H N P D I S C U S S I O N P A P E R Working with the Private Sector for Child Health Hugh Waters, Laurel Hatt and Henrik Axelsson June 2002 Working with the Private Sector for Child Health Prepared for the SARA Project and the Inter-Agency Working Group on Private Participation and Child Health Hugh Waters Laurel Hatt Henrik Axelsson June 25, 2002 Bureau for Africa, Office of Sustainable Development Health, Nutrition and Population (HNP) Discussion Paper This series is produced by the Health, Nutrition, and Population Family (HNP) of the World Bank's Human Develop- ment Network. The papers in this series aim to provide a vehicle for publishing preliminary and unpolished results on HNP topics to encourage discussion and debate. 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SARA is funded by the U.S. Agency for International Development through the Bureau for Africa, Office of Sustainable Development (AFR/SD/HRD)under Contract No. AOT-00-99-00237-00. The Academy for Educational Development is an independent, nonprofit service organization committed to addressing human development needs in the United States and throughout the world. Support for Analysis and Research in Africa (SARA) Project Academy for Educational Development 1825 Connecticut Ave., NW Washington, DC 20009 website: www.aed.org/sara ISBN **** ISSN **** © 2002 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 Working with the Private Sector for Child Health Prepared for the SARA Project and the Inter-Agency Working Group on Private Participation and Child Health Hugh Watersa, Laurel Hattb, and Henrik Axelssonc a. Assistant Professor, Department of International Health, Health Systems Programs, Johns Hopkins Bloomberg School of Public Health, Baltimore, USA b. Research Assistant, Department of International Health, Health Systems Programs, Johns Hopkins Bloomberg School of Public Health, Baltimore, USA c. Consultant, Health Nutrition and Population, World Bank, Washington DC. Paper prepared for the SARA Project and the Inter-Agency Working Group on Private Participation and Child Health, Washington DC, USA, June 2002 Key words Child health services, child health outcomes, developing countries, private sector, non-profit organization, con- tracting, social marketing, regulation, franchising, information dissemination, training, advocacy, behavior change communication, community financing. 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 Hugh Waters; Johns Hopkins Bloomberg School of Public Health, Room E8132, 615 N Wolfe St, Baltimore, MD 21205; Tel: (410) 955-3879; Fax: (410) 614-1419; Email: hwaters@jhsph.edu; Web: www.jhsph.edu iii Contents Acknowledgements ------------------------------------------------------------------------------------------------------------------- vii Acronymns------------------------------------------------------------------------------------------------------------------------------- ix Summary -------------------------------------------------------------------------------------------------------------------------------- xi Introduction--The Importance and Potential of the Private Sector in Child Health ------------------------------------------1 Objectives of this Paper ----------------------------------------------------------------------------------------------------------1 The Current Role of the Private Sector ---------------------------------------------------------------------------------------1 Challenges in Working with Private Providers ------------------------------------------------------------------------------2 A Framework for Analyzing the Contribution of the Private Sector to Child Health -------------------------------------------3 Strategies for Working with the Private Sector for Child Health -----------------------------------------------------------------7 1. Contracting --------------------------------------------------------------------------------------------------------------------7 2. Regulation and Setting Standards -------------------------------------------------------------------------------------- 10 3. Financing Support for the Provision of Services--------------------------------------------------------------------- 12 4. Non-Financial Incentives ------------------------------------------------------------------------------------------------- 13 5. Coordinating Service Provision and Financing ---------------------------------------------------------------------- 13 6. Commercialization of Child Health Products ----------------------------------------------------------------------- 14 7. Training to Improve Quality of Care ---------------------------------------------------------------------------------- 16 8. Advocacy --------------------------------------------------------------------------------------------------------------------- 16 9. Changing Behavior through Communication------------------------------------------------------------------------ 17 10. Promoting Community Involvement in Financing ------------------------------------------------------------------ 18 Next Steps for Working with the Private Sector ---------------------------------------------------------------------------------- 21 1. Guidelines for Assessing the Potential of the Private Sector ------------------------------------------------------ 21 2. Documentation of Case Studies ----------------------------------------------------------------------------------------- 22 3. Documentation of Treatment Patterns -------------------------------------------------------------------------------- 23 4. Interventions ---------------------------------------------------------------------------------------------------------------- 23 References ----------------------------------------------------------------------------------------------------------------------------- 25 Case Studies Case Study 1. Contracting out in Senegal and Madagascar -------------------------------------------------------------9 Case Study 2. Handwashing Initiative in Central America ------------------------------------------------------------ 15 Case Study 3. Improving Pharmacists' Treatment of Childhood Diarrhea ----------------------------------------- 17 Appendices Appendix 1. The Importance of the Private Sector in Child Health--Available Evidence -------------------------- 32 Appendix 2. The Performance of the Private Sector--Available Evidence --------------------------------------------- 34 Appendix 3. Strategies to Work with the Private Sector for Child Health --------------------------------------------- 36 v Working with the Private Sector for Child Health Figures Figure 1. The Proximate Determinants of Child Health Outcomes--Household Level-----------------------------3 Figure 2. The Proximate Determinants of Child Health Outcomes--Household and Provider Level -----------4 Figure 3. Other Components of the Private Health Sector--Influence on Households and Private Providers --------------------------------------------------------------------------------------------------5 Figure 4. Strategies Targeting the Private Sector -----------------------------------------------------------------------------7 Figure 5. Steps in Contracting Health Services ----------------------------------------------------------------------------- 10 Figure 6. Strategies Targeting Households ---------------------------------------------------------------------------------- 18 Figure 7. Matching Strategies and Private Sector Components--------------------------------------------------------- 22 vi Acknowledgements USAID's Support for Analysis and Research in Additionally, Flavia Bustreo and April Harding of Africa (SARA) Project of the Academy for Educa- the World Bank have substantially contributed to the tional Development sponsored the writing of this analysis and direction of this work. The Inter- document. Special thanks to Hope Sukin, USAID, Agency Working Group on Private Participation and Bureau for Africa, Office of Sustainable Develop- Child Health--including the World Bank (Mariam ment, for making this activity possible. This Claesson and Alex Preker), the World Health Orga- document was written by Hugh Waters and Laurel nization (Hans Troedsson and V. Chandra-Mouli), Hatt of Johns Hopkins University, and Henrik the U.S. Agency for International Development (Al Axelsson of the World Bank. The authors would like Bartlett), and representatives from the SARA Project, to acknowledge the USAID-funded Support for and the Partnerships for Health Reform (PHR) Analysis and Research (SARA) Project for the finan- Project--met several times over the course of the de- cial support and technical input into this document. velopment of this document to guide the document's Suzanne Prysor-Jones, Youssef Tawfik, and Oscar progress and to shape an inter-agency research Picazo all provided valuable guidance for this effort. agenda in the area of public- private collaboration to improve child health inter- nationally. vii Acronyms ARI Acute Respiratory Infections MOH Ministry of Health BASICS Basic Support for NGO Non-Governmental Organization Institutionalization of Child Survival PHR Partnership for Health Reform CCSS Costa Rican Social Security Institute PHR Project Partnerships for Health Reform CNW Community Nutrition Workers PRITECH Technologies for Primary Health Care COPRA Consumer Protection Act, India PPS Pre-payment Schemes CUHCA Cambodian Urban Health Care PSI Population Services International Association PVO Private Voluntary Organization DHS Demographic and Health Survey ORS Oral Rehydration Salts IMA Indian Medical Association ORS Oral Rehydration Solution IMCI Integrated Management of Childhood Illnesses ORT Oral Rehydration Therapy INSALUD Instituto Nacional de Salud RAP Resource Allocation and Purchasing (Dominican Republic) Initiative IPSS Instituto Peruano de Seguridad Social SARA Support for Analysis and Research ITNs Insecticide-treated Nets UNICEF United Nations Children's Fund KAP Knowledge, Attitudes, and Practices UPA United Planting Association, Malaysia LSMS Living Standards Measurement Surveys UPA United Planting Association MCH Mother and Child Health USAID U.S. Agency for International Development ix Summary I n the majority of low and middle-income · Pharmacies. countries, the private sector presents significant opportunities for expanding the reach of essen- · Food producers. tial child health services and products. Through bet- · Shopkeepers. ter coordination with the private sector, governments · The media. and donors can improve the availability, quality, and effectiveness of child health services. Collaboration · Private suppliers. with the private sector also presents significant chal- · Health insurance. lenges. On a practical level, the diversity of private sector providers can make it difficult for govern- The framework then identifies strategies to work ments and donors to identify opportunities and es- with the private sector to improve child