Making partnerships work for health, focusing on low-income countries

Wolfgang Bichmann Opening
the system. In this process, appropriate
incentive systems can not only enhance
the integration of private service suppliers
into service provision but into investment
as well.
Innovative approaches to private
sector involvement in developing
countries
Over the last years, despite the difficult
conditions, a range of promising approaches
have been developed to integrate
private sector providers into
<strong>health</strong> care in developing countries.
Box 2 lists key links on the current in<strong>for</strong>mation
plat<strong>for</strong>ms in this area.
Box 2: Resources on private sector
involvement and <strong>health</strong> in developing
countries
PSP-one/USAID: Private Sector
Health Projects Database
www.psp-one.com/section/project/
UCSF/Global Health Group: Private
Health Care in Developing
Countries.
www.ps4h.org/about.html/
Rockefeller Foundation/Results <strong>for</strong>
Development/IHPP Thailand: The
Role of the Private Sector in
Health Systems.
www.ps4h.org/about.html/
HLSP Institute: Private Sector
Participation in Health.
www.hlspinstitute.org/projects/
?mode= type&id=15043
AED: Center <strong>for</strong> Private Sector
Health Initiatives.
https://pshi.aed.org/
The basic <strong>health</strong> care service <strong>for</strong> many
people could be improved by closer cooperation
between public and private
facilities and innovative funding models.
Two approaches that have been successful
in practice are presented here as
examples.
1. Social marketing/social franchising
Social marketing organizations can be
entrusted with the professional marketing
of simple-to-use, subsidised highquality
<strong>health</strong> products (e.g. condoms,
mosquito nets) which can be sold via a
wholesaler and retailer net<strong>work</strong>. Such
an approach relieves the public <strong>health</strong>
sector of a set of tasks. The social marketing
model has become well-known.
This model can be further expanded by
allowing clearly defined services – <strong>for</strong>
example, in reproductive <strong>health</strong> or combating
TB – to be professionally marketed
under the brand name of a social
franchise net<strong>work</strong>. Franchisees (e.g.
doctors, private clinics) offer the products
at a set quality and price and use
the net<strong>work</strong>‘s brand name as a quality
seal. They receive free specialised further
training and advice. Public funds
may be allocated to the franchiser who
takes on the key tasks of awarding contracts
to private suppliers and quality
assurance [9]. For example, over 12000
doctors are presently <strong>work</strong>ing in Pakistan
in the Green Star franchise net<strong>work</strong>,
offering 30 percent of all family
planning services in the country – primarily
<strong>for</strong> poor sections of the population.
Although the doctors receive no
financial incentives, they benefit from
their use of the professionally marketed
Green Star logo. They also receive free
professional further training, can use a
telephone hotline, and have monthly
inspections.
2. Demand side financing/output
based aid
The per<strong>for</strong>mance-based funding of
measures (OBA) has proven to be an approach
with particular potential <strong>for</strong> success.
Instead of financing the building
and equipping of <strong>health</strong> care facilities
(inputs) without control over their use,
the services (outputs) delivered here by
public or private providers are financed
by vouchers [10] or contracting [11].
The voucher system entitles members
of a certain target group to use <strong>health</strong>
care services at subsidized prices. Accreditation
provides a basis <strong>for</strong> awarding
per<strong>for</strong>mance contracts to suitably
qualified service providers and the service
provider is paid on the basis of the
number of vouchers used. A voucher
scheme allows the services supplied to
be defined precisely in advance (service
package). At the same time, voucher
schemes offer a means of stimulating
demand since access <strong>for</strong> the poor is
improved [12] by only granting subsidies
to specific groups to use the services
provided [13]. There<strong>for</strong>e, in countries
without a nation-wide social <strong>health</strong> insurance
system as yet, voucher schemes
are excellently suited to encourage the
use of those <strong>health</strong> care services ranked
as central to the public interest.
Comparative private sector
advantages
Contracting private service providers
and leveraging the private sector‘s
comparative advantages over the public
sector is not limited to direct <strong>health</strong>
care services <strong>for</strong> patients [14]. In developing
countries, too, the private sector
increasingly offers social services
together with infrastructure services.
Here, private capital is essential in those
developing countries with a more advanced
economy. There exists also some
evidence that, precisely in developing
countries, private companies <strong>work</strong> more
efficiently than state-owned enterprises.
However, in social infrastructure and in
rural areas, private sector solutions are
slow to be realized without a kick-start.
In this process, the public and private
sector roles are complementary and the
state sets the regulatory frame<strong>work</strong> <strong>for</strong>
private transactions. Growing numbers
of developing countries have aligned
their laws to take account of the new
situation, creating a basis <strong>for</strong> integrating
a private sector previously primarily
focused on providing services in
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