Commercial Private Health Sector

Commercial Private Health Sector Dr Rajeev KashyapIntroductionIn any country, the healthcare system is comprised ofboth the public and private sector. The private sector is a large and diverse group that is increasingly being recognized as a significant part of developing country health systems.

Why Involve the Private Sector? The major challenge for developing countries is how to improve healthcare for all their people,especially the poorest citizens. The most common approach focuses almost exclusively on the public health sector: Building the capacity of public facilities Training and recruiting staff Expanding subsidized public services to the poorHigh quality, well-funded public services are essential.

High quality, well-funded public services are essentialApublic sector-only approach fails to harness all the resources available in the health sector. While not seeking to detract from the government's role in providing healthcare, it is important todispel myths and misconceptions, andreasons why ministries of health should work with the private health sector to achieve health goals.

Private health sector in actionVisiting the public hospital would cost a whole day in lost pay to the factory's workforce.In Gujarat, India, a private obstetrician /gynaecologist delivers new baby. She does not have to pay for care because the state government has created a voucher program that pays a set fee to private doctors who join the program and serve poor patients. Is this an example of the private health sector in action?

Who is the Commercial Sector in Health? Most of the people never goes to the doctor. When he or his family get malaria, they walk to the local drug shop, get medicine, and treat their illness at home.If they get sicker, they call in a traditional healer. Is this an example of the private health sector in action?The Health SectorThe private sector in health is also called the "non-state sector" and is typically defined ascomprising "all providers who exist outside of the public sector, whether their aim is philanthropic or commercial, and whose aim is to treat illness or prevent disease. (WHO, 2005)

Private Health SectorThe private health sector is a large and diverse group that covers a wide range of health sector entities, including:Private practitioners, clinics, hospitals, and laboratories and diagnostic facilities Non-profit non-governmental organizations (NGOs) and faith-based organizations (FBOs) Shopkeepers and traditional healers Pharmacies and pharmaceutical wholesalers, distributors, and manufacturers Private companies not engaged in health who provide health care services to their employees and communities

Overview of the For-Profit Private Sector Did You Know?In any country, the healthcare systemcomprises public and private sectors. The public sector, which in many developing countries is the largest healthcare provider, includes the Ministry of Health and its network of healthcare staff and infrastructure.Who are the principal private sector players in your own country? Can you name examples ofNGOs, FBOs, and for-profit providersin your country?Overview of the For-Profit Private SectorThe for-profit private sector comprises a wide range of actors, some of which are in the informal health sector. The two primary health activities in which the private entities engage are:Direct provision of private health services Provision of health products through private channels

Private Sector ProvidersPrivate healthcareis delivered in both the formal and informal health sectors.Even the poor pay for health services in the private sectorThe private sector share of healthcare markets varies from region to region and within regions, based on political, historical, and economic factors.

The formal sectorThe formal sector includes a wide range of trained and licensed private healthcare providers such as:Private doctors Nurses Midwives Paramedical staff, includingclinical officers and physician assistantsPrivate pharmacists and drug sellers also play a critical role in developing countries, asthey are often the first-line providers in the formal health sector that serve remote population groups. The dynamic private health sector also includes a wide range ofsupport services such as private laboratories and other diagnostic services

Informal Sector Private ProvidersTheinformal health sectorcomprises:Traditional healers Traditional birth attendants Market drug sellersIn India, care and treatment of sexually transmitted infections, including HIV/AIDS, is provided not only by physicians, but also by registered medical practitioners and other qualified homeopathic and traditional healers.14Private providersPrivate providers, whether formal or informal, deliver their services in a variety of locations:Single room in the provider's home State-of-the-art clinic Privately owned hospital that offers a broad array of health services (International Finance Corporation Report, 2007)

Private Provision of Health ProductsThe pharmaceutical industry boasted global sales of US$643 billion in 2006. (IMS, 2007)The pharmaceutical industry (both internationally and locally) plays a key role in the manufacture and distribution of health products.In the private sector, product distribution is more complicated and involves more marketing and detailing than in the public sector.Pharmaceutical CompaniesInternational pharmaceutical companies, also known as research and development (R&D) companies or "Big Pharma," manufacture many of the healthcare products used in both the public and private sectors.These R&D companies often deal directly with private healthcare providers,either through their own company representativeslocated in-country or through a local distributor,to satisfy existing demand and to create new demand.There are also a growing and significant number of pharmaceutical manufacturers in developing countries that produce generic versions of "R&D" or "priority" medicines (such as those used for the treatment of HIV/AIDS and malaria).

