Building Public/Private Partnership

for Health System Strengthening

Some Other Issues:Defining and Measuring the Private Sector in Health

Value debates about public and private roles

Peter BermanThe World Bank

Bali Hyatt Hotel, Sanur, Bali21-25 June 2010

Defining “Private” Non-government Ownership? Control?

What do we mean by “private sector”?

Provision Public Private

Financing Public

Private

Classic government

sector?

?Classic private sector

A Conceptual View of Public and Private Sectors

PUBLIC SECTOR ?

? PRIVATE SECTOR

PUBLIC PROVISION

PRIVATE PROVISION

PUBLIC FINANCING

PRIVATE FINANCING

A 2x2 matrix showing the potential mix of public and private financing and provision

A

B D

C E

F

“PUBLIC” SECTOR

“PRIVATE” SECTOR

PUBLIC PROVISION

PRIVATE PROVISION

Public financing

Private financing

Public financing

Private financing

Financing and Provision Private financing

◦ Private health insurance: FP and NFP◦ Direct payments by firms and employers◦ NGOs◦ Out of pocket payments

Private provision (services)◦ Hospitals, clinics, individual MDs and paramedics◦ Providers of ancillary services◦ Traditional practitioners◦ “LTFQ” practitioners

Private provision (inputs and resources)◦ Medical education and training◦ Equipment and supplies◦ Pharmaceuticals◦ Management services

Measurement of the Private Sector in Health Financing

◦ Private share of total health expenditure◦ Distribution of that share across relevant

institutional categories◦ Policy-relevant attributes of institutions

Provision◦ Numbers and share of different types of

providers who are “private”◦ Policy relevant attributes of provider-types

Provision “below the radar” What qualifies as a “health service” and

who actually delivers these services? ◦ Technical definition

Based on technology Based on outcome?

◦ Definition based on purpose or intent “Informal” providers

◦ “LTFQ”◦ Pharmacies and drug shops

“Traditional” providers◦ Formal systems◦ Other systems

Mixed provision

Provider Mix Highly Variable Across Countries

Public provision is surprisingly similar across countries, but private provision is not

Historical conditions◦ LTFQs in S. Asia◦ Mission/church providers in E and W Africa◦ Role of pharmacies in Anglophone and

Francophone countries◦ Restriction of private provision in socialist

countries and changes with transition to market

Expanding role of “scientific” medicine

What should be the role of private sector in health system? Normative question – ethics, values,

goals? Strongly different views reflect differences

in underlying values◦ Economists: “market failures” argument◦ Public health advocates: focus on equity and

population health outcomes◦ Others?: “Rights” perspective, Role of the State,

etc. Pragmatist view: Feasibility and

Consequences◦ Short term and longer term view

Economists’ View: Public, Quasi-public and Private Goods

“Pure public good”

Clean air

Disease eradication

Water

Disease control

“Quasi-public good”

Immunization

ANC

Safe delivery

Well baby care

Acute illness care

“Pure private good”

Symptomatic treatment

Elective surgery

Hospitalization for acute or chronic illness

Publicly provided/ financed goods

Privately provided/ financed goods

Economists’ View: Additional Criteria

Public health specialists’ view: Equity and Social Service

Health is a right, should not be affected by ability to pay

Government should be proactive in determining what health outcomes should be assured for all, not rely on individual preferences

Private sector is market-driven◦ Profit motive, reduces equity for both health

and financial protection◦ More responsive to consumer preferences, less

to objective health needs Non-profit private sector may be OK

A Pragmatist’s Approach

Identify problems in terms of core performance goals, national values, political feasibility

Traces the causes of problems back to intermediary criteria and their causes

Be agnostic about whether government or private sector:

“Who cares if the cat is black or white as long as it catches mice!”