July Reflections

You cannot have development in today’s world without partnering with the private sector – Hillary Clinton

Typically, discussions about the private sector revolve around the private-for-profit sector. Although this is an important sub-sector of the private sector, it is not all there is. The private sector refers to non-state actors; they could be for-profit or not-for-profit, formal or informal, providing a mix of goods and services including direct provision of health services, medicines and medical products, financial products, training for the health workforce, information technology, infrastructure and support services (e.g. health facility management).  This post will focus on the private health sector involvement in service provision.

With the advent of COVID-19 and the realization that the public sector did not have the capacity to handle all current and estimated cases, it was clear that response had to be a whole of society approach and  ‘all hands had to be on deck’ .  This cleared the way for increased private sector engagement (PSE). Some countries have fared better than others in leveraging this sector for the pandemic response and to support countries to do this in a systematic way, WHO has recommended a three-phased approach. Our blog post of the month, points to the various ways that the sector has supported the pandemic response in different countries and the challenges it faces.

But long before the current crisis, PSE had been described as an essential component of national efforts towards UHC. The pandemic has led to a broader discussion on how to leverage this momentum for further engagement post-COVID-19. For this to happen, there has to be a clear pathway to collaboration that maximizes the benefits and reduces the demerits of engaging with this sector. So, what have we seen in different countries as the key success factors for PSE?

  • An enabling environment. This involves the development of policies, legislation, guidelines and strategies to increase PSE. The enabling environment allows the government to leverage the capacity of this sector and ensures that private sector investment is incentivized and protected. In Nigeria, part of efforts to create an enabling environment included providing a tax holiday for private health sector providers introducing innovative services into the country, under the Pioneer Status Incentive Scheme. This enabled the first cardiac catheterization labs to be established. In Rwanda, private sector providers starting up health posts partner with districts and are provided with buildings for this purpose
  • Coordination and transparent communication. Transparent communication increases private sector visibility in policy planning and implementation and provides a platform for them to proffer ideas and build a more enduring, trusting relationship with public sector colleagues. Our SPARCchat  panelists from Uganda told us that this inclusive approach has led to open dialogue with the private sector and co-creation of a policy framework and solutions. In addition, the private sector co-chairs the MOH technical working group on public-private partnerships in health.
  • Availability of a database of current private sector providers and areas of practice. To identify potential areas of collaboration and partnership, there has to be an understanding of existing capacities in the private sector and how they can be leveraged to address capacity gaps in the health system. Our SPARCchat panelists from Uganda told us that the country conducted a survey and mapping of private providers to understand existing capacity and therefore match them to existing gaps they could help fill for the pandemic response
  • Capacity development. PSE in several countries on the continent is still relatively new and viewed with suspicion by public sector officials. If this is to be institutionalized, there is a need to build capacity at the national and sub-national levels, introducing a “business culture” and business skills in government partners. On the other hand, it is also important to build the capacity of the private sector to engage with the public sector, support pandemic response, contribute data to the national database, etc. In our SPARCchat with Uganda, our country partners assert that although the private sector has contributed critical capacity to the COVID`9 response, there is a need to build their capacity for conducting effective surveillance, increase interest in data reporting into public data systems etc.
  • Monitor and evaluate service quality. Private sector providers, perhaps even more than public sector providers with spending autonomy, respond to incentives in a way that could be positive or negative for the health system. This means that without enabling policies, strategic contracting and monitoring of contracts, PSE may indeed end being the horror that people fear. To prevent this, purchasers must have the capacity to deploy the necessary tools to monitor performance. In Nigeria, some private sector providers that were contracted for the National Health Insurance Scheme (NHIS) at the commencement of implementation subjected beneficiaries to long waiting times while they attended to patients who were prepared to pay out of pocket. To mitigate this, active case management with clear indicators was set up. In addition, purchasers set up customer help desks in some hospitals, the NHIS mandated all third-party purchasers (Health Maintenance Organizations) to set up 24-hour call centers to resolve issues and erring providers were sanctioned

The above is by no means an exhaustive list of key success factors, so please drop us a note to share your thoughts on other enablers of PSE that you are observing in your own country

As we pause and reflect this month, we present some other emerging issues that still need to be addressed.

  • How can the private sector be protected during health systems shocks like the COVID-19 pandemic?  Although some countries have made funds transfers to protect the private sector, others have not, leaving this sector in dire financial distress.
  • Should there be a different tariff for reimbursing private sector providers? Those who support higher rates for the private sector cite the fact that public sector providers have access to government subsidies not available to the private sector. Those against this, cite economies of scale from large beneficiary populations. The latter was used to good effect in Nigeria at the commencement of the NHIS in 2005. Is this argument also useful in smaller markets e.g. Rwanda with 12 million people compared to the approximately 200 million-strong population of Nigeria at the last count? What happens if the purchaser cannot command planned purchasing power because the envisaged enrollment numbers do not materialize in voluntary insurance schemes, as happened in Nigeria where fifteen years after the kick-off of the scheme less than 5% of the population is registered to receive care under the scheme?
  • How can governments ensure equity in service provision given that most private sector providers are mainly in the urban areas? Does this open up opportunities for public-private partnerships or public private community partnerships as seen in Rwanda’s scale-up of health posts nationwide?
  • Should contracting and indeed policies addressing PSE be the same for private-for-profit and private-not-for-profit providers?
  • How can countries be supported to make the necessary changes to support PSE? Is the coaching approach a good fit for capacity development here? SPARC’s coaching approach  calls for regional experts with the relatable experience to support country-led processes. This approach would be useful for the technical and the non-technical work associated with this reform including aligning all stakeholders behind a common understanding of PSE, defining success factors, building trust, etc.
  • What research evidence can guide countries undertaking this change? What gaps exist in the evidence?

As we move towards a consistent whole-of-society approach to health system challenges, these concerns have to be addressed.

What are your thoughts about PSE? What are the enablers and emerging themes from implementation in countries? What works? When? Why? How? Let us know as we keep this conversation going.

Stay safe and healthy.

Dr. Nkechi Olalere,

Executive Director, SPARC

July Reflections

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