health, tablish mechanisms for cooperation. briefly summarized below: This document assesses the current importance-- Contracting to private sector organizations offers and potential--of the private sector in contributing promise as a means of improving on or avoiding the to child health. The potential is vast. In many limitations of the public sector in delivering services. countries private and non-governmental providers But there are institutional limitations in lower and are more commonly consulted for child health middle-income countries on the potential for con- illnesses than public providers are. Even poor tracting for essential health care services. As a result, families often use private sector services. Families informal "relational" contracting based on relation- spend relatively large amounts of money for curative ships and trust between private organizations and services in the private sector, even when there are governments may be more appropriate in these cheaper public sector alternatives available. countries. Senegal and Madagascar have successfully However, in many settings private providers are experimented with contracting out nutrition services poorly regulated--and the technical quality of the to NGOs. services they provide is questionable. Regulation and setting standards. In the context of The document begins with a framework for ana- child health care, regulation and standard setting can lyzing the contributions of the private sector to child include: health care. The framework--based on the work of · Licensing and accrediting providers, Mosley and Chen (1984) and the World Bank's Pov- pharmacies, and laboratories. Licensing fees erty Reduction Strategy Framework--provides a ba- can be used to both raise revenue and influence sis for assessing the potential contributions of the the geographic distribution of providers. different components of the private sector in a given setting or country. · Regulation of pharmaceutical products. Public sector essential drugs lists can influence the The framework begins at the household level, practices of the private sector. and then identifies the components of the private sector that can influence child health outcomes and · Lowering legal and regulatory barriers. are potential collaborators in public-private · Involving NGOs and private providers in partnerships. They include: establishing standards. · Service providers (formal sector, other for- Financing support to the private sector for child profit, employers, non-governmental health services, including: organizations (NGOs), private voluntary · Subsidies to encourage the provision of specific organizations (PVOs), and traditional healers). services, particularly for poor population · Pharmaceutical companies. groups. xi Working with the Private Sector for Child Health · Public insurance to pay for specific health There is a substantial literature available on inter- services provided by the private sector. ventions by governments and international organiza- tions to work with the private sector to improve · Incentives and tax breaks for the purchase and child health and other essential health services. Ex- distribution of essential drugs and vaccines. amples are provided throughout the document, and Non-financial incentives. With appropriate incen- this literature is summarized in Appendix 3. tives, corporations may be valuable partners in ex- One clear lesson from this review is that the pri- tending health coverage to working populations. vate sector is enormously heterogeneous. At the Examples from Malawi, Malaysia, and Central country level, feasible strategies will depend on the America are presented here. potential of the different components of the private Coordinating service provision and financing--to sector and the capacity of governments and their ensure that a standard minimum of services is pro- partners for collaboration. This document presents vided across geographic areas and social groups. preliminary guidelines for an assessment tool to Commercialization of child health products. There identify potential strategies and interventions at the are several examples in the literature of social mar- country level. keting and commercialization of ORS. There are It is also clear that the strategies will work best in also examples of cooperation with private compa- combination with each other. Interventions based nies to make bednets and handwashing soap more only on improving private providers' knowledge lev- widely available. As with other strategies involving els may well not result in changing their practices. the private sector, the key challenge facing commer- The most effective interventions have been those that cialization strategies has been the sustainability of have included consumer education with incentives to the efforts once external funding support is no private providers. longer available. In particular, there is a need to balance govern- Training. There are several examples of training of ment's role as "promoter" and "regulator" of the private practitioners. Private pharmacists and their private sector. In several countries, particularly in staff are a logical target for training, because of their Africa, an increased reliance on community financ- strong influence on caregivers' behavior in many ing and service delivery by NGOs creates a need for countries. This type of training can be effective in a strong government role in terms of regulation, set- the short run--as seen by a case study in Indone- ting standards, and protection of the poor. sia--but there is not much evidence that it has a sus- This document focuses on the role of the private tained impact. sector in the direct provision of child health services. Advocacy--including promoting the economic and The private sector clearly has a much broader poten- social benefits of child health services to govern- tial role in many other areas related to and support- ments and private companies. ing the provision of child health services--including Educating consumers can be a strategy in its own the provision of ancillary services, training of health right and is essential to support other strategies for professionals (both pre-service and in-service), com- working with the private sector, particularly com- munication services, and financing of health care. mercialization. The potential of the private sector in each of these areas is touched on in this document, but a detailed Community involvement in financing. Community- treatment of each of these important topics is be- level prepayment plans have been recently yond the scope of the paper. Financing of health care promoted, particularly in sub-Saharan Africa, as an and services is a particularly complex topic. In most alternative or complement to government financing countries, the private sector has an important role to of essential health services and as a means to play in financing both recurrent health service costs encourage community involvement in health care and investment costs. management. xii Summary The importance of sustainability is highlighted throughout this document. Many of the case studies reported here present results that appear to be suc- cessful in the short or medium term, but for which results beyond that point are simply unknown. Other case studies document projects that have clearly proved to be unsustainable. xiii Introduction -- The Importance and Potential of the Private Sector in Child Health D espite the enormous progress made in child treatment of diarrhea were treated by private survival internationally, approximately providers and unregistered village doctors 10.5 million children under five years of (Rohde, 1997). The private sector distributes age still die each year in lower and middle-income 65 to 70 percent of the Oral Rehydration Salts countries. Seventy percent of these deaths are due to (ORS) used in the country (Chakrabarty 1998, five preventable conditions: diarrhea, acute respira- Northrup 1997). tory infection (ARI), malaria, measles, and malnutri- · In Nepal, a study of 900 households showed tion (BASICS, 1999). that the private providers and drug sellers were the source of care for 65 percent of child Objectives of this Paper diarrhea episodes and 60 percent of ARI illnesses (Kafle, 1998). The principal objective of this paper is to iden- tify existing and potential strategies at the national · In Egypt, private physicians treat 41 percent of and international level to better harness the poten- child ARI cases and 22 percent of child tial of private sector to improve child health. The diarrhea cases (Hudelson, 1998). target audiences for the paper include ministries of · In Bolivia, Guatemala, and Paraguay, more health in low and middle-income countries, and than 50 percent of child ARI and diarrhea program managers and technical staff working with cases are treated in the private sector (Berman child health programs in international organiza- and Rose, 1994). tions. This work is funded by the U.S. Agency for Even poor families often use private sector services: International Development through the Support for Analysis and Research (SARA) Project, and sup- · A study in Dakar, Senegal found that the total ported by the Inter-Agency Working Group on Pri- cost of drugs sold in a disadvantaged suburb vate Participation and Child Health--comprised of was 11 times the Ministry of Public Health representatives of the World Bank, the SARA expenditures on pharmaceuticals in the area Project, WHO, and the Partnerships for Health Re- (Fassin, 1988). form (PHR) Project. · Demographic and Health Survey (DHS) data from Dominican Republic indicate that 66 The Current Role of the Private Sector percent of families in the poorest quintile obtained treatment for acute respiratory In many countries private and non-governmental infections from private facilities. providers are more commonly consulted for child health illnesses than public providers are. Appendix Families spend relatively large amounts of 1 provides a detailed accounting of the evidence to money for curative services in the private sector, date concerning the importance of the private sector even when there are cheaper public sector alterna- in delivering child health services and limitations on tives available: publicly provided services. Among this evidence are · In Vietnam, 68 percent of health financing the following examples: comes from the private sector; including · In India, approximately 80 percent of regis- households. The private sector accounts for tered doctors work in the private sector. A approximately 50 percent of the provision of 1988 national survey showed that 93 percent services (Krasovec et al., 1999). of children taken outside the home for 1 Working with the Private Sector for Child Health · In Sierra Leone, most spending on curative clinics were more likely than private physicians care takes place in the private and NGO or pharmacies to prescribe ORS. Children