export it?

In the town of Huddersfield in northern England, the local hospital’s Accident and Emergency Department is set to be closed. 130,000 local people have signed petitions against the closure, fearing the impact on their community.

The local health service around Huddersfield is under increasing financial pressure, and one of the reasons is the Public-Private Partnership (PPP) deal in neighbouring Calderdale Royal Hospital. The hospital was built between 1998 and 2001. Its planned initial cost of £34 million has increased three folds to £ 103 million by the time it was finished.

Under the terms of the PPP deal, the local health service is expected to pay $966 million over 30 years in order to be able to use the hospital. The Local MP Jason McCartney from the governing Conservative party has called this situation “scandalous”. These huge costs have contributed to the local health service seeking to close the Accident and Emergency Department at Huddersfield Royal Infirmary.

The UK’s PPPs Disaster

The high costs of PPPs are being felt across public service sectors throughout the UK. PPPs (or the ‘Private Finance Initiative’ as they are known in the UK) began in the early 1990s, but new schemes were at their peak from 1998 to 2007. They consist of a contract between a public body and a private company, where the latter builds and operates a public infrastructure, and the public body guarantees to pay to use it through a long-term contract, usually around 30 years.

Such PPPs have been far more expensive than the alternative of the government borrowing to build the infrastructure itself. An inquiry by the UK parliament’s Treasury Select Committee found that PPPs have “The effect of increasing the cost … to the government”. A review by the National Audit Office, the independent body responsible for investigating government accounts, found that the interest rates ultimately paid by the government through PPPs are double those paid by the government when it borrows directly. Moreover, PPPs further increase the cost to the public sector, including through the payment of high profits and inflated running costs to the private companies, as well as the financial cost of expensive lawyers and consultancy companies hired to work on the complex contracts behind PPP schemes.

Since they started in the early 1990s a capital investment of $71 billion in the UK has been through PPPs, but the government will pay more than five times that amount under the terms of the PPP contracts it has signed up to.

Despite their high cost, one of the reasons PPPs were pursued is that they keep debts hidden, off the government’s accounts. Although the actual payments made by governments for PPPs are higher than if the government had borrowed directly, these payments don’t go on the government’s books in the same way as direct government borrowing. Therefore, PPPs are an expensive way to bypass transparency and accountability and to hide public debt. Even the IMF criticise PPPs impact on debt. The IMF’s Fiscal Affairs Department state that in many countries, investment projects have been procured as PPPs not for efficiency reasons, but to circumvent budget constraints and postpone recording the fiscal costs of providing infrastructure services.

The promotion of PPPs around the world

The disaster of PPPs in the UK has been criticised by politicians from all parties. In 2015, the UK’s Health Minister, Jeremy Hunt, from the Conservative Party said: “One of my biggest concerns is that many of the hospitals now facing huge deficits are seeing their situation made infinitely worse by PFI debt.” The Mayor of London, Sadiq Khan, from the Labour party described the PPP deals as “a millstone round the necks” of London hospitals.

Professor Jean Shaoul from Manchester Business School concludes that PPPs in the UK have been “an enormous financial disaster in terms of cost” adding: “Frankly, it’s very corrupt… no rational government, looking at the interests of the citizenry as a whole, would do this.”

Yet despite the evidence from the UK and from other countries  PPPs have been heavily promoted around the world by institutions such as the World Bank. Shockingly, in an evaluation in 2014, the World Bank’s own Independent Evaluation Group found that of 442 PPPs supported by the World Bank across numerous sectors, assessments of their impact on poverty were conducted for just nine of them (2%), and of their fiscal impact for just 12 (3%).

In the UK PPPs constitute an inefficient use of public money to provide health service. Governments elsewhere should adopt evidence-based policies to finance and run health services. International institutions, such as the World Bank, should refrain from pushing countries to adopt ideology-based policies such as PPPs. Instead, countries should be helped to adopt strategies that ensure that health services are accessible to all those who need it without breaking the budget of the household or the country.

This blog is based on ‘The UK’s PPPs disaster: Lessons on private finance for the rest of the world’ by Jubilee Debt Campaign http://jubileedebt.org.uk/reports-briefings/briefing/uks-ppps-disaster-lessons-private-finance-rest-world

Tim Jones, Policy Officer, Jubilee Debt Campaign

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Why Brazil should not take a U-turn on its health system, by Pallavi Gupta, Health Programme Coordinator, Oxfam India

Brazil has been the envy of the world in terms of its successes in reducing health inequality. Yet recent developments threaten its health achievements. This blog looks at the potential impact of recently announced policies on the public health system in Brazil by exploring how similar policies have played out in the Indian health system.

