PRIVATE SECTOR ENGAGEMENT IN PUBLIC HEALTH SYSTEMS DISCUSSION PAPER SEPTEMBER 2022 Rafael Cortez Meaghen Quinlan-Davidson / PRIVATE SECTOR ENGAGEMENT IN PUBLIC HEALTH SYSTEMS Rafael Cortez and Meaghen Quinlan-Davidson September 2022 Health, Nutrition, and Population (HNP) Discussion Paper This series is produced by the Health, Nutrition, and Population Global Practice of the World Bank. The papers in this series aim to provide a vehicle for publishing preliminary results on HNP topics to encourage discussion and debate. The findings, interpretations, and conclusions expressed in this paper are entirely those of the author(s) and should not be attributed in any manner to the World Bank, to its affiliated organizations, or to members of its Board of Executive Directors or the countries they represent. Citation and the use of material presented in this series should take into account this provisional character. 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Any queries on rights and licenses, including subsidiary rights, should be addressed to World Bank Publications, The World Bank Group, 1818 H Street, NW, Washington, DC 20433, USA; fax: 202-522-2625; e-mail: pubrights@worldbank.org. © 2022 The International Bank for Reconstruction and Development / The World Bank 1818 H Street, NW, Washington, DC 20433 All rights reserved. ii Health, Nutrition and Population (HNP) Discussion Paper Private Sector Engagement in Public Health Systems Rafael Corteza and Meaghen Quinlan-Davidsonb Economist, Health, Nutrition and Population Global Practice, The World Bank, Washington a Senior DC. b Consultant, Institute for Global Health, University College London Paper prepared for the World Bank’s Health, Nutrition, and Population Global Practice under the Advisory Services and Analytics (ASA) “Strengthening the strategic purchasing of health care services to improve health system efficiency and equity” and supported by the Korean-World Bank Trust Fund Abstract: The aim of the literature review was to provide evidence on private health sector engagement globally, with a specific focus on the South Caucasus. The analysis focused on private sector engagement through the lens of policy dialogue, information sharing, regulation, financing, and private sector provision, including performance and private sector engagement modalities. Results showed that the private sector in Armenia, Azerbaijan, and Georgia is heterogenous. Regulation aimed to increase health coverage with quality services and increase the institutional capacity of the Ministries of Health to collect and analyze data to know better how the private health sector operates and promote private-public partnership to respond to public health challenges. The creation of an autonomous health superintendence would help improve the performance of the private sector: overseeing and supervising the service delivery of private providers and ensuring a strong regulatory environment within countries with high levels of out-of-pocket payments. This entity should enforce transparent behaviors of doctor practices, licensing of physicians, and accreditation of private providers. In addition, the South Caucasus countries can adopt a mix of payment systems with private providers and establish arrangements that ensure a strong private-public partnership (PPP) in health through well-defined contracts. Health facilities with management autonomy should also ensure quality-based purchasing. PPPs would be an optimal way for the South Caucasus to engage with the private sector. Political will, legislative environments and regulatory frameworks, transparency, public sector capacity, complete and flexible contracts, and broad stakeholder engagement are essential conditions to expand PPPs. Learning from best practices globally and expanding research on how health systems create and regulate mixed public-private services are also essential to improve quality, equity, and efficiency of these systems, as countries work to achieve universal health coverage. Keywords: Regulation, private-private partnership, universal health coverage, regulation Disclaimer: The findings, interpretations, and conclusions expressed in the paper are entirely those of the authors, and do not represent the views of the World Bank, its Executive Directors, or the countries they represent. Correspondence Details: Rafael Cortez, World Bank, 1818 H St., N.W, Washington, DC 20433, USA; telephone: 202-458-8707; fax: (202) 522-0050, e-mail: rcortez@worldbank.org; website: www.worldbank.org/hnp. 3 TABLE OF CONTENTS RIGHTS AND PERMISSIONS ...................................................................................... II TABLES AND FIGURES ................................................................................................ 4 ACRONYMS ..................................................................................................................... 5 ACKNOWLEDGMENTS ................................................................................................ 6 INTRODUCTION............................................................................................................. 7 METHODS ........................................................................................................................ 8 RESULTS .......................................................................................................................... 8 COVID-19 ....................................................................................................................... 9 PRIVATE SECTOR ENGAGEMENT .................................................................................... 10 Policy Dialogue ......................................................................................................... 10 Sharing Information .................................................................................................. 11 Regulation ................................................................................................................ 12 Financing ................................................................................................................... 16 Private Health Sector Provision ................................................................................ 24 Hospitals .................................................................................................................... 28 Pharmacies ................................................................................................................ 29 Private Health Sector Performance .......................................................................... 30 MODALITIES OF PRIVATE SECTOR ENGAGEMENT........................................................... 32 Outsourcing ............................................................................................................... 32 Public-Private Partnerships ...................................................................................... 32 Hospital Privatization .................................................................................... 48 DISCUSSION AND RECOMMENDATIONS............................................................. 49 REFERENCES................................................................................................................ 51 Tables and Figures Figure 1. Coverage of Public and Private Provision of Health Care in Europe (2018) .... 17 Table 1. Search Terms used in Database Search ........................................................... 8 Table 2. Health Financing in South Caucasus Countries (2018).................................... 18 4 ACRONYMS BRIC Brazil, Russia, India, and China BLT Build-Lease-Transfer BOO Build-Own-Operate BOT Build-Operate-Transfer BT Build-Transfer BTL Build-Transfer-Lease BTO Build-Transfer-Operate CCG Clinical Commissioning Group CHPI Centre for Health and Public Interest CSU Commissioning Support Unit EU European Union GDP Gross Domestic Product GP General Practitioner GPPP Global Private-Public Partnership LMIC Lower-Middle-Income Country MAP Medical Assistance for the Poor MOH Ministry of Health MolDLPHSA Ministry of Internally Displaced Persons from the Occupied Territories, Labour, Health and Social Affairs (Georgia) NHS National Health Service OECD Organization for Economic Co-operation and Development OOP Out of Pocket PFI Private Finance Initiative PHCC Primary Health Care Center PPM Public-Private Mix PPP Public-Private Partnership SDGs Sustainable Development Goals SHA State Health Agency SHCC Sindh Healthcare Commission SHI Social Health Insurance SPV Special Purpose Vehicle SRAMA State Regulation Agency for Medical Activities SSA Social Services Agency UHC Universal Health Coverage UHCP Universal Health Care Program WHO World Health Organization 5 ACKNOWLEDGMENTS This report was prepared by a team led by Rafael Cortez (Senior Economist, HMNHN), and Meaghen Quinlan-Davidson (Consultant, University College London). This report was part of the products prepared for the World Bank’s Health, Nutrition, and Population Global Practice under the Advisory Services and Analytics (ASA) “Strengthening the strategic purchasing of health care services to improve health system efficiency and equity” The main task as well as this report benefited from helpful peer review comments by Moulay Driss Zine Eddine El Idrissi (Lead Economist, HECHN), Roberto Lunes (Senior Economist, HHNGE), Olena Doroshenko (Senior Economist, HECHN), Elvira Anadolu (Senior Health Specialist, HECHN), and Ahmet Levent Yener (Practice Leader, HECDR). The team is grateful to Jane Brodie for her editorial services. The authors are grateful to the World Bank for publishing this report as an HNP Discussion Paper. The work was possible thanks to the generous financial support from the Korean- World Bank Trust Fund. 6 INTRODUCTION 1. The fundamental goal of each country’s health system is to ensure the health and well-being of its citizens so that each individual is able to actively engage in social and economic activities in good health (Franken et al. 2013). Yet, the strain that health care systems face to guarantee access to and the quality of health services, while controlling costs, has increased over time. This has been attributed to the changing disease burden (toward chronic diseases), increased demand, financial crises, demographic shifts, and migration due to political and economic instability (Abuzaineh et al. 2018; WHO 2020). To address these challenges, countries have increasingly engaged the private sector through the implementation of mixed (both public and private providers) health care systems. In fact, health services and products delivered by the private health sector have become essential to health systems in countries across the globe (WHO 2020). The private sector is perceived as providing greater health service access responsiveness, increased financial resources, management expertise, and expertise in technology and innovation (WHO 2018a6). Private sector engagement is promoted by Goal 17 of the Sustainable Development Goals (SDGs) and toward the achievement of universal health coverage (UHC) (UN General Assembly 2015). 2. Indeed, the shift in the disease burden and an increased demand for health care services are expensive. According to Abuzaineh et al. (2018), it was projected that government spending on health globally between 2010 and 2020 would increase by over 65 percent, with Organisation for Economic Co-operation and Development (OECD) and Brazil, Russia, India, and China (BRIC) countries investing over US$3.6 trillion in infrastructure alone. This has led countries to engage in innovative partnerships and explore different ways to finance health care (Abuzaineh et al. 2018). Evidence suggests that the private sector, in partnership with governments, donors, and key stakeholders, has promoted and developed innovative approaches to health service delivery in many countries (Bhattacharyya et al. 2015). 3. The private sector is heterogenous and can include formal or informal, for- profit, or not-for-profit organizations, or qualified or underqualified individuals (WHO 2020). According to the WHO (2018a), the private sector provides a mix of health care services, goods, and supplies that are not owned or controlled by governments. This can include medicines, financial and medical products, health care provider training, support services, infrastructure, information technology, and direct provision of health care services. The private health sector can also play a role in shaping countries’ health policy (WHO 2018a). 4. Yet there are several challenges to engaging the private sector in health care systems. Evidence suggests that governments, once they have engaged the private sector in health systems, tend to focus on managing the public sector while ignoring the private sector’s provision of services. The COVID-19 pandemic has illustrated the importance of governmental regulation of private sector engagement. Effective governance, with clear dialogue, policy frameworks, and contracting of private sector engagement, is critical to the attainment of UHC. Well-developed, explicit strategies and effective management of such strategies between governments and the private sector are needed. These strategies should include sharing information and data between the public and private sectors. This could include, for example, information on out-of-pocket (OOP) payments, quality control, and access to referral services to ensure continuity of care (WHO 2020). 7 5. The ways in which the private sector participates in the contracting of health care services vary. The mixing of public and private services can be implemented in a variety of ways. For example, “public financing can finance the private sector, private financing can finance the public sector; contracts can be signed between public authorities (regions, insurance funds, etc.) and private providers, contracts can be signed between public hospitals and private clinics; private practice may be developed in public hospitals” (Andre and Hermann 2008). At the same time, if insurance is mandatory within a country, private sector organizations may supply the benefits. The processes involved in privatization include deregulation, contracting, implementation of private organizations, and an increase in cost-sharing and new OOP payments. 6. Given the important role that the private sector can play in providing access to and in the quality of health care services, as well as toward the achievement of UHC, it is critical to identify and understand how countries are engaging the private sector. This requires a better understanding of the private sector within health systems. This information can then be used to inform effective interventions (Mackintosh et al. 2016). As such, the current report aims to provide a literature review on private sector engagement in health care globally, with a specific focus on the South Caucasus (Armenia, Azerbaijan, and Georgia). METHODS 7. A narrative literature review was carried out to identify private sector engagement within public health systems. The review was conducted using Pubmed, Web of Science, Medline, and Google Scholar, focusing on global and regional, specifically the South Caucasus, literature. The search terms used in the database are provided in Table 1 and articles were included if they were written in English. References were also found by scanning the references of included articles and gray literature. RESULTS 8. Of the 343 references identified in the database search, 120 full-text articles were identified, of which 13 were included from the database search and 38 were additional gray literature in the review. Results according to private sector engagement themes are described in Table 1. Table 1. Search Terms Used in Database Search Private Stewardship Engagement Contract sector in health Private Engagement in Private Insurance Licensed sector health expenditure providers unlicensed providers Private Health service Primary Service Contract Public- Health sector provision health modalities private care facilities partnership Health service Secondary Hospital delivery health facilities Private Engagement in Commercial Market sector health market incentive Private Pharmaceutical Health Supply sector Medicines products chain 8 COVID-19 9. Since the onset of the COVID-19 pandemic, countries have been increasingly engaging the private sector to respond to health needs. For example, the National Health Service (NHS) in the United Kingdom has been managing all private inpatient facilities and COVID-19 patients. In Spain, all private hospitals were nationalized to combat the virus, and in Lombardy, Italy, private providers were engaged in the initial COVID-19 surge (O’Hanlon and Hellowell 2020). 10. Despite this increase in private sector engagement, there are policy challenges to ensuring that the private sector is aligned with each country’s national response. Some of these challenges include (a) engagement of the private sector in preparing the national response; (b) limited sharing of data between the private sector and the government on private sector resources and capacity; (c) explicit defining of inputs to ensure that the private sector is effectively responding to the pandemic; (d) weak health systems and the regulation of the private sector; (e) uncertainty about governmental financial planning, provision, and reimbursement to the private sector for services and products rendered; and (f) financial losses to the private sector incurred by the pandemic (O’Hanlon and Hellowell 2020). 11. In Armenia, the Ministry of Health (MOH) has facilitated access to health care for COVID-19. The package of services covered by the government has expanded to include all COVID-19–related care, including testing, telemedicine, and case management. The clinical pathway for COVID-19 care has been described, including detection of suspected cases by primary care physicians; care for cases that are mild or asymptomatic at the primary health care level; and referral to inpatient care for severe cases, older patients, symptomatic pregnant women, and patients with comorbidities. Primary care physicians are required to make two calls per day to patients to determine the need for a change in management, and services are monitored through the e-health systems. The selection of providers and suppliers reflects consideration for service delivery needs. The MOH has specified the service requirements for COVID-19 treatment and designated nine medical centers with a total of 1,700 beds for case management, all of which are publicly owned. Children under 18 years and pregnant women are transferred to designated health facilitates, four of which are private. The MOH has developed technical specifications for equipment needed for COVID-19. Following a call for volunteer nurses and medical students, the MOH is facilitating retraining to ensure competence in managing COVID-19 cases. The MOH has implemented changes in provider payment methods to incentivize conversion of hospital beds to intensive care beds, protect the health of vulnerable groups, and mobilize surge human resources for health capacity. Hospitals, which are routinely paid per case, are reimbursed on a per diem basis for each hospital bed involved in COVID-19 care provision. Specialized centers that care for COVID-19 cases among children and pregnant women receive special tariffs. Physicians who are mobilized to provide care receive bonuses (Chukwuma et al. 2020). 12. In 2020, due to COVID-19, Georgia’s Ministry of Internally Displaced Persons from the Occupied Territories, Labor, Health, and Social Affairs (MolDLPHSA) signed a memorandum with the United Nations Development Programme (UNDP) to support the Georgia Medical Holding to manage public health care facilities. This has also included introducing a clinical quality assurance mechanism. The Georgia Medical Holding currently manages five health care facilities, and its aim is to provide management expertise to publicly owned hospitals (UNDP 2020). At the same time, the World Health 9 Organization (WHO) supported the government of Georgia to develop and expand primary health care (PHC) services through training on essential health services and preparing and strengthening the health system (WHO 2021). 13. The WHO is working with the Azerbaijan government to prepare and respond to COVID-19. It launched, in collaboration with the Heydar Aliyev Foundation, MOH, the State Agency on Mandatory Insurance, and the Administration of Regional Medical Divisions, the REACT-C19 Project. The aim of this project is to share medical expertise, reform the hospital response, and use digital platforms and innovative solutions. The WHO also implemented the Solidarity for Health Initiative funded by the European Union (EU), which provides technical assistance to the government in procuring and delivering key equipment and medical devices (WHO 2020). PRIVATE SECTOR ENGAGEMENT 14. Historically, public health systems engaged the private health sector through large vertical health programs. According to the WHO, there have been three waves of private sector engagement: (a) linking of social marketing techniques to social goals, within a range of contexts (i.e., seat belt campaigns in the United States); (b) global private-public partnerships (GPPPs) (i.e., vaccine development); and (c) implementation of market systems within the health sector. Additional waves of private sector engagement have focused on addressing global health commitments, responding to country needs, and ensuring participation of new actors in the health sector (WHO 2020). 