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

The role of contractual arrangements in improving health sector performance
Pakistan
The contracting arrangements between the public purchasers and private providers
vary with the level of hierarchy, type of contract and set of services to be provided. The
purchasers are mainly the Federal Ministry of Health, provincial departments of health
and social welfare, and district governments. The private providers are mainly the
international and national nongovernmental organizations, institutions and private firms.
Contract types include contracting out, cost-sharing agreements, grants and loans. The set
of activities covered in contractual arrangements comprise primary health care services,
research and development services, and technical and management services.
The public sector rationale for contractual arrangements is to partner with the
private sector to target priority health problems, expand coverage in less accessible areas,
meet rising consumer expectations and test public–private innovations. The private sector
interests include enhanced size and scope of activities, recognition and financial support,
and humanitarian concerns.
There exists serious political commitment in favour of public–private partnership.
Despite a cautious approach, support for contracting is increasing, along with the number
of projects with contractual arrangements. The early success of the flagship project, the
contracting out of primary health care services in district Rahim Yar Khan, has led to its
possibly premature replication in several districts of the Punjab province. A recent World
Bank-sponsored evaluation showed mixed results. On one hand, the utilization and
physical condition of primary health care centres have improved, patient satisfaction has
increased, and out-of-pocket expenditure has decreased. On the other hand, quality of
care, drug availability and accessibility by remote communities have remained poor. In
addition, contracting out has had little effect on the coverage of preventive health services
[22].
The institutional arrangements for managing the contractual partnerships are
inadequately developed. Although private sector partners have expressed overall
satisfaction with the support received from their public counterparts during planning and
implementation of project activities, delays in payment have also been reported due to the
complexity of government financial procedures.
Many national programmes have developed capacity in preparing bids, evaluating
technical and financial proposals, negotiating terms and awarding contracts. There is
wide variation in the technical, managerial and financial capacity of private providers,
which is often addressed through short-term expert inputs. The majority of private
providers rely on up-front project funding for initiating activities, which makes the longterm
sustainability of such activities less certain.
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