1. Building Public/Private Partnership for Health System Strengthening
Some Other Issues:
Defining and Measuring the Private Sector in Health
Value debates about public and private roles
Peter Berman
The World Bank
Bali Hyatt Hotel, Sanur, Bali
21-25 June 2010

2. Defining “Private”
Non-government
Ownership?
Control?

3. What do we mean by “private sector”?
Provision
Public Private
Financing
Public
Private
Classic government sector ?
Classic
private
sector

4. A Conceptual View of Public and Private Sectors
“PUBLIC” SECTOR
“PRIVATE” SECTOR
A 2x2 matrix showing the potential mix of public and private financing and provision A B D C E F
Public financing
PUBLIC PROVISION
PRIVATE PROVISION
PUBLIC PROVISION
Private financing
PUBLIC FINANCING
PUBLIC SECTOR ?
PRIVATE SECTOR
Public financing
PRIVATE FINANCING
PRIVATE PROVISION
Private financing

5. Financing and Provision
Private financing
Private health insurance: FP and NFP
Direct payments by firms and employers
NGOs
Out of pocket payments
Private provision (services)
Hospitals, clinics, individual MDs and paramedics
Providers of ancillary services
Traditional practitioners
“LTFQ” practitioners
Private provision (inputs and resources)
Medical education and training
Equipment and supplies
Pharmaceuticals
Management services

6. Measurement of the Private Sector in Health
Financing
Private share of total health expenditure
Distribution of that share across relevant institutional categories
Policy-relevant attributes of institutions
Provision
Numbers and share of different types of providers who are “private”
Policy relevant attributes of provider-types

7. Provision “below the radar”
What qualifies as a “health service” and who actually delivers these services?
Technical definition
Based on technology
Based on outcome?
Definition based on purpose or intent
“Informal” providers
“LTFQ”
Pharmacies and drug shops
“Traditional” providers
Formal systems
Other systems
Mixed provision

8. Provider Mix Highly Variable Across Countries
Public provision is surprisingly similar across countries, but private provision is not
Historical conditions
LTFQs in S. Asia
Mission/church providers in E and W Africa
Role of pharmacies in Anglophone and Francophone countries
Restriction of private provision in socialist countries and changes with transition to market
Expanding role of “scientific” medicine

9. What should be the role of private sector in health system?
Normative question – ethics, values, goals?
Strongly different views reflect differences in underlying values
Economists: “market failures” argument
Public health advocates: focus on equity and population health outcomes
Others?: “Rights” perspective, Role of the State, etc.
Pragmatist view: Feasibility and Consequences
Short term and longer term view

10. Economists’ View: Public, Quasi-public and Private Goods
“Pure public good”
Clean air
Disease eradication
Water
Disease control
“Quasi-public good”
Immunization
ANC
Safe delivery
Well baby
care
Acute illness
care
“Pure private good”
Symptomatic treatment
Elective surgery
Hospitalization for acute or chronic illness
Publicly provided/ financed goods
Privately provided/ financed goods

11. Economists’ View: Additional Criteria

12. Public health specialists’ view: Equity and Social Service
Health is a right, should not be affected by ability to pay
Government should be proactive in determining what health outcomes should be assured for all, not rely on individual preferences
Private sector is market-driven
Profit motive, reduces equity for both health and financial protection
More responsive to consumer preferences, less to objective health needs
Non-profit private sector may be OK

13. A Pragmatist’s Approach
Identify problems in terms of core performance goals, national values, political feasibility
Traces the causes of problems back to intermediary criteria and their causes
Be agnostic about whether government or private sector:
“Who cares if the cat is black or white as long as it catches mice!”