Brazil: success and threats

In response to its commitment to the 1978 Alma-Ata declaration of “health for all”, the constitution of Brazil enshrined health as a right of all citizens in 1988, thereby mandating the state to provide universal and equal access to health services to its population [1]. A long political struggle and the Brazilian Health Reform Movement led to the establishment of the Unified Health System (SUS) [2]. The SUS decentralized and universalised access to health care, with municipalities providing comprehensive and free health care, financed by the states and federal government [1]. Primary health care (PHC) has been key to Brazil’s health reform strategy. PHC integrates medical care with health promotion and public health actions. Family health-care teams, comprising one doctor, one nurse, one auxiliary nurse, and four to six community health workers are assigned per 600–1000 families [2]. Despite opposition from the private health sector as well as underfunding, the SUS has managed to vastly improve access to primary and emergency care, reach universal coverage of vaccination and prenatal care, and invest in the expansion of human resources and technology, including the production of essential medicines [2]. Since 2000, the government has been investing 3 to 4 % of GDP in health [3]. Consequently, fertility rates in Brazil decreased from 5·8 per woman in 1970 to 1·9 in 2008, and infant mortality reduced from 114 per 1000 live births in 1970 to 19·3 per 1000 live births in 2007 [2].

Furthermore, in response to protests by Brazilians demanding better access to physicians, Brazil sourced doctors from the country and from Cuba as part of its “More Physicians” (Mais Médicos) programme introduced in 2013 by Dilma Rousseff’s government. This additional workforce benefited 63 million Brazilians living in remote and vulnerable areas, which previously had shortages of health professionals [4]. Today, 70 to 80% of the country’s more than 190 million people rely on SUS for their healthcare needs [2[4].

However, the austerity measures proposed by the new government after the impeachment on August 31st 2016 and approved by the senate in December 2016 include the control of public spending for 20 years, which will have an impact on public education and public health services. Another measure that has been controversial since the interim government (from May to August 2016) is the creation of a plan to encourage people to seek healthcare from private providers instead of the country’s public health system, while the government is ending the monitoring of the private health-care sector. There are also attempts to diminish the role of public health care as evident by the staff cuts in the National Unified Health System. There is also a possibility of reduction in the number of foreign professionals in the country’s “More Physicians” programme [4].

Learning from India

Will looking at the fate of people in India make the new President and Minister of Health of Brazil think again about their plan? What the Brazilian government is planning to dismantle is exactly what civil society organisations and health rights groups have been calling to be established in India for decades. 70% of the out-patient care in India is sought from the private sector and nearly 60% of healthcare expenditure in the country is paid out-of-pocket by people at time of use [5]. One of the reasons for this is the abysmal state of the public health system in the country which has forever been underfunded, at a meagre 1.28% of GDP5. Shortages of health staff is a huge challenge that India faces, especially in the rural and tribal areas. The private healthcare industry, that has been growing by leaps and bounds, is largely unregulated and enjoys tax sops in more ways than one [5]. The central government passed the Clinical Establishment (Registration and Regulation) Act 2010 to regulate private medical services across the country, so that the patients can get good quality services with some control over their cost [6]. However, the whole private health care industry, including the Indian Medical Association (a private voluntary association of doctors) has been protesting the implementation of the Act and the sector continues to operate more or less on its own terms, leaving patients at their mercy.

Oxfam India supported the collection of testimonies of 78 rationally practicing doctors who shared the inside stories of how private healthcare operates in an “industry mode” and how patients are frequently fleeced of their money and right to care [7]. For example, a pathologist in a leading Indian city hospital gave a fake report declaring a patient diabetic (when his blood sugar was normal) on the suggestion of the doctor who had referred the patient. By doing so, the doctor ensured having a long term patient under his care who would be a continuous source of income. And this is not a one-off case.

The results of the proposed measures in the Brazilian public health system can be seen in Indian healthcare.

As the saying goes, “to make, it takes one lifetime, and to break, it takes one day”. India’s one life time for progressive changes is still to come but Brazil’s “one day to break” is right here. Given the impact that we witness everyday of a weak health system on people, we can only hope that the Brazilian public health system does not take a U-turn and tread the India Path.

