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TMIH261 Tropical Medicine and International Health volume 3 no 6 pp 512–514 june 1998

Towards new partnerships for health development in developing countries: the contractual approach as a policy tool Guy Carrin, Michel Jancloes & Jean Perrot 1 World Health Organization, Geneva, Switzerland

Summary

What roles for government but also for society’s groups in the advancement of public health in developing countries? This paper focuses on the need to adopt the contractual approach as a powerful policy tool and sketches the contours of a policy framework for good contracting. A short historical review of health system changes leads up to a discussion of the the current emergence of a multitude of actors, the forging of alliances between the various partners, examples on how significant health policy benefits might be secured through contracting, and the implications of building alliances, such as defining and assigning accountability to the contracting partners.

keywords contracting, health policies, privatization, legislation, partnerships, health for all correspondence: Dr M. Jancloes, Division of Intensified Cooperation with Countries, WHO, 1211 Geneva 27, Switzerland

Introduction

Health service providers today

Three to four decades ago, many developing nations were heading for a government-financed and government-managed health system. There was serious pressure to expand the coverage of government health services at all levels of the health system. In the mid-seventies, when severe economic problems led to structural adjustment programs, government health budgets in many countries were under pressure. Perhaps more importantly, the allocation of shrinking budgets resulted in even more problems: Increasingly budgets were spent on staff, which often decreased real expenditure for drugs, maintenance and other recurrent expenses. In several countries this imbalance led to an under-utilization of human resources and a drop in productivity. Management in many ministries of health also suffered, either because of staff reduction or low morale. Then the idea of cost recovery or cost sharing took hold to rescue underfunded government health services. Its implementation was hampered by lack of sound financial planning for the maintenance and improvement of government health services, which weakened these even further. Several countries are now at the point where the government has become the smallest provider of health services, and where no more than 20]30% of the population in need of care choose government health services. This is a fact insufficiently recognized in national as well as international health policies.

Stimulated by weakened governments, a multitude of health service providers have appeared side by side, usually without much regulation: private doctors and nurses, religious and humanitarian missions, local community initiatives such as health insurance and private pharmacy networks, and last but not least a truly informal health care sector with drugs and health services sold in markets by small traders. Increasingly government health personnel work part-time in the private sector or solicit informal payments from patients seeking government health service. Secondly, other partners not directly involved in health care as such have emerged, such as credit schemes that deal with the overall improvement of families9 welfare including their health. Community support organizations help families affected by AIDS cope with the disease. Companies are increasingly involved in getting information about AIDS to their workers, and schools are important partners in transmitting health messages to younger age groups. Health policy thinking has arrived at a crossroads. One avenue would be simply to accept the weakened role of government, and to proclaim that governments with their meagre resources ought to concentrate their efforts on the poorest or neediest population groups. Non-government health providers would then more or less independently cater for all others. This view implies growing privatization and a

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© 1998 Blackwell Science Ltd

Tropical Medicine and International Health

volume 3 no 6 pp 512–514 june 1998

G. Carrin et al. Partnerships for health development in developing countries

public-private mix. At first sight this may look attractive from an equity point of view, as more government resources could be allocated to the disadvantaged. From a public health point of view, the benefits are doubtful. Public health concerns all levels of society, and why should only one actor, namely the government, be responsible for only one specific group? Non-governmental health service providers are often very popular, as they respond in different ways to the population’s preferences regarding quality of services (measured by such factors as availability of medicine and cleanliness of the premises and opening hours adapted to people’s working schedules). However, de facto, government health personnel plays a role in the nongovernment sector as well.

The conversion of a multitude of actors into alliances It is sometimes thought that this multitude of actors merely confuses and complicates health policy. But complexity can be turned to advantage through governments seeking alliances with these actors. But what are governments9 rights and duties? It is mostly agreed to assign government the responsibility for the organization of health services with communitywide interest (e.g. vaccination programs), of health education and information campaigns (e.g. STD prevention) and for improving equity among the population. Governments can maintain their crucial role in monitoring and guaranteeing public health while engaging actively in health-related contracts with other agencies. The contracts ought to aim at better health for all (HFA) and should involve all parties active in health care. Thus the distinction between “public” and “private” in the organization of the health care sector becomes increasingly blurred. Contracting is not an easy option for governments, but potentially a major policy tool in pursuing a Health for All (HFA) strategy. In other words, contracting is essentially a strategic device.

