The role of contractual arrangements in improving health sector ...

Jordan
businesses efficiently. The managers of the private hospitals are more powerful and
can adapt easily to the changing environment. Since 55% of the country health
expenditures are in the private sector, this sector has developed contractual
arrangements with different insurance companies, third party administrators and
private firms. Therefore, private hospitals have better contracting skills and financial
management that could reflect positively on its partnership with the public sector.
The following are the main strengths and weaknesses of the private sector that
should be taken into consideration when entering into a contractual agreement:
Strengths:
Advanced medical equipment of large hospitals.
Skilled technical workforce.
Good reputation outside Jordan, since one third of private hospitals’ revenue is
from foreign patients.
Good quality services especially hotel services.
Relatively advanced computerized information system, especially financial and
management systems.
Good experience in negotiating contracts, especially with private health
insurance companies.
Weaknesses:
Most private hospital beds (75%) are located in Amman (mainly in West
Amman).
Cashflow problems.
Low bed occupancy rate (44%).
Excess capacity in certain medical equipment and services.
Less advanced equipment for small hospitals compared with large hospitals.
Shortage of qualified nurses and paramedical personnel.
Lack of treatment protocols and systematic quality control programmes.
Inefficient role of the Private Hospital Association.
Lack of skilled and professional managers.
Inefficient cooperation within the sector.
A strategic analysis showing strengths, weaknesses, threats and opportunities
(SWOT) of the private sector is given in detail in Figure 1.
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