References

[1] Flawed but fair: Brazil’s health system reaches out to the poor, Bulletin of the World Health Organization, Volume 86, Number 4, April 2008, 241-320. http://www.who.int/bulletin/volumes/86/4/08-030408/en/ (accessed 7 December 2016)

[2] Jairnilson Paim, Claudia Travassos, Celia Almeida, Ligia Bahia, James Macinko. The Brazilian health system: history, advances, and challenges. Lancet 2011; 377: 1778–97

[3] http://apps.who.int/nha/database/ViewData/Indicators/en (accessed 30 November 2016)

[4] Katarzyna Doniec, Rafael Dall’Alba, Lawrence King. Austerity threatens universal health coverage in Brazil. Lancet 2016; 388:687

[5] Vikram Patel, Rachana Parikh, Sunil Nandraj, et al. Assuring health coverage for all in India. Lancet 2015; 386: 2422–35. http://www.thelancet.com/pdfs/journals/lancet/PIIS0140-6736(15)00955-1.pdf (accessed 30 November 2016)

[6] The Clinical Establishments (Registration and Regulation) Act, 2010, Ministry of Health and Family Welfare, Government of India. http://clinicalestablishments.nic.in/cms/Home.aspx (accessed 30 November 2016)

[7] Voices of Conscience from the Medical Profession. Support for Advocacy and Training to Health Initiatives, Oxfam India 2015.

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Private sector heterogeneity and Universal Health Coverage By Dr. Anuj Kapilashrami, Lecturer in Global Public Health, University of Edinburgh

Universal Health Coverage has risen quickly to the top of the global health policy agenda, yet debates around how best to deliver healthcare to achieve UHC – and the role of the private sector -are often unhelpfully polarised.

This blog attempts at ‘setting the scene’ as discussed in a joint session by Oxfam and the Global Public Health Unit of the University of Edinburgh last year in the International Conference on Public Policy in Milan. The blog introduces key concept of Public Private Partnerships (PPP), its rising salience and the basic premise it rests on, and discusses the nature of private sector and issues relevant to achieving the UHC goals.

 The rhetoric of public private mix:

Public private partnership has emerged as key priority within the framework of Universal Health Coverage (UHC), as a gateway to improved access to services -even if in its most narrow sense of expanding coverage. There has been a sharp rise in partnerships with the private sector – not only in Europe and other high income countries, but increasingly in Low and Middle income countries (LMIC) – to deliver health care infrastructure, clinical and non-clinical services, technology systems, and manage facilities.

Interactions between the public and the private sector are not new, especially in LMICs where health systems are historically characterised as pluralist and hybrid. However the ascendency of private sector in the last two decades can be attributed to the rise of the Public Private Partnerships paradigm; a post 1990s development. Such paradigm proposes a re-evaluation of the structure and function of government in relation to delivery of public services based on the assumption that hierarchical bureaucracy- the organisational form of the public delivery system is inefficient and that introduction of market mechanisms can substantially enhance its efficiency (Osborne 2000, Mills 1995).

Broadly guided by the theoretical foundations of ‘new public management’, such paradigm is concerned with injecting ‘business like practices’ into public sector agencies (Shaw 1999, 2004). Advocates for this model also argue that by increased diversity of provision, partnership initiatives secure better quality infrastructure and services at ‘optimal’ cost and risk allocation (Kwak et al 2009, Roehrich et al 2014). Overall, the literature often portrays PPPs as win-win arrangements in weak, under-resourced and deficient public systems.

However, while the partnership agenda gains currency in health (and other public) policy debates, important gaps remain in its understandings, both conceptual and empirical, and practitioner comprehension of what constitutes the private sector.

First, there is ambiguity in defining the ‘private’. Without adequate differentiation of the nature, scale and scope of the private sector engaged, evidence from one experiment involving a certain private entity on a particular health problem is used selectively to justify and legitimise involvement of ‘private’ sector at large. This is clear in the mix-up between profit making private sector and non-profit organisations.

Non-profit, non-governmental and faith based organisations including networks of people affected by particular health problems, mainly HIV, are gaining prominence. Their role in health care, especially service delivery, has significantly diversified in recent years and is no longer restricted to undertaking outreach work in family planning and reproductive health services for governments. Partnering with well-established faith based organisations in Africa or NGO managing primary health centres in India have distinct implications for health systems and governance than posed by engaging for-profit private sector such as health insurance companies.