who sectors (Fabricant et al., 1999). were seen by private doctors or pharmacists were more likely to be given antibiotics and · In Papua New Guinea, a survey of 325 antidiarrheals (Langsten and Hill, 1995). patients attending six private clinics in Port Moresby found that the most common reason · Studies in Nigeria (Igun, 1994), Kazakhstan cited for choosing private care was that it was (Ickx, 1996), and Bangladesh, Sri Lanka, and faster than public sector care. Many respon- Yemen (Tomson and Sterky, 1986) have all dents felt that private clinics had better doctors found that ORS is underprescribed--and drugs or gave better medicine (Mulou et al., 1992). heavily overprescribed--for child diarrhea cases. There is a demonstrated willingness to pay for services that are perceived to be of higher quality In many cases there is a discrepancy between pri- than publicly provided health care. Perceived quality vate providers' knowledge of appropriate treatments is a complicated concept that includes the availabil- on one hand and their practices and recommenda- ity of drugs, qualifications of providers, confidential- tions on the other. This "KAP gap" (knowledge, atti- ity, and users' preconceptions of what is an effective tudes, and practices) is particularly evident in the cure. treatment of child diarrhea cases and acute respira- tory infections (Murray, 1998). There is a wide vari- ety of factors influencing the interaction between Challenges in Working with Private Providers private practitioners and their patients. Interventions Despite users' perceptions, in many settings pri- based only on improving private providers' knowl- vate providers are unregulated and the technical edge levels may well not result in changing their quality of the services they provide is questionable. practices. Appendix 2 summarizes studies that have been con- In many countries, NGOs have become impor- ducted to date on the quality of child health services tant sources of health care provision. While this is provided in the private sector. In particular, there is a clearly a positive development in terms of the in- well-developed literature on the treatment of child- creased availability of essential health care services, hood diarrhea and dehydration by different types of the proliferation of NGOs also leads to concerns providers. The following studies provide examples: about a lack of regulation and standardization of ba- · A compilation of DHS data from 28 countries sic treatment protocols (Gilson et al., 1997). Like- shows that private providers are a significant wise, an increased reliance on community source of care for childhood diarrhea in most financing--particularly in Africa--creates a need for of the countries--and that they are less likely a strong government role in terms of regulation, set- to use ORS and more likely to prescribe ting standards, and protection of the poor. unnecessary drugs than public providers (Muhuri et al., 1996). · In Egypt, a longitudinal household survey conducted in 1990­91 found that government 2 A Framework for Analyzing the Contribution of the Private Sector to Child Health T his chapter describes a comprehensive con- dren do fall ill, treatment at the home and care-seek- ceptual framework that clarifies the com- ing behaviors have a strong effect on the evolution ponents of the private sector that of the illness, and, ultimately, the possibility of potentially influence child health outcomes. The death. Household behaviors are in turn influenced framework also identifies the strategies that coun- by additional factors at the household level--includ- tries can potentially choose to better harness the po- ing available financial resources, the physical envi- tential of the private sector to meet child health ronment and possible contamination of the objectives. household and surrounding community, and cultural attitudes, values and knowledge relative to children The framework presented here is based on the and their health (Figure 1). World Bank's Poverty Reduction Strategy Frame- work, which in turn is rooted in Mosley and Chen's (1984) portrayal of the determinants of child health outcomes and the interrelationships among these de- terminants. Mosley and Chen laid out a series of im- mediate, or proximate, determinants of children's health status: · Maternal factors · Environmental contamination · Nutrient deficiency · Injury · Personal illness control These proximate determinants are themselves in- fluenced by a series of socioeconomic determinants: · Individual-level variables--productivity, norms, and attitudes · Household-level variables--income and wealth · Community-level variables--the ecological Once caregivers have made the decision to take a setting child to a service provider, whether for preventive or curative health care, the provider directly influences · Political economy the child's health status (Figure 2). · The health system In addition, health care providers directly affect A child's health and nutritional status, and, ulti- household's behavior--through health education, fi- mately, survival, are most immediately influenced by nancial incentives and other channels. Both public conditions and actions at the household level, analo- and private providers clearly play this role; public gous to Mosley and Chen's proximate determinants providers are omitted from this framework as it fo- (Figure 1). cuses on the role of the private sector (Figure 2). Household's behavior and risk factors directly in- Private sector service providers are grouped here fluence whether children become sick. When chil- into general categories in order to provide an ana- 3 Working with the Private Sector for Child Health Pharmaceutical companies influence the price and availability of medications. Governments regulate them; in addition, commercialization and social mar- keting interventions work with pharmaceutical com- panies to make drugs that are essential for child survival widely available at affordable prices (see Section 6 under "Strategies," below). In many lower and middle-income countries, pri- vate pharmacies and drugs vendors have an enor- mous influence on household behaviors and, ultimately, children's health status. While private pharmacies are generally regulated by governments, the term "drug vendors" is used here to indicate the considerable drug sales that are unlicensed and un- regulated. Such drug sales are widespread in the de- veloping world, in both urban and rural areas. A study by the BASICS Project in Eritrea found that drug vendors are the main source of selling medicine lytical framework and advance the discussion of fea- in rural areas (Murray et al., 1998). Overall in sible strategies to work with the private sector for Eritrea, the private sector--both regulated and un- child health care. Formal sector providers include regulated--dispenses more drugs than the public for-profit physicians and other types of health care health system (Orobaton, 1997). Evidence from workers that are accredited or registered--and thus Dakar, Senegal (Fassin, 1988) and rural Guatemala function within the context of a regulated health sys- (Van Der Stuyft et al., 1997) presents a similar story. tem. Other for-profit providers, working outside of Food producers and shopkeepers affect the types the formal sector, are typically outside of the realm of foods produced and sold. Food producers are po- of government regulation. In many settings, the tential partners in food fortification programs. Shop- quality and consistency of care provided by this keepers can directly influence household behavior group is problematic. related to child feeding and caregiving. In most Private employers are a significant source of both countries, the media has a strong impact on house- health care provision and financing in many holds and represents one of the principal channels countries. NGOs include church-based and other for governments and their partners to affect house- not-for-profit health care providers indigenous to the holds' behavior related to child health. "Private sup- country or settings. PVOs, on the other hand, are in- pliers" are a group that includes suppliers of medical ternational organizations that have a physical pres- equipment to hospitals and private providers as well ence and provide health care in a given country. as the manufacturers and distributors of non-phar- Finally, the category of traditional healers covers maceutical products used to improve child health at many different types of providers, all practicing the household level. Examples of such products in- some form of traditional medicine and typically out- clude handwashing soap and bednets (see Section 6 side of the purview of government regulation.1 under "Strategies"). There are a wide variety of other actors in the pri- Finally, the private sector plays a major role in vate sector that influences the behaviors of both house- the health sector in many countries by pooling finan- holds and health care providers (Figure 3). cial resources and helping households to insure 1. This categorization is intended to provide a straightforward means of analyzing interventions targeting the private health sector in a variety of countries and settings. More complex categorizing structures are available in the literature. Smith et al. (2000) catego- rize providers by their level of organizational complexity and profit or non-profit status. Slack and Savedoff (2000) organize pro- viders by the type of mechanism used to pay them. 4 A Framework for Working with the Private Sector for Child Health against risk. Private health insurance companies also directly affect provider behavior through payment mechanisms, incentives, and setting standards. Be- cause health insurance and contracting mechanisms are of intrinsic importance to health systems in gen- eral and go well beyond child health care, they are not treated in depth in this paper. 5 Strategies for Working with the Private Sector for Child Health G overnments and the international organiza- tions that support them have a variety of strategies at their disposal to work with the components of the private sector with the ulti- mate goal of improving child health outcomes. These strategies can be characterized by the actors they tar- get. Figure 4 lists the first group of these strate- gies--a group that targets private organizations and actors influencing child health. A second group of strategies, described later in this document, directly targets households. The following sections describe experiences to date with these strategies in lower and middle-in- come countries. Throughout, emphasis is placed on the use of strategies to work with the private sector to improve child health. All of the strategies cited are also important parts of working with the private sec- tor to improve the health of the entire population, and this document does not attempt to provide a comprehensive guide to working with the private health sector. As such, this document is intended to complement, and not substitute for, documents writ- ten in support of the World Bank's Resource Alloca- tion and Purchasing (RAP) initiative.2 Appendix 3 summarizes the available literature on interventions by governments and international organizations to work with the private sector to improve child health. Appendix 3 is organized alphabetically by strategy. 