15. WHO (2018) defines private sector engagement as a partnership between the public and private sectors toward the accomplishment of a specific target. This requires effective governance to guarantee access to and quality of care as well as financial protection. It also requires that the private sector commits to the public sector health goals as set by the government. Private sector engagement includes the following: (a) private actors to support the development of public health policy as well as ownership and contracting arrangements, (b) use of regulatory and financing tools to influence private sector behavior, and (c) transfer of “private features” to public sector organizations. (WHO 2018a). 16. There are five domains for effective private sector engagement: policy dialogue, sharing information, regulation, financing, and public provision of services, proposed by the WHO (2020): Policy Dialogue 17. Governments should actively engage the private health sector in dialogue and national health plans to ensure participation and obtain input on national health goals. In a landscape analysis of private sector engagement of 16 lower-middle-income countries (LMICs) (with the highest overall utilization of private health providers), Albania and the Kyrgyz Republic explicitly mentioned “private health sector” or “private sector” in their national health strategic plan or national health policy. These countries have also included a specific objective for private sector engagement. 18. In Afghanistan in 2008, the Ministry of Public Health launched an initiative to oversee, regulate, collaborate, and build the capacity of the private health sector (Cross et al. 2017). The government wanted to align the private health sector with national health goals by improving quality of services and products, efficiency, and garnering greater funds for the health system. This involved developing intragovernmental relationships, public-private dialogue, and private sector partnerships. It also included the establishment of the Office of Private Sector Coordination in 2009, which managed for- 10 profit health companies and the creation of a public-private partnership (PPP) unit for large hospital PPPs. In its Strategic Plan 2011–2015, the government committed to regulations, procedures, and specific policies to collaboratively engage and partner with the private health sector. In 2013, the Office of Private Sector Coordination became the Directorate of Private Sector Coordination within the Ministry of Public Health. The Information and Communications Desk for Private Providers was established in 2015 to simplify the licensing of private providers. An evaluation of the directorate between 2012 and 2014 found improved capacity in strategic planning; work and monitoring and evaluation plans; communication; and staff responsibilities, roles, and satisfaction. Some of the identified challenges included a lack of financial resources for monitoring and evaluation plans, decisions not made based on monitoring and evaluation data, and inadequate management of information and records. Similar results were found for an evaluation of the PPP unit (Cross et al. 2017). 19. In Armenia, engagement with the private health sector has increased since the early 1990s. The MOH submitted a document to the government in 1994 outlining privatization of health care facilities. Almost all pharmacies, medical technical services, and large medical centers are privatized and are under private sector companies (Torosyan et al. 2008). It is not clear how the government has been and is currently engaging in policy dialogue with the private sector; the State Health Agency (SHA) works with private providers (Chukwuma et al. 2020). 20. In Azerbaijan, private health care was legalized in 2001. The MOH licenses the private sector but does not formally regulate it with strong installed mechanisms. (Richardson 2013). The mechanisms by which the government has engaged in policy dialogue with the private sector in Azerbaijan remain unclear (Hohmann and Lefevre 2014). 21. Georgia began a decentralization and privatization process of health care in the early 1990s. By 1996, distribution of medicines was privatized, and health insurance was privatized in 1997 (Hohmann and Lefevre 2014). However, the challenge of installing formal mechanisms through which the government engages in policy dialogue with the private sector is not clear yet. Sharing Information 22. The sharing of information between the government and the private sector is critical to ensuring effective health systems and services. This includes engaging the private sector in the government’s health strategy and within existing health information systems and ensuring that the private sector is collecting and providing data to these systems. For example, this could include data on the planning and allocation of health resources, utilization of private health services, disease surveillance data, and the coordination of health services. The Kyrgyz Republic and Armenia both have national health information systems that include private providers (WHO 2020b). 23. There are several challenges to private sector engagement and for sharing health information. Evidence suggests that private health providers lack motivation to collect and contribute data to health information systems. This is due to a lack of training on collecting and analyzing data and reporting to health information systems and a lack of time and incentives (Buchner et al. 2019; Tan et al. 2019; Wandera et al. 2019). The limited evidence available on private sector engagement in health information systems has found variation in implementation, reporting systems, and the health information data collected and provided. These challenges have a negative impact on governmental regulation and financing of the private sector, including paying providers. They also limit 11 understanding of private sector engagement and its accountability to the health system (Barber, Lorenzoni, and Ong 2019). 24. In Armenia, the National Health Information Analytical Center collects and analyzes routine data from both public and private health facilities. Evidence shows that not all private facilities are included in the database. At the same time, the SHA collects information on finances and activities from contracted health facilities. Some of the challenges to this system include collecting data more frequently, updating, streamlining, and verifying data quality (Richardson 2013). 25. In Georgia, the MolDLPHSA has prioritized the development and health sector’s use of integrated information and technology systems. The aim is for the Social Services Agency (SSA) to selectively contract health care providers based on performance and quality of services delivered. Under the inpatient and outpatient Universal Health Care Program (UHCP) and vertical programs, electronic reporting systems were gradually launched between 2014 and 2016. A national cancer registry was launched in 2015. The Georgian Birth Registry was launched in 2016 to monitor antenatal and obstetric services and expanded in 2018 to cover children ages 0–5 years. As of 2017, hospitals in Tbilisi had piloted electronic medical records; however, they had not been scaled up at the national level. Yet, deregulation, decentralization, and privatization have led to a mix of health information solutions for private insurance and private providers. In fact, communication between the systems has been limited (Richardson et al. 2017). Other challenges to the system include limited staff capacity for data analysis, a lack of analytical tools, a lack of motivation to collect and share the data in a context of decentralization, and private organizations in the health system. Registration of the cause of deaths is also limited (Cortez 2020; Richardson et al. 2017). 26. Azerbaijan has experienced fragmentation in its data collection and analysis. Health care providers do not have the capacity or are not motivated by government policies to collect and analyze data. There is also weak enforcement of the private sector reporting on its procedures (Ibrahimov et al. 2010). Regulation 27. To improve access, quality, financial protection, and health outcomes, governments can regulate the private health sector through administrative and bureaucratic controls, including licensing, registration, and pricing of services and products. This can be achieved through incentives and economic signals (Barber, Lorenzoni, and Ong 2019). Other types of regulatory approaches that governments can use include “market supply-oriented approaches, consumer/citizen-oriented approaches and collaboration-oriented approaches” (Bloom, Henson, and Peters 2014; WHO 2020). In an analysis of 18 countries, evidence suggests that to control market entry of the private health sector, Albania, the Kyrgyz Republic, and Armenia have a standardized registration and regulation process of private providers and private pharmacies. The Kyrgyz Republic regulates service and drug pricing, while there is weak evidence on Armenia and Albania enforcing these regulations (WHO 2020). 28. Regulation is defined as “statutory rules laid down by the government or government-appointed agencies, and also self-regulation implemented by professional bodies.” Regulation can include contracting, provider payment systems, accountability, and quality improvement (Barnett and Hort 2013; Ensor and Weinzierl 2007; Montagu et al. 2016; Morgan and Ensor 2014). 12 29. Regulation of the private sector is critical, as evidence suggests private health sector failures in the implementation of health services and products. This includes charging exorbitant prices for health care services, excessively ordering unneeded diagnostic tests, having inequities in coverage of health services, monopolizing the pharmacy industry, and providing fake and harmful medicines (World Bank 2012; Marriott 2009; Montagu et al. 2016). conducted a systematic review of private sector engagement and experience with health system interventions in LMICs. They outlined four approaches that governments can adopt to engage and regulate the private sector while addressing these challenges (Montagu et al. 2016).  Prohibition: This entails forbidding some or all components of the private health sector. For example, prohibiting health service provision by unlicensed providers. To guarantee prohibition, countries need to have the capability to enforce these restrictions as well as have social support in favor of these restrictions. According to Montagu et al. (2016), low-income countries may not have the resources to monitor or prohibit the private sector from practicing, whereas middle-income countries may have more resources to enforce and audit private health sector restrictions. Complete prohibition of the private health sector is uncommon.  Constraints: This involves regulating and limiting some private health provider activities. This can begin with dialogue and voluntary activities, and where required, can move to mandatory or statutory constraints (World Bank 2012; Marriott 2009; Montagu et al. 2016). Statutory constraints, for example, can include regulation of medicines, equipment, human resources, and quality of services. They can also include constraints on licensing and registration of clinics, health facilities, hospitals, medical products and supplies, and health care providers, as well as price gouging and monopolies (Bloom, Henson, and Peters 2014; Ensor and Weinzierl 2007; Kumaranakyake et al. 2000). Regulating and enforcing constraints is challenging in LMICs due to lack of resources and monitoring capacity. Evidence suggests that this form of regulation can increase the cost of services, particularly in poor communities (Attanayake and Siyambalagoda 2003; Wafula et al. 2013) and lead to corruption within the private sector (Wafula et al. 2013). There is limited evidence on countries introducing, implementing, and improving regulations (Chalker et al. 2005; Chuc et al. 2002; Montagu et al. 2016; Sax and Marx 2014; Sheikh, Saligram, and Hort 2015; Stenson, Tomson, and Syhakhang 1997; Wafula et al. 2013), although it appears that constraints have prevented an ungoverned free market (Montagu et al. 2016). For example, health care providers tend to have some form of qualification and hospitals some form of accreditation, and medicines are often sold in specific places (Goodman et al. 2007).  Encouragement and subsidizing: This component involves governments promoting the uptake of key health interventions and the improvement of quality through the use of positive supply-side incentives. For example, training private health care providers (Morgan and Ensor 2014; Shah, Brieger, and Peters 2011); promoting tax incentives to increase investment and reduce the price of services and products; creating a social franchise network for private providers (Montagu 2002); providing subsidies; and 13 promoting the social marketing of commodities that have high public health value (Montagu et al. 2016).  Purchase: This entails governmental purchase of private goods and services, using contracts. These can include construction and operational models for the provision of health care services (Coelho and O’Farrell 2009; Llumpo et al. 2015; Montagu and Harding 2012). The private sector may be able to invest, build, and expand facilities quicker than governments; it may also be able to provide specialized services that the government cannot provide. At the same time, governments can also promote the use of vouchers among patients as a way to indirectly purchase services (Montagu et al. 2016). 30. The aim of regulation is to control provider behavior while guaranteeing accessible, acceptable, equitable, and quality health services that are aligned with a country’s health sector goals (Akhtar 2011; Morgan and Ensor 2014). A lack of regulation can lead to poor quality of care (Morgan et al. 2016). One way to regulate private health providers and guarantee the provision of qualified and competent staff is through the use of certification. Health care providers can obtain certification after meeting a set of standards (Harding 2003; Morgan and Ensor 2014). These standards must be enforced and monitored. Accreditation is another way of regulating the quality of private health services (Posnett 2002). 31. Despite the importance of regulation, there is a lack of evidence on effective regulation within health services, and experience from low-income countries has showed poor government regulation (Montagu and Goodman 2016; Morgan et al. 2016). This is influenced by the structure of the public and private sectors within countries. Changes to the quality, efficiency, and equity of health services within the public sector will lead to changes in the private sector (Morgan et al. 2016). 32. Primary health care was privatized in Croatia in 1993. This involved privately owned facilities providing health services through self-employed doctors (contracted by the Croatian Health Insurance Fund and financed mostly through capitation) and private practice within rented offices of county health centers. Private providers are regulated by the MOH on the quality of care, with private health care providers continuously evaluated on improving the quality of clinical and nonclinical services. The country has several reviews of performance indicators, including wait times, duration of hospitalizations, survival rates, unplanned readmissions, patient and personnel safety, personnel satisfaction, infection control, patient rights, drug side effects, deaths, and autopsies (Dzakula et al. 2014). 33. The Private Health Centers Regulation Law in 2012 in Afghanistan specifies the regulations, procedures, and fees for the establishment, licensing, and operation of all private hospitals, clinics, physical therapy, and radiology centers (Cross et al. 2017). The country has experienced some challenges to the implementation of this law, which has potentially undermined and discouraged private sector engagement. These challenges included a commission within the Ministry of Public Health to review and approve all private sector fee schedules, disproportionate monetary penalties for violations, expensive licensing fees, strict personnel requirements, and high capital guarantees. In 2013, standards were set and private sector providers were required to use a checklist to ensure the safety and quality of services (Cross et al. 2017). 14 34. Health care services are decentralized in Pakistan (World Bank 2019). The Sindh Healthcare Commission (SHCC) was mandated by the Sindh Healthcare Commission Act No. VII of 2014. The SHCC has been tasked with strengthening the government’s regulatory function through licensing, quality assurance, and banning of fraudulent health services. To date, the SHCC has developed the Minimal Service Delivery Standards, Sindh Service Delivery Standards, and Primary Health Care and Clinics Standards. As of 2019, the SHCC was also preparing to map public and private sector providers and to determine a baseline for the standards of and access to quality care. Progress for the SHCC has thus far has been positive; however, additional capacity-building in organizational structure and human and financial resources is required to implement core stewardship and regulatory functions. A shift in approaches is also needed, from a traditional punitive government-dominated approach to regulation and toward a mix of incentives and implementation of legislation approach, developed in collaboration with multiple stakeholders. This could include strategies such as tax breaks, subsidies, branding, accreditation, consumer awareness, and penalties, to ensure compliance and encourage private providers to self-regulate. The Aga Khan University, in partnership with the London School of Hygiene and Tropical Medicine and SHCC, has designed a research project to test the response to innovative health care regulations in Sindh through a participatory multistakeholder approach (World Bank 2019). 35. In Azerbaijan, the private sector is licensed by the MOH but is otherwise independent. The licensing process in the country is transparent with information available to the public. The MOH does not formally regulate the “status, structure, and services provision of private health facilities.” According to Ibrahimov et al. (2010), the MOH does not have an approach to regulate quality of care in private health service provision. The government’s approach toward privatization is as follows:  Improve transparency of financial flows in the health sector  Mobilize additional financing resources through investments by the private health sector  Improve efficiency and effectiveness of health resources  Improve quality and diversity of services and providers  Increase choice and competition for health care users (Richardson 2013): 36. The Georgian health system has undergone several reforms since 1991, mainly focusing on decentralization and privatization of health care provision and management of funds (Richardson et al. 2017; Rukhadze 2013). Private health providers predominate the system and experience limited regulation. Private health care providers are independent in terms of ownership, governance, and management (Cortez 2020).  Between 1995 and 2004, the country implemented a Social Health Insurance (SHI) scheme, but this was abandoned due to insufficient financial resources (Cortez 2020).  By 2004, the government decided to focus on marketization, privatizing health service provision, and purchasing and liberalizing regulation and supervision of private insurance companies. The idea was that the private sector would be more efficient than the public sector, and through competition the health market would achieve greater efficiency and fairness (Cortez 2020).  To complement this new approach, in 2008, the government implemented the Medical Assistance for the Poor (MAP) program. Under the MAP program, a 15 basic benefits package was made available to households living below the poverty line. The Social Services Agency (SSA) paid private health insurance companies and covered the benefits package for the poor while non-poor populations financed their own health expenses and insurance cost (Cortez 2020).  The State Regulation Agency for Medical Activities (SRAMA) is under the MolDLPHSA; SRAMA is the regulatory agency responsible for issuing licenses and permits to health care facilities and pharmacies and regulating health care providers, medical devices, and pharmaceuticals (Richardson et al 2017).  The Insurance State Supervision Service regulates the private insurance industry. Insurance companies are licensed by the Insurance State Supervision Service and are required to provide annual reports to the government (Insurance State Supervision Service 2017).  Since 2008, the private insurance industry was consolidated, and as of 2017 there are six private health insurance companies (Imedi L, PSP Insurance, ARDI, IRAO, GPIH, and Alpha) (Cortez 2020; Richardson et al 2017). 