I have been working with policymakers on private sector engagement in the health sector for seventeen years. So very often, policymakers opt for unpromising strategies to engage the private sector, frequently those which hold some promise of mobilizing large volumes of private investment. NB: such strategies are not always unpromising, but they frequently are in developing countries’ health system context. I have long wondered, and worried, about this. I believe I have untangled at least one thread of the mystery, it appears to derive from the perspectives and mental models of the key government stakeholders. Let me explain.
Governments’ efforts to engage the private sector commonly involve three distinct cadres and perspectives: budget professionals; political authorities; and, health professionals. See this excellent paper by Joe White which outlines the distinct perspectives and mental models of the cadres of officials involved in health policy.
Budget professionals are attracted to engagement by the idea of getting more resources for health activities. Health budget officials see engagement as a way of containing public expenditure on health, reducing deficits, etc. Occasionally, these officials are attracted to services contracting, even without the prospect of reduced public expenditure, because they think it may offer a better “handle” to monitor the health sector, push for performance improvement, and control costs.
Political authorities’ are always conscious of the next election, and, hence, they prioritize delivering some observable health service improvements, ideally in the very short term. Their thinking about how to do so is often grounded in political beliefs or ideology. Where engagement is eagerly sought, political authorities often express a vague belief that markets and/private ownership will increase efficiency, productivity, responsiveness and/ or quality.
Political authorities and budget professionals with these perspectives are often key figures in countries’ efforts to engage the private sector in health. They are most often located in ministries of finance, treasury, and/ or economy. They are rarely familiar with health systems/ health policy issues in general, nor specifically, evidence about approaches to private sector engagement.
Health professionals are the cadre with the deepest knowledge of health policy and strongest influence on day-to-day operation and delivery. They are rarely knowledgeable about, nor do they have a positive view of, private sector engagement. They may be attracted by the idea of increasing resources for their sector (e.g. accelerating acquisition of medical equipment; or upgrading facilities), though they would generally prefer to obtain more public resources for this. Health agencies are usually staffed by such professionals. Their knowledge of the sector is essential to identifying sensible approaches to engagement; and, implementation depends greatly on their actions.
This all-too-common alignment of expertise, responsibility and mental models is what drives governments to pursue appealing, rather than promising, private sector engagement strategies.
Focusing on private resource mobilization encourages pursuit of engagement modalities that expand private payment, which can undermine equity. NB: An exception is: when social insurance reimbursement rates cover capital costs, and payment is predictable enough to attract private investment.
Focusing on quick encourages choosing poor strategies and implementing them poorly. There is too little time to do situation analysis, consult with private actors, and slow-to-unfold strategies will be dismissed even if they are brought up.
The lack of buy-in and pro-active engagement of health professionals with their deeper health system knowledge decreases the likelihood that good strategies are selected. Good strategies are those which: fit the health system context; and, are associated with accelerated progress toward the health goals of: access, responsiveness, and/or efficiency.
Illustrative examples of good strategies include: Tanzania’s development of a commercial ITN delivery platform; Bangladesh’s development of a commercial ORS delivery platform; Tanzania’s accreditation of drugshops; Estonia’s primary care contracting; Nicaragua’s rural primary care contracting; China’s fortification of salt; Brazil’s hospital operation contracting (PPP); Colombia’s shift to wide use of generic drugs, China’s consolidation of distribution within the commercial drug delivery platform; Colombia’s construction of a social health insurance system. NB: I would argue the distribution of subsidized ACTs through the commercial supply chain and drugshops is another example. All these initiatives expanded access to essential products or services. In some cases, they also increased efficiency, and, in some cases, responsiveness. And, they did so with no deterioration in equity. Some even increased equity (Brazil hospital contracts/PPPs, Colombia’s generic promotion and social health insurance construction, Tanzania drugshop accreditation). Thoughtful engagement initiatives, aiming to improve access, efficiency, quality and/or responsiveness, would naturally turn to such strategies.
Engagement initiatives driven by political authorities and budget officials, with their common preferences and mental models, rarely find such strategies appealing, however. They may simply now know about them. Or, they seem too slow to “show results”, and, they hold little prospect of relieving health budgets of any spending responsibilities.
Services contracting is a strategy which constitutes an occasional exception. The strategy’s implementation time horizon can be relatively short (1-3 years), and results can be relatively easy to see. The strategy mobilizes little private investment, and hence does not hold the prospect of reduced demand for public spending; however, budget professionals can find contracting appealing – because they expect it will give them a tighter handle on health activities than existing budgeting mechanisms.
It strikes me that the preferences and mental models of the key cadres involved in health policy discussions on private sector engagement contributes to the relative infrequency of pursuit of promising, relative to appealing, engagement strategies. I think it comes down to this: the people who are “driving” the policy “car” have a bad map, and are likely heading for the wrong town; the people (e.g. health professionals) who have a better map, and know which town they should be heading for, are asleep in the back seat.
Am I oversimplifying? Undoubtedly, and on a number of points. However, I believe there is some truth to this narrative. I’d love to hear what others think.