Public-Private Mix

Free Zimbabwean contraceptives smuggled for sale in South Africa
K Mutandiro: Groundup, Times Live, March 2017

This article tells a story of Nancy (not her real name), who every month travels to Zimbabwe to stock up on Marvelon family planning pills distributed at hospitals‚ clinics and pharmacies through the Family Planning Council of Zimbabwe. She smuggles them back into South Africa‚ where she sells them at a healthy profit to other Zimbabweans who for various reasons don’t want the contraceptive pills dispensed in South African clinics. Nancy’s suppliers are hospital staff in Zimbabwean hospitals who sell the pills to her for R5 a blister pack. If she runs short of stock‚ she buys packets for R10 from a “wholesale” supplier in Johannesburg who also illegally imports the pills from Zimbabwe. Nancy says she has a 100 customers a month in Springs alone‚ and she sells the packets for R20 to bulk buyers or R30 to individuals. By contrast‚ Marvelon tablets were reported to be sold for about R130 per 28 tablets in Johannesburg pharmacies

Can the private sector help achieve universal health coverage?
Nishtar S: World Economic Forum, 2016

When the world committed to ending poverty, protecting the planet and ensuring prosperity for all with the 17 Sustainable Development goals, we knew no single entity would be able to achieve such lofty goals – it would take collaboration. “A successful sustainable development agenda requires partnerships between governments, the private sector and civil society,” Goal 17 stated. The author argues that in few areas is that more obvious than in the fight to achieve universal health coverage, which falls under Goal 3 of Good Health and Wellbeing. If universal health coverage in all countries is to be achieved, even those where privately-financed market delivery is predominant, this will depend on the ability of governments to harness their potential. In such contexts, she observes, it is critical to build the stewardship capacity of public agencies so that they can frame and implement rules that define the environment and the incentives that guide the behaviours of health system players. Rather than focusing on privatisation, marketisation or the scaling up of private provision, the idea would be to get private actors involved in the pursuit of universal health coverage and financial protection goals. Although the private sector often has a dominant role in the provision of healthcare, too often governments do not know enough about how these providers operate, and there is little, if any, regulation in place. She recommends that countries examine if service delivery models incorporating tools such as franchising and social marketing and utilising economies of scale, standardisation, and/or market incentives can enable universal health coverage within their respective health systems. In recent years, public ownership and not-for-profit service provision and autonomous governance arrangements have been promoted over publicly financed, owned and operated models. However, gains due to hospital autonomy should go beyond revenues for hospitals and incentives for staff and must also enhance quality and equity. New frameworks of participatory governance and appropriate channels of accountability and regulation need to be established. She notes however that the commercial presence of a foreign service provider could create a dual market structure, with high-quality services being provided to affluent consumers to the detriment of the healthcare needs of poorer people. Additionally, the movement of healthcare providers and brain drain – both internal and external – can lead to a loss of trained healthcare providers in the home country. Policy safeguards will be needed to prevent this type of situation.

Video: The role of private nurse training institutions in the production of nurses in Kenya
Mwita N; Ngwawe C; Okaro S: AMREF Health Africa, Kenya, 2016

Kenya faces severe health workforce shortages, especially at the primary health care level. Currently, the density of nurses per 100,000 of the population is 103.4, far below the World Health Organisation minimum target threshold of 500 nurses per 100,000 required to provide sufficient coverage for essential interventions. RESYST research has shown that private and faith-based training institutions currently make up 30% of admissions for nursing courses in Kenya, and are increasingly being considered an important way of increasing nurse production. Students from private nursing institutions are much more likely to graduate than public sector students; of which up to 40% do not successfully complete their training. The curriculum of private institutions, however, is more limited with less focus on public health issues such as health equity and the social determinants of health. Whilst Kenya has increased capacity to train nurses in recent years, severe blockages remain in the system, including in nurses’ employment prospects upon graduation. This video is based on research carried out as part of the RESYST health workforce theme, which looks at the role of the private sector in addressing human resource constraints in Kenya.

