Private sector in health

February 11, 2019


The writer is a graduate of Harvard University in health policy and management.
The writer is a graduate of Harvard University in health policy and management.

UNIVERSAL health coverage for all segments of the population is one of the 17 SDGs. Pakistan struggles with large gaps in health coverage that can only be addressed through substantial policy homework. Policy focus has historically been on revitalising government service delivery, wishfully thinking that improvements in this sector will take care of the nation’s health needs. International aid agencies have also employed this unifocal perspective over the last 30 years on improving the slow-changing government health system rather than triggers for the private health market towards the SDGs.

While larger public-sector hospitals are the major providers of critical hospital admissions, and the main lifeline for the poor, 70 per cent of Pakistan’s population (66pc rural and 76pc urban), including many from the lower socioeconomic segments, go to private medical providers for routine consultations. These are not ‘traditional’ health providers but mainstream medical clinics and hospitals. The numbers are particularly high in Punjab and Sindh (77-75pc), but also substantial in KP and Balochistan (47-61pc).

The private health sector, which has grown phenomenally in response to deficiencies in government health services, is firmly entrenched and highly entrepreneurial. In fact, noticeably high private usage is also found in areas of primary care typically considered the government’s domain: 73pc of treatment for diarrhoea in children (the second highest cause of child mortality), 57pc of pregnancy care visits, and 69pc of all births take place in private clinics. The private sector also boasts a substantial share of blood bank, routine laboratory and X-ray services, and in some provinces, ambulance services too.

Achieving universal health coverage by 2030 demands the inclusion of the private sector.

Availability of staff and medicines, attractive timings, transport, accessible locations and user-friendly attitudes have earned the private sector a clientele even amongst the poor. But private provider services come at a cost, and the quality of service is uneven across providers who tend to overprescribe medications and procedures. Moreover, most are geared towards medically profitable services (eg Caesarian sections) but often overlook essential preventive care (eg breastfeeding advice, family planning support and newborn immunisation services). There are notable exceptions where professionally managed philanthropic private health services have filled a niche for the poor with quality services and are growing remarkably in scale, but this only bolsters the argument for an inclusive approach to the private sector.

So the question is not whether the policy focus should be expanded to include the private sector but what can be done to harness its potential to meet collective universal health targets?

There are three leading policy pathways. None is perfect, but they need serious consideration and creative implementation.

The traditional pathway is one of command and control by the state: regulating private health providers to provide quality services and inclusion of essential preventive health services. Business as usual in Pakistan is that anyone can set up a maternity home, clinic or hospital as a business venture without much attention to quality benchmarks.

The first step in regulation, the licensing of facilities and elimination of quackery, has good backing from medical professionals. Provincial health regulatory commissions have been set up and close to 20,000 quackery setups have been shut down in Punjab, whereas work in the other provinces is getting off the ground. The second step of clinical governance and standard setting is likely to meet resistance from the powerful medical industry and demands extensive investment in the scarce regulatory resources in Pakistan.

Another pathway to get the private sector to deliver responsively is through private market management using SMART regulations. Given the policing involved in routine regulation, a softer approach is preferable because of the difficulties in relying solely on a command-and-control model. Health leaders may not want to rock the boat either: after all, health providers often go on strike and logjam services. SMART regulations do not rely on a single regulator but distribute the regulatory burden across state, professional associations, accrediting institutes and patients themselves. It involves a mix of strategies: tax breaks, subsidies, branding, accreditation, consumer awareness and penalties to bring compliance and encourage private providers to self-volunteer for regulation. Consumer awareness is important as the patient will always face the odds of knowing less about the technical world of healthcare than the health provider.

The third pathway is strategic purchasing of healthcare by the government from private providers to fill the gaps in health coverage in underserved areas or specialty services where it cannot deliver well. While global sceptics argue this is not sustainable, what has gone unnoticed is that the model of public-private partnership (PPP) has grown in Pakistan: extensive purchasing of private health services in Sindh, increasing examples in Punjab and instances of PPPs in the tenure of previous KP district governments. It is currently being practised as a route to circumvent slow, leaky government services by handing the management of government rural hospitals and health centres to private health organisations.

However, PPP arrangements must look beyond the ambit of government network to also consider the strategic purchasing of services provided out of private health facilities for meeting the supply shortfall in a range of services from routine clinical (eg laboratory services), specialty (eg cardiac care) or domiciliary services (eg hospital waste management).

But PPPs need quality triggers to deliver well and not pose a further risk to the health system. The current management of PPPs needs infusion of gold-standard practices to deliver successfully, eg feasibility studies, proper pricing analysis, pre-qualification of bidders, pay-for-performance rather than block grants, and clarity on how savings from government-provided funded are to be treated; service SoPs and drug procurement lists that tie in with UN-assisted government standards. Above all, independent standard performance monitoring is a cornerstone and must not be left to the contracted party to procure, posing a conflict of interest.

In conclusion, achieving universal health coverage by 2030 demands the inclusion of the private sector. Creative solutions and capacity investment in the ‘softer skills’ of private market management are critical to a pluralistic entrepreneurial healthcare system. There are countries that have made headway with the private sector; let’s import some lessons from them, instead of only aid monies.

The writer is a graduate of Harvard University in health policy and management.

Published in Dawn, February 11th, 2019