International standards for generic medicinesBecause of the importance of ensuring the quality, consistency, and authenticity of generic and otherwise new medications, the World Health Organization (WHO) and other multilateral organizations have joined together to create standards for their manufacturing and distribution.

HighlightsChina, India, and Brazil are the powerhouses of local pharmaceutical manufacturers, and supply many parts of Africa and Asia with generic and low-priced pharmaceutical products.Retailers in Health SectorRetailers are an important segment of the private health sector because they are often the de facto health advisors in many communities that are difficult to reach. Retail outlets sell medicine and other health-related products and include such places as:Pharmacies Over-the-counter drug shops Medicine and chemist shops Supermarkets and corner groceries Market stalls and kiosksUnregulated Sector presents many health challengesThe poor quality of some drug products, whether distributed in the formal or informal health sector, is creating health problems such as increased drug resistance in the treatment of malaria and HIV/AIDS.There is also an informal sector for health products, particularly for drugs. This unregulated sector presents many health challenges.

Private Services to Sell Healthcare Products Many private sector companies support product distribution and sales of healthcare productsthrough private channels including:Advertising agencies Market research firms Public relation companies Communication companiesHealth communications campaigns can increase sales of pharmaceutical products and encourage healthy behaviours. Whyministries of health work with the private sector. In most countries, people already use the private sector or pay for government health services.Individuals paying out-of-pocket for both public and private health services make up the majority of healthcare expenditures.The percentages of public and private expenditures vary widely, but consumers in all countries spend a substantial amount of personal resources in the private health sector. (Rosen, 2000).

Despite all the evidence showing the significant amount of money being spent by populations on services from the private sector, most governments and aid organizations still focus quasi-exclusively on public delivery of health services.(Marek,2005)

A study in Kenya found that poorfamily planningclients receive a variety of benefits by choosing private sector facilities over public sector facilities.Benefitsinclude a much greater proximity of services and better quality of interpersonal care.When the cost of transportation and wages lost was factored in, the private sector facilities were in fact cheaper than those in the public sector.(Aghaand Keating, 2008)25With the right marketincentives ( i.e., governments' policies and actions) the private for-profit health sector can become sustainable enterprises that also serve the poor. As part of the health system, the for-profit sector can also help governments achieve priority health goals. The base of the economic pyramid(BOP) are the 4 billion people in the world living on less than US$2 per day.

The Private Sector Can Improve the Quality of the Health Sector

Why individuals choose private providers rather than public ones. Many consumers perceive that the quality of carethey receiveat private sectorfacilities is high. Key factorsdriving the perceptionof private sector facilities include:Cleanliness Convenience Wait time Friendliness There is much debate about the quality of private sector services. Many of the patient-perceived benefits do not necessarily translate into higher standards of care or better health outcomes. Although these concerns about private sector quality of care are legitimate, publicly provided care also falls short of acceptable standards. Clearly there is room to improve quality in both sectors.The private sector can deliver, often at a lower cost, priority services and products that are not available through the ministry of health. For example, by contracting out to the private sector, the public sector can extend its reach to underserved populations at a lower cost. To deliver key services for distribution of health products, social marketing and other private sector partnerships can ensure wider and more reliable availability to urgently needed health products.(IFC, 2007).Working with the Private Sector can Strengthen Resources The private health sector employs a large proportion of medical personnel all over the world. The public sector can greatly increase the number of trained professionals working in the country by simply including private providers in its training programs. Private providers have their own infrastructure and clientele, where they can apply their new knowledge and skills. The public sector can also create more flexible regulations, thereby allowing more private providers to set up practiceStrategies to strengthen quality in the Health Sector Improving the quality of private health services is often a priority for governments and donors. Creating an effective regulatory framework Working through professional associations Voluntary certification and quality improvement programs Supportive supervision

Dimensions of Quality in Healthcare

Quality healthcare has many different dimensions, including provider technical competence, efficiency, effectiveness, safety, access to services, physical infrastructure, and strong communication skills.A successful quality improvement process should result in:Increased provider compliance with evidence-based protocols and guidelines Reduced number of medical errors Improved patient satisfaction Efficient use of healthcare resources Improved health status of the population. (Fischer, 2009)Governments and donors have legitimate concerns about the quality of services in the private health sector, due to:Diverse and fragmented nature Weak regulations Poor enforcement Informal private providers Counterfeit unregulated drugs

Governmentin its role as a health steward can improve quality in the private health sector and protect consumers by updating laws and procedures. This can createa "level playing field" in which all healthcare providers (public, private, NGO) abide by the same rules and standards of quality.