An assessment of private General Practitioners contracting for public health services delivery in O.R. Tambo District, South Africa
Hongoro C; Funani I; Chitha W; Godlimpi L: Journal of Public Health in Africa 6(2) doi:

Low- and middle-income countries are striving towards universal health coverage in a variety of ways. Achieving this goal requires the participation of both public and the private sector providers. The study sought to assess existing capacity for independent general practitioner contracting in primary care, the reasons for the low uptake of government national contract and the expectations of general practitioners of such contractual arrangements. This was a case study conducted in a rural district of South Africa. The study employed both quantitative and qualitative data collection methods. Data were collected using a general practitioner and practice profiling tool, and a structured questionnaire. A total of 42 general practitioners were interviewed and their practices profiled. Contrary to observed low uptake of the national general practitioner contract, 90% of private doctors who had not yet subscribed to it were actually interested in it. Substantial evidence indicated that private doctors had the capacity to deliver quality care to public patients. However, low uptake of national contract related mostly to lack of effective communication and consultation between them and national government which created mistrust and apprehension amongst local private doctors. Paradoxically, these general practitioners expressed satisfaction with other existing state contracts. An analysis of the national contract showed that there were likely to benefit more from it given the relatively higher payment rates and the guaranteed nature of this income. Proposed key requisites to enhanced uptake of the national contract related to the type of the contract, payment arrangements and flexibility of the work regime, and prospects for continuous training and clinical improvements. Low uptake of the national General Practitioner contract was due to variety of factors related to lack of understanding of contract details. Such misunderstandings between potential contracting parties created mistrust and apprehension, which are fundamental antitheses of any effective contractual arrangement. The authors suggest that the idea of a one-size-fits-all contract was probably inappropriate.

Health system’s barriers hindering implementation of public-private partnership at the district level: a case study of partnership for improved reproductive and child health services provision in Tanzania
Kamugumya D; Oliver J: BioMed Central 16(596), 2016

Public-private partnership (PPP) has been suggested as a tool to assist governments in lower to middle income countries fulfil their responsibilities in the efficient delivery of health services. In Tanzania, although the idea of PPP has existed for many years in the health sector, there has been limited coordination, especially at a district level – which has contributed to limited health gains or systems strengthening obviously seen as a result of PPP. This case study was conducted in the Bagamoyo district of Tanzania, and employed 30 in-depth interviews, document reviews, and observations methods. A stakeholder analysis was conducted to understand power distribution and the interests of local actors to engage non-state actors. The study findings reveal several forms of informal partnerships, and the untapped potential of non-state actors. Lack of formal contractual agreements with private providers including facilities that receive subsidies from the government is argued to contribute to inappropriate distribution of risk and reward leading to moral hazards. Furthermore, findings highlight weak capacity of governing bodies to exercise oversight and sanctions, which is acerbated by weak accountability linkages and power differences. Disempowered Council Health Services Board, in relation to engaging non-state actors, is shown to impede PPP initiatives. Effective PPP policy implementation at a local level depends on the capacity of local government officials to make choices that would embrace relational elements dynamics in strategic plans. Orientation towards collaborative efforts that create value and enable its distribution is argued to facilitate healthy partnership, and in return, strengthen a district health system. This study highlights a need for new social contracts that will support integrative collaboration at the local level and bring all non-state actors to the centre of the district health system.

Rising Healthcare Costs in South Africa
Chowles T: EHealth News, South Africa, September 2016

The funding of healthcare in South Africa is a highly contentious issue, involving a variety of stakeholders. Royal Philips released the South Africa results of the first edition of its Future Health Index (FHI) in July 2016. The FHI is an extensive international study which explores how countries around the world are positioned to meet long-term global health challenges through integration of health systems and adoption of connected care technologies. The report revealed that cost is a significant barrier to healthcare in South Africa and that HCPs and patients indicate improving access to healthcare services as a core priority for local government. Health status indicators in South Africa as a whole are reported to be worse than that in other upper middle income countries. Privately insured people though have outcomes comparable to best in world. However, this comes at a high cost. People in South Africa who cannot afford private medical insurance have some of the worst outcomes in terms of healthcare. The report identifies that approximately 40% of total healthcare funds in South Africa flow via public sector financing intermediaries (primarily the national, provincial and local Departments of Health), while 60% flow via private intermediaries.