The commercial sector on the other hand is very diverse and heterogeneous: including practitioners (of mainstream and traditional medicine), pharmacies, hospitals, pharma and medical devices companies, products manufacturers, suppliers and retailers, as well as other actors in the non-health sector such as insurance companies. On one end of the spectrum, there are informal sector, often under qualified providers offering the only source of care (or drugs) available to certain populations. On the other end there are large corporate (national or multinational) hospitals at the receiving end of substantial investments from international agencies such as the International Finance Corporation, multinational companies as well as State subsidies through arrangements involving their empanelment in national and state health insurance schemes. In the middle are small scale private enterprises such as clinics, nursing homes, drug vendors and pharmacies or larger non-health sector corporations, e.g. cement, automobile companies establishing/running anti-retroviral treatment centres (and other facilities) through partnerships with public sector under national disease control programmes.

Subsuming such widely differing arrangements under a common label of ‘public private partnerships’ obscures important distinctions between interactions and creates a false sense of novelty of the PPP approach. Engaging these diverse actors has distinct implications (and raises different concerns) for achievement of UHC goals. Distinguishing these will allow for a better assessment of their real scope and ability (or inability) to contribute to UHC goals, and explain variation in practice based on separation of ownership and risk bearing between the public and private.

Second, there is significant variation in the meaning and practice of partnerships. The term is used loosely to refer to almost any kind of arrangement (including ‘contracting in’) between the ‘private’ and the ‘public’. Partnering has extended to describe a wide range of activities involving an ever-expanding web of relationships between donors, governments, NGOs, community members, and corporate and business houses and their representatives (Kapilashrami 2010). Further, while there is a reasonably sized body of  literature (empirical and conceptual) describing and evaluating global health PPPs (likes of the Global Fund to fight AIDS TB and Malaria, Roll back malaria, GAIN) and their country level interactions, a huge gap exists in understandings of PPPs at national and sub-national level.

Third, there are significant gaps in understanding the dynamics of PPP arrangements: these are not discrete models of interaction between one public, one defined private entity for example insurance companies or pharmacies. These are often complex incremental in nature and need to be seen in the changing political economy of health systems. This is evident from state partnerships that engage insurance companies and other private entities as third party administrators managing purchasing of care through provisions that engage private facilities to provide services at primary, secondary, tertiary level.

Subject to the nature of private sector agency partnered with and the design/ nature of partnership, important questions arise for achieving the goals of UHC.

These include:

  • Increased competition and dual system of ‘free’ and ‘paid’ services as observed in private sector partnerships in disease control programmes whereby corporate centres charged for services (HIV testing, laboratory tests and CD4 counts) offered free in public hospitals (Kapilashrami and McPake 2012). This affects affordability and access, and leads to opportunistic behaviour and reduced accountability of providers.
  • Problems of quality among untrained and unregulated informal providers and regulatory infringements by drug vendors and pharmacies; irrational prescriptions and unnecessary investigations and surgical procedures (Garg et al 2014, Duggal et al. 2013)
  • Concerns around affordability resulting from cost escalation and diversion of costs from primary level care which have negative implications for women as service users and carers (Oxfam 2013)
  • Changes in governance and customary relationships between institutions, providers and users as State becomes financier and guarantor of services purchased from third parties. Such complex arrangement undermines traditional accountability systems and obscures users understanding of their entitlements to care.

Partnership with private sector is portrayed as win-win arrangements (Sanbrailo 2013). However, such projections disregard the heterogeneity in the private sector, and lack any systematic assessments of their effects, pathways through which health sector goals are influenced, and any uncertainties and in-coherences arising from their operations. Thus, careful and comprehensive assessment of the nature, scale and scope of these initiatives, alongside their underlying assumptions is an undeniable necessity for progressing the UHC agenda.