37. In Armenia, licensing of public and private medical facilities is carried out in compliance with the following: Decree 1936-N for medical facilities and Decree 1275- N for dental clinics, polyclinics, and ambulatories. These standards address the structural requirements for service delivery in terms of equipment, staffing, and infrastructure. However, following market entry, reviews of licenses are rarely conducted. This may inadvertently create incentives for health facilities to not maintain the standards for licensing. There is also a need for regulation to guide the monitoring and enforcement of quality standards in the private sector and prevent financial fraud and other abuses even for private health care spending (Chukwuma et al. 2020). Financing 38. This component refers to the availability of private sector funds from the government and the arrangements agreed upon by the government over the use of funds. Evidence shows that the private sector in many LMICs is financed through OOP payments, with limited financial risk protection. When the public sector is not meeting the health needs of its citizens, one way that governments can ensure that the population’s needs are met is through strategic purchasing of private health services (WHO 2020). 39. In Croatia, the Croatian Health Insurance Fund is the sole purchaser of health services and purchases all individual health services delivered by both public and private providers. Primary care is provided mainly by private medical practices, while almost all hospitals are publicly owned and managed. Mandatory health insurance contributions made by employers and individuals are the main source of financing for health and account for 76 percent of total financing (Voncina et al. 2018). 40. In Europe and the United Kingdom, health care financing is almost universally government-managed, either through direct taxation revenue (the United Kingdom) or through Social Health Insurance (SHI), which is semi-direct government-subsidized and managed (Germany). European governments provide a health care safety net for most of their citizens through SHI (Montagu 2021) (Figure 1). Meanwhile, most private health care providers in Europe are paid either through tightly regulated SHI schemes or through the national health insurance system (Orosz and Morgan 2004; Paris, Devaux, and Wei 2010; Tchouaket et al. 2012). At the same time, OOP payments are low across European 16 countries, with 2018 estimates suggesting they represent 0.5 percent of total spending on preventive care and less than 20 percent of the total health expenditure (Montagu 2021; OECD Statistics 2020). Figure 1. Coverage of Public and Private Provision of Health Care in Europe (2018) 120 100 80 60 40 20 0 Public (%) Private (%) Source: Montagu 2021. 41. Table 2 shows health financing in the countries of the South Caucasus compared to the entire region. As a percentage of gross domestic product (GDP), current health expenditure is low in Azerbaijan (3.5 percent) compared to Armenia, Georgia, and the region in its entirety. Compared to the region (17.7 percent), OOP expenditure is high in all countries (84.3 percent in Armenia, 72.8 percent in Azerbaijan, and 47.7 percent in Georgia). At the same time, external health expenditure (as a percentage of current health expenditure) is high in Armenia (1.2 percent) compared to the other countries and region (0.02 percent) (WHO 2018a). In Croatia, OOP spending accounts for most of the private health expenditure and is the second-most important source of health financing (Dzakula et al. 2014). 42. In Azerbaijan, the level of private health expenditure is difficult to determine due to the following: A large proportion of informal payments and OOP expenses, Inadequate reporting by the private sector and a lack of a national health accounts system to identify health expenditures within the entire system (Ibrahimov et al. 2010). 43. Given that private providers are paid on a fee-for-service basis, they are incentivized to have a large volume of services, with evidence showing there is excessive diagnostic and laboratory service referrals. Fee-for-services are paid through OOP or voluntary health insurance and set by each private health facility. In cities, the private health sector is perceived as having better quality of care and an extensive provision of diagnostic and laboratory services. As such, those who can pay will seek care in the private sector (Ibrahimov et al. 2010). 17 Table 2. Health Financing in South Caucasus Countries (2018) Europe and Indicator Armenia Azerbaijan Georgia Central Asia Current health expenditure (% of 10.0 3.5 7.1 9.3 GDP) Current health expenditure per 1,036.95 633.56 795.90 2,968.91 capita, PPP (current US$) OOP expenditure (% of current 84.2 72.8 47.7 17.7 health expenditure) Domestic general government 12.3 26.5 39.5 72.5 health expenditure (% of current health expenditure) Domestic general government 127.96 168.07 314.08 1,701.61 health expenditure per capita, PPP (current intl $) External health expenditure (% of 1.2 0.7 0.5 0.02 current health expenditure) External health expenditure per 12.62 4.23 4.26 1.32 capita, PPP (current intl $) Source: WHO Global Health Expenditure database 2018. Notes: GDP = Gross domestic product; PPP = Public-private partnership. 44. In Armenia, the institutional arrangements for paying for health services have involved the Marz governments, the State Health Agency (SHA) and its Marz branches, the MOH, donors, private health insurance agencies, community-based health insurance, and service users through OOP payments—and a relatively small percentage of health expenditure flows through voluntary health insurance, community-based health insurance, and external donors. The territory of the Republic of Armenia is composed of ten marzes (regions) and Yerevan city which is governed by the law on local self-government in the city of Yerevan. Public administration in the marzes is governed by President’s decree “On public administration in the marzes of the Republic of Armenia” and other legal acts. Marz governors implement the regional policy of the government. 45. In 2018, to further pool risks, the government discussed the possibility of administering the benefits package and civil servants’ package through private health insurance companies. Private insurers would act as third-party administrators to purchase services, while program beneficiaries would be randomly assigned to the insurers. The insurers would then pay claims using previously established rates to a set of providers chosen by the government (Lavado, Hayrapetyan, and Kharazyan 2018). By 2020, third-party purchasing mainly occurred through the MOH and SHA. However, there have been challenges in defining institutional roles and decision rights for purchasing in the country that facilitate accountability and the attainment of health system goals (Chukwuma et al. 2020). The SHA still lacks several important aspects of modern payment systems including effective gatekeeper and referral systems, limited managed care use, lack of effective spending caps, and weak and limited regulation of private sector health spending. The SHA is not a strategic purchaser, and because it is under the auspices of the MOH, it is granted limited autonomy to initiate major initiatives such as budget program changes. Every program budget adjustment must go through the MOH and the Ministry of Finance. Furthermore, the funds it manages are too limited to pay incentives for finance development/improvements. Benefits package funding is a small share of revenue for private hospitals, and the SHA has no fiscal space for negotiation with providers. 18 Currently, the SHA does not have health or health system roles or objectives—as it is narrowly focused on processing facility payments (Lavado, Hayrapetyan, and Kharazyan 2018). 46. In Georgia, in 2013, the SSA became the single purchasing agency while private insurance companies stopped dominating the health market in the purchase of the government-funded benefits package. The SSA manages service purchasing for the Universal Health Care Program (UHCP) and 23 other vertical health programs and uses a list of fixed prices for health care services. In 2017, the government excluded high- income households from access to SSA funding, as they were expected to buy their own insurance or pay for their services. This did not exclude an option for employers to continue paying for health insurance plans of their workers. The government understood that one factor for SSA entry in the health market was to stabilize the private insurance companies’ generation of high-level profits (Cortez 2020; Rukhadze 2013). Contracting 47. Contracting private providers is one way governments can negotiate and improve the effectiveness of public funds. It also gives governments the opportunity to better regulate the private sector by specifying certain conditions within the contract, such as providing quality of care and becoming accredited. Contracting assigns responsibility to the private health sector to deliver certain services and products. This gives the government the opportunity to focus on stewardship (or monitoring contract performance) over the private health sector and health financing. According to Rao et al. (2018), there is mixed evidence on the impact that contracting has on private health sector performance, including improved access to and utilization of health care services and improved health outcomes. 48. To ensure equity of care, governments can incentivize providers through voucher schemes that target underserved populations. At the same time, providing high coverage for a core set of health services through pooled financing is associated with wide-scale financial risk protection (WHO 2020, 2018b). 49. Rao et al. (2018) differentiates between two types of contracts: management contracts, or those where the private health sector provides services within existing government establishments, and service delivery contracts, where the private sector uses its own resources and infrastructure to provide services (Rao et al. 2018). In an analysis of 18 countries, Albania, the Kyrgyz Republic, and Armenia had in-service contracting of the private health sector (regional or specific diseases). They also had publicly financed health care for citizens and coverage of pharmaceuticals through public insurance. The Kyrgyz Republic and Armenia covered private providers through public insurance. The Kyrgyz Republic reported an established partnership with private sector engagement for a tuberculosis program. The proportion of utilization of private sector medical providers in Albania, the Kyrgyz Republic, and Armenia was 7.8 percent, 7.1 percent. and 4.5 percent, respectively. In Albania, there were 450 private sector retail pharmacies (WHO 2020, 2018b). 50. Once services are contracted by the private health sector, it is important that the government monitors and enforces these contracts. For example, Bosnia and Herzegovina has near universal health care (Rakic et al. 2018; Rao et al. 2018). In 2009, the Ministry of Health and Social Welfare passed a certification regulation to ensure quality, safety, and trust of health services. In 2010, to increase access in rural areas and quality of health services, the government began to contract the private health sector through the provision of specialist services. In 2012, the government assigned an 19 independent agency to evaluate the private health sector’s compliance with these mandatory standards. Evidence suggests large variation in compliance by specialist practices, dentists, and pharmacies. Those that went through the certification process reported doing so to improve management and provider confidence and safety. Those that did not go through the certification identified the following challenges: costs, disruption of services, and time. Despite being mandatory, there was low governmental monitoring and enforcement, and this led to a lack of certification among certain pharmacies, dentists, and specialist services (Rao et al. 2018). 51. In 2015, the Centre for Health and Public Interest (CHPI) investigated National Health Service (NHS) England’s contracting out of services to the private sector (CHPI 2015). At the time, over one-fifth of NHS England’s annual total health care budget (approximately £20 billion per year) was contracted out to the private sector to deliver health care services. In fact, the budget between the private sector and NHS trusts and local commissioning bodies increased by 50 percent between 2009 and 2014 (from €6.6 billion to £10.0 billion, respectively). This included contracts with pharmacies, general practitioners (GPs), and dentists, with the largest services outsourced to community health services and secondary care. A total of 53,000 contracts were estimated to be between NHS England and the private sector. The contracts were administered by about 25,000 staff at Clinical Commissioning Groups (CCGs) and local area teams, costing upward of approximately £1.5 billion. CHPI posited that private sector engagement with NHS England would increase due to the Health and Social Care Act of 2012, which requires CCGs to put out a competitive tender for services. One of the main challenges highlighted in the report, as identified by the Public Accounts Committee and by Monitor (the economic regulator of the health care market), was NHS England’s lack of monitoring and enforcement of these contracts. This is critical given the need to ensure quality and safety of health services. This was attributed to a lack of information-sharing. In fact, service commissioners did not know whether the private provider was adhering to the contract or maximizing revenue by cutting back on the provision of services and products. In the analysis, CHPI showed that 211 CCGs held over 15,000 contracts, with 2013–2014 expenditure on private sector contracts estimated at £9.3 billion (approximately 16 percent of the £65 billion budget). At the same time, there was a lack of information on the number of site inspections that CCGs had conducted on private sector contracts. The reason for this was that CCGs contract out their monitoring function to Commissioning Support Units (CSUs). As such, CCGs would not know the number of contracts or site inspections held. 52. Monitor also reported, in a 2013 study, that CCGs were reluctant to enforce contract terms to not expend the limited financial resources available. In fact, CHPI found that seven of the 15,000 contracts were terminated due to poor performance, 16 CCGs had imposed financial sanction on private providers, and 134 contract query notices had been issued. Ultimately, this illustrated poor monitoring of services with limited information on value for money and good quality and safe care. CHPI made several recommendations including commissioning an independent audit of CCGs’ capacity to monitor and manage contracts with the private sector; ensuring that CCGs are accountable to enforcing the contracts with the private sector; and collecting and making data about private sector contracts publicly available, including payment and performance (CHPI 2015). 53. Following the breakup of Socialist Yugoslavia in 1993, the MOH reformed the inherited primary care financing and organization models in Croatia. The Health Care Act of 1993 combined three separate health insurance schemes under the Croatian Health Insurance Fund. Budgets were replaced by capitation, with no fee-for-service 20 payments, and all citizens were required to register with individual GPs. In addition, the MOH allowed for privatization of individual primary care doctors’ offices. Within several years, most primary care doctors chose to become private entrepreneurs contracted directly by the Croatian Health Insurance Fund because this meant better incomes compared to health center salaries. By the mid-1990s, over 80 percent of private practices in primary health care operated as microentrepreneurs in leased facilities. Health centers, formerly exclusive providers of all primary health care services, with salaried employees and public health functions, transformed into administrative organizations that leased premises and organized some forms of care such as laboratory services, community nursing, and radiological diagnostics (Vocina et al. 2018). This was abolished in 2002. 54. In 2006, the Voluntary Health Insurance Act outlined the provision of voluntary health insurance by the Croatian Health Insurance Fund and private insurers. The Croatian Health Insurance Fund contracts private health care providers. The insurance fund is overseen by a governing council, comprising representatives from the insured population, MOH, Ministry of Finance, the Croatian Employers’ Association, health institutions, and private practices (private GPs). Over time, primary care practices have become privatized. Private health insurers must be approved by the MOH and supervised by the Croatian Health Insurance Fund. Although formally independent of the MOH, the central government effectively controls the Croatian Health Insurance Fund since it appoints its director and board of directors (on the recommendation of the minister of health) and has the authority to dismiss them. The Croatian Health Insurance Fund is responsible for managing the mandatory health insurance scheme and contracting health care providers across all levels of care. As the main purchaser of health services, the Croatian Health Insurance Fund plays a key role in establishing performance standards and setting the price of services. The Croatian Health Insurance Fund is also responsible for the distribution of sick leave compensation, maternity benefits, and other allowances as regulated by the Croatian Health Insurance Act (Voncina et al. 2018). Concessions or purchasing power parity (PPP) tenders for the provision of primary health care services, between county governments and the private sector, were introduced in the country in 2009 with the new Health Care Act. All health care providers belong to the National Health Care Network and PPPs are granted to primary care teams that operate outside of the primary health care center in which doctors are salaried employees. The Health Care Act was amended in 2012, where market prices were applied to health care centers rented by private physicians. Every three years the Croatian Health Insurance Fund holds a competition in contracting with individual and institutional health care providers, within the scope of the Mandatory Health Insurance. The Croatian Health Insurance Fund, under the agreed contract, pays for health care services. The contract includes the scope and quality, requirements for cost accounting, and payment terms. Contracts conform to the National Health Plan’s guidelines. Over the contract period, the Croatian Health Insurance Fund monitors the execution of the contract, including the financial and medical aspects (Dzakula et al. 2014). All providers in the public health network, regardless of public or private ownership, are directly contracted by the Croatian Health Insurance Fund. The Croatian Health Insurance Fund purchases primary care services based on contracts with primary health care providers. Primary care providers are paid through a combination of capitation and fee-for-service payments (called diagnostic therapeutic procedures), and quality and performance bonuses, with the following elements: capitated amount per enlisted patient (diagnostic therapeutic procedures codes used to report services provided); fixed payment for running costs, such as heating and nurse’s salary; fee-for- service payments for selected services (diagnostic therapeutic procedures codes); bonus for quality indicators; and bonus for key performance indicators. The shift to capitation 21 payments and privatization of primary care offices were intended to provide physicians with direct incentives to provide better quality and more efficient care, as patients were expected to vote for both with their feet. At the same time, as gatekeepers, primary care doctors were responsible for the influential role of coordinating and rationing the provision of health care services. Patients were not allowed to access hospitals without primary care referrals (except in emergencies), and only primary care doctors were allowed to prescribe reimbursed medicines (Voncina et al. 2018). 