Commission hears data on WHO report on high price of hospital care in SA
Pitso R: BusinessDay, August 2016

The South African Competition Commission’s healthcare market enquiry on Tuesday convened a special session in Pretoria, at which stakeholders were due to give oral presentations in response to a report by the World Health Organisation (WHO). The report, contested by the private actors, concluded that the cost of hospital care in SA was high when measured against GDP per capita and that the driving forces were in-house hospital and specialist fees. The Organisation for Economic Co-operation and Development (OECD) collected the data and conducted the study, which compared the prices of South African private hospitals to those of 20 OECD countries. The health market inquiry was established to determine why medical inflation has historically risen faster than consumer price inflation, and whether there are barriers to effective competition in the private healthcare sector. The public hearings aim to explore the relationships among different players.

Indian Private Sector Investments in African Healthcare
Ngangom T; Aneja U: ORF Issue Brief 145, 2016

This paper examines India's partnership with Africa in four sectors – medical tourism, tele-health, frugal innovations, and the pharmaceutical industry. It examines the nature of Indian private sector investments in African healthcare. It analyses their effectiveness in dealing with the issues around equity of access, the establishment of comprehensive 'prevention- based' health systems, and the creation of mutual benefit. The author reports that there is significant Indian commercial presence in Africa's health systems but the engagement needs a broader conception of the 'private sector' to include traditional healers and social entrepreneurs engaged in innovation for healthcare. Given their common health challenges, the authors argue that India and African countries must work towards crafting innovative low-cost healthcare models, and invest in the production and research of pharmaceutical products, especially for neglected diseases.

Helpdesk report: Comparative advantage of the private sector in delivery of health services
Browne E: Health and Education Advice and Resource Team, June 2016

This report explores evidence on the private sector in delivery of health care services for public health goals particularly in the areas of MNCH and SRH. It finds that there is a considerable body of evidence on the private provision of healthcare in low- and middle-income countries, often focusing on SSA, but that the evidence base is not robust. The arguments in favour of private healthcare suggest it is more responsive and efficient, while arguments in favour of public services suggest they are more equitable and better equipped than the market to respond to health needs. Some studies find that the private sector is unregulated, has financial incentives for inappropriate healthcare, and is expensive. There is very little evidence on the comparative cost-effectiveness of the private sector. This varies considerably across country contexts and types of services. There is no conclusive evidence that the private sector is more cost-effective or more efficient than the public sector. The literature warns that increased use of private services may crowd out or decrease the funding available to the public sector. The major criticism of private sector services is that their higher user fees create inequality of access, limiting their use by the poor. The literature is quite clear that private for-profit health services create inequality. Private non-profit, or services run by NGOs, appear to mitigate some of the inequality effects. In practice, boundaries can be blurred between public and private; both formal and informal cost recovery schemes operate at public facilities. NGOs providing healthcare are generally seen as private, although they may not charge for their services. The difference between free-at-the-point-of-use NGOs and out-of-pocket-expenditure on private doctors can be enormous, and it is important to differentiate between the types of providers when reviewing the evidence on private services.

Managing the public-private mix to achieve universal health coverage
Hanson K; McPake B: The Lancet, June 2016, doi:

The private sector has a large and growing role in health systems in low-income and middle-income countries. The goal of universal health coverage provides a renewed focus on taking a system perspective in designing policies to manage the private sector. This perspective requires choosing policies that will contribute to the performance of the system as a whole, rather than of any sector individually. This paper draws and extrapolates main messages from the papers in the Lancet series and additional sources to inform policy and research agendas in the context of global and country level efforts to secure universal health coverage in low-income and middle-income countries. Recognising that private providers are highly heterogeneous in terms of their size, objectives, and quality, the authors explore the types of policy that might respond appropriately to the challenges and opportunities created by four stylised private provider types: the low-quality, underqualified sector that serves poor people in many countries; not-for-profit providers that operate on a range of scales; formally registered small-to-medium private practices; and the corporate commercial hospital sector, which is growing rapidly and about which little is known.