References

Kapilashrami A. and McPake B. (2012). Editor’s Choice:Transforming governance or reinforcing hierarchies and competition: examining the public and hidden transcripts of the Global Health initiatives and HIV in India. Health Policy Plan. 28(6):626-635

Kapilashrami A. (2010) Public private partnerships: The discourse, the practice and the system-wide effects of the Global Fund to fight AIDS, TB and Malaria. A case of HIV management in India. PhD Thesis. Queen Margaret University, UK

Kwak, Y. H., Chih, Y., & Ibbs, C. W. (2009). Towards a comprehensive understanding of public private partnerships for infrastructure development. California Management Review, 51(2), 51-78

Osborne SP (ed). 2000. Public-Private Partnerships: Theory and Practice in International Perspective. Routledge: London

Roehrich, J., Lewis, M. K., & George, G. (2014). Are Public-Private Partnerships a Healthy Option? A Systematic Literature Review of “Constructive” Partnerships between Public and Private Actors

Oxfam (2013) Universal health Coverage: Why health insurance schemes are leaving the poor behind

https://www.oxfam.org/sites/www.oxfam.org/files/bp176-universal-health-coverage-091013-en_.pdf

Sanbrailo, J. (2013). Public-Private Partnerships: A Win-Win Solution. Blog on Huffington Post. 09/25/2013

Shaw, R. P. (2004). New Trends in Public Sector Management in Health: applications in developed and developing countries

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Achieving universal health coverage in Africa: is there a role for formal for-profit providers? By Jane Doherty, School of Public Health, University of the Witwatersrand, South Africa

There is increasing consensus that public financing is required to achieve the financial protection from the costs of using health care that is an essential component of the concept of universal health coverage. However, the other dimension of universal health coverage is access for all to health care services that are both needed and of sufficient quality to be effective (World Health Organisation 2010).

Some donors and international agencies, such as the International Finance Corporation, argue that private, formal, for-profit providers should play some role in extending access to quality care (International Finance Corporation 2007). There are initiatives by international agencies, donors, African governments and others to expand the for-profit private sector in Africa. These include efforts to attract new local and international investors, encourage bank loans to private practitioners, and subsidise for-profit health care businesses (Doherty 2011).

Can this expansion support the principles of universal health coverage? In low- and middle-income countries, for-profit private providers, especially private hospitals, are often costly and located in more urbanised areas. For-profit services are seldom comprehensive and, while they are often perceived to offer superior and more convenient care, there is minimal public monitoring of their quality (Doherty 2015).

There is also evidence that private care is subject to incentives that distort treatment decisions (Berer 2011, Ravindran and de Pinho 2005, Hanson, Gilson et al. 2008, Doherty and McIntyre 2013). The existence of private facilities contributes to the brain drain from the public sector and aggravates the fragmentation of the health system. Further, fair competition is obstructed through unfair practices (such as collusion) as well as unregulated practices such as the ownership by single companies of health insurance companies, health care providers and pharmacies (which makes patients vulnerable to exploitation) (Shamu et al. 2010).

Lastly, powerful private sector alliances compromise governments’ ability to regulate the sector in the interests of national health objectives.

This is not to argue against the fact that some for-profit private providers make very particular contributions to the health systems in which they are located. Some patients prefer some forms of private provision, so private provision should remain an option to complement strengthened public services (Balabanova, McKee et al. 2011). However, in most health systems in developing countries, the private sector is poorly regulated and monitored. Therefore, the perceived benefits of private provision are often offset by the distortions that are introduced by the private sector overall. In particular, for-profit private provision is simply unaffordable for the vast majority of the populations in developing countries.

In the current environment of donors pushing for a strong role for the private sector, policy-makers in Africa (and in other low- and middle-income countries) need to embark on a programme of action to strengthen regulatory frameworks. Such a programme includes policies, legislation and reimbursement mechanisms that incentivize appropriate behaviours by for-profit providers (Hongoro and Kumaranayake 2000, Doherty 2015). Without these actions, investment by donors and funders in the expansion of the private sector will only serve to increase inequality in health care.

