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Private health providers are NOT more efficient, accountable or medically effective

In 2009 Oxfam published “Blind Optimism: Challenging the Myths about Private Health Care in Poor Countries,” to help redress what we saw as an international health discourse increasingly dominated by unchallenged private sector advocates.  Some of those same advocates accused Oxfam of being purposefully selective with the evidence.

The health team at Oxfam were therefore very pleased to see the recent publication of a thorough and balanced independent appraisal of peer-reviewed evidence on this topic in PloS Medicine. The study supports many (not all) of our conclusions about both the public and private sector.

In their research Basu et al. assess the comparative performance of the private and public sectors in health across a range of health system performance areas. They are clear that comparative evidence is often lacking and that distinctions between what is public and private are often difficult (for example when public facilities act more like commercial operators by charging fees). With these limitations acknowledged, the authors’ own conclusion states:

‘Studies evaluated in this systematic review do not support the claim that the private sector is usually more efficient, accountable, or medically effective than the public sector; however, the public sector appears frequently to lack timeliness and hospitality towards patients’.   

Like Oxfam, the authors of this comparative study make special note of the World Bank as an influential advocate of public-private partnerships in health, but one whose claims are often unsubstantiated by their own data. The authors raise concerns about a conflict of interest for the World Bank that may undermine the validity of their research and analysis on this topic.

Some highlights from the paper are listed below (though I recommend reading this important article in full – especially for interesting country examples):

Access and responsiveness

  • A significant proportion of services in some developing countries are provided by the private sector but figures vary enormously by country and by income level. When informal or unlicensed providers are excluded, the public sector provided the majority of care in 19 out of 22 low- and middle-income countries for which World Bank data is available.  
  • Studies that measured utilization by income levels tended to find the private sector predominately serves the more affluent. In Colombo, Sri Lanka, where a universal public health service exists, the private sector provided 72% of childhood immunisations for the wealthiest, but only 3% for the poorest.
  • Waiting times are consistently reported to be shorter in private facilities and a number of studies found better hospitality, cleanliness and courtesy and availability of staff in the private sector.

Quality

  • Available studies find diagnostic accuracy, adherence to medical management standards and prescription practices are worse in the private sector.
  • Prescribing subtherapeutic doses, failure to provide oral rehydration salts, and prescribing of unnecessary antibiotics were more likely in the private sector, although there were exceptions.
  • Higher rates of potentially unnecessary procedures, particularly C-sections, were reported at private facilities. In South Africa for example, 62% of women delivering in the private sector had C-sections, compared with 18% in the public sector.
  • Two country studies found a lack of drug availability and service provision at public facilities, while surveys of patients’ perceptions on care quality in the public and private sector provided mixed results.

Patient outcomes

  • Public sector provision was associated with higher rates of treatment success for tuberculosis and HIV as well as vaccination. In South Korea for example, TB treatment success rates were 52% in private and 80% in public clinics. Similar figures were found for HIV treatment in Botswana.

Accountability, transparency and regulation

  • While national statistics collected from public sector clinics vary considerably in quality, private healthcare systems tended to lack published data on outcomes altogether. Public-private partnerships also lacked data.
  • Several reports observed significant public spending being used to regulate the private sector in order to improve patient care quality, and with limited effectiveness.

Fairness and equity

  • Financial barriers to care exist in the public and private sector.
  • Private sector services tend to cater for higher income groups with studies showing exclusion and discrimination against poorer patients and women.
  • Several studies suggested the process of privatizing existing public services increased inequalities in the distribution of services.
  • Private contracting and social franchises showed potential for reaching impoverished groups, though findings are tentative because comparisons to the public sector are unavailable.

Efficiency

  • Contrary to prevailing assumptions, the private sector appeared to have lower efficiency than the public sector, resulting from higher drug costs, perverse incentives for unnecessary testing and treatment, greater risks of complications, and weak regulation.
  • The evidence is mixed (and often weak) on the cost of contracting to private providers – increasing expenditure in some countries whilst reducing it in others.

Other important findings

  • Rather than adding resources, several studies reported that growth of the private healthcare sector, whether independently or via public-private partnerships, directly reduced public funds and staff available for public provision.

And on the World Bank….

  • The World Bank has made strong claims that investing in public-private partnerships will improve efficiency and effectiveness in the health sector, yet several of its publications revealed that these assertions were either unsupported by data or the data was not provided in sufficient detail to pass minimal inclusion criteria for this review’.
  • Despite the lack of data about private sector performance, recent initiatives by the World Bank’s International Finance Committee (IFC) are underwriting the expansion of private sector services among low- and middle-income countries. For example in sub-Saharan Africa, the IFC has created a private equity fund to make 30 long-term investments in private health companies. These conflicts of interest pose a potential threat to the validity of World Bank-sponsored studies and raise the need for independent scrutiny.

The evidence from this study shows that while public health systems are often weak and under-resourced they still deliver better quality of care, more equitably and with greater efficiency than the private sector.  The study highlights the tendencies of private providers to serve higher socio-economic groups, have higher risk of low-quality care, create perverse incentives for unnecessary testing and treatment, and suffer from weak regulation. It also suggests there are a number of ways public health systems can do better.  They must be more responsive to patients and more accountable to citizens, improve systems for distributing essential inputs like medicines, and address financial barriers to accessing care (such as formal and informal fees).

These are legitimate challenges that deserve thoughtful attention and action, but they should not be used as evidence of the superiority of private sector approaches. Instead, the policy response to these findings should be very clear: far more effort and resources must be mobilized to maximize the clear advantages of public health systems, rather than further starving them of the resources and support they need to deliver equitable and quality health care for all.

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4 Responses to “Private health providers are NOT more efficient, accountable or medically effective”

  1. massimo serventi says:

    Dear Anna,

    I add few comments based on my direct observations, in Tanzania where I’ve been living for the past 31 years.

    Private health settings do prescribe too many antibiotics(see Gwimile et All, overprescription of antibiotics in Tanzania) and too many laboratory tests. Read: unnecessary antibiotics and unnecessary lab tests. Just for profit.

    It is a fact that most private centres provide the delivery of drugs besides their prescription. It is a clear conflict of interest: more I prescribe, more I sell and make profit. Drugs that are more expensive (cephalosporines) are prescribed and sold for the same reason. If there is a laboratory it becomes ‘obvious’ that : more tests I prescribe and more money I’ll gain. An example is the Widal test, requested to exclude typhoid fever. It is obsolete, poorly sensitive and/or specific, nevertheless widely prescribed because its result(quite always unreliable)leads to a further prescription of drugs and therefore more profit. African colleagues , not only Tanzanian, should possibly confirm what I’m writing.

    All this occurs under the silence of health authorities: poor, the last ring of the chain, pay the price. With their money that should be used to buy food….and not unnecessary, dangerous drugs or lab tests.

    Thanks for your committment that goes in favour of people and medicine itself.

    Massimo Serventi
    Paediatrician
    Dodoma, Tanzania

  2. Avoka Cephas Ke-on says:

    Hi Anna,
    I cannot agree with you more especially on the issue of private health institutions prescribing unnecessarily all in the bid to make profits. in order to build the capacity of our public institutions, we should focus more on strategic administrative policies as well as effective supervision. This has been the hallmark of most private institutions. We should focus more on empowering our public institution, because they are more accessible especially in the rural areas…

    Avoka Cephas
    Medical Student
    KNUST School of Medical Sciences
    Ghana

  3. max says:

    so good to have you back anna. never was this fight more relevant. and it is one we can win i firmly believe.

  4. Atsu says:

    I think these findings should have been obvious to all but ideological loyalties have blinded people to these facts.

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