Research Article: Is Private Health Care the Answer to the Health Problems of the World’s Poor?

Date Published: November 25, 2008

Publisher: Public Library of Science

Author(s): Kara Hanson, Lucy Gilson, Catherine Goodman, Anne Mills, Richard Smith, Richard Feachem, Neelam Sekhri Feachem, Tracey Perez Koehlmoos, Heather Kinlaw

Abstract: Background to the DebateThe global burden of disease falls disproportionately upon the world’s low-income countries, which are often struggling with weak health systems. Both the public and private sector deliver health care in these countries, but the appropriate role for each of these sectors in health system strengthening remains controversial. This debate examines whether the private sector should step up its involvement in the health systems of low-income countries.

Partial Text: Is private health care the answer for the world’s poor? Our starting point is that there are no strong grounds for assuming the superiority of either public or private health care. Theory tells us that it is not whether a health facility is publicly or privately owned that determines health provider performance. Instead, what influences performance is the nature of incentives that providers face and the quality of management and oversight. Theory does, however, suggest that the profit-making incentive dominant in much of the private sector is likely to be problematic for health care. Indeed, the reasons why private health care markets fail can be found in any introductory health economics text: (1) key preventive and public health services that produce external benefits (for example, prevention of spread of communicable disease or reduction in spread of antimicrobial resistance) will tend to be under-provided by private markets because these additional benefits are not valued in the market transaction; and (2) the patient’s lack of technical knowledge, and the role of health providers in directing patient care, leave patients vulnerable to low-quality treatment, excessive use of diagnostics, and over-prescription.

In low-income countries today the private sector is a significant actor in health care—just as it is in high-income countries. Here we define the private sector as everything that is not the public sector, including non-governmental and faith-based organisations, social enterprises, for-profit companies, and a host of individual private providers in the formal and informal sectors. The private sector’s role in health care should be strengthened and more closely aligned with the public interest. Indeed, a question recently posed by Anne Mills and colleagues is not how governments can finance and provide all health services, but instead how can private sector activities “be influenced so that they can help meet national objectives?” [6]. In recent years, there has been growing agreement in the international community that addressing health needs in developing countries and achieving the Millennium Development Goals requires that governments and donors actively engage with the private sector [7,8]. To have a national impact, true partnerships between governments and the private sector must be created that go well beyond the contracting out of basic services such as laundry or housekeeping to private companies.

Richard Smith and colleagues are forceful advocates for a greater role for the private sector in the health systems of low-income countries. Unfortunately, as they also recognise, the evidence to support their position is limited. In an era where national governments and donors are encouraged to embrace evidence-based policy making, blanket exhortations to harness the capacity of the private sector are unhelpful.

These two Viewpoints agree much more than they disagree. Both agree that the public sector cannot be ignored and both agree that there is a role for the private sector in improving the health of the world’s poorest. The disagreement is about emphasis. We believe that many countries will benefit more from harnessing the energy of the private sector rather than continuing to invest solely or mainly in the public sector.



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