1. Contracting specifying the type, quantity, and time period of While there are several examples of governments services provided by a private provider on behalf of contracting with private sector health delivery orga- government. Purchasing is a wider term that includes nizations for a range of services that include child budgeting, regulation, supervision, and a range of health care, such contracts are rarely for child health market transactions and mechanisms used by gov- services alone. The discussion of contracting for ernments to acquire a broad range of preventive and child health services is by necessity placed into a curative health services, support services, administra- greater context of contracting for essential health tive and technical services, drugs, and supplies (Tay- services. In this context, contracting is a mechanism lor, 2000). 2. See Preker et al. (2000) for a presentation of the RAP initiative. 7 Working with the Private Sector for Child Health Preker et al. (2000) present a framework for pur- in"). The contracted-out districts appear to be chasing decisions, based on core policy characteris- performing better than those contracted in, but tics, organizational characteristics, and institutional there is no hard evidence of improvements in characteristics. Child health services--both preven- either quality or efficiency (Smith et al., 2000). tive and curative--are part of a package of essential · In 1992, the Instituto Peruano de Seguridad health services that are generally cost-effective and Social (IPSS) established a network of private carry positive externalities. Governments should primary care physicians in Lima. As a result, therefore ensure that these services are provided, ei- patients have greater choice of provider and ther through direct public service provision or by shorter delays--resulting in a reduction in purchasing them from the private sector. Distinct demand for supplementary health insurance types of contracting in health care can be usefully and improvements in consumer perceptions of distinguished--including health services contracting IPSS. (with both institutional and individual contracts); contracting for ancillary services; and management · The Nicaragua Social Security Institute also contracting.3 began to contract with accredited health providers to provide care in 1996. In this case, NGOs may be able to expand health services cov- however, the effort has met with resistance erage to areas beyond the reach of the public sector. from providers, who must assume risk. The As detailed in Case Study 1, governments in Senegal general populace, philosophically opposed to and Madagascar have successfully contracted with privatization, has been slow to accept the NGOs to offer nutrition services (see text box). changes (Fiedler, 1996). Other examples of contracting for health services that include child health care are described below Combining public finance with private provi- and are detailed in Appendix 3. sion allows resource allocation decisions to be made by the public sector, while encouraging effi- · In El Salvador, the MOH signed a three-year ciency in service provision. However, there are sig- contract with an NGO, FUSAL, which nificant limitations in lower and middle-income assumed full responsibility for primary health countries on the potential for contracting for services in the Municipality of San Julian, a health care services. Competition may be limited. difficult-to-reach rural area. Designing and monitoring contracts may be con- · Similarly, in Guatemala, CARE operates a strained by government capacity or corruption. project in partnership with the MOH and Public finance may be insufficient. McPake and Ministry of Social Welfare. CARE manages Banda (1994) suggest that significant investments seven jurisdictions where formal health in human resources and information systems are coverage is minimal (Rosenthal, 2000). needed to make contracting feasible in most devel- oping country contexts. · In Cambodia, the MOH recently piloted a program to contract essential health services to Palmer (2000) also points out that there are cur- NGOs and for-profit firms in five districts. The rently serious limitations on the use of formal con- MOH awarded the contracts through competi- tracts in lower-income countries. Competition-- tive tender. In two districts, contracts granted provider choice--and the institutional infrastructure total responsibility for the management and necessary to support a comprehensive contract are delivery of district health services to the lacking in most cases. As a result, informal "rela- awardee. In the other three districts, contracts tional" contracting based on relationships and trust granted management responsibilities to the between private organizations and governments may awardee organization, but district health be more appropriate in these countries. remained under MOH control ("contracted- 3. Rosen (2000) provides an excellent overview of issues related to contracting for reproductive health care services. 8 Case Study 1. Contracting out Nutrition Services and Management in Senegal and Madagascar Strategy: Contracting Private sector component: NGOs Intervention: Provision of preventive nutritional services to malnourished children. Services provided include monthly growth monitoring, weekly nutrition and health education sessions to women, referral to health services when needed, home visits, food supplementation to malnourished children, and income generating projects. Both projects were supported by the World Bank. Description: Senegal and Madagascar have successfully experimented with contracting out nutrition services to NGOs. These governments aimed to expand services to high-poverty areas not served by public or other private providers, thereby reducing childhood malnutrition and freeing up government resources to address other high-pri- ority concerns. International donors, the governments, and local communities provide funding. In Senegal, the government delegated overall management responsibility for the "Community Nutrition Project" to an NGO called Agetip in 1996. Agetip signed a "Convention" or contract with the government to implement the project, and it is entirely responsible for project management and results. The government's National Commission Against Malnutrition, a presidential-level task force, is responsible for monitoring the contract. Agetip in turn con- tracts with local NGOs in 14 urban areas for day-to-day supervision of service providers. Each local NGO oversees approximately four workers, who usually are young people from nearby neighborhoods. Local consultants provide training, and workers are paid a minimum salary. As of 1998, 176 Community Nutrition Centers had been estab- lished. In Madagascar, the Secaline project has provided nutritional services in rural villages since 1994. The government initially organized a Project Management Unit of individual contractors. These contractors are responsible for project implementation and are monitored directly by of the office of the Prime Minister. Community Nutrition Workers (CNWs) provide nutrition services to women who have been chosen by local community members in the target villages. Secaline project staff provide training to the CNWs, and then contract with local NGOs for ongoing supervision. Each NGO oversees around 8­10 CNWs. CNWs are paid with rice, equivalent to a minimum salary. Results: In Senegal, the community nutrition centers provided services to 131,000 women and 100,000 children under three between 1996 and 1998. Between 1994­1998 in Madagascar, CNWs served 241,000 children under five and their mothers in 534 villages. Rates of severe and moderate malnutrition (measured by weight for age Z- scores) decreased significantly in the target areas of both projects, as demonstrated by cross-sectional surveys. Both projects expanded to the national level after the pilot phase. Keys to success: In both countries, the government delegated authority for project implementation to non-govern- mental groups with strong management capacities at the national level. Local supervisory NGOs were contracted via an open tendering process, with stated eligibility criteria. Contracts with these NGOs clearly stated the tasks to be accomplished and specific performance expectations (minimum number of beneficiaries to be served, minimum percentage attendance at nutrition education sessions, etc.). In Senegal, some contracts have been canceled based on poor performance. Both projects relied on locally available human resources, attempting to build capacity within the local population. Project staff also tried to target the most vulnerable geographic areas. Community participation in monitoring and implementation of the projects was promoted through local steering committees. Simple management information systems were developed for use by local supervisory NGOs; these systems usually targeted three to five main indi- cators, and were periodically monitored by national-level staff to ensure data accuracy. Overall, high-level political support was essential to the success of the projects, as was the availability of sufficient funding from government and international donors. Challenges: Since community contributions total only about four percent of the projects' cost, while donors provide almost 90 percent, the long-term sustainability of these projects is a concern. Agetip is exploring ways to "gradu- ate" successful communities to greater self-sufficiency through income-generating projects. In addition, it has proved difficult to find ways to refer severely malnourished children to government health services in areas where these services are inaccessible. Source: Marek et al. (1999) 9 Working with the Private Sector for Child Health An example of this type of contracting comes 1. Assess the feasibility of contracting, including from South Africa--Mills et al. (1997) compared costs, political consequences, availability of costs and quality at two government facilities and suppliers, regulatory framework, and readiness two rural mission hospitals receiving substantial to contract. government grant money. No formal contract ex- 2. Gain political and institutional support for isted between government and mission institutions; contracting, including building public support the informal relationship was based on goodwill. It from communities, organizations, and unions. was found that the two mission hospitals provided similar services to the government hospitals, but at 3. Define service specifications, including services much lower unit cost. to be purchased and the target populations to be served. Contracting is also possible between a govern- ment and its own hospitals or health facilities. In 4. Select performance measures. these cases, the contribution of contracting may be 5. Define payment methods and link payment to primarily to increase clarity on objectives and perfor- performance. mance expectations, rather than to lower costs. In Costa Rica, the Costa Rican Social Security Institute 6. Select providers and maximize competition in (CCSS) has entered into management contracts with the bidding process. its hospitals--specifying objectives in terms of pro- 7. Negotiate and write the actual contract. duction, quality, satisfaction, and allowing for in- 8. Monitor and evaluate the contract, and assure creased managerial and financial autonomy (Coll the capacity for contract management. and Beeharry, 1999). 