Achieving health policy benefits through contracting: some examples In many countries nongovernment providers are already linked up with government, but only through licences, general agreements or special authorizations. The public health aspect of such agreements can be found in the fact that the providers will respect certain quality standards. One could qualify this as a first, though important, benchmark in contracting, to be followed by possibly other initiatives. A ministry of health could promote the contractual approach as a new mode of functioning of the health system. Government can engage in a contract with a private health facility in a region or district where there is no government

© 1998 Blackwell Science Ltd

facility. Government can request this private facility to provide certain types of health services in return for a certain amount of government subsidies, for the assignment of a number of government health personnel to the facility, or for the right to charge certain categories of patients predetermined service fees. It does not matter so much whether the facility is for-profit or nonprofit. All that counts is that certain rules are agreed and respected. Contract conditions can be set out in such a way that they are coherent with the basic HFA principles of greater access to good quality care. Contracts with private clinics in companies could stipulate, for instance, the conditions of access for nonstaff members. Affordable fees could be predetermined as well as the amount of government subsidies (e.g. to pay for the care of exempted poor). By establishing working relationships with the nongovernment sector, the government saves money on construction of new health facilities. Governments can allocate private pharmacies the right to sell essential drugs. Pricing rules would have to ensure that essential drugs remain accessible for the population. Contracts could also be made with small shopkeepers or informal traders for the sale of specific essential drug items. Special insignia confirming the contractual relationship with the government could be given to the pharmacist or shopkeeper for public display. An ever-growing challenge to ministries of health will be to deal with the private activities of their own health personnel. Take the situation where a government-paid doctor leaves the district hospital where he or she is employed at noon in order to continue a private practice in the afternoon. Different regulatory frameworks are possible: private practice in private premises can be officially recognized but the private doctor agrees to respect a certain fee schedule during certain hours; he or she may also be assigned a special role in public health initiatives such as vaccination programmes or health information projects; or private practice at the district hospital could be permitted provided certain conditions concerning fees and hours of practice are met; in addition some form of revenue-sharing with the district hospital could be arranged. The latter ruling would have the advantage of raising the district hospital revenues for further use towards better maintenance, availability of medicine or to finance exemptions. Initiatives could emerge from the nongovernment sector. One case in point is where a community association in a city district contracts with the government to construct a health centre and to finance it; government would provide the health personnel and other inputs; but the community association could bargain to have a say in the management of health services. The community association could also contract with a private physician to deliver outpatient and certain inpatient services; the government could then in turn register this 513

Tropical Medicine and International Health

volume 3 no 6 pp 512–514 june 1998

G. Carrin et al. Partnerships for health development in developing countries

private clinic and subsequently monitor its activities. Contracts can be limited to specific services only. One example is where government contracts with NGOs to provide family planning services, preventive services or curative treatment services for specific diseases. The public health nature of such contracts rests in the fact that government stipulates guaranteed coverage of certain geographical areas and certain conditions regarding population contributions. Voluntary organizations are already active in the organization of vaccination campaigns in many developing countries. Government can go beyond arrangements for strictly health services and become involved in promoting health in, for instance, local enterprises or schools by stimulating them to allocate part of their net benefits to investment in occupational health, to support local health insurance schemes or development initiatives in the area of female literacy or general health information (involving the tourist industry in STD and AIDS prevention is an example), etc. And in schools, governments can agree (perhaps through the Ministry of Education) to the establishment of a school clinic provided the school takes sufficient initiative in the area of health education.

Implications for building partnerships Who actually operates or finances the health service operations matters less than the fact that several parties, whether government or nongovernment, are brought together in a contractual arrangement that benefits public health. Sounds too good to be true? Contracting is not the latest panacea. It will require major rethinking of government and nongovernment relationships, which often are competitive rather than cooperative. Government would, on the one

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hand, have to accept that NGOs or private doctors may well be providing necessary health services as well; on the other hand, it might need to develop a way of regulating and monitoring them. Health bureaucracies would have to be revised, including the recruitment of new legal experts who could competently represent the government in making and following up contracts. In any case official contracts raise each partner’s accountability: the government’s responsibility for the nation’s population increases as agreements become part of the public domain, so that they can be scrutinized and debated in parliamentary health committees. The accountability of the other partners also rises as they have to comply with the conditions officially established in legal documents. There is also a political aspect to contracting. Government loses its traditional health services monopoly but gains regulatory and monitoring power. Non-government actors may lose their power to set fees (and thereby some revenue) or to establish practices or clinics where they wish; but they gain by expanding their activities and prestige. Ideally, a contract would result in a win-win situation or a net gain for all partners.

Conclusion International donors and health agencies, such as the WHO, would also have to adjust. The nature of technical assistance to ministries of health would involve more support for administrative and legal affairs. Within developing countries, WHO could be working with ministries of health in shaping the policy framework for contractual arrangements. NGOs might also require more technical support. Given that the different actors turn into more effective partners, contracting is a potentially powerful tool in achieving the goal of Health for All.

© 1998 Blackwell Science Ltd