55. In Pakistan, the Sindh Province has the highest concentration and utilization of private sector health facilities in the country (World Bank 2019). However, the private health care services provided are largely unregulated while holding over 80 percent of the province’s health service infrastructure. Over 60 percent of public primary health care facilities in Sindh are currently contracted (24 of the 27 districts) to People's Primary Healthcare Initiative (PPHI), which currently manages over 1,013 primary health care facilities. The PPHI Sindh is a PPP program of the government of Sindh. It was developed in Pakistan to improve the delivery of primary health care services in public health facilities that were understaffed, poorly resourced, and/or ineffectively managed. A 2011 third-party evaluation of PPHI provided evidence for improvements in staffing; the availability of drugs and equipment; and the physical condition of facilities, including the rehabilitation of dysfunctional Basic Health Units (BHUs) that the PPHI had been operating since 2007. Of the over 90 secondary health care facilities in Sindh, only 7 are currently contracted out through PPPs. There are also existing plans to scale up the ambulance services in Sindh. Other contracted entities include Indus Health Network, SINA, Aman Foundation, Integrated Health Services, and Health and Nutrition Development Society. Overall, the Sindh PPP Unit, in collaboration with the Department of Health, has actively embraced the contracting of health services. Promulgation of the Sindh Public-Private Partnerships Act 2010, coupled with legislative guidelines and financing and procurement rules, was largely a result of the urgency to improve service delivery post-devolution and to help reduce the infrastructure and service delivery gaps within the limited resources available. Along with these reforms came the establishment of the PPP Unit in the Sindh Finance Department. The Sindh PPP Unit, in recognition of the commercial nature of PPPs, has also established a viability gap fund to provide assurances to private sector partners that negotiated subsidies or payments over the life of a PPP project and will be met according to contractual obligations. Complementary to this, the Sindh PPP Act 2010 (Chapter V) defines financing options for all PPP projects inclusive of construction/infrastructure and equipment. However, some gaps remain in contract design—the overarching Sindh outsourcing strategy needs further refinement, including more detailed operational procedures for performance monitoring and payments schedules; performance-based penalties are not completely developed; and finally, the issue of the assessment and regulation of technology and related ethical concerns needs to be addressed. In addition, to develop and implement a sound contracting and institutional framework, there is a need to incorporate gold standard practices of contracting including precontract feasibility studies, pricing analyses, competitive tendering and prequalification of bidders, adequate costing, and terms of reference preparation of the contracts, as well as to put feedback mechanisms in place. There is also no overarching strategy that fosters the growth and development of the private health sector nor a framework/platform for developing a sound working relationship between the public and private health care sectors. Other concerns have to do with self-evaluation and a weakness in monitoring and evaluation, each contractor is required to hire its own independent evaluator. Baseline assessments of the contract that utilize District Health Information Software data have limited information available for initial inputs, leading to difficulties in assessing performance. Another 22 challenge is that the process for the awarding of contracts is vulnerable to political interference, and taxation levels are inhibitory for some private sector entities’ entry into primary health care (PHC) service delivery, coupled with lower profit margins in the sector. Diagnostic and laboratory service fees are the main component of fees charged in contracted out facilities. The PPP Node is housed under the Department of Health and currently has a staffing organizational structure of up to four people. The study findings suggest challenges including delays in receipt of payments for contracted entities, with biannual payment mechanisms using a single line budget transfer facility. Payment delays have been attributed to difficulties in bifurcations of the budget. There is also a need for more contracting in preventative programs, and unclear referral mechanisms between the public and private sectors hamper primary health care service delivery (World Bank 2019). 56. In a literature review of public-private interactions in South Africa, Kula et al. (2014) showed that contract development, management, and monitoring were weak and failing. For example, challenges were found in contracts between hospitals and private psychiatric hospitals. This included a lack of connection between performance and payment as well as a lack of incentives to improve quality of care. Similarly, contractors limited the quantity and quality of contracted-out district health services that failed to meet public sector standards (Kula et al. 2014). 57. In Azerbaijan in 2010, the centralization of funds for health services was discussed to provide greater health care provider autonomy and introduce contracting as a payment mechanism. This included per capita payments in primary care and case-based payments for hospitals. Private providers are not covered by state treatment and diagnostic protocols. Insurance companies have mechanisms to control providers’ behavior through utilization management. At the same time, the procurement of private sector medical equipment is not regulated by the MOH (Ibrahimov et al. 2010). Contracts to public and private providers include conditions of access, benefits plans, payment mechanisms, information systems, payments, and investments, monitoring and evaluation, and audits and incentives (Cortez et al. 2021). 58. In Armenia, the SHA contracts private hospitals and clinics for public health services (Chukwuma et al. 2020). The SHA started operating in 1998 by contracting a few providers in a pilot and scaled up operation nationally in January 1999 (Chukwuma et al. 2020).  The ongoing privatization agenda had implications for SHA operations. By 1993, state health institutions had become semi-independent and able to generate revenues (Chukwuma et al. 2020).  In 1995, hospitals and polyclinics were permitted to provide private care in addition to state-funded services, under the regulatory framework of private and commercial firms (Chukwuma et al. 2020).  The contractual arrangements between the SHA and providers were limited to health services providers using the state’s property. The SHA also had limited ability to supervise private enterprises and could only resolve challenges that did not violate the independence of these enterprises. For example, hospitals could set the terms of service and had discretion over investments of surplus income. Also, the MOH continued to undertake centralized procurement of some medicines and to define allocations for public health programs such as tuberculosis, HIV/AIDS, and oncology. Where these public health programs were financed by donor agencies, there were also reporting lines to these agencies 23 from the MOH. The MOH continued to be directly involved in service delivery, particularly of tertiary care (Chukwuma et al. 2020).  Since 2017, third-party administrators have been contracted to carry out the purchasing of services in the social package. This decision was made by a minister of health who had led a private health insurance company. Under this arrangement, the benefits, tariffs, providers, and beneficiaries continue to be decided by the MOH, in line with broader health system goals, and this effectively reduces the scope for competition among the private insurers. The functions of the third-party administrators included helping beneficiaries navigate the health system and processing claims. The ratio of benefits to insurance premiums was fixed at 90 percent. Despite this target, there are still indications of inefficiency and decreases in coverage (Chukwuma et al. 2020). 59. In Georgia, the SSA purchases all services, from both public and private providers, under the UHCP (Richardson et al. 2017). The relationship between purchases and providers shifted over time from an integrated model to a contracting model. For the UHCP, the SSA purchases services from health care providers, while private health insurance companies purchase services for those with voluntary health insurance. Services are essentially provided by private providers.  By 2013, most of the health care sector was private: approximately 80 percent of hospital beds and primary care and outpatient specialists. Only a few hospitals were part of the public sector (Smith 2013). Within recent years some of the private hospitals have been taken over by the public sector (Nikuradze 2013).  Most health facilities are autonomous and not under local government or MolDLPHSA management. Health care workers are employed by these facilities. Fee-for-service is the most common payment mechanism used by the SSA to pay to health providers. In parallel, services not covered by UHCP and voluntary health insurance can be directly purchased OOP (Cortez 2020).  The state does not employ health care providers; rather, they are employed by health facilities that are independent actors. The most common payment mechanism is fee-for-service. Prices are controlled by those reimbursed by private insurance companies (Richardson et al. 2017). Private Health Sector Provision 60. Globally, health care delivery, from community services and primary care to tertiary-level services, shows that the private sector is engaged in health systems in a variety of ways, delivering services. The private sector is not necessary for the delivery of national health services nor is it a barrier to an effective and strong national health care system (Moisidou 2017). 61. Based on 2008/2009 data from the OECD (Paris, Devaux, and Wei 2010), the provision of specialist care in European countries varied by solo private specialist practitioners (9 of 22 European countries) and group private specialist practitioners (3 of 22 European countries). Meanwhile government specialist services were predominantly available in Italy, Portugal, and Spain (Group 2); Czechia, Finland, Hungary, and Portugal (Group 3); and Ireland, Sweden, and the United Kingdom (Group 4). The United Kingdom and 15 of 22 European countries reported providing primary health care through the private sector, including those with SHI and countries with national health systems (Paris, Devaux, and Wei 2010). 24 62. Albreht et al. (2006) investigated the evolution of primary health care centers (PHCCs) in Slovenia after health system reforms in the 1990s. A total of 57 PHCCs were surveyed to understand the changes in health care for PHCCs—in services and resources and the relationship between PHCCs and new primary health care providers. Results showed a reduction in public health care providers as providers moved to private health care provision. Health care providers reported that the introduction of private health care services led to chaos and poor management under the MOH, specifically a lack of coordination between the MOH and the municipalities as well as a lack of understanding of the share of private provision and goals for the private sector. Health care providers recommended a better definition of the responsibilities and conditions for private provision as well as a revision of the contracting arrangements (Albreht et al. 2006). 63. A study of ambulatory services in Krakow, Poland, in 2004 (Chawla et al. 2004) identified five types of private health care providers: (a) publicly financed family medicine services; (b) OOP-financed specialist physician services provided by nonpublic integrated health care units; (c) specialist ambulatory services provided in physician private practices; (d) home visits provided by physicians; and (e) facility-based emergency services. Approximately 35.1 percent of patients used the private sector in Krakow: estimates showed that 18.5 percent of individuals used the nonpublic integrated health care units while 14.5 percent used individual physician private practices. The private health sector is organized either on an individual basis or through the nonpublic integrated health care units (with two or more private physicians). The nonpublic units can be established by one private physician, through a civil partnership or through corporations (more than 15 private physicians) and foundations. Private practices have greater management autonomy compared to the public sector. These services are organized on a fee-for-service basis, although there has been evidence of private providers receiving informal payments. About 52 percent of total OOP expenditure went to private sector providers, with 26 percent going to drugs and 19 percent to nonpublic integrated health care units (Chawla et al. 2004). 64. In Vietnam, in 2018, there were about 35,000 private clinics across the country, nearly triple the number of commune health stations and regional polyclinics within the public sector. Altogether, private health facilities account for 32.2 percent of outpatient services and 6.3 percent of inpatient services provided to the Vietnamese people. Some evidence also indicates that private health care is meeting the expectations of the emerging middle-income class: in exit interviews at facilities in Ho Chi Minh City, patients at private hospitals reported shorter waiting times, more comfortable amenities, friendlier behavior by providers, and better consultations than those visiting public hospitals (Le, Govindaraj, and Bredenkamp 2020). 65. In Croatia, provision of primary care is predominantly private, although financing for primary care services is predominantly public. Care is provided in a dual public-private system—by public institutions that employ doctors and nurses (primary health care centers) owned by region and by private medical practices (single doctor owner, who in addition employs one nurse). Private medical practices operate as concessionaires, that is, regions award concessions or the right to offer primary care services in the public system. Approximately 40 percent of primary care medical doctors and nurses work in primary health care centers, while the remaining 60 percent operate as concessionaires (Vocina et al. 2018). 66. Since the late 1990s, Armenia has significantly redesigned its health system. To improve efficiency, access, and quality of health care service provision, the country undertook institutional and structural reforms. The reforms included (a) strengthening 25 primary health care provision, (b) downsizing excess hospital capacity, (c) changing provider payment mechanisms and introducing a purchaser-provider split, and (d) improving targeting (Lavado, Hayrapetyan, and Kharazyan 2018). Health system policies have concentrated on the design of the system, specifically decentralization, primary health care, and family doctors, as well as on external financing, targeting equipment purchasing and building renovation (Hohmann and Lefevre 2014). Households largely incur the cost of health care, with OOP spending representing more than 50 percent of total health care costs. This has led to citizens not seeking treatment despite service provision being viewed as high quality. At the same time, the cost of medication is exorbitant as almost all drugs are imported (Hohmann and Lefevre 2014). 67. Armenia made legislative changes to its health system framework that permitted the establishment of private health practices. Health services were then privatized via the transfer or sale of government facilities (Richardson 201315). Since 1993, licensed doctors were also allowed to practice privately. Health system reforms led to fee- for-service payments and a basic benefits package of free health care, becoming effective in 2001. There are 29 categories of individuals who qualify for benefits package coverage, ranging from the disabled, children under seven years, and pregnant women, to anyone who qualifies for the Family Benefit Program (a social assistance program of unconditional cash transfers to the poor) (Hohmann and Lefevre 2014; Lavado, Hayrapetyan, and Kharazyan 2018). 68. The country has few officially registered insurance companies, with private health coverage availed mostly by employers for their staff and not by individuals themselves. In fact, private health insurance is not attractive for Armenians given informal payments and high premiums (Hohmann and Lefevre 2014). In 2012, voluntary private health insurance for corporations and individuals under the benefits package covered approximately 1.1 percent of the population (Lavado, Hayrapetyan, and Kharazyan 2018). 69. In 2013, the private health sector in Armenia included hospitals, diagnostic centers, dental clinics, pharmacies, and medical universities (Richardson 2013). The MOH contracts all health facilities through the SHA, which is in charge of paying the facilities and monitoring their reports. The SHA purchases the benefits package from almost all public and private providers in the country (Hohmann and Lefevre 201416). 70. The share of resources from employers/private ventures has grown over the last two decades in the country from 0 to 2 percent between 2004 and 2014. OOP payments remain the greatest source of the country’s health financing, ranging from 68 percent in 2004 to 51 percent in 2014. Meanwhile, public spending ranged from 24 percent to 30 percent over this time frame, respectively. It has been posited that it is unlikely that there will be reductions in OOP spending unless there is a significant increase in public funding to cover essential health services and/or a reduction in treatment costs through efficiency gains in payment mechanisms (Lavado, Hayrapetyan, and Kharazyan 2018). 71. According to Armenia’s National Health Accounts, private health sector revenues increased from 82.5 percent in 2015 to 85.1 percent in 2017. The nominal growth from the private sector (employers, insurance payments, and household payments) in 2015 was estimated at 119.7 percent. Direct payments to households increased by 19.7 percent, insurance payments by 38.1 percent, and employers’ funds remained unchanged (Davtyan et al. 2018). 72. By 2019, the following private health facilities provided the benefits package: 23 medical centers, 2 health centers, 5 hospitals, 1 polyclinic, 3 other primary care facilities, 7 diagnostic centers, 19 dental clinics, 1 sanatorium/rehabilitation center, and 5 facilities 26 that provide other services. At the same time, approximately 83 percent of private providers have been contracted by the MOH to provide the benefits package services, following the same procedure as the public providers. Health care providers not contracted by the MOH are mainly private outpatient diagnostic centers and dental offices (Chukwuma et al. 2020). 73. Azerbaijan’s health system has been engaging with the private sector. The system has been privatized, leading to “multispeed health care,” with large oil companies developing their own health system for their employees (under the authorization of the MOH). In 2001, private health care was legalized. Doctors apply for licensing from the MOH to form private practices, with most pooling resources with other doctors to cover the cost of the establishment. As the public health system does not pay doctors well, many doctors work part-time in the private sector (Hohmann and Lefevre 2014). 74. Evidence shows that there are positive benefits associated with company social systems, as these can spill over to the rest of society through improved infrastructure (Hohmann and Lefevre 2014). In 2018, evidence showed that private provision of health care had increased. That same year, 500 private health care providers were estimated to be in the country, including hospitals and outpatient clinics (Bonilla-Chacin, Afandiyeva, and Suaya 2018). 75. However, despite the increase of the private sector in the health system, the public health system is still centralized, with formal and informal fee-for-service payments. Households incur a large percentage of health care costs, with evidence showing over 70 percent of households not being able to afford health services (Hohmann and Lefevre 2014). 76. Georgia has an active private sector in health. Medication production and distribution were privatized in 1996, private health insurance legalized in 1997, and specialist doctors could practice privately in the primary health care system in 1998. In 2003, almost all hospitals were privatized (Hohmann and Lefevre 2014). In 2006, the Medical Insurance Programme for the Poor was launched to financially protect the poorest 20 percent of the population. This included a comprehensive benefits package but excluded medication costs. OOP payments for medication are high. The Medical Insurance Programme for the Poor was implemented by private insurance companies and financed by taxes. For those not covered by the Medical Insurance Programme for the Poor, private health insurance coverage is expensive, and only a minority can afford to purchase private health insurance (Hohmann and Lefevre 2014). 77. In 2008, the law on Compulsory Health Insurance promoted private health insurance among those able to afford it and a voucher system for free basic health care for the poorest income quintiles in the country. That same year, the country saw an increase in private health insurance companies and private hospitals, with the approval of the free market policy (Hohmann and Lefevre 2014). 78. In 2011, the share of private health care expenditure in total health expenditure was estimated at 78.8 percent with private spending on health care estimated at GEL 403 (Verulava 2015). By 2020, the share of private expenditure was estimated at 60 percent (with OOP estimated at 55 percent) (Georgia Healthcare Group 2021). 79. In 2020, it was shown that private providers account for most of the country’s total supply. The six largest competitors (all private) account for 35 percent of the total number of beds in the country. In 2020, there were 609,000 private medical insurance packages (Georgia Healthcare Group 2021). 27 80. Within the existing health system, doctors can “self-privatize” without changing workplace or position. Within hospitals, head doctors in effect become company managers. Public bodies do not regulate private or privatized hospitals. One of the challenges to the system is that medical graduates do not have the resources to establish a private practice. Due to these reforms, public funding for health care is low while health care costs and OOP payments have increased, estimated at 70 percent of total costs in 2010 (Hohmann and Lefevre 2014). Hospitals 81. Health care delivery is evolving across Europe and the United Kingdom, as efficiency has become more important and outpatient services are provided in clinics rather than in hospitals (Montagu and Goodman 2016; Zelmer 2013). Private hospitals in Europe and the United Kingdom can be organized in the following groups:  Group 1: This includes countries in which there is minimal difference between public and private hospitals in terms of patient experience, services provided, bed numbers, and bed stay duration; they are functionally equivalent and exist in parallel. Health systems like this are based on Bismarck’s model of care and financing. Countries that implement this model of care are Belgium, Germany, Norway, Switzerland, and the Netherlands. About 60 percent of hospitals are mostly private.  