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

Defining “Private” Non-government Ownership? Control?

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

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

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

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

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

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

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

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

Economists’ View: Additional Criteria

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

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!”