Provider Purchasing and Contracting for Health Services_The Case

ecommended drug, artemether-lumefantrine, is too expensive for the private sector. To
ensure that the treatment procedures are aligned in all sectors, the government has undertaken
to provide free or subsidized drugs to the private sector.
Similarly, the government has provided the private sector with anti-retrovirals to scale up
HIV and AIDS treatment in Zambia. Although this partnership has existed since 2007, the
Ministry of Health started in 2008 the process of accrediting public and private health centers
as “centers of excellence,” through the Medical Council of Zambia (the health sector
regulatory authority), to offer anti-retroviral services through the partnership. To qualify as a
“centre of excellence,” a facility must have qualified personnel, laboratory facilities, and
sufficient and patient-friendly consulting space. In all these partnerships, information sharing
is regarded as a critical component of these partnerships.
Limitations of the partnership design
During interviews, the private for-profit providers observed that although these partnerships
exist, they do not cater to the needs of the poor.
First, the drugs are supplied only when the government has some stock. This implies that
clients may not be able to access affordable services with persistent stock-outs. The
unpredictability of supplies makes it difficult for the private sector to provide sustainable
services through these partnerships. The representative of the private health practitioners of
Zambia stated that the design of the partnerships does not take into account the true cost of
treatment. For instance, while drugs are given for free, the representative explained, the
consultancy fees in the private sector are quite high for the poor Zambian. This acts as a
barrier to accessing private sector care.
Second, the partnerships do not provide for the reimbursement of implicit and hidden costs
arising from diagnostic and laboratory services that the private practitioners incur when
treating patients. Considering the high cost of these services, an average patient cannot afford
to seek care from the private for-profit providers. With this limitation, the private sector ends
up subsidizing the government and the poor clients, which is a disincentive to entering into
these partnerships.
Although partnerships are emphasized in government policy documents, the private for-profit
sector feels that very little or nothing is being done to translate them into tangible action. One
of the managers observed that although the Medical Council of Zambia is authorized to
register, monitor, and supervise the private practitioners, it does not have a clear accreditation
criterion as obtaining in government facilities which are classified based on the type of
services they are able to offer. Rather, the council is faced with unwarranted government
intervention resulting in the influx and registration of unqualified medical personnel
especially from the Far East. The lack of criteria and enforcement of standards make it
difficult to enter into contracting with the government. It was also noted that information is
lacking on the services that the private sector offers because the Medical Council of Zambia
has no capacity to supervise and monitor services.
As one performance indicator, the private sector is supposed to provide the government with
information about the patients and usage of the drugs. However, the government does not
collect this information, and if it is provided, the Ministry of Health does not take that
information in account. One of the managers stated, “My facility compiles the relevant drugs
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