9. Encourage competition over the long run to Mintz, LaForgia, and Savedoff (2001) provide a avoid monopolistic abuses in contracting. practical framework for implementing the formal contracting of health services. The steps described in the framework are useful whether the contracting in 2. Regulation and Setting Standards question is with private organizations, or within government institutions (Figure 5). Regulation is clearly one of the principal means by which governments can influence the behavior of private organizations in health and related sectors. Figure 5. Steps in Contracting Health Services Typically, separate regulation and standard-setting regimes apply to the labor market for health care, the markets for pharmaceuticals, medical equipment, Define and supplies, financial capital investment, physical Select payment system providers capital and equipment, support infrastructure, and Select performance the quality of health care provision itself. Write the contract measures Each of these areas can in turn be influenced by Monitor Define services compliance government regulations in several ways. For ex- ample, regulation of the labor market for health care Gain support Encourage includes pre-service and in-service training, licensing competition and certification of providers, continuing education, Assess feasibility and incentives for professional providers to locate in certain areas. Regulation of the pharmaceutical mar- ket includes essential drug lists and their enforce- Source: Mintz, La Forgia, and Savedoff (2001). ment, the promotion of generic drugs, import regulations, registration, encouragement and As described in Figure 5, important steps for con- regulation of local production, and quality and price tracting health services include: regulations for for-profit retailers. 10 Strategies for Working with the Private Sector for Child Health A comprehensive discussion of each of the types 1991. Most of the existing regulations focus on of regulation that could influence child health care is licensing requirements for providers and facilities. clearly beyond the scope of this document. As with Regulations are needed to govern new actors in contracting, regulation and setting standards for pri- the private sector, such as laboratories, health care vate health care provision is a topic that transcends organizations, and private health insurance, and child health care. This document instead provides to protect consumers. It is important to set up a some examples of the regulation of private sector regulatory structure soon--before stakeholders' child health service provision and financing (as part interests become entrenched. (Kumaranayake et of a package of essential health services) and ex- al., 2000). amples of initiatives to involve the private sector in setting standards. Appendix 3 provides additional details and examples. In the context of child health Regulation of Drugs--Essential Drug Lists and care, regulation and standard setting can include the Role of Private Pharmacies (but is certainly not limited to): · Public sector essential drugs lists can influence the · Treatment protocols. private sector. In Sri Lanka, over 70 percent of the pharmaceutical products registered by the private · Licensing and accrediting providers, sector are listed on the essential drugs list, despite pharmacies, and laboratories. the fact that the list is intended to regulate the · Price controls for health services, if necessary. public sector (Weerasuriya, 1993). · Regulation of pharmaceutical products-- · In Laos, a 1992 initiative to control the quantity essential drug lists and the role of private of private pharmacies by restricting the opening of pharmacies. new pharmacies failed due to political pressures, demonstrating the difficulties of regulating drug · Regulation of private insurance. sales in low-income settings. As an alternative, · Protecting the poor--targeting children for fee licensing fees could be used to both raise revenue waivers. and influence the geographic distribution of providers. The revenue could be used to · Improving legal and regulatory barriers. strengthen the regulatory capacity of the · Involving NGOs and private providers in government (Stenson et al., 1997). establishing standards. Improved Regulatory Environment Licensing and Accrediting Providers, Regulations protecting health care consumers are Pharmacies, and Laboratories lacking in many lower and middle-income countries. · In India, the Consumer Protection Act, COPRA, At the same time, existing laws and regulations can came into effect in 1986 to protect consumer limit the population's access to child health care ser- interests by establishing consumer councils. The vices and products. Some countries are loosening purpose of the act was to promote and protect the regulations and controls on the sale of public health rights of consumers, provide accurate infor- products in order to increase access to these products. mation, protect consumers against unfair trade For example, in some Sub-Saharan African and Latin practices, and ensure that consumer interests American countries, private pharmacies can provide receive due consideration in appropriate fourms. immunizations after obtaining approval to sell vac- However, COPRA has not been enforced and has cines from the government (Slater and Saade, 1996). had limited effectiveness for changing provider Countries such as Malawi, Mozambique, and Tanza- behavior to improve quality standards (Bhat, nia have been successful in increasing private sector 1997). participation by eliminating unnecessary regulatory · In Tanzania, the private health care market is practices (Bennett et al., 1997). When promoting relatively new--private practice was legalized in private sector service provision by reducing regula- 11 Working with the Private Sector for Child Health tory barriers it is also important to ensure the safety of encouraging private sector growth. In and appropriateness of health care services. exchange, medical institutions in specific categories are required to provide at least 10 percent of their beds free to poor patients Involving NGOs and Private Providers in referred by an authorized government officer. Establishing Standards They are also required to provide outpatient In countries where NGOs play an important role services free for one hour in the morning and one in service delivery, involving them in the regulatory hour in the evening to poor patients (Winfrey et process can lead to improved public-private coordi- al., 2000). nation and higher standards. In the Dominican Re- · In Bolivia, the NGO PROSALUD, an public, INSALUD, a nodal organization for more autonomous, nonprofit Bolivian organization, than 100 NGOs, participates in the National Com- manages an extensive network of primary health mission for NGO Qualification and Accreditation. care clinics for low- and middle-income people. INSALUD collaborates with the government to de- The clinics provide free care to 10 percent of their velop systems to ensure that NGOs receiving public patients. PROSALUD is subsidized by USAID funding comply with minimum requirements, stan- (Cuellar et al., 2000). dards, and norms. Similar examples are available from Bolivia and Mexico. The Ministry of Health in · In Thailand the Government's Board of Invest- El Salvador has contracted with an NGO to estab- ment helped encourage the growth of new lish quality-of-care requirements and assess compli- private hospitals by providing substantial tax ance (Rosenthal, 2000). breaks. However, Green (2000) argues that this support for private sector development has come at the expense of appropriate regulation and 3. Financing Support for the Provision of oversight by the Ministry of Public Health, Services which lacks political clout. Private hospitals now dominate the market in Bangkok and there Financing support to the private sector for child are significant concerns about the quality of care health services can include: and cream-skimming practices. There is there- · Subsidies to encourage the provision of specific fore a need to balance between the government's services or commodities, particularly in disad- role as "promoter" and "regulator" of the pri- vantaged areas. vate sector. · Public insurance to pay for specific health · Pakistan has been successful in using tax in- services provided by the private sector. centives to convince private primary health care · Incentives and tax breaks for the purchase providers to set up operations in rural areas and distribution of essential drugs and (Bennett et al., 1997). vaccines. · Subsidies to encourage the media to provide Public Insurance to Pay for Specific Health health education messages. Services Provided by the Private Sector Public insurance can effectively influence the Subsidies to Encourage the Provision of Specific types of services provided in the private sector, and Services or Commodities increase access to child health services through the private sector. The government of South Korea pro- · Subsidies can be an effective way to encourage vides medical insurance for most of its population, the private sector to serve the poor. The gov- and this insurance covers the cost of immunization ernment of Rajasthan, India provides allotments services obtained through the private sector (most of land at subsidized rates, sales tax relief on health facilities are private) (DeRoeck and Levin, medical equipment, and eligibility for other fiscal 1998). benefits to private health institutions as a means 12 Strategies for Working with the Private Sector for Child Health Incentives and Tax Breaks for Essential Drugs the government agreed to provide free and Vaccines immunizations, send mobile immunization teams In almost all lower and middle-income countries, to the plantations, and provide informational government regulatory bodies give preferential tax materials to plantations (Sinniah et al., 1994). and import treatment to products classified