Public-Private Mix

Where there is no regulator

Until very recently, the healthcare sector in developed industrialised countries consisted largely of public services for curative and preventive care provided by governments and the regulated private sector. These services were organised into different levels from primary care facilities up to tertiary hospitals providing specialist care, with a referral mechanism from one level to the next. But in many low and middle income countries healthcare has moved away from this model. People, including many of the poor, use a wide range of different service providers, all of which they have to pay. The healthcare sector increasingly resembles an unregulated marketplace rather than an organised public service. How has this come about, what does this marketplace look like and what does it mean for health policy and planning?


Paper prepared for WHO’s Commission on Macroeconomics and Health by Adam Wagstaff The World Bank, The University of Sussex, UK
There are three key levels of government action—the macro level, the health system, and the micro level. Government decisions and actions at each level influence the amount households pay for their health care (financing), and the quantity, quality and type of services they receive (delivery). At the macro level, governments decide how much to spend on health care (and related services) and where, and how to raise the revenues to finance them. At the system level, they decide the mode of service delivery and how to regulate the private sector, and how much to charge for different services and how far to exempt the poor from fees. At the micro level, they influence the accountability of providers and the services and interventions they deliver, and how best to implement facility-based revenue collection schemes. There are, in short, many ways that governments can potentially influence both health gaps between the poor and better-off, and the degree to which poor households are affected disproportionately by the costs of health services.

Who goes where and why? Examining HIV counseling and testing services in the public and private sectors in Zambia
Ron I, Wang W and Magvanjav O: PSP-One, January 2010

The main objectives of this study were to document the role of the private for-profit sector in voluntary counseling and testing (VCT) service delivery and to establish whether there are significant differences in the quality of VCT services, particularly in counseling and referral practices, between public, private for-profit, non-governmental (NGO) and mission health providers. Copperbelt and Luapula were selected, which are urban and rural provinces. HIV prevalence among adults is approximately 17% in Copperbelt and 13% in Luapula. Geographic proximity and the cost of transportation were found to be important factors for clients in selecting a facility, as well as the specialised reputations of NGOs. Clients were drawn to the private sector because of its ability to offer high-quality general health services, in comparison with other medical sectors. This finding suggests that the private sector may be uniquely positioned to pilot more extensive integrated HIV services. However, no one sector emerged as providing overwhelmingly higher quality services than another and, overall, rural sites performed on par in quality with the urban sites. However, the findings revealed less than optimal counseling practices across the sectors.

Who profits? Private healthcare - opportunity or risk?

As evidence about the importance of the private sector in healthcare delivery accumulates, emphasis is being placed on better understanding the opportunities and risks it creates. Private providers are often key sources of treatment for diseases of public health importance, such as malaria, sexually transmitted infections (STIs) and tuberculosis (TB). They are also an important source of care for poor people, who may use private providers nearly as much as better-off groups. But there are concerns about their quality and affordability.

WHO R&D financing committee approved with controversial industry expert
Saez C: Intellectual Property Watch, 22 January 2011

A compromise was struck at the World Health Organization (WHO) Executive Board meeting, held from 17-25 January 2011, allowing a Swiss pharmaceutical industry representative to sit on a committee selecting proposals for research and development (R&D) financing for neglected diseases, despite the fact that he is author of one of the proposals. In light of the fact that a predecessor working group fell prey to allegations of conflict of interest and lack of transparency, WHO added special safeguards to prevent undue influence, but questions remain for some about conflict of interest. The compromise was reached in the margins of the meeting after developed countries threatened to subject other committee appointees to scrutiny. Developing countries, including those with burgeoning generics industries also have candidates on the 21-member expert committee, though none is considered as directly positioned to benefit from the outcome. Critics say the Swiss private sector proposal could be worth billions of dollars to developed country brand-name pharmaceutical companies. Thailand raised concerns about the proposed expert and Brazil argued that equity in global health was at stake.

WHO reform: opening the floodgates to the private sector?
Richter J: Third World Resurgence 298/299, 20-23, 2015

The author presents in this paper how in the name of 'reform', against a backdrop of a funding crisis, a greater collaboration between WHO and big business is being justified. She provides a historical overview of the process which began in 1992 with the drive for UN 'reforms', naming it as a euphemism for the neoliberal restructuring of the world body. Both the idea of attracting more funding from private foundations and the commercial sector and the notion of dealing with global health and nutrition matters through multi-stakeholder approaches are argued to carry major risks to WHO's role as the highest authority in international public health. Even though the regular World Health Forum is abandoned at the moment, the notion of greater involvement of the private sector as legitimate 'stakeholders' in public health affairs is not. She calls for an urgent reflection on whether this path should be pursued, noting that the 'privatisation' of public agencies and spaces increases the reliance on private sector funding, as well as inviting profit-motivated actors into public decision-making forums, and sometimes removing specific public issues from the public sphere altogether. This is seen to be the opposite of ensuring financial independence of public institutions and safeguarding and enlarging of spaces for public debate.

WHO seeks affordable medicine for poor, without stifling drug companies
International Herald Tribune, 5 November 2007

The UN health chief urged countries to come up with new ways to make medicine for HIV/AIDS and other diseases more affordable in the world's poorest countries, without stifling innovation among pharmaceutical companies. WHO's 193 member states are looking to forge a global strategy on the highly divisive issues of drug development, patenting and pricing.

WHO studying possibilities for bird flu vaccine insurance policy
Wakabayashi D: Reuters, 13 June 2007

The World Health Organization made a unique proposition: what if big donors pooled resources to take out private insurance to pay for vaccines in the case of a bird flu pandemic? WHO Director-General Dr Margaret Chan said WHO had been given more preparation time than it could have hoped for ahead of an influenza pandemic. WHO is using that time to study various financing options to allow low income countries to access vaccines and prevent a pandemic catastrophe that could kill millions of people.

WHO under siege by private sector
Tom Fawthrop, Third World Resurgence, March 2012

The World Health Organisation (WHO) is under siege by private sector forces using their financial leverage to gain undue influence in the financially beleaguered United Nations agency, according to the author. He makes this assertion from observing developments such as the presence of Microsoft Chairman Bill Gates sharing the stage with WHO Director General Margaret Chan at the World Health Assembly in 2011, in the presence of industry interests at a civil society meeting before the 2011 UN summit on non-communicable diseases or from the private-sector influence in the increasingly powerful global foundations in health. Many corporate giants are noted to have been adopted by WHO since 2010, as private sector partners working together for ‘better global health’.
The origins of this public-private sector partnership process can be traced to WHO’s chronic funding problems and in the search for extra resources, the private sector funding of foundations has become more influential. The author points to concerns of industry influence in the reform proposals of WHO and asks the question whether the Director General's actions in promoting public-private partnerships have been at odds with her speeches on defending the basic mandate of WHO to promote the public health interest on the global stage?

Why should governments serve the poor?

Is government responsible for ensuring public health? Is it necessary for public entities to deliver this public good? Who else might serve the unprofitable urban poor?