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![Page 1: Private hospitals in health systems: strategies, policies and challenges Introduction to the Private Hospitals Module April Harding World Bank Pathumwan.](https://reader036.fdocuments.net/reader036/viewer/2022062314/56649e4c5503460f94b41201/html5/thumbnails/1.jpg)
Private hospitals in health systems: strategies, policies and challenges
Introduction to thePrivate Hospitals Module
April HardingWorld Bank
Pathumwan Princess Hotel, BangkokMay 30-June 4, 2011
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Your advice requested
Your Health Minister just came back from a meeting with potential international hospital investors.
They have expressed interest in investing in existing and new private hospitals in your country.
Your minister asks you:
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Your advice requested
What should my response be?
Should I encourage this?
If so, Why• what potential gains?• what potential problems?
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Private hospitals’ potential? More capital
◦ (which is often in very short supply)
Better maintenance of capital investments
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Private hospitals’ potential? More capital
◦ (which is often in very short supply)
Better maintenance of capital investments
Better Management
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Management practice score
105
95 95
90
UK heart attack mortality rates
Bottom quartile
3rd quartile
2nd quartile
Top quartile
There is a strong relationship between management practices and outcomes
Source: LSE CEP and McKinsey cross country hospital study
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Hospital Ownership
2.4
2.5
2.6
2.7
2.8
2.9
3
Private Public
Private hospitals tend to have higher management scores
Source: LSE CEP and McKinsey cross country hospital study
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Efficient use of resources
Efficient allocation of staff
Efficient cost-risk balance on intervention choice
Management also matters for productivity
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Broomberg compared PPP hospitals with similar public hospitals.
Conclusion: delivered same quality, at a lower cost (productivity!).
But……… Public sector management of contracting
was poor, so public sector paid the same price for public as private (no cost containment)
Insight: public sector action and capacity is KEY to capturing the gains
South Africa hospital study
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But challenges: Even if private hospitals are more productive, could:
cause cost escalation; distortion/inequality; still have poor quality
What would you advise the minister to: obtain the good, while containing the bad?
Private hospitals’…..pitfalls
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That is what this module is about:
Finding the combination of policies that fit your setting and help capture the benefits of private hospitals, while containing potential problems.
Private hospitals’…..pitfalls
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Outline
Private hospitals in health systems: global models
Introduction to module Goals, Strategies, Policy Instruments
What is so special about hospitals? Time, capital, complexity, non-profits
Overview of module sessions
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International models
Segmented
Edge
Integrated
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World Health Report 2000Core Functions of Health Systems
Financing collecting funds; pooling funds; purchasing
Service Delivery public health/ population services; individual & curative
services (PHC, hospitals)
Stewardship
Input generation
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World Health Report 2000Core Functions of Health Systems
Financing collecting funds; pooling funds; purchasing
Service Delivery public health/ population services; individual & curative
services (PHC, hospitals)
Stewardship
Input generation
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Little or no linkage between public sector and private hospitals
Health system with private hospitals segmented: UK example
Public sector Private sector
Public hospitals Private
hospitals
Private insurers
OOPs
Regional health
authority
Regional health
authority
Regional health
authority
Regional health
authority
Public financing organizations
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Social health insurers
Government exercises stewardship over both public and private hospitals , especially through the funding arrangements
Health system with private hospitals integrated: Germany example
Public sector Private sector
Public hospitals
OOPs OOPs
Public sector stewardship domain
Private hospitals
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Public financing
organizations
Temporary public purchasing from private providers to fill immediate shortfalls in capacity
Health system with private hospital services purchased “at the edge”: UK Independent Treatment Centers example
Public sector Private sector
Public hospitals Private
hospitals
Private insurers
OOPs
Private companies temporarily provide
services
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Unpacking stewardship Stewardship of private hospital in integrated mixed
systems (e.g. Germany, Australia, France, Belgium, Switzerland, US) goes far beyond funding
Yes: public/social sector is funding private
hospitals, but also:
Intense regulation
Extensive co-regulation
Information collection and dissemination
Training support
Tax incentives – location, specific services
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Reg
ula
tio
n N
irva
na!