as essen- tial drugs. A recent survey of the tax treatment of 5. Coordinating Service Provision and three public health commodities--vaccines, ORS and Financing contraceptives--in 22 countries found that vaccines receive the most favorable tax treatment (Krasovec In countries where NGOs and other private sec- et al., 1998). tor organizations play a significant role in providing and financing health care, governments can and should play a coordinating role that goes beyond 4. Non-Financial Incentives regulation. Such coordination should seek to ensure There are several examples available in the litera- that a standard minimum of services is provided ture of governments and donors using non-financial across geographic areas and social groups. Govern- incentives to encourage the provision of specific ments can also actively involve the private sector in health services, often in remote areas:4 public health initiatives. · Corporations may be valuable partners in ex- · An analysis of the insurance sector in Thailand tending health coverage to working populations. indicates that coverage is expanding, but that In Malawi, 39 tea estates collaborated with private and public schemes overlap and lack risk Project HOPE to provide maternal and child diversification--demonstrating a need to co- health (MCH) services to their employees' fami- ordinate coverage and terms among the several lies under a USAID child survival grant. The public and private schemes. To improve this project paid for each estate to hire a health pro- situation, the Government could adopt a national moter to provide MCH care to all families. The policy on health insurance, and provide education health promoters helped establish specialty clin- and training on health insurance principles to ics, build and maintain water and sewer systems, policy makers, system administrators, managers, clean up residential compounds, and provide and providers (Sriratanaban et al., 2000). community education, immunizations, and other · In India a "Universal Immunization Program" preventive measures. A BASICS survey showed immunized more than 85 per cent of the children remarkable improvements--on the measures of in Calcutta against major diseases, bringing well child visits, exclusive breastfeeding, water, together government, private sector repre- and sanitation--as a result of this program. At sentatives, UNICEF, and the voluntary sector. The present, there are 58 estates owned by 11 compa- organizations pooled their cold chain equipment nies providing preventive care under this scheme to increase the effectiveness of their outreach. to 55,000 workers and 270,000 family members Collaboration between public and private sectors (Burkhalter, 1998). was essential--private providers provided easy · The United Planting Association of Malaysia access to the general population, while public (UPA) covers seven percent of the Malaysian sector coordinated logistics. It is however difficult population through its employees and their to sustain collaboration on this scale (Chaudhuri, families. The UPA agreed to provide free transport 1990). to government facilities so that children and · Kirsch and Harvey (1994) examine why private pregnant women could be immunized, and to providers often do not participate in surveillance keep track of im-munization schedules. In turn, 4. The terminology "non-financial incentives" may lead to some confusion, since in many cases this type of collaboration includes governments and donors providing materials, supplies, or land--all of which have a financial value. The key point is that this type of collaboration does not focus on direct payments to private sector providers. 13 Working with the Private Sector for Child Health of diseases like polio. They point to several examples in the literature of social marketing and approaches to increase the role of the private commercialization of ORS, including the following: sector in surveillance--strengthening surveillance · In Indonesia, the PRITECH Project worked to laboratories, assisting with transportation of convince commercial firms to invest in specimens to labs, providing incentives to report producing ORS. PRITECH first conducted new cases, establishing awards for private market research, and used the data collected to providers, making communication equipment convince the industry of the untapped market available to providers, and developing simple potential. Production and sales of ORS reporting forms. increased after just one year. The active involvement of the government and the 6. Commercialization of Child Health Products Indonesian Medical Association were critical to this success. The MOH developed a national Governments and donors have been successful logo, messages for specific target audiences, in collaborating with private pharmaceutical com- and materials for pharmacies and shops panies and suppliers to make ORS, soap, and (Ferraz-Tabor, 1993; Ferraz-Tabor and Jansen, bednets available to populations at low prices. 1991). Slater and Saade (1996) present a framework for assessing the potential for public-private coopera- · In Bolivia, a public-private partnership fi- tion for commercialization. They identify the fol- nanced market research and the development lowing as products that could be promoted of a brand name, resulting in the launching of through public-private partnerships: Vitamin A an ORS product that the pharmaceutical dis- and iron supplements, iron-fortified foods, iodized tributors made available in pharmacies and salt or foods fortified with iodized salt, insecticide- small retail shops. The MOH sponsored media treated bed nets, anti-malarial drugs and treat- campaigns to promote ORS. ment, soap, ORS, disinfectants, antibiotics, and · A similar intervention in Western Kenya in the vaccines. late 1980s led to the conclusion that a combi- Public-private initiatives to promote the availabil- nation of mass communication techniques and ity of public health products can be usefully catego- commercial distribution can increase the use of rized by the level of sustainability of the product in ORS, but that--given the population's finan- question: cial resources--the sale of ORS could not replace free ORS distribution through clinics · Some products, such as disinfectants and soap, (Kenya et al., 1990). are fully sustainable as commercial under- takings. · Population Services International (PSI) estab- lished a social marketing program for ORS in · Others--including ORS and bednets--require Bangladesh. Sales revenues covered the cost of a partial subsidy in many settings in order to manufacturing and some operating expenses, reach a significant part of the population. while USAID supported marketing, training · Other products are naturally sold in the and education. The product was marketed by private market but can be positively influenced the PSI-affiliated Social Marketing Company from a public health perspective through (SMC), which promoted the product through regulation and promotion--for example, food pharmacies and other outlets at government- fortification. fixed prices. More than 87 million sachets of ORS were sold between 1986 and 1993. The These distinctions are important to keep in mind name "ORSaline" became the generic term for when planning interventions. As with other strate- ORS (PSI, 1994). gies involving the private sector, the key challenge facing commercialization strategies has been the sus- There are also examples of cooperation with pri- tainability of the efforts once external funding sup- vate companies to make bednets and handwashing port is no longer available. There are several soap more widely available: 14 Strategies for Working with the Private Sector for Child Health · The Rotary Net Initiative in Tanzania used five (Schellenberg et al., 1999; Abdulla et al., different channels to sell and distribute 2001). insecticide-treated nets (ITNs)--public hospital · The Gambia implemented a National Impreg- pharmacies, public health clinics, "net nated Bednet Programme in 1992. Rates of committees," village health workers, and retail insecticide treatment dropped sharply when shops. Each outlet was essential in increasing user fees began to be charged for the insecti- the availability of ITNs, but none had much cide (Muller et al., 1997). success in encouraging the treatment of nets with insecticide (Fraser-Hurt and Lyimo, · In Indonesia, USAID promoted the use of a 1998). After 18 months, a survey of 312 leading soap, Lifebuoy, as a handwashing and families with children under five found that 46 hygiene product, thereby increasing its market percent of the children were sleeping under share significantly (Slater and Saade, 1996). As treated nets. By the end of the second year of reported in Case Study 2, the BASICS Project the marketing campaign, only 17 percent of also promoted soap and handwashing in children in the area were without a net Central America (see text box). Case Study 2. Handwashing Initiative in Central America Strategy: Commercialization. Private sector component: Private suppliers (soap producers) and the media. Intervention: The project acted as a catalyst between the public sector and the private sector. By partnering with private suppliers like soap producers and the media, the public sector can efficiently achieve health objectives. Private suppliers can benefit from the development of a new selling point for their products and from an enhanced image in the community Description: Studies have shown that many households in Central America with a high incidence of diarrhea are using poor handwashing practices and that diarrhea and subsequent dehydration causes 25 percent of children's deaths in the region. To improve handwashing behavior and ultimately reduce children's deaths from diarrhea, the BASICS handwashing initiative was launched in 1996. The terms of the partnership were stated in a formal agreement. The project task force, coordinated by the BASICS Project, was in charge of ensuring the integrity of the public health focus. Public health messages encouraged improved handwashing techniques and handwashing at critical times such as after defecating and before preparing meals. The soap manufacturers used their marketing skills to develop a creative strategy for advertising their products based on the public health messages developed by the task force. The media was involved in disseminating the public health messages to the population. Non-financial incentives were used to involve the private sector. The project conducted baseline market research-- beneficial to the soap producers' marketing strategies--to analyze the handwashing behavior of the targeted population. Soap producers would also benefit from enhanced interest in their products and an improved image in the community. Results: The project achieved its objectives of improving handwashing behavior. In Guatemala the number of children displaying intermediate or optimal handwashing behavior increased from 19 percent to 29 percent. This was in large part due to the involvement of the soap producers and their marketing channels. The incidence of child diarrhea decreased by 4.5% among children under five years of age . Sources: Slater and Saade, 1996, Miller, 1997. 