Group 2: This includes countries in which the private sector is not universal, and the focus of private provision is on outpatient services and lower-risk hospital care, with fewer beds and higher bed turnover compared to government hospitals (Chevreul et al. 2015). Countries that implement this model of care are greatly influenced by the Bismarckian model and include Austria, France, Italy, Luxembourg, Portugal, and Spain. About 40 to 60 percent of hospitals are mixed (public-private).  Group 3: This includes countries where hospitals are more specialized, smaller, provide fewer opportunities for inpatient stay, and are limited in offering emergency, chronic, and inpatient services. This model of care was influenced by social services in Eastern Europe and is based on the Semashko model. This includes the Czechia, Estonia, Finland, Hungary, Latvia, and Poland. About 20 to 40 percent of hospitals are mixed.  Group 4: This includes countries in which there is an emphasis on national social services and hospitals are mostly public. Management of the hospitals is centralized and there are a limited number of facilities, with limited competition. Private hospitals either do not exist at all or there are a minority of them providing services not covered by the national insurance or to those willing to pay for outpatient services. This model of care is based on the Beveridge system and includes Denmark, Iceland, Ireland, Lithuania, Slovenia, Sweden, and the United Kingdom. About 20 of hospitals are private. (WHO 2020b). 82. In Vietnam, the number of private hospitals reached 240 by the end of 2018 (up from only 1 in 1996, 43 in 2005, and 182 in 2015), accounting for 14 percent of all hospitals and 6 percent of all hospital beds nationwide. Currently, 50 of the 63 provinces have at least one private hospital, with an average of 1.7 private beds per 10,000 population. While the five centrally managed cities (Ho Chi Minh, Ha Noi, Da Nang, Hai Phong, and Can Tho) account for 45 percent of private hospitals, the provinces with 28 the highest number of private beds per 10,000 population are Binh Duong, Vinh Long, Thanh Hoa, and Nghe An (Govindaraj and Bredenkamp. 2020). 83. In Croatia, hospitals are predominantly publicly owned and managed; fewer than 5 percent are privately owned. The central government owns tertiary care hospitals. Ownership of other health care facilities is decentralized. Counties own secondary care general and specialized hospitals (Voncina, L., A. Arur, F. Dorčić, and D. Pezelj-Duliba, 2018). 84. In Azerbaijan in 2015, more than 50 percent of outpatient care visits across all income quintiles occurred in both public and private hospitals. That same year, the number of private hospitals was estimated at 656 (Bonilla-Chacin, Afandiyeva, and Suaya 2018). 85. In Georgia, the government holds regionalized tenders on hospitals to engage the private insurance sector. The aim is to reform health infrastructure supply and stimulate the construction sector. The private insurance company that wins the tender and is chosen for the regionalized hospital is granted several years of monopoly on health care provision to the population in that region. The privatization of the hospital sector led to the construction of modern, multiprofile hospitals owned by private investors (Hohmann and Lefevre 2014). Pharmacies 86. The WHO (2020) conducted a 65-country analysis on inpatient and outpatient care globally. This included Armenia, Albania, and the Kyrgyz Republic. In terms of the proportion of inpatient and outpatient care from the for-profit private sector, Armenia registered an average of 4.5 private medical providers (3.8 inpatient and 5.4 outpatient private medical providers). Albania came in first place with an average of 7.8 private medical providers (3.4 inpatient and 11.8 outpatient), followed by the Kyrgyz Republic, with an average of 7.1 private medical providers (1.5 inpatient and 12.1 outpatient). 87. Community pharmacies are all privately owned, operated, and regulated in the private market across Europe and the United Kingdom, with some countries restricting certain types of ownership (i.e., corporate chains and franchise arrangements) (WHO 2020b). 88. Toward the end of 1990, pharmacies underwent privatization in Croatia. This was due to a legislative act on private ownership within the health care system. Privatization of existing state-owned pharmacies began with legislation that was passed in 1996, wherein pharmacies could be leased to employed pharmacists who worked for the pharmacy for at least three years. By 2014, approximately 66.5 percent of pharmacies were privately owned (Dzakula et al. 2014). 89. The Georgian economy relies heavily on pharmaceuticals, as one of the largest private employers in the country. In 2015, pharmaceutical expenditure was 38 percent of the total health expenditure (3 percent of the GDP) (MoLHSA 2018). The SSA is the main importer of pharmaceuticals. Approximately 50 essential medicines are covered by UHCP. Prescription medication for outpatient care is purchased by the patient at full cost unless it is covered by UHCP or private health insurance. The following groups are covered by UHCP with 50 percent copayment while all other UHCP beneficiaries (not listed below) must pay for the prescription medication at cost (Richardson et al. 2017): target groups are covered up to GEL 50 per year for the cost of prescription medication (GEL 200 for pensioners), other pensioners GEL 100 per year, and children ages 0–5 years and veterans GEL 50 per year. Pharmaceuticals are costly in Georgia. The system 29 is inefficient as the cost is seen as one of the biggest barriers to accessing care. It can be catastrophic for households and is one of the main barriers to coverage. The country has experienced some improvements in access to medication; however, this has been seen mainly in urban areas (World Economic Forum 2019). There is a push by the government to increase coverage, as it expanded pharmaceutical coverage for those with certain chronic conditions, intending to expand coverage to other groups and diseases. Generic brands are not promoted by health care providers and well-accepted by patients, and the government must enforce standards about pharmaceuticals (Chanturidze et al. 2009; Richardson 2017). Pharmaceutical spending in Georgia is one of the highest in the world, representing approximately 3–4 percent of the GDP (Hohmann and Lefevre 2014). 90. In Armenia, prices in private pharmacies (which predominate) are high by international standards and limit access from households. There are no legal or regulatory provisions regarding medicine prices, and the Armenian government does not run an active price monitoring system for wholesale or retail medicine prices. Pharmaceutical products are also subject to a 20 percent value-added tax (Lavado, Hayrapetyan, and Kharazyan 2018). 91. In Azerbaijan, private pharmacies were legalized in 1997. Similar to Armenia, medications are imported and expensive with the cost incurred by the individual (Hohmann and Lefevre 2014). Private Health Sector Performance 92. Morgan et al. (2016) conducted a literature review on private sector performance, focusing on quality, equity, and efficiency as countries progress toward UHC. The authors differentiated between service quality (staff responsiveness as measured by patient satisfaction) and technical quality (provider competency, including implementation of guidelines). The review found evidence that the private sector performed better on service quality compared to the public sector (Basu et al. 2012; Bhatia and Cleland 2004). Technical quality in the private sector, on the other hand, was poorer in comparison to the public sector in Mexico, Nigeria, Perú, South Africa, the Lao People’s Democratic Republic, Uganda, Vietnam, (Basu et al. 2012). Private providers often charge OOP to individual clients, which leads to the exclusion of poorer patients and inequities in health services. Despite this, poor people will use the private sector when there are gaps in the provision of essential services in the public sector. These services, however, are often provided by unqualified providers and are of poor quality (Basu et al. 2012; Morgan et al. 2016). 93. Bathia ad Cleland 2004, and Bloom et al. 2014 found that the private, informal sector provides most health care for poor people. In fact, in an analysis of 22 LMICs, both poor and wealthy individuals are more likely to use the private health sector, particularly informal providers including private drug shops (Prata, Montagu, and Jefferys 2005). This is attributed to their convenience, affordability, and accessibility for patients (Sudhinaraset et al. 2013). The challenges associated with this are limited regulation over informal underqualified providers, which contributes to poor quality of care (Mills et al. 2002) and poor efficiency within the health system (Hsu 2010). These challenges include the use of brand name medicines versus generic; overprescription of medication, tests, or procedures; wasting of medical supplies (Brugha and Pritze-Aliassime 2003); and a lack of referral links between services and sectors creating further delays in diagnoses, repeat diagnostic tests, and higher prices for patients (Basu et al. 2012; Morgan et al. 2016). 94. Provider performance is based on organizational objectives, staff competence, and organizational size. Evidence shows that the quality of private and 30 public ambulatory health care in LMICs found little difference between the two sectors. They both performed poorly in technical quality compared to public sector providers. They also found that staff in the private sector had slightly lower competence than those in the public sector (Berendes et al. 2011). 95. Many health care providers, particularly doctors, in LMICs practice in both systems (dual practice) (Macq et al. 2001), with most of them trained in the public sector (Ensor, Serneels, and Lievens 2013). Dual practice does affect the performance of both the private and public health sectors. Challenges of dual practice include the increase of patient referrals to the private sector. This can lead to increased patient costs, lower quality of care in the public sector, absenteeism in the public sector, and increased capacity to keep health care providers. Government regulation and market opportunities play a role in this (Eggleston and Bir 2006; McPake et al. 2016; Morgan et al. 2016; Socha and Bech 2011). 96. Private sector performance is also shaped by patient characteristics. Limited health literacy, a lack of information about health care providers to patients, lower socioeconomic status, limited education, and household and community preferences affect the quality of health services (Ensor and Cooper 2004). Evidence shows that tackling and reducing these barriers can lead to better patient choice, access, and quality of health care in both the public and private sectors (Borah 2006; Morgan et al. 2016). 97. Albania has experienced several health sector reforms: the inclusion of private service providers (for primary and specialty services), the complete privatization of the pharmaceutical sector and dentistry, decentralization of primary health care services, and the founding of the Health Insurance Institute (Gabrani et al. 2020). As of 2019, there were 10 private hospitals, 229 specialized private diagnostic and laboratory clinics, and 177 license outpatient medical centers and cabinets. The inclusion of private health services has led to a lack of coordination with the national health system and greater competition between the public and private sector. In a cross-sectional facility- based survey of patients at 38 public health care facilities and five private health care facilities; Gabrani et al. (2020) showed that coordination of care (p < 0.01) and prompt attention (p = 0.03) were rated significantly higher among urban, public primary health care services compared to private services. Meanwhile, private outpatient clinics were perceived as significantly better on confidentiality (p = 0.03), quality of basic amenities (p < 0.002), and autonomy (p = 0.07) compared to public services. 98. In Georgia, assessing quality of health care has been a challenge for the country. The government must develop clear criteria to assess the quality of care at the national and regional levels. Data collection and sources of information must be developed. At the same time, there are no incentives to providers for the achievement of goals or higher productivity. In this context, the SSA is considering the actions needed to monitor quality of care as it begins to selectively contract facilities. With no monitoring of performance, it will not be feasible to ensure value for money (Cortez 2020). 99. In Armenia, the MOH has committed to undertaking reforms to address the barriers to access and quality of care. In the 2019 “Concept Note for the Introduction of Universal Health Insurance,” there was a proposal to launch a health reform that introduces Universal Health Insurance, which has been put forward for public review and debate. In addition to the proposal to mobilize revenues for health through new taxes, the Concept Note recommends selective contracting of providers to improve the quality of health care and financial discipline. Also, performance-based payments that reward quality will be implemented to incentivize better care (Chukwuma et al. 2020). 31 100. Azerbaijan faces challenges in the quality of health care services, with system losses at the level of doctor’s services and availability and quality of drugs (Hohmann and Lefevre 2014). Ibrahimov et al. (2010) stated that a 2008 Presidential Decree on health financing reform was supposed to focus on contracts and performance-related payments. There has been lack of evidence on the improvement of health system performance in terms of financial protection, quality of services, and user satisfaction (Rechel et al. 2014). MODALITIES OF PRIVATE SECTOR ENGAGEMENT Outsourcing 101. Outsourcing is defined as the transfer of decision making and internal activities and services from the public sector to the private sector, through short- or long-term agreements or contracts (Rajabzadeh et al. 2008). Outsourcing has been used to decrease government spending and increase efficiency (Pollitt and Bouckaert 2011; Van de Walle and Hammerschmid 2011). 102. Historically, outsourcing to the private health sector was used for secondary services such as cleaning and catering. However, evidence suggests that outsourcing of services and supplies to the private health sector has expanded to include laboratory services, surgeries, hospital planning, accounting, and information technology. For example, in 2000, the UK government signed an agreement with the private health sector to outsource approximately 150,000 medical procedures per year (Pond 2006). At the same time, the UK government outsourced low-risk elective surgeries through independent treatment centers. The private sector and the UK government signed a five- year contract, which outlined a minimum number of surgeries that had to be performed per year. Evidence suggests that instead of hiring overseas talent to provide services through the private sector, private treatment centers were increasingly hiring NHS medical staff (Pollock 2003). 103. The long-term outsourcing of services is also referred to as public-private partnerships (PPPs). Public-Private Partnerships 104. PPPs are a “a long-term contract between a private party and a government entity, for providing a public asset or service, in which the private party bears significant risk and management responsibility, and remuneration is linked to performance” (World Bank, Asian Development Bank, and Inter-American Development Bank 2014). There is also public-private mix (PPM), which usually focuses on diseases. This involves various collaborative strategies including public-private (i.e., collaboration with the private sector on national disease programs); public-public (i.e., collaboration with the public sector and national disease programs); and private-private (i.e., local private providers collaborating with a private hospital) (WHO 2020). 105. The aim of the PPP is to utilize the strengths of both the public and private sector together and ensure value for money. The private sector is usually contracted for over 15 years, managed by the government at the national or subnational levels. The government takes control of the PPP at the end of the contract (Abuzaineh et al. 2018). Critical to this definition is the financial, operational, and technical risk shared between the private sector and the government. PPPs vary in their remit and services (clinical and/or nonclinical) provided (IEG 2016). According to Ferreira et al. (2021), depending upon the contract and its length, PPPs are subject to uncertainty; incomplete, rigid demands; shared risk, rewards, and roles; some degree of public control over the project; and large investments that are subject to opportunistic behaviors by the contractors and contracted. 32 106. With PPPs, the government’s role shifts from an investor and beneficiary of infrastructure projects to a regulator, supervisor, and policy maker of the services provided (Tabrizi et al. 2020). For example, Tabrizi et al. (2020) reviewed the role of public and private sectors in PPP plans in primary health care globally. Evidence shows that service provision (i.e., vaccination, diagnostic and treatment services, referral services, health education, disease screening, and distribution of medicines and vaccines) was the most common arrangement for private sector involvement, while financing and management (i.e., coordinating, organizing, and managing a health service center) were the least common activities. The public sector engaged in providing supportive activities such as equipment provision, infrastructure, training, licensing, human resources, physical space, and provision of medicines. Indicators most used to measure PPP success included case detection and service coverage. Meanwhile, the least used indicators included quality of care, satisfaction of both providers and users, and equity (Tabrizi et al. 2020). 107. Some countries establish a technical PPP unit or node within the MOH, in addition to the PPP unit that is usually in place in other oversight ministries, to formulate policy, standardize documentation, coordinate the relevant players, provide technical support, raise awareness, and build the capacity of public officials. In addition, government agencies (whether line ministries or subnational governments) require resources to prepare and tender PPP projects, monitor project performance, and deal with unexpected changes to projects during the contract term. Political will, private sector readiness, and stakeholder engagement are also critical factors for health PPP projects (Le, Govindaraj, and Bredenkamp 2020). 108. There are several health system challenges that the private sector, through PPPs, can help the government address. This includes (a) building or renovating infrastructure; (b) providing financial resources; (c) designing the services and infrastructure; (d) ensuring better management skills for cost efficiency and quality of care; (e) ensuring more expansive and efficient procurement and supply chains; and (f) operating and expanding services, skills, and service capacity (Abuzaineh et al. 2018; Barlow et al. 2013). It has also been argued that PPPs can enhance innovation in the delivery of services and products and put health in all policies and improve self-regulation (Abuzaineh et al. 2018; Parker et al. 2019). It is critical that the government actively participates in designing the PPP and monitors and evaluates its effectiveness and the private sector’s role (Ferreira et al. 2021). PPPs should ensure a lasting and real improvement in the population’s health (Parker et al. 2019). 109. There are some challenges to PPPs and partnerships between governments and the private sector. Some PPP projects may be so large and expensive that a limited number of private sector organizations are able to bid on them, set up the project, and manage over an extended period (Barlow et al. 2013). The private sector also may be able to negatively influence the government and push its agenda (Parker et al. 2019). Another challenge is the linking, or integration, of care models and ensuring that incentives between all parties are aligned to ensure good performance (Barlow et al. 2013). At the same time, the private sector, when unregulated, may provide products and services that are harmful to an individual’s health (Parker et al. 2019). 