There is an increasing amount of chatter about public private partnerships in the health sector, but sadly most of it is simply talk, and the amount of meaningful collaboration in service provision is still minimal. This is because the Ministries of Health and the private sector still largely think in silos, though neither have any objection to the principle of PPPs. On the ground, a civil servant will be very unwilling to share any funding, or program, with the private sector, since this would probably mean a loss of benefits to him personally, such as the per diems, travel allowance, or the loss of opportunity for personal advancement.

The analogy of leaving the hyena to guard the meat is apt when one is looking at public private collaborations, thus even if a DFI is seeking private involvement it can be a difficult marriage.  At a high level such as ministerial level there is usually broad agreement on the need to collaborate with the private sector, but the implementation of such projects is usually sluggish, or stalls at a lower level. Public servants and medical personnel working in the public sector still see the private sector as purely profit orientated, while they feel that they occupy the moral high ground, and do not see any benefit in an inclusive attitude to the private sector.

On the other hand, the public sector is happy to collaborate with NGOs, or aid organizations, who bring in money and programs under the authority of the Ministry of Health, which can then take credit.

Although the private sector provides up to 50% of the healthcare in East Africa, it is, of necessity, dealing with those who can afford to pay, thus most of the service provision of the private commercial health providers is located in urban centres where the money is. Some of the faith-based hospitals are able to operate in the rural areas, but the patient fees are subsidized by philanthropic donations from well-wishers abroad. The Ugandan government used to recognize the valuable contribution of these hospitals by giving them some budget support, but over the years the amount allocated to non profit hospitals has become derisory. Such a reversal in policy reflects a shortsighted perspective, since these hospitals were effectively removing part of the burden of provision of healthcare to the poor.

Having said all this, there are some good examples of collaboration between the public and private health sectors, particularly in the provision of maternal and reproductive health services through voucher schemes. There three main players involved in the provision of health services: there is the patient, the payer, and the provider. The patient may also be the payer, but the payer may be the government, the employer, a relative, a health insurance company, or a social health insurance scheme.

The poor are not able to meet all of their medical costs, so they will either receive free healthcare from the government (assisted by NGOs and aid agencies), they will receive part of their healthcare free, such as a free bed in a government hospital, but will then have to find money for drugs, disposables or, in some cases, surgeon’s fees. They may receive subsidized healthcare from a mission hospital, or they pay the full cost of the service from a private clinic or hospital.

Studies have shown that patients prefer getting their care from private providers, but they default to the government clinics in the absence of finance. In voucher schemes, there is the patient – the pregnant mother, or the woman in need of reproductive health services; there is the payer – in some cases a combination of government and World Bank or other DFI, and there is the provider, which could be a public or private provider. In voucher schemes there is also another layer – the administrator and auditor of the service. This organization receives the money from the payer, dispenses the voucher to the patient (usually for a small fee) and pays the provider an agreed fee for provision of the service through the redemption of the voucher. This method of provision means that the patient has a choice of service provider, thus introducing competition between various private providers, or between public and private providers, since public facilities can also take part in the scheme.

In all the cases where voucher schemes have been used, the level of service provision has gone up dramatically since the providers, which could be faith based, commercial, or public, now have a mechanism through which they are guaranteed payment for the service. They then use any cash surplus to upgrade their facilities in order to compete for more patients. It is a positively reinforcing cycle.

Given that someone always has to pay for healthcare,  either government, donors, or patients, it is simply a matter of deciding where is the best bang for the buck. It is hypocritical for government to pretend to be giving free healthcare, when in reality they cannot afford it, and patient-care then becomes a hit and miss affair. If the patient arrives at the health centre after there has been a delivery of drugs, he gets treatment, if he comes at the end of the month, when the drugs have run out, he gets a prescription and is told to go and buy the drugs at a private pharmacy.

In many districts there are sufficient healthcare providers to meet the needs, but there is a lack of coordination between the public and private providers. If the MOH became the regulator and payer, it could then utilize all service providers, public or private, in the most effective way.

The most cost effective way to provide healthcare is through capitation schemes, not through fee for service, which is expensive, and open to abuse. In a capitation scheme, the patients sign up for a chosen provider, public, NGO, faith based or private. They pay some contribution and the government and donors top up to a reasonable yearly membership.

All providers have a fixed cost base, which includes staff, electricity, rent, equipment maintenance, plus variable costs, which include drugs and laboratory reagents. When a service provider receives membership fees for a certain number of patients he knows his fixed costs are met, the next group meets his variable costs and any beyond that produce a surplus, which can be used to upgrade his equipment, or pay his staff a bonus. When the schemes are renewed on a yearly basis, patients vote with their feet and leave the centres, which did not provide a good service, thus competition keeps up the quality. Costs are also kept affordable, because this model does not encourage overbilling, poly-pharmacy and poly-laboratory, which is a common abuse of insurance schemes, driving up premiums. The administration costs of the scheme are also minimal, and the MOH can police the providers to ensure they are meeting the required standards.

Voucher schemes for certain defined services such as deliveries, and capitation schemes for primary and secondary healthcare, would ensure best value, healthy competition and better bang for the buck for primary and secondary care, while other methods of service delivery can be devised for tertiary care.

The problem is that we are still thinking in silos, and there are vested interests in both the public and private sectors, so we just keep going round in circles. There are means of providing better healthcare to the base of the pyramid, but it requires thinking outside the box, and some radical changes from how we currently deliver healthcare. As things stand, those who can pay will continue to access their care from the private sector, while those at the bottom of the pyramid will get a hit and miss service where they can.