Major legal and Regulatory Areas Quality that governments can address include: Qualifications for medical practice Scope of practice for different professions Facility licensing Provider relicensing Continuing education Criteria to establish private practices Regulations are only as effective as the systems that are available to monitor and enforce them. Strengthening regulatory agencies and political commitment to sufficiently fund these institutions are also important components of quality improvement. (Ravenholt,2006)

37Factors that Affect Private Provider Quality Policy and program interventions can encourage and inhibit quality in the private sector.Governments interested in improving private sector quality need to leverage factors that motivate, and mitigate those that inhibit, private providers.Countries that have successfully improved quality in the private health sector have consistently included a wide range of key health sector actors outside the MOH.Involving these multiple stakeholders in policy considerations provides the MOH a wide range of perspectives on factors that motivate the private sector.(Brugha and Zwi 1998)

Regulatory Tools Accreditation, Certification, and Licensure 40Continuing professional development In addition to provider training and skill development, innovative approaches tochange provider behaviourinclude: Job aids (e.g. worksheets, checklists, decision tables) On-the-job training Modularized training Distance learning Web-based approaches

Studies in India show that training private medical practitioners can address some of these quality barriersby improving private providers technical knowledge and perception An Effective Strategy to Improve Quality of Care Clinical guidelines, based on WHO, International Planned Parenthood Federation, and US Centers for Disease Control and Prevention (CDC) standards andrevised by a committee of leading physicians from different sectors Training of private physicians Ongoing development of an assessment tool (Quality Improvement Package) Orientation for physicians on steps in the certification process

Quality of CareProfessional health associations offer:Organizational umbrella and structure Credibility to influence professional standards and scopes of practice Ability to provide input into pre-service education and training policies Advocacy for their patients and profession. To Improve Quality Most professional associations in developing countries need capacity building and organizational strengthening to be effective in working with the private sector to improve quality. Such support can include:Strategic planning Leadership development Training Peer support and supervision programs Information systems Institutional growth and sustainability Many US- and European-based professional organizations are establishing partnerships with "sister" organizations in developing countries to transfer skills, help build systems, and share experiences. Partnership ModelIdentify critical stakeholder members Explore different associations interests and potential contributions Agree on the policy focus Determine how the partners will work together Identify actions to work on together as groupSupportive supervision Supportive supervision has the following advantages for the private health sector:Promotes quality by improving communicationFocuses on problem-solvingFacilitates teamworkProvides leadership and support to empower health providers to monitor and improve their own performance For supportive supervision to work well in the private sector, there must be:Group or network of identified private providers Entity or organization to coordinate and provide the supportive supervision Challenges with this approach include:Costs associated with providing supportive supervision Scheduling difficulties for busy providers.

Public-private partnerships (PPPs) in health involve government and the private sector working together to achieve common goals, share risks and rewards, leverage each partner's comparative advantage, and use each partner's resources effectively (O'Hanlon, 2008). Some of the most common forms of PPPs for health service delivery include: Contracting out Subsidies Vouchers Health insurance Risk poolingPublic-private partnershipsImprove health outcomes among target populations such as poor and rural groups Remove barriers to healthcare (access, economic, quality) Reduce government spending (eliminating large up-front investments of scarce public funds) Improve efficiency (due to private partners' operational efficiency) Leverage technical or management expertise Spur technology transfer (Nikolic and Maikisch, 2006)

Contracting To increase access to health services and improve performance of the health system, driven by the following factors:Need to rapidly scale up coverage or range of services Frustrations regarding the availability, quality, and efficiency of centralized publicly provided services Shortages of public healthcare personnel Clientpreference for private care.Contracting to Increase Access to Primary Health Services There are two main types of contracting:Contracting-out, or a "service delivery contract." In a service delivery contract, the contract specifies that the contracted entity will both manage and supply the production infrastructure such as personnel, equipment, and drugs. Contracting-in.The government contracts a private sector entity to manage existing government services in a specific area (a "management contract") or to provide some other support service with existing staff, logistics arrangements, and infrastructure.

Benefits of Contracting-out Benefits of contracting-out include the following:Taps the private sector's greater flexibility to improve services and strengthens the focus on measurable results Provides for competitionamong private providers, whichincreases the efficiency and effectiveness of healthservice delivery(Loevinsohnand Harding, 2004) Builds the capacity of NGOs that often deliver these health services, in areas such as clinical services, nutrition and immunization programs, and consumer education campaigns

Steps to Design an Effective Contract for Health Services Thank YouPresentation Based on Reference UNICEF/ WHO Guidelines