15 Working with the Private Sector for Child Health 7. Training to Improve Quality of Care lar, and had good geographic coverage, at an annual Training private health care providers is among cost of $18 per retailer. Refresher courses were even- the most feasible activities that governments and do- tually needed, and dependence on donors to fund the nors can undertake to influence the providers' be- training sessions was a concern (Kafle et al., 1992). havior. Training is a discrete activity, generally The Indian Medical Association (IMA) developed without recurrent funding commitments. Experience a national ORT training program in the late 1980s to shows that a wide variety of training of private pro- improve private physicians' management of childhood viders has in fact been carried out--the private sec- diarrhea. IMA physicians trained almost 22,000 phy- tor components targeted for training include sicians by 1988. The IMA successfully used its struc- pharmacists, physicians, nursing aides, and tradi- ture to promote the training program, publishing tional healers. Unfortunately, partially because most information on the program in its monthly newsletter. training efforts to date have been ad hoc rather than An entire issue of the Journal of the Indian Medical institutionalized, there is very little evidence of sus- Association was devoted to diarrhea and its manage- tained impact for this type of training. ment. Knowledge and practice among trainees im- In many countries, the involvement of the private proved, and over 90 percent of participants sector in training differs for pre-service training recommended the trainings to others (Sobti, 1988) (medical and other professional training schools), in- Traditional healers have also been the target of service training, and continuing medical and nursing training efforts. In rural areas of the Philippines-- education. Most of the available literature empha- where more than half the villagers were found to sizes in-service training. Hudelson (1998) highlights seek the services of traditional healers before con- several interventions undertaken to train private sulting the formal health care system--training of practitioners in the Integrated Management of traditional healers (herbolarios) included lectures, Childhood Illnesses (IMCI). In Kenya, shopkeepers discussions, demonstrations and practical case re- were trained in dispensing antimalarials and view. Results showed an increase in knowledge ac- antipyretics, and providing treatment advice to cus- quisition, but there was no evaluation of the impact tomers for childhood illnesses. Training sessions for on practices (Caragay, 1982). In Ghana, the Danfa unlicensed drug retailers in Nepal and licensed drug project has been described as a success story for in- retailers in Kenya, Indonesia, and the Philippines formation provision to illiterate traditional healers. have been organized to improve drug-dispensing The project utilized verbal teaching of modern practices. All these experiences showed improve- health techniques to these healers, while also educat- ments in the behavior and practices of private practi- ing villagers about improved traditional medical tioners after tailored training sessions. practices (Yeboah, 2000). Private pharmacists and their staff are a logical target for training, because of their strong influence 8. Advocacy on caregivers' behavior in many countries. Case Study 3 (see text box on the next page) provides de- In the context of this paper, advocacy involves tails of a successful intervention to use the techniques communicating with governments and private com- of the pharmaceutical industry--training through de- panies in order to convince them that promoting tailing--to influence pharmacists' behavior. child health services is in their best interest and is the right thing to do. The USAID-supported TIPPS In Nepal, retail drug outlets outnumber health Project aimed to persuade private companies to pro- posts and health centers by a ratio of four to one. In vide family planning and MCH services to employ- 1981, Nepal's Department of Drug Administration ees and their dependents. TIPPS presented data to established a 45-hour course for drug retailers to im- corporate leaders in a range of countries, showing prove the quality of services they provide. The that these services could both save the companies course emphasized practical training and formal money and improve the health of their workers. teaching on pharmacology, ethics, storage, and legal Overall, 140 companies agreed to add these services issues. The program proved to be feasible and popu- to their health package (JSA Healthcare, 1991). 16 Case Study 3. Improving Pharmacists' Treatment of Childhood Diarrhea Strategy: Training--Detailing to Private Pharmacies. Private sector component: Private pharmacies. Intervention: A controlled field test of the WHO-CDD (Control of Diarrheal Diseases) Guide for Improving Diar- rhoeal Treatment Practices of Pharmacists and Licensed Drug Sellers in Indonesia. The study evaluated the efficacy of face-to-face outreach to private pharmacy owners and staff in improving diarrhea case management for children. Description: The Indonesian Ministry of Health (MOH) followed a four stage process: assessing knowledge and cur- rent actual diarrhea treatment processes, identifying underlying motivations and constraints to changing practices, designing a persuasive educational intervention through face-to-face encounters, and implementing the intervention. First, interviews were conducted with a sample of pharmacy owners, pharmacists, and counter attendants to assess current knowledge about diarrhea and its treatment. Next, "surrogate patients" were sent to these pharmacies to observe actual practices, posing as mothers of children with diarrhea and asking for advice. Six focus group discus- sions were then held with pharmacy workers to explore the factors underlying their observed behavior. Based on the results of these information gathering activities, the MOH team developed printed educational materi- als to convey target messages about appropriate diarrhea management. The core of the educational intervention consisted of short, interactive face-to-face sessions between outreach educators, pharmacists and counter staff--a version of "academic detailing." These sessions were conducted by MOH personnel and had the sponsorship of the WHO and the National Pharmacists' Association. Results: The study included 43 intervention pharmacies and 44 control pharmacies in Java. The "surrogate pa- tients" visited each pharmacy one month before and after the training. The intervention was successful--from a baseline ORS sales rate of 40 percent in both groups, the intervention group increased its ORS sales by 34 percent after the training, compared to a 13 percent increase among controls. Intervention pharmacies also decreased their sales of antidiarrheal drugs by 29 percent after the training, compared to a 9 percent decrease among controls. Keys to success: The in-depth information-gathering process allowed the MOH team to design effective and appro- priate materials and strategies. One-on-one academic detailing, which has repeatedly proven effective in changing physicians' prescribing behaviors in industrialized nations, was shown to be feasible in the developing world con- text as well. The backing of respected national and international health organizations increased the credibility of the outreach educators. In addition, providing pharmacies with free posters and patient education materials ex- tended the impact of the intervention. The surrogate patients were essential to an "unbiased" assessment of the intervention's impact. Challenges: It is unclear how sustainable these improvements in diarrhea case management will be; a one-time inter- vention is unlikely to have a long-term impact, and follow-up strategies need to be developed. A variety of forces continue to motivate drug vendors to improperly prescribe anti-diarrheals or fail to prescribe ORS: the perception that ORS is "good first aid" but not strong enough treatment for diarrhea; aggressive advertising and product out- reach by pharmaceutical companies; consumer preferences for specific anti-diarrheal brands; and the higher profit margin of anti-diarrheal drug sales. Source: Ross-Degnan et al. (1996) Goel et al. (1996) present a framework for ana- 9. Changing Behavior through Communication lyzing the behavior of pharmacy staff in developing The remaining two strategies--changing behavior countries. The framework leads to four proposed through communication and promoting community types of interventions--including information alone, involvement in financing--are directed at households persuasion, incentives, and coercion. Advocacy in- rather than at private sector organizations (Figure volves the first three of these approaches, while the 6). However, households themselves can be consid- fourth, coercion, is more related to regulation. Each ered as a critical component of the private health approach alone has strengths and weaknesses, and sector--particularly since household expenditures on the most effective strategy will combine all four ap- health care are a major source of health financing in proaches. 17 Working with the Private Sector for Child Health · In Bolivia, BASICS worked to reach house- holds by helping to launch the "El Zambo Angolita" radio series for reinforcing inte- grated child health practices in the community. BASICS' work included building partnerships with radio stations, identifying local private sponsors, and identifying sustainable incentives for broadcasting the program (Contreras and Brun, 1998). · In Guatemala, Honduras, El Salvador, and Costa Rica, the BASICS project worked to convince mass media organizations to mobilize their resources behind the expansion of a regional handwashing campaign (see Case Study 2, above). These efforts underline the close link between commercialization (in this case, of soap) and consumer education. · In Peru, a health literacy campaign promoting family planning, immunization, and oral rehydration utilized a mass-communication approach, and relied heavily on private sector advertising agencies. The immunization campaign was highly successful, although the other programs were not (Hornik et al., 1987). 