110. It is also difficult to identify the size of the PPP health market given the limited data available, the various models used, different stages of PPP development, and PPPs that may be categorized under “social sector” projects (e.g., education) (Abuzaineh et al. 2018). In fact, according to an evaluation of PPP in health care delivery across the European Union in 2012–2013 by the European Agency for Health and Consumers (EXPH 33 2014), results showed that there was a lack of availability of public information on PPP investments. The information available was not standardized or reliable and there was a lack of evidence on the cost-effectiveness of PPPs compared to public health care services. In fact, the European Agency for Health and Consumers concluded that it is hard to calculate value for money, or cost-effectiveness, of a health service as it requires data on a defined patient population compared to an alternative. The agency recommended (a) transparency on the government’s PPP obligations, such as contingent liabilities and ripple effects through public lenders; (b) arrangements to ensure that the PPP is following the same rules as the public sector on patient access, tariff, and OOP payments so that there are no significant differences in patient experience; (c) ensuring appropriate financing mechanisms, including an incentive structure for providers, as well as management and follow-up; (d) appropriate policies for PPPs; and (e) ensuring evidence- based health care, including provisions for monitoring and evaluation of the PPP. This can be achieved through observational studies, using data from clinical practice such as patient outcomes and cost-effectiveness (EXPH 2014). 111. According to some evidence, the United Kingdom and Australia are two countries that have signed the most PPP contracts, representing approximately 15 percent of all infrastructure investments. For OECD countries, PPP contracts represent less than 5 percent, while in European countries PPPs represent a little over 5 percent. In fact, the total value of PPPs within the European market (27 countries, Western Balkans, and Turkey) was estimated at €12 billion in 2016 (Kosycarz et al. 2019). In 2018, it was estimated that there were globally 600 health care infrastructure projects/assets, with PPPs comprising the vast majority of these. Over 60 percent of these projects were in Europe, with 15 percent found in North America and less than 5 percent in Sub-Saharan Africa and the Middle East (Abuzaineh et al. 2018). 112. According to research from the University of California, San Francisco, and PricewaterhouseCoopers (PwC) on PPPs, there are three dominant facility-based PPP models. These will be explored in the sections below:  Infrastructure-based model: renovating or building health care infrastructure  Discrete clinical services model: expanding or adding service delivery capacity  Integrated PPP model: comprehensive provision of infrastructure and services. (Abuzaineh et al. 2018): Tendering Process 113. Before the tendering process can begin, the potential project should first: Conform to national PPP guidelines, demonstrate affordability, and establish that it can lead to better outcomes compared to other alternative projects (Abuzaineh et al. 2018). 114. Once the project has been assessed and approved, the ministry in charge (i.e., the MOH) is authorized to solicit private sector interest through a competitive bidding process (which usually requires separate technical and financial proposals). It is recommended that the ministry be as transparent as possible in operating and managing the tendering process. Each private sector organization should demonstrate cost of finance in its bids. Some tenders may require that private sector organizations include the participation of specific local partners and entities. In Lesotho, for example, an integrated PPP model bid required the inclusion of local organizations in the contract as a way to shift responsibility of the project to local partners over time (Abuzaineh et al. 2018). 34 115. A special purpose vehicle (SPV) may be developed at this time, forming one bid. An SPV is a consortium of private sector organizations representing their collective interests. As part of the contract, the SPV commits to (a) key project terms (such as date of completion of design and construction activities) and (b) prespecified outcomes and quality metrics for services to be provided during the contract term. In fact, an SPV is simpler and less risky for the government to contract, as it requires only one contract. When multiple private sector organizations are involved, the government must contract each of them separately (Abuzaineh et al. 2018). 116. Risk, or the appropriate allocation of responsibility, is a critical component of the PPP. The contract should explicitly state the roles and responsibilities of each partner, including closely monitoring and managing risk. By shifting construction and financing risk as well as operational risk onto the private health sector, the public sector can not only diminish the potential for project delays and overrunning costs but also focus on performance and contract management and improve the efficiency of costs and services. There are several tools and payment mechanisms that the public and private partners use to manage these risks. There are three main types of risk: General and financial risk, planning/design and construction risk, and operating risk (i.e., clinical performance) (Abuzaineh et al. 2018). 117. Before the tendering process, governments go through a series of PPP project reviews to align the project with health plans and legal frameworks. For example, financial planning should be conducted by the government to identify the fiscal impact and risk of the PPP (i.e., capital expenditures, revenue drivers, and operating expenses). It will help identify available revenue streams to cover government payments associated with the PPP as well as the costs and benefits (Abuzaineh et al. 2018). 118. Vietnam does not have a single unified legal document that governs all aspects of a PPP project. Rather, a PPP project is governed by an array of laws and regulatory documents. The laws cover a wide range of issues, including investment rules, enterprise management, land acquisition and valuation, construction, ownership of assets, the PPP process, and fiscal management. In addition, there are regulations related to the operation of a PPP project, for example, regulations on government incentives, tolls, accounting, auditing, taxation, finance, contract management, monitoring, and dispute resolution. The legal and regulatory framework for PPPs is still under development. Over the past decade, the government has revised and amended the regulatory framework for PPPs three times. In 2010, Decision 71/2010/QĐ-CP regulated the piloting of PPPs. In 2015, Decree 15/2015/NĐ-CP on PPP investment forms was promulgated and was replaced by Decree 63/2018/NĐ-CP in 2018. In 2019, Decree 69/2019/NĐ-CP was enacted to regulate payment for build-transfer (BT) projects. Vietnam's new Law on Public- Private Partnership (Law No. 64/2020/QH14) (the "PPP Law") was ratified on June 18, 2020 by the Vietnamese National Assembly and came into effect on January 1, 2021. In this changing environment, the only ministry that has issued a circular regulating PPP projects within its sector is the Ministry of Transport. The MOH began developing a circular regulating health PPP projects in 2016 but has not yet finalized this document (Le, Govindaraj, and Bredenkamp 2020). Contracts 119. PPP contracts employ a direct relationship between payment and performance. They are critical to managing the PPP relationship. They explicitly detail the roles and responsibilities of each partner as well as risk allocation. Contracts usually 35 include a single payment mechanism for infrastructure and services together. However, sometimes infrastructure is paid separately from the variable costs of services. In general, payment from the public to private sector does not occur until key terms in the contract have been met. This usually incentivizes the private sector to deliver on time, while meeting performance and quality standards defined in the contract. For service delivery, contracts tend to include more complex arrangements, with payments linked to service provision across the population, or through data on better health outcomes (Abuzaineh et al. 2018). 120. Tools and mechanisms used to incentivize the private sector and its behavior with planned outcomes include payment amounts, timing, and triggers. There are four categories of payments:  Availability payment: A fixed payment that covers the cost of infrastructure and maintenance, It is a payment for making a hospital available to the provider.  Service payment: A variable payment based on the volume and type of services and procedures performed.  Capitation: A variable payment that aims to manage the overall health, and the payment is made on a per person basis  Payment penalties: Whereupon payment is delayed or reduced when terms or expectations of the contract are not met. (Abuzaineh et al. 2018) 121. One way to minimize risk is for contracts to include specific details and arrangements for each party, along with hefty penalties when changes are made (McKee et al. 2006). Yet, evidence suggests that this can create problems when all phases are bundled into one contract. With rigid contracts, identifying and implementing solutions to problems that arise during the PPP become more complex to solve as the fee is placed on the private provider. There is less space for private providers to include flexible design solutions since the cost of changes falls on the private sector (McKee et al. 2006). Evidence suggests that contracts should specify service quality ex ante or ensure that performance indicators are being measured on an ongoing basis during the PPP to reward or penalize service providers. At the same time, collaboration is critical between the public and private sector; however, evidence suggests that many PPPs have noncollaborative relationships. This has been attributed to differences in goals and values and an imbalance in power between the public and private sector. It can also be affected by social, political, and legal factors (Roehrich et al. 2014). 122. Provisions to monitor the PPP and private sector engagement are critical. However, monitoring health care in a PPP is not as easy as in other sectors. Hospitals, for example, are complex. Identifying all dimensions and capturing the scope and quality of all of their services is enormous. There is also uncertainty associated with population health and demand for health care as well as health technology development. This may lead to costlier PPP than traditional public procurement. Ferreira et al. (2021) argue that flexibility should be given to the private partner to ensure that innovative solutions to the PPP are exploited. They argue that there are nine success factors for PPPs: stewardship, coordination, regulation, incentives, capacity to support partnership, monitoring and evaluation, high-level support and buy-in, harmonization and alignment, and innovation. 123. Parker et al. (2019) conducted a systematic review of evaluations of PPP interactions and found that there is a lack of strong PPP evaluation on health. Existing 36 evidence on PPP evaluation has focused on public-private arrangements (Parker et al. 2019). 124. In response to public demand for transparency and accountability in Vietnam, Government Decree 63/2018/NĐ-CP has established a mechanism to disclose PPP project information throughout the project cycle. PPP project announcement, bidding documents, and selected project contract information must be accessible to the public on the national procurement website. Assigned state agencies must supervise compliance of the investor and the project enterprise with their obligations as prescribed in the project contract. However, there is neither a regulatory requirement nor a technical guideline for public and private parties to monitor, report, and disclose project performance against key performance indicators. Therefore, individual PPP contracts rarely set out an effective performance monitoring system, and payment for the private operator is minimally linked to performance. The MOH and provincial Department of Health have mainly relied on regulation, licensure, and self-assessment to ensure the quality of PPP health care providers. All health care professionals and institutions must be licensed to practice. Hospitals are required to self-measure their quality against the MOH’s 83 quality criteria, of which the majority reflect structural and nonclinical factors and are expected to report to relevant health authorities for evaluation once a year. Quality criteria for preventive and primary health services are not developed. Measurement of clinical process and outcomes against key performance indicators is rarely carried out. The national health care accreditation system is still underdeveloped, and only some pioneer hospitals have been accredited against international standards. Patients hold health care service providers accountable for service quality by voicing their complaints through different channels, such as in face-to-face meetings, telephone hotlines with managers, or weekly patient council meetings in the hospital. In addition, patients may send their grievances directly to health authorities (provincial Department of Health and MOH) or Peoples’ Councils at different levels. Patient complaints can trigger inspection visits by health inspectors, financial sanctions, or revocation of medical licenses. Health care providers can be prosecuted for fatal medical errors. The grievance mechanism is regulated in the Examination and Treatment Law and applied to both the public and private sectors (Le, Govindaraj, and Bredenkamp 2020). 125. Decree 63/2018/NĐ-CP specifies eight PPP contract types (which are also proposed in the draft PPP Investment Law): build-operate-transfer (BOT), build- transfer-operate (BTO), build-transfer (BT), build-own-operate (BOO), build-lease-transfer (BLT), build-transfer-lease (BTL), operate-manage, and mixed. Internationally, the BT contract is not regarded as a PPP because the contract duration is short, and the private sector takes on limited risks and management responsibility. However, in the Vietnamese environment, the BT contract is the most used contract type, accounting for 188 (or 56 percent) of 336 signed PPP contracts. BOT contracts are also common, accounting for 42 percent of the total number of signed PPP contracts. Other contract types including BOO, BLT, and BT-BOT mixed contracts account for just 2 percent. No BTO, BTL, or operate- manage contracts have been signed in Vietnam (Le, Govindaraj, and Bredenkamp 2020). Health PPP project enterprises, like other companies doing business in Vietnam, are required by law to comply with the Vietnam Accounting Standard, which guides how revenues, expenses, the balance sheet, cash flows, and so on must be recorded. Unlisted PPP project companies are not subject to internal audit practices (although many public health institutions are), but PPP projects might undergo spot audits by the state audit agency of Vietnam. So far, the audit agency has audited more than 80 BOT and BT projects, including one BT project in the health sector. In many cases, the audit agency has recommended reduction of a project’s total investment capital and shortening of the 37 contract duration. Vietnam Social Security is another key actor in financial accountability relationships. Vietnam Social Security enters contracts with licensed health care providers—both public and private—reimbursing them for certified services at negotiated price schedules that link to the hospital’s technical capacity. To contain fraud and misuse of health insurance funds, Vietnam Social Security uses an electronic medical review system to scrutinize eligible services, drugs, and materials delivered by the health facilities. This electronic system is connected to all contracted health care providers, enabling Vietnam Social Security to process more than 176 million claims with total value of VND 98,116 billion per year. Although the primary accountability role that Vietnam Social Security plays is associated with financial control, its electronic medical review system can strongly influence compliance with prescribed inputs and procedural standards as well as performance accountability of health service delivery networks, including health PPP facilities (Le, Govindaraj, and Bredenkamp 2020). Public-Private Partnership Business Models Infrastructure-Based Model 126. With the infrastructure-based model, the private health sector is contracted to design, build, finance, and maintain health facilities. Components of the model include infrastructure; financing; nonclinical services (i.e., cleaning, food service, parking, reception, utilities, and waste management) and—where relevant—clinical support services (i.e., radiological or laboratory services). It is the most common PPP model globally. The United Kingdom’s Private Finance Initiative (PFI) is an example of this model. It has also been implemented in Australia, Canada, Egypt, Italy, Japan, South Africa, and throughout Latin America. The objectives of this model are to (a) provide financial resources to the government for infrastructure projects; (b) renovate or build public health care facilities, within a shorter time; (c) improve public health care system capabilities to deliver quality services; and (d) increase efficiency and quality for clinical and nonclinical services (Abuzaineh et al. 2018). 127. The private sector is contracted under this model for approximately 25–30 years to build, renovate, or replace public health infrastructure while maintaining the infrastructure over the course of the contract. The private sector may also be contracted to manage and deliver clinical or nonclinical services, where needed. They are contracted to “(i) design; (ii) build; (iii) finance; (iv) maintain; and (v) operate”: • The minimum risk involved in this PPP is to design and construct and be responsible for maintenance costs as well as potential overbudget costs due to delays in project completion. Given this risk, the private sector is incentivized to perform well across the entirety of the project. Contracts usually provide an 18- to 24-month completion of construction and/or renovation activities. The private sector is incentivized to deliver on time and within budget, as the private sector is not paid until its completion (Abuzaineh et al. 2018). • Payment for the construction or renovation from the government to the private sector, as outlined in the contract, usually occurs through an amortized annual payment over the course of the contract, along with an annual maintenance payment. This makes the project more affordable and provides the private sector opportunities for long-term debt financing (Abuzaineh et al. 2018). • For the provision of nonclinical services, the contract usually specifies that the private sector is covered through a single, annual payment. These costs are usually reassessed every five years to determine value for money. The private 38 sector incurs additional risks to the cost and operation of these services as well (Abuzaineh et al. 2018). • The provision of clinical services is a more advanced form of this PPP wherein the private sector hires staff and operates the services. This model provides a more complex service delivery project for the government to manage when it engages in the provision of clinical services (Abuzaineh et al. 2018). The United Kingdom’s Private Finance Initiative 128. The United Kingdom began implementing this PPP model in the 1990s when facilities were upgraded, and services expanded within the NHS. It is the most common form of health care PPP globally. The project costs have ranged from US$15 million for a small hospital to over US$2 billion for several hospitals (Barlow et al. 2013). 129. The rationale behind promoting the PFI was to pass the risks onto the private health sector, as well as ensure that health care infrastructure and services were kept on budget and schedules were not delayed. Within the United Kingdom, the private sector not only designs and constructs hospitals but also operates some services (Abuzaineh et al. 2018; Andre and Hermann 2008; McKee et al. 2006). 130. The PFI is an SPV, comprising a group of companies; it typically includes a bank, construction company, and a firm that manages the facilities. According to McKee et al. (2006), the SPV enters into three types of subcontracts:  One contract with the bank to finance the project  One contract with the construction company to build the hospital  One contract with the facilities management firm to manage the PPP over the life of the contract (typically 25–30 years) 131. Once the facility has been built or renovated and is fully operational, the PFI charges an annual fee over the 25- to 30-year contract term to the NHS Trust or District Health Authority (Andre and Hermann 2008). The agreement within the contract is that the government pays a defined amount from its revenues, and the private sector maintains and manages the facilities. 