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

Expected risks and incentives
Ministry of Health
Risks
Jordan
• The amount of financial claims from contracted hospitals may exceed the amount
allocated in HID budget.
• The tendency of the private hospitals to provide unnecessary or low quality health
services to maximize revenues.
• Some private qualified providers may be reluctant to participate in the contracting
process due to anxiety over working with the public sector.
• There is a possibility that private providers may change their behaviour and give
priority to private patients. This may create long waiting lists and increase
waiting time for the Ministry of Health patients.
• There is a possibility that some political parties may misunderstand the objectives
of the government from contracting. They may consider contracting as a way of
“privatizing” health care and allowing government to avoid its responsibilities to
provide services for the poor.
Incentives
• Improves accessibility for the Ministry of Health beneficiaries and poor patients.
• Decreases pressure on and over-utilization of Ministry of Health facilities,
especially in Amman.
• Optimizes the utilization of health care resources in the country.
• Could provide, if well negotiated and managed, better quality services with less
cost.
• Builds skills and experience in negotiation, preparation, management, monitoring
and evaluation of contracts.
Private sector
Risks
• Delay in accounts settlement due to bureaucratic procedures or shortage of
budget allocations.
• Due to competition, discounted contract prices may not be economically feasible.
• Abrupt changes in government directions could incur financial loss for private
hospitals.
Incentives
• Increasing bed occupancy rates and revenues.
• Acquiring public financing and cash flow.
• Improving the competitive position of the hospital.
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