Non-Profit Organization
Hospital License
Beneficial NPO Tax Exemptions
Social insurance eligibility/ payment
Medical Education Provider
Subsidized Capital
Accreditation
Private Hospitals: US Regulatory Regime Example
Fed. Statute: Commercial Code
State Govt
FederalTax Code
Federal Govt (Medicare)
Joint Commission
Med. School Regulator
Local Gov’t
Disease Reporting/ Surveillance Fed. Center for Disease Control
Participation in Disaster Planning & Response
Local Gov’t
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Developing countries Often have large private hospital sector, but public
sector is not exercising stewardship Funding (rare) Regulation (on the books….)? Co-regulation (rare) Collaboration on disease reporting, disaster
response (rare) Training (rare) Tax incentives – location, specific services (some)
Much potential to improve private hospital contribution to sector goals….by changing this
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Introduction to module: three core elements Goals Strategies: Policies:
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Introduction to module: three core elements Goals: which are the most important goals
which policymakers engage with private hospitals to achieve?
?
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Introduction to module: three core elements Goals: which are the most important goals
which policymakers engage with private hospitals to achieve?
AccessQuality
Cost containment
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Introduction to module: three core elements Strategies: which strategies do
policymakers pursue toward private hospitals?
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Framework: Strategies
Source: Adapted from Harding & Preker, Private Participation in Health Services, 2003.
Grow
A well-functioning part of the private sector
could contribute to expanding access by increasing investment & service provision
• Romania dialysis contracting
Priv
ate
Hos
pita
l Situ
atio
n
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Framework: Strategies
Source: Adapted from Harding & Preker, Private Participation in Health Services, 2003.
Harness
A large existing private sector with good quality could be leveraged
to provide good public services at lower cost (contain costs)
• South Africa hospital contracting
Priv
ate
Hos
pita
l Situ
atio
n
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Framework: Strategies
Source: Adapted from Harding & Preker, Private Participation in Health Services, 2003.
Convert
Well-performing non-profit hospitals
could run public hospitals more effectively (quality; cost containment)
• Sao Paulo Brazil hospital PPP initiative
Priv
ate
Hos
pita
l Situ
atio
n
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Framework: Which policies do policymakers use to implement the strategies?
Source: Adapted from Harding & Preker, Private Participation in Health Services, 2003.
Grow
• Contracting• Regulation &
deregulation (enabling environment)
• Accreditation• Taxation
Priv
ate
Hos
pita
l Situ
atio
nP
olic
ies
used
to
impl
emen
t st
rate
gy
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Source: Adapted from Harding & Preker, Private Participation in Health Services, 2003.
Harness
• Contracting• Regulation• Accreditation• Information
dissemination & exhortation
• Taxation
Priv
ate
Hos
pita
l Situ
atio
nFramework: Which policies do policymakers use to implement the strategies?
Pol
icie
s us
ed t
o im
plem
ent
stra
tegy
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Source: Adapted from Harding & Preker, Private Participation in Health Services, 2003.
Convert
• Contracting• PPPs
Pol
icie
s us
ed t
o im
plem
ent
stra
tegy
Framework: Which policies do policymakers use to implement the strategies?
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What is so special about hospitals? Time Capital Complexity Non-profits
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Harding-Montagu-Preker Framework: Overview
• Access
• Efficiency/
cost containment
• Quality of Care
Source: Adapted from Harding & Preker, Private Participation in Health Services, 2003.
• Contracting/ purchasing
• Regulation
•Accreditation
• Information dissemination & exhortation
• PPP transactions
Ownership•For-profit corporate • For-profit small business
• Non-profit
Capacity planning
Grow
Harness
Convert
StrategyPoliciesGoal Focus
Private Hospitals
PublicSector
Restrict
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Overview of module sessions Today
◦ Capacity Planning, Shita◦ Ownership and Taxation, Dominic ◦ Regulation, EK Yeoh
Tomorrow◦ Contracting + Purchasing, Jack Langenbrunner◦ Thai Case on Hospital Contracting, Chantal/Siripen◦ Case Workshop: (1) Accreditation, Jiruth ,(2) Contracting, William Ho◦ Field trip
Thursday◦ Exhortation /Information Dominic◦ Hospital PPP - Intro and Models, April ◦ (Jakarta Case), Shita◦ Facility and Financing PPPs (PFI), Dominic ◦ Services Contracting PPPs (Operating Contract), April◦ Putting it all together, April and Dominic
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Private Hospital Share
Private
Public
Low
Medium-Low Medium-High High