132. A challenge to the PFI is keeping building costs low. As a result, there is a lack of innovative building designs (i.e., improved work settings or therapeutic environment). At the same time, evidence suggests that several UK PFI hospitals are experiencing financial stress (Barlow et al, 2013). It was found a lack of peer-reviewed evidence on PPP evaluation in the United Kingdom, as well as a lack of information on challenges associated with inflexible contracts. For example, a PPP was implemented for a hospital in Norfolk and Norwich; this evaluation showed how the arrangements were not quite so clear regarding PPPs. Within this case study, there were concerns about patient safety and fear of retribution for speaking out about the way things were organized. This highlighted a lack of transparency and information-sharing (EXPH 2014). Italy 133. Italy has the second-largest PPP market in Europe, after the United Kingdom. The country has taken a decentralized approach to PPPs, meaning that standard models do not apply. Rather, this approach provides an opportunity for the private sector to innovate and customize solutions. Indeed, regions focus on increasing financial resources to modernize and upgrade facilities as well as increase efficiency and quality standards. 39 Most of the PPP deals have been concentrated in the north of the country due to the financial resources available. Despite this, evidence shows that clear, legal frameworks and methodologies for evaluating the cost-effectiveness of the PPPs from the central government would help determine whether PPPs are beneficial (EXPH 2014). 134. One example of a successful PPP, signed in 2004, was the Castefranco Veneto and Montebelluna Hospitals. The overall value of the investment was estimated at €120 million for the private sector and €31 million for the public sector. The contract between the Local Health Authority and Solo Hospital Services (a private company) focused on modernizing the hospitals and nonclinical management of services. Within the contract, it was explicit that there would be penalties levied against the private partner if it did not meet performance standards set by the Local Health Authority. The contract also included a commitment by the private partner to provide technological upgrades at 19.6 percent of the fee paid annually by the Health Authority (EXPH 2014). Sweden 135. Sweden tried to implement a PFI-like approach to the New Solna Karolinksa hospital in 2008 (EXPH 2014). The government thought a PPP would bring certainty of cost, certainty to deliver, and better value. As such the government held a preliminary design competition to generate new and imaginative ideas for the future of New Solna Karolinksa. It also had to address issues of adaptability and flexibility explicitly. This was a departure from public PFI projects at the time, as most PFI projects are confined by rigid contract structures that mitigate against future flexibility and adaptability. Swedish Hospital Partners won the bid, which was a partnership between a construction company (Skanska) and Innisfree, a UK private equity fund. The risk transfer was high within the PFI model, and as such, there was a low level of participation. Instead of developing a new PFI model, New Solna Karolinksa maintained the standard UK PFI model. As such, New Solna Karolinksa withdrew from consideration (EXPH 2014). South Africa 136. Netcare, a private health sector company, was contracted to implement six PPP public hospitals. This involved the company investing in the physical infrastructure, equipment, and fittings of the hospital infrastructure. It also involved including private facilities in two public health hospitals. This resulted in increased revenue for the public sector and profit for the private sector. An external review of Netcare showed significant infrastructure investment, along with economic and social benefits. Through the creation of jobs, this included economic growth and poverty alleviation. It also led to improved efficiency quality of health care. The reasons why this PPP was successful were due to understanding the motivation of both parties and meeting partnership expectations; ensuring that the correct incentives are in place (e.g., the rental fee per month that Netcare charged for using underutilized space in the public facilities); good contract management of the interaction (which required good capacity and skills); and monitoring and evaluation (Kula et al. 2014). Turkey 137. The Adana Health complex entails the construction, operation, and maintenance of an integrated health complex in Adana, a key health sector hub in Anatolian Turkey. The health complex has a 1,550-bed capacity and comprises six hospitals. Total project costs were estimated to be €500 million. Under the structure, the winning consortium is responsible for financing, building, maintaining, and managing the facilities and providing or coordinating medical support services, while the MOH will deliver core medical services. The MOH will pay the private partner to use the facilities (availability payments) and for services provided (service payments). By separating the service 40 payments from the availability payments, this model makes financing easier than if the UK model were adopted. It does, however, mean that the government bears more risk and must ensure that it has the means to manage that risk. The agreement includes debt guarantees, compensation for early termination, and key performance indicators to be achieved. The construction period was expected to last 36 months, followed by a 25-year concession period. Following a transparent bidding process, an agreement was signed between the MOH and a consortium in 2014. The health complex is now operational. This is a pioneering project for the Turkish government’s Hospital Public-Private Partnership Program (Le, Govindaraj, and Bredenkamp 2020). Lessons Learned from the Model 138. Where governments lack the up-front financial resources or the expertise to manage large health system projects, this type of PPP model is most relevant. The public sector can then focus its efforts on managing the delivery of health services. With infrastructure projects, it is easy to measure the opening of a new hospital (on time and within budget) and garner the support of the community and government. These projects also allow the government to improve the design and layout of health facilities as well as increase efficiency and improve service delivery (Abuzaineh et al. 2018). 139. There are several challenges to this type of model: focusing on staying within budget and within the time frame. This type of model also favors standard/preexisting templates for large health facilities. This limits innovation for the private partner (Barlow et al. 2009). Particularly for infrastructure-only PPPs, there are challenges with gauging patient demand. Evidence shows that some hospitals are built for political reasons as opposed to addressing patient demand. To overcome this challenge, governments should link investments with projections of future inpatient need (PwC 2017). An additional challenge is the evolution of health-related information technology systems and equipment. This is particularly a challenge within rigid, long-term contracts. Lessons from Latin America have shown that to overcome this issue, equipment should be bundled with IT in the PPP contract (Abuzaineh et al. 2018; Llumpo et al. 2015). Discrete Clinical Services Model 140. In the discrete clinical services model, the private sector is contracted to deliver discrete clinical services such as specialty care or clinical support services (Abuzaineh et al. 2018). This type of PPP is generally of short to medium duration (usually less than 10 years) due to the life cycle of clinical equipment, although it can be extended. Despite the shorter duration, contracts for this PPP focus on performance, maintenance, or replacement of clinical equipment. For example, an asset-light model focused on increasing service capability for specific clinical services. This model is being used increasingly across India and Southeast Asia. Objectives of the model are to (a) mobilize the involvement and resources of the private sector in the provision of health care; (b) better the management of clinical service provision, particularly for high-demand, specific services; and (c) improve access to and quality of clinical services (Abuzaineh et al. 2018). 141. The private sector is contracted by the government to operate and provide certain clinical or clinically related services. For this type of model, the contracts come in many forms due to the variety of services they provide such as diagnostic, laboratory, dialysis, or other specialized services. Usually, the contract and its performance management focus on the number of services provided and patients reached. The private sector is contracted to finance, maintain, operate, and deliver services (Abuzaineh et al. 2018). 41 142. One of the benefits of this model is that it delivers targeted clinical services and focuses on being “asset-light.” As a result, this reduces the complexity and cost of the PPP. Compared to the infrastructure-based PPP, discrete clinical services are higher risk, but they are lower risk compared to the integrated PPP model (Abuzaineh et al. 2018). Examples of This Model Portugal 143. The MOH and the Ministry of Finance share overall supervision of PPPs in Portugal. PPP contracts in Portugal are under the remit of the Health System Central Administration. The Mission Structure of Health Partnerships identifies PPP health projects, while the Health System Central Administration coordinates and monitors the implementation of the contracts. This is achieved through the nomination of a contract manager (through a public tender, assigned by the MOH), who supervises the contract and summarizes the information provided by the private sector. A monitoring committee, which represents the public sector, is designated by the government to the PPP hospital. It is responsible for formulating and renegotiating the contract, verifying that the private health sector is complying with the contract and reporting on hospital activity. The evaluation of clinical and nonclinical performances is under the remit of a user deputy. The deputy drafts recommendations and supports the private sector to remedy issues that arise. Legislations passed in 2002, 2003, and 2006 define the PPP arrangements as a relationship between the MOH and private sector, where the private sector manages and funds the PPP within primary, secondary, or continuous health care. The Ministry of Finance regulates and controls the financing aspects of the PPP. The PPP also includes self-evaluation of the private sector, which comprises 52 distinct performance indicators. There is also a Court of Auditors, which is a public interest protector. It advises and provides preventive supervision and judicial inspection activities, ensuring that the PPP is within the government’s budgeting capacity (Pereira et al. 2021). 144. The country launched the first wave of PPP arrangements in hospitals in 2001 (Pereira et al. 2021). These included Sintra, Cascais, Braga, Vila Franca de Xira, and Loures. Portugal’s Hospital Amadora-Sintra was a PPP but was returned to public sector ownership. The hospital itself was built by the public sector and the PPP involved the management of clinical activities. Subsequently, performance of the PPP varied over time. The experience illustrated the importance of engagement and management of the private sector by the public sector as well as private sector incentivization (EXPH 2014). 145. Using the lessons learned from the Hospital Amadora-Sintra, the country integrated the infrastructure and clinical activities together in one PPP. The contract stipulated different timings for each component: a 30-year contract for infrastructure and maintenance activities and a 10-year contract for managing clinical activities (with the option for the public partner to change the private partner after the 10-year time frame if it is performing poorly). This did not include primary care centers as it remained under public domain (EXPH 2014). The arrangements included conception, construction, funding, maintenance, and exploration of hospital building and health care provision by a consortium of two management entities. The contracts included a 10-year contract for clinical management and a 30-year contract for building management. According to Pereira et al. (2021), there was a lengthy process associated with the time between the public tender, the signing of the contract, and the start of the activity, ranging from five to eight years. The private company Jose de Mello Saude won the tender for Braga and Vila Franca de Xira Hospitals, Hospitais Privados Portugueses won the tender for Cascais, and Espirito Santo Saude won the tender for Loures. The tenders were selected on price and technical quality. In terms of the risk of the PPP, legislation in the country stipulates 42 that it is attributed to the party that is more competent in managing it. To ensure mutual benefits between the government and the private health sector company, as the government is capable of withstanding great risk, the private sector health company must have higher-risk management capability (Pereira et al. 2021). 146. According to Ferreira et al. (2021), recent PPPs in the country have been implemented in secondary-level facilities or hospitals. The current model is a mix of the United Kingdom’s PFI and the Spanish (Alzira) model, explored further below. The idea behind the Portuguese PPP model is “that synergies arising from bundled infrastructures and clinical management can be exploited, diminishing the risk of interface friction.” Hospital PPPs belong to the Portuguese NHS, yet they do not have the same contracting terms for funding as the public hospitals (Ferreira et al. 2021). Romania 147. To increase access to and quality of dialysis services, the Romanian government, in 2004, contracted four separate private partners to operate and manage dialysis centers across eight hospitals. The government also wanted to simplify the funding stream for these centers. The contract stipulated that the private sector was responsible for renovating the facilities; providing and maintaining equipment; obtaining supplies; and managing service provision, including health care providers. The private partner was paid per hemodialysis treatment as well as an annual fee per peritoneal dialysis patient. 148. According to the International Finance Corporation (IFC), it was estimated that the government saved €3 million between 2005 and 2008 due to this PPP (Abuzaineh et al. 2018). However, evidence suggests mixed results in this case. According to EXPH (2014), the Romanian case provides an example of factors that could impede PPP implementation in health care. The agency stated there was a lack of data and that the analysis conducted should have investigated each contract with each private partner, separately. At the same time, there was no formal audit or evaluation (EXPH 2014). Croatia 149. In 2009, Croatia implemented concessions, with county governments providing tenders to the private sector to provide primary health care services to teams within the National Health Care Network. This involved the delivery of family medicine; maternal, infant, and child health services; dental health care; occupational medicine; laboratory diagnostics; pharmaceuticals; and home visits. Market prices were applied to health care centers rented by private physicians and prices of services provided in private practices were regulated (Dzakula et al. 2014). India 150. In Gujarat in 2007, the government launched the Chiranjeevi scheme in secondary-level facilities (Baru et al. 2020). Within this PPP, the state government contracted private providers (after verifying and enrolling them) to provide institutional deliveries (skilled birth attendance and emergency obstetric care) to women living below the poverty line. A district health society was created to manage the PPP. Private providers were paid by the government for their services, and participating pregnant women were financially remunerated. Evidence showed some challenges to the scheme: bureaucratic procedures negatively influenced private providers’ engagement in the scheme; private providers felt that participating in the PPP would lower their private practice status while others did not want to handle complex cases; and there were also operational and trust challenges between public and private providers. In addition, evidence suggests that 43 pregnant women who participated in the scheme incurred OOP expenses (Baru et al. 2020). 151. The Pradhan Mantri National Dialysis Program under India’s national health mission was announced in the Union Budget 2016–2017. The guidelines for implementing the Dialysis Program include provision of dialysis services through a PPP as a cost-effective approach. The private service providers are required to provide medical human resources, dialysis machine, water plant infrastructure, dialyzer, and consumables. The government entities should provide space in district hospitals, drugs, power, and water supply and pay for the cost of dialysis for poor patients. A majority of states in India are delivering dialysis services through a PPP outsourcing model as per the guidelines (Le, Govindaraj, and Bredenkamp 2020). South Africa 152. The government partnered with Discovery Health and Vodacom to support public health programs directly and indirectly. There were no contractual agreements between the entities. They used their technology, expertise, innovation, and financial resources to implement initiatives to strengthen health systems. For example, Discovery Health improved the capacity of health care providers and the quality of health services in both the public and private domains. They also increased equitable coverage of primary care and essential services. Vodacom donated mobile phones to the National Health Department. All the phones were able to access, at no cost, a central database of health- related information. The phones are used for a mobile monitoring and reporting system to improve data quality and service provision as well as to inform decision making (Kula et al. 2014). Kenya 153. Kenya is pioneering a large-scale project that involves outsourcing the provision of medical equipment for 98 hospitals across 47 counties. The project comprises seven-year contracts between the Ministry of Health and five contractors for the supply, installation, maintenance, replacement, and disposal of various equipment as well as training and reporting for the entirety of the contract period. The total tender sum amounts to US$432,482,160 paid in quarterly instalments of US$15,445,790 (Le, Govindaraj, and Bredenkamp 2020). 154. The project has been delivering tangible benefits for the government and the people in many counties. For example, the contract for the provision of radiology equipment improved access to radiology services, increased the skill set of health care workers, and reduced patient referrals. However, several facilities have not yet been able to benefit from the arrangement. Reasons include contractual issues, lack of requisite infrastructure and support systems for the equipment, lack of specialized health personnel to operate the equipment, high charges for the specialized services being provided following the installation of equipment, underutilization of installed equipment, and so on (Le, Govindaraj, and Bredenkamp 2020). Lessons Learned from the Model 155. This type of PPP model provides lower risk for the private sector and also addresses constraints within the public system as it focuses on service provision. It could lead, in the future, to a more complex, integrated PPP model. It stimulates competition among private bidders and can lead to an increase in access, efficiency, innovation, and governmental savings over the long term (World Bank 2016). In designing this PPP, the government should conduct due diligence to determine the local need for services, long-term management capacity, and the financial resources available. To 44 overcome any resistance to this type of PPP, the private sector should demonstrate a clear need for these services that can be delivered at a lower cost. The partner should also include clearly defined metrics, evaluation, and publicly available outcomes to illustrate performance. Integrated PPP Model 156. Within the integrated PPP model, the private partner is contracted to design, build, finance, operate, and deliver nonclinical and clinical services. This is the most complex PPP model and has been implemented in several countries including Australia, Lesotho, Peru, and Spain (Abuzaineh et al. 2018). The objectives of this model are to (a) provide long-term financial resources and investment to the infrastructure and delivery of health care services; (b) renovate or build public health care facilities, within a shorter time; (c) improve public health care system capabilities to deliver quality services; (d) improve the management of nonclinical and clinical service delivery; (e) increase access to and quality of comprehensive health care; (f) improve management of primary care referrals to improve efficiency, value for money, and health outcomes within the community; and (g) provide financial resources to the government for infrastructure projects (Abuzaineh et al. 2018). 157. The aim of the integrated PPP model is to improve the management, access to, and quality of health care services while remaining within the budget of the government and maintaining cost neutrality for service users (who would have the same OOP costs at a public facility). The model not only renovates and builds health facilities but also uses private sector expertise to provide inpatient and outpatient clinical services (Abuzaineh et al. 2018). 