The range of actions should address the failings of the health insurance and health provision industries in tandem, as well as the interplay between them. They should include:

  1. developing a sound evidence base on the nature and extent of the private sector, differentiating clearly between different components of the sector and their existing or potential impacts
  1. assembling country-based evidence on where particular arrangements have allowed private provision to be incorporated successfully in universal health coverage strategies (together with the factors explaining the strengths and weaknesses of these arrangements);
  1. exercising greater stewardship over the for-profit private sector by demonstrating the political will and leadership to regulate effectively and in the interests of national health objectives;
  1. developing an over-arching policy on the private sector’s roles and responsibilities in support of the achievement of universal health coverage;
  1. raising the awareness of Competition Commissions regarding the reasons why some behaviours of the private health sector can have an adverse impact on the health system, and necessary strategies to protect national health objectives;
  1. conscientising Ministries of Trade and Development regarding the damaging impact on public health and health systems strengthening of some of their policies that seek to attract investment into the private health sector and stimulate private health businesses;
  1. strengthening government capacity to develop, implement and monitor legislation and other regulations;
  1. making efforts to rationalise, harmonise and strengthen existing regulators;
  1. addressing important gaps in the legislation (including that relevant to health insurers, health providers, health professionals, fair competition and consumer protection);
  1. building strategic alliances with key stakeholders to counteract regulatory capture by groups with vested interests;
  1. introducing a range of price controls for services;
  1. strengthening sanctions against non-compliance with regulations;
  1. ensuring greater transparency on the part of private providers with respect to their underlying costs and quality; and
  1. monitoring and evaluating the impact of the private health sector and its regulation on the health system, including on equitable access, affordability, quality of care and efficiency.

The length of this list underlines the extent to which extensive interventions are required to ensure that the for-profit private sector meets, rather than undermines, national health objectives, including equitable universal coverage and access to quality services. It also underlines the current weaknesses of governments in developing countries in exercising oversight of the private sector.

Accordingly, extreme caution should be exercised, by both governments and development agencies, with respect to promoting further expansion of private provision or health insurance, until solid strategies such as those proposed above can be put in place. Given the capacity constraints facing governments in Africa and other developing countries, it can be expected that progress on these interventions will be slow.

A greater priority than expanding the private sector is surely the strengthening of public sector provision, not only to meet the needs of the majority but also to provide stiffer competition with private providers. Public provision must remain the core function of the public sector.

Equally importantly, it is a priority for governments in Africa to strengthen mandatory prepayment for health care, especially through general taxation but also, where appropriate, through earmarked taxes, including payroll-based payments. The leverage provided by this instrument in incentivizing providers to comply with quality controls and contain costs is arguably far greater than through legislation alone.

References

Balabanova D, McKee M, Mills A (eds). 2011. ‘Good health at low cost’ 25 years on: what makes a successful health system? London: London School of Hygiene and Tropical Medicine.

Berer M. 2011. Privatisation in health systems in developing countries: what’s in a name? Reprod Health Matters; 19(37): 4-9.

Doherty J. 2011. Expansion of the private health sector in East and Southern Africa. EQUINET Discussion Paper 87. Harare: EQUINET.

Doherty J, McIntyre D. 2013. Addressing the failings of public health systems: should the private sector be an instrument of choice? In: Surender D, Walker R. Social policy in a developing world. Cheltenham, UK: Edward Elgar: 101-124.

Doherty J. 2015. Regulating the for-profit private health sector: lessons from East and Southern Africa. Health Policy and Planning; 30: i93-i102.

Hanson K, Gilson L, Goodman C, Mills A, Smith R, Feachem R, Feachem N, Koehlmoos T, Kinlaw H. 2008. Is private health care the answer to the health problems of the world’s poor? PLOS Medicine; 5(11): e233

Hongoro C, Kumaranayake L. 2000. Do they work? Regulating for-profit providers in Zimbabwe. Health Policy and Planning; 15(4): 368-377.

International Finance Corporation. 2007. The business of health in Africa:  partnering with the private sector to improve people’s lives. Washington, D.C.: International Finance Corporation, the World Bank Group.

Marriott A. 2009. Blind Optimism:  Challenging the myths about private health care in poor countries. Briefing Paper 125. Oxfam International.

Ravindran T, de Pinho H. 2005. The Right Reforms? Health Sector Reforms and Sexual and Reproductive Health. Johannesburg: Women’s Health Project, School of Public Health, University of the Witwatersrand.

Shamu S, Loewenson R, Machemedze R, Mabika A. 2010. Capital flows through medical aid societies in Zimbabwe’s health sector. EQUINET Discussion Paper 82 Serie. Harare: Training and Research Support Centre, SEATINI, Rhodes University, EQUINET.

World Health Organisation. 2010. World Health Report. Health systems financing: the path to universal coverage. Geneva: World Health Organisation.

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Global Health Check was created by Anna Marriott and is currently edited by Mohga Kamal-Yanni