158. The contract is complex and involves private sector responsibility for managing the financing, design, construction, and provision of services. For example, the contract usually stipulates that the private partner is responsible for the provision and management of all patient care services. This includes hospital care, referral clinics and referral networks, ancillary clinical (radiological and laboratory services) and nonclinical support services (food services and cleaning), equipment management, and patient systems. It also includes staffing and managing health care providers and other health staff. Due to demographic shifts and demands in health care, the contract also has to be flexible enough to address changes within the population (Abuzaineh et al. 2018). 159. The risk involved for the private sector for this type of PPP is more than the other two types of models described earlier. It is responsible for going over budget, managing delays due to construction and service provision, managing health care providers and other staff, ensuring quality standards in service provision, and tracking changes in population demand for services. Generally, governments contract one set of private sector partners to finance and design/construct the health facility in the short term and contract another set of private partners to provide services over the contract’s length (Abuzaineh et al. 2018). Examples of This Model Spain 160. The Alzira model was implemented across five health districts in Valencia, Spain, becoming operational in 1999 (Abuzaineh et al. 2018). The government contracted a private company to build and operate the hospital while developing a separate contract for the provision of care to a defined population (Caballer-Tarazona et al. 2016). It was financed by a group of firms under the Adeslas SA (a private health 45 insurance company owned by a regional savings bank), Bancaja, CAM, Caixa Carlet, Dragados, and Lubasa (EXPH 2014). 161. The contract for the Alzira model is focused on managing comprehensive care and is supervised by the Regional Health Department Commissioner. Financially, there is a premium per capita on population covered by a designated doctor. Invoices are also made for intercenter movements (populations moving from another department), populations from autonomous communities (Caballer-Tarazona et al. 2016), procedures performed in publicly managed health facilities, incentives for pharmacy savings, and civil servant salaries (Julian et al. 2018). According to Julian et al. (2018), contracts included a clause to limit the profitability of the private sector, with a limit on the internal rate of return at 7.5 percent. Yet, this has been difficult to determine due to changes in accounting standards and a lack of information on financial statements from the private sector. It was also found that the indebtedness ratio was high in the PPPs with shareholders appearing as creditors through participative loans. The interest rates of these loans were higher than the bank financing received, which could mean further reprisal to private shareholders (Julian et al. 2018). 162. According to EXPH (2014), the following public services are provided by the private sector in the country: primary health services (10 percent), hospital and specialist services (20 percent), pharmacies, and some hemodialysis and ambulance services. Some of the services such as primary health care, hospitalizations, medicines, and specialized care are contracted for a year and renewed annually. This reduces the risk and provides a more flexible way to service delivery (EXPH 2014). 163. In a comparison of public and PPP hospitals (using the Alzira model) on performance, cost, and quality indicators, Caballer-Tarazona et al. (2016) showed that for “emergency material cost,” public hospitals performed better. For everything else (first consultations, wait time for first consultations, outpatient replacement rate, magnetic resonance imaging (MRI) equipment, management agreements score, and rate of hip fracture operations with more than two days of delay), the PPP hospitals showed better results. The results should be taken with caution given the small sample size. They also found that there was a lack of competition in assigning concession contracts (Caballer- Tarazona et al. 2016). Other studies conducted have shown that there is not enough information to conclusively state how successful this model has been. For example, the National Competition Agency Report found that there were several problems associated with the processing of tenders and contracts between 1997 and 2010. Meanwhile, the Spanish National Association of Public Health and Health Administration in 2012 stated that PPP implementation has led to increased cost, and there is not enough information to show that it is advantageous (EXPH 2014). Poland 164. Poland implemented a PPP at a hospital in Jaworzno, with the private partner Nefrolux in 2009 for a contract of 15 years. The private partner built a dialysis center and nephrology clinic. Nefrolux is tasked with managing and providing medical services. It also benefited from the facilities. At the end of the contract, the infrastructure and equipment will be transferred to a public hospital. There are no data on the benefits thus far (Kosycarz et al. 2019). Lesotho 165. In 2006, the government of Lesotho launched a PPP to build a 425-bed national referral hospital to replace its outdated hospital. The Lesotho PPP structure was a first for Africa. In addition to the design, construction, and full operation of the hospital and 46 associated health care facilities, the private operator delivers all clinical services, with the objective of providing vastly improved, high-quality health care services at an affordable cost. The government made significant up-front payments for hospital construction and will provide the private operator with an annual fixed payment for 18 years. The PPP agreement includes performance monitoring of both clinical and nonclinical service indicators. An independent monitor conducts a quarterly audit of the private operator’s performance. A penalty deduction is applied if performance is not achieved. Following a competitive tender process, a consortium was selected, and the PPP agreement was signed in 2008. The hospital and clinics were opened in 2011. In the initial operation, the project faced several challenges, including excessive demand for its services, payment delays, a lack of physicians, and negative media reaction. Despite these challenges, both public and private parties reported significant achievements. This PPP has demonstrated that it is possible for a lower-middle-income country to embark on an ambitious project that is affordable for the country and patients. The successful implementation of the Lesotho hospital PPP has been attributed to political commitment, leadership, and advice received on how to set up a PPP transaction (Le, Govindaraj, and Bredenkamp 2020). Vietnam 166. In 2015 in Vietnam, the Quang Ninh PPC entered a contract with the TTP Industrial Development Joint Stock Company—a local investor in the business of coal mining and retailing—to improve hospital infrastructure and service quality at Cam Pha General Hospital. This was the first PPP contract in the local health sector implemented under Decree 15/2015/nD-CP on PPP. The hospital was designed for 500 beds, and construction commenced right after the contract was signed in 2015. However, because of disagreement among the medical staff and protracted issues with the legal procedure for transferring public assets (land) to the project company under this modality, the project could not continue. Finally, the PPC had to cancel the project without compensation to the private sector. Cam Pha General Hospital’s contract involved transfer of the existing hospital to the investor. The investor was to be responsible for financing, design, construction, provision of clinical services, and maintenance of the new hospital facility for a period of 50 years. The investor was to develop and construct a new 13-story hospital and consolidate it with an existing 4-story building while providing all the required facilities management. The capital required for the Cam Pha Project was estimated at VND 800 billion (US$36 million). Quang Ninh PPC was the contracting agency. The hospital was to provide medical services to patients covered by SHI, and examination and treatment services were to be charged for at the public prices set by the local government. These services are currently claimed under the cost-recovery initiative and partly subsidized by the local government budget. In the contract, the shortfall in cost recovery was to be repaid by the local government in the first five years of operation. The amount paid was to equal the current level of subsidy to the hospital, adjusted for annual inflation and the increased capacity required for patients covered by SHI, and charged at public prices. The private investor was to repay the local government the residual values for the hospital building and return all the old medical equipment purchased by the public sector to the local Department of Health. The investor was to assume demand and revenue risk without the support of any local government guarantee. On-demand medical services (charged at prevailing market prices) were expected to generate more than 50 percent of the project revenues. Revenue from payments by SHI and public health services (charged at public prices) was to contribute the remaining. According to the contract, the Department of Health would monitor all the examination and treatment activities of the hospital and place the orders for public health services. However, there were no key 47 performance indicators in place to monitor the hospital performance (Le, Govindaraj, and Bredenkamp 2020). Lessons Learned from the Model 167. Although this model is the least commonly implemented model, it does provide countries with a road map to reform health systems. It can lead to improved clinical performance; however, government management, political support, and oversight are critical in this aspect due to the complexity of this PPP. There also needs to be greater evaluation on the efficiency and gains made through this type of PPP as there is limited robust evidence (Abuzaineh et al. 2018). 168. Enforcing clinical quality and performance standards is critical to this model as well as improving management at all levels. This can be achieved through accreditation agencies that aim to improve quality and performance standards as well monitor and evaluate public and private health services. This should include training of health care providers, administrators, and managers. obtaining buy-in from health care providers and staff on the design, operations, and management of the facility. At the same time, there should be clarity on which health care staff and providers will change to private employment or if it will be a mix of both (Abuzaineh et al. 2018). Hospital Privatization 169. It has been argued that the sale of public hospitals to the private sector is a significant component of privatization (Andre and Hermann 2008). In Europe, several public hospitals in Germany were privatized. In fact, between 1991 and 2004, public hospitals sold under private ownership increased from 14.8 percent to 25.4 percent. In tandem, the share of public hospitals decreased from 46 percent to 36 percent over the same period. Sweden has also experimented with public hospital privatization. Countries in Europe have also seen an increase in the share of newly built specialized, private hospitals. These are offered to patients who are self-paying or have private insurance (Andre and Hermann 2008). 170. Fidler et al. (2007) conducted an analysis of hospitals in Austria and Estonia in 2007. In Austria, the hospitals are decentralized with the nine state governments financing and providing care. In 2003, hospitals entered a hospital holding concept, which means horizontal integration between public and private hospitals and contracts between the state government and management company of the hospital. Indeed, private hospital inpatient services are integrated and financed by the same public financing scheme. The mandate is to provide comprehensive and quality secondary level of services that are financially sustainable. For example, in 2007, the KHBG (Krankenhause Betriebsellschaft) was the largest health care provider in Vorarlberg State, with a market share of 84 percent. It managed five public hospitals with approximately 1,700 hospital beds at eight different locations. The company was legally owned by the government and four towns. It outsources nonclinical services, including laundry, restaurants, facility management, maintenance, and IT services. In Upper Austria, the OÖ. Gesundheits- und Spitals-AG (GESPAG) is the largest health care provider, owning approximately 50 percent of the market share of hospitals and employing 8,500 individuals. Health care providers in hospitals are contracted under state employment law but contractually transferred to report to the private holding company. This allows the holding company to hire, fire, and transfer employees. Staff selection and hiring procedures are shorter and flexible and less likely to be influenced by politics. In Estonia in 2003, hospitals were incorporated under either a private company or foundation, with some hospitals merging into large integrated organizations. This means that the hospitals were publicly owned but privately managed. 48 They were under the domain of private law; however, the government is the only shareholder with the supervisory board ensuring that the hospital complies with the government’s strategic vision. The hospital reforms were widely accepted by the population, and according to Fidler et al. (2007), led to efficiency gains, increased quality, and the stabilization of public hospital expenditure. 171. In India, nonprofit hospitals that provide clinical and nonclinical services in Delhi and Mumbai have become commercial entities. As such, the hospitals are managed, run, and the services costed and delivered by for-profit private companies (Baru et al. 2020). These nonprofit hospitals were transformed through the support of state subsidies. A study in 2009 found that most of these hospitals did not provide free treatment to the lower-income quintiles. Studies have also found that contracted workers in these hospitals work long hours, are not paid well, and are not given minimum protective measures (Baru et al. 2020). 172. In 2010 in Georgia, the government released a bid to private insurance companies to provide services within state-owned hospitals in a region for three years. The government’s aim was to increase financial revenue and rationalize hospital stock by closing underutilized facilities. The private companies that won the bids were contracted out to renovate or build and operate the hospitals between 2010 and 2012. Some private companies did not deliver, and the government stepped in to suspend the contracts and resume responsibility with the hospitals. Between 2014 and 2015, privately owned and operated medical centers were bought back by the government in mountainous and remote regions (Richardson et al. 2017). DISCUSSION AND RECOMMENDATIONS 173. This report has summarized evidence on private health sector engagement globally, with a specific focus on the South Caucasus. We have looked at private sector engagement through the lens of policy dialogue, information-sharing, regulation, financing, and private sector provision, including performance and modalities of private sector engagement. 174. In terms of policy dialogue, there is limited evidence on the government’s engagement with the private sector in Armenia, Azerbaijan, and Georgia. The private sector is heterogenous; therefore, clear and transparent policy approaches are needed to regulate the private sector to increase health coverage with quality services. In this context, it is key to increase the institutional capacity of MOHs to collect and analyze data, to know better how the private health sector operates and its resources and capacity to deliver quality services, considering transparency, accountability, and anti-corruption goals. The government should also incorporate private sector engagement into the national health strategy and set the policy conditions for the private sector to function efficiently with monitored results. 175. For information-sharing between the public and private sectors, evidence showed that the countries of South Caucasus have experienced several barriers to data collection and analysis. Despite Armenia and Georgia prioritizing health data collection and analysis through the National Health Information Analytical Center and the MolDLPHSA, respectively, they have experienced challenges in communication with key stakeholders, limited staff monitoring and management capacity, and motivation to collect and share data. In Azerbaijan and Georgia, the MOHs have not developed functional institutional arrangements to regulate and monitor results of the private sector. The governments in the South Caucasus should continue prioritizing the construction of information-sharing by synthesizing public and private health information systems and 49 using standardized indicators and instruments to collect and analyze the data. The expected outcomes of constructing monitoring and evaluation systems are not only related to ensuring quality and transparency in the system but also to promoting sustainable private sector investments with social goals. Indicators could be included considering priority health conditions for each country, quality of care, periodic monitoring of provider performance, publication of comparative provider performance, and rewarding of improvements in the quality and integration of health care. Data should also be collected on supply, infrastructure, equipment, and constant training to staff to monitor results and disseminate good practices to private providers. 176. The countries of the South Caucasus experience limited regulation of the private health sector. To ensure the delivery of safe, equitable, and quality health care, governments should enforce regulatory standards for infrastructure, health care providers and health staff, and clinical interactions, including provider licensing, service delivery network planning, and the development of clinical pathways for prevalent diseases. As followed by health systems in middle-income countries, the creation of a health superintendence would add value to improve the performance of the private sector. This autonomous entity representing the government should oversee and supervise the service delivery of private providers and ensure a strong regulatory environment that is particularly important given the role of private providers in coverage and the high level of OOP payments. On the other hand, this entity should enforce transparent behaviors of doctor practices, licensing of physicians, and accreditation of private providers. 177. Armenia, Azerbaijan, and Georgia need to adopt a mix of payment systems with private providers and establish arrangements that ensure collaboration between the public and private sector through well-defined contracts. Governments of South Caucasus countries should scale up centralized procurement and framework contracts and build capacity for procurement coordination, planning, and execution at the facility level in the long term, with health facilities and with clear autonomy in decisions ensuring quality-based purchasing. 178. PPPs may be a way for the South Caucasus to engage with the private sector. Political will, legislative environments and regulatory frameworks, transparency, public sector capacity, complete and flexible contracts, and broad stakeholder engagement are essential conditions to expand PPPs. 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Regulation aimed to increase health coverage with quality services and increase the institutional capacity of the Ministries of Health to collect and analyze data to know better how the private health sector operates and promote private-public partnership to respond to public health challenges. The creation of an autonomous health superintendence would help improve the performance of the private sector: overseeing and supervising the service delivery of private providers and ensuring a strong regulatory environment within countries with high levels of out-of-pocket payments. This entity should enforce transparent behaviors of doctor practices, licensing of physicians, and accreditation of private providers. In addition, the South Caucasus countries can adopt a mix of payment systems with private providers and establish arrangements that ensure a strong private- public partnership (PPP) in health through well-defined contracts. Health facilities with management autonomy should also ensure quality-based purchasing. PPPs would be an optimal way for the South Caucasus to engage with the private sector. Political will, legislative environments and regulatory frameworks, transparency, public sector capacity, complete and flexible contracts, and broad stakeholder engagement are essential conditions to expand PPPs. Learning from best practices globally and expanding research on how health systems create and regulate mixed public-private services are also essential to improve quality, equity, and efficiency of these systems, as countries work to achieve universal health coverage. ABOUT THIS SERIES: This series is produced by the Health, Nutrition, and Population Global Practice of the World Bank. The papers in this series aim to provide a vehicle for publishing preliminary results on HNP topics to encourage discussion and debate. 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