10. Promoting Community Involvement in Financing Community-level prepayment plans have recently been promoted, particularly in sub-Saharan Africa, as an alternative or complement to government fi- nancing of essential health services and as a means many countries. Moreover, these two strategies di- to encourage community involvement in health care rectly influence how households use private sector management. The plans generally arise to protect health services. households in the presence of user fees or other bar- Examples of behavior change efforts targeting riers to access to health care. In countries with rela- households and related to child health care include: tively weak institutional structures, government- sponsored health insurance is not well suited for cov- · In 1995, the Cambodian Urban Health Care erage of rural populations, unless funded by general Association (CUHCA) was set up as a facilita- tax revenues, because formal employment rates are tor between private health care providers and low and income tends to be seasonal. their patients. CUHCA's goals were to guaran- tee good quality and fair pricing to patients One difficulty in assessing the capacity of com- and to provide training and logistical support munity prepayment plans to improve access to to providers. The fact that consumers lack the health care and contribute to financing is the diver- requisite knowledge to make good choices in sity of the plans. Creese and Bennett (1997) re- the market for health services was recognized viewed 36 informal sector health insurance schemes. early on as a fundamental problem. CUHCA There are at least five categories of plans: now seeks to educate consumers (Stuer, 1998). 18 Strategies for Working with the Private Sector for Child Health · Hospital-based facility schemes, which are · In Cameroon, the Babouantou Association is managed by a hospital and generally cover an ethnically based group of urban workers catastrophic hospital costs. and middle class professionals. Each of the 450 members contributes an annual premium; only · Community-based schemes focusing on five percent of dues owed are not paid. Benefi- primary health care and drugs. ciaries receive a lump sum equivalent to $39 if · Cooperative schemes, which are linked to the they are hospitalized seven or more days labor market. (Atim, 1999). · Solidarity funds based on a common ethnic · In Rwanda, pre-payment schemes (PPS) were group. recently introduced with assistance from the · NGO plans. Partnerships for Health Reform (PHR) Project. PPS were set up in three pilot districts contain- Examples of these plans include: ing about one million people, with two control · In Ghana, a hospital-based plan that targets districts. The annual premium is equivalent to farmers in a rural district. Membership in the approximately $6.80 per family per year. Eight plan provides 100 percent coverage of the percent of the population in the three districts costs of hospital admissions for referred enrolled in the schemes. The beneficiaries had patients as well as surgery and incapacitation on average 1.2 to 1.6 consultations per year at of 15 days or more. Premium collection is health facilities, compared to 0.2 for non- annual, and corresponds to the time of the members and control districts (Schneider and cocoa harvest. There are 23,000 members Schneidman, 2001). (Atim, 1999). 19 Next Steps for Working with the Private Sector 1. Guidelines for Assessing the Potential of the 5. Assessment of the quality of care provided by Private Sector the private sector components, and its impact of The private sector clearly plays an important role child morbidity and mortality. in child health care in many lower and middle-in- 6. Identification of points of contact for private come countries. This document has described a vari- providers--including organizations and ety of interventions that governments and donors associations reaching formal and informal have undertaken in order to better harness the po- private providers. tential of the private sector to improve child health. Prescriptions as to which strategies will work in a 7. An understanding of the factors influencing given context are well beyond the scope of this pa- private providers--including their perceptions per. The logical next step is to establish guidelines to and sources of information. assess the potential for working with the private sec- 8. Assessment of the capacity of the public sector tor in a given country or context. to regulate and motivate the private sector This document does not seek to provide a de- components in question--including: pooling and tailed assessment guide, but rather to present the payment capacity, information capacity, and directions that such a guide should take. A compre- financial resources. hensive assessment of the potential for working with 9. Based on the above, identification of the private the private sector to improve child health in a spe- sector components in the country that have the cific country would include:5 greatest potential to affect child health outcomes 1. A compilation of national policies regulating the and that can be reached through one or more of practice of formal and informal private the strategies described in this document. practitioners--and information on the 10. Identification of strategies to work with the enforcement of these policies. selected private sector components. 2. An evaluation of the extent of child mortality 11. Exploration of possibilities for collaboration and morbidity resulting from different disease with other organizations, including government types, focusing on conditions that are most agencies, multilateral and bilateral lending and feasibly preventable through public health donor organizations, professional associations, interventions and through collaboration with the and NGOs. private sector. 12. Identification of the main local food, soap, and 3. An understanding of health care seeking bednet producers--and their markets and incen- behavior. What are the relative roles of the tives and disincentives to work with the public various components of the private sector in sector. household care-seeking behavior? What are the factors--including perceived quality, financial 13. Assessment of the potential impact and sustain- ability of the strategies identified, including resources, and other factors--that influence market analysis. The importance of sustainabil- households to use or not use private providers? ity is highlighted throughout this document. 4. Identification of the types and distribution of Many of the case studies reported here present formal and informal private providers. results that appear to be successful in the short 5. Several authors have discussed the importance of assessments of the potential of the private sector for child health. This discussion includes elements from Tawfiq (2001) and Slater and Saade (1996). 21 Working with the Private Sector for Child Health or medium term, but for which results beyond type, "Capacity" non-sustainability might occur that point are simply unknown. Other case stud- when an initiative is structurally sustainable ies document projects that have clearly proved (meriting public and public expenditure) and is to be unsustainable. supported by government officials, but is still non-sustainable due to a lack of technical, Assessment of sustainability should distinguish managerial, or administrative capacity. between different types. Initiatives with the pri- vate sector can fail in at least three major ways The main steps in the assessment can be usefully related to a lack of sustainability, or "non-sus- portrayed in a grid format, indicating the identifica- tainability". The first of these is "Structural" tion of combinations of viable private sector compo- non-sustainability--an initiative to work with nents and feasible strategies to reach them (Figure the private sector is (structurally) not sustainable 10). This type of grid can help to focus efforts and because the cost of the initiative is greater than resources. the corresponding public health benefits and nei- ther the public nor private sector will continue to support the initiative. The second type can be 2. Documentation of Case Studies described as "Ownership" non-sustainability-- There is currently limited experience with the use an initiative to work with private sector is not of the different strategies described in this document sustainable because government is not commit- to improve private sector participation in child ted to the approach and will withdraw funding health at the country level. Existing experiences are despite potential public health gains. The third generally limited to the use of one strategy at a time Figure 7. Matching Strategies and Private Sector Components Strategies vice incentives ser financing and involvement support and consumers standards Components of financing Private Sector Contracting Regulation setting Financing Non-financial Coordinating provision Commercialization Training Advocacy Educating Community in Service providers: Formal sector Other for-profit Employers NGOs PVOs Traditional healers Fill in to indicate appropriateness and success of strategies. Pharmaceutical companies Pharmacies Food producers Shopkeepers The media Private suppliers Health insurance 22 Conclusions and Next Steps and not in combination. There is a clear need to de- InterAmerican Development Bank, and the Demo- velop further case studies of these strategies in ac- graphic and Health Surveys (DHS). The lack of tion, with clear documentation of their impact, cost, systematic analysis of these data to date represents a and implementation arrangements. major gap in terms of lost potential information. The results of such analysis would increase understand- ing of the barriers to access to child health care and 3. Documentation of Treatment Patterns patterns of care-seeking behavior, and would assist While it is clear that the private sector is an im- in the design of interventions to improve access and portant source of care for child illnesses, there to collaborate with the private sector. remains a lack of clear understanding of the level and patterns of private care in different countries. A large amount of data concerning private sector treat- 4. Interventions ment for sick children has been generated through Following the development and implementation household surveys, but these data have been only of an assessment tool, the next steps will be to work partially analyzed. Among the available types of na- in a specific country to identify private sector com- tional-level household surveys that contain ponents and strategies for a series of trial interven- information on child health and care-seeking behav- tions--and then to systematically evaluate these ior are: the Living Standards Measurement Surveys interventions in order to be able to improve and rep- (LSMS), the MECOVI surveys coordinated by the licate them in other settings. 23 References Abdulla S, Schellenberg JA, Nathan R, Mukasa O, Brugha R. and Zwi AE. 1998. "Improving the Quality of Marchant T, Smith T, Tanner M, Lengeler C. 2001. Private Sector Delivery of Public Health Services: Impact on Malaria Morbidity of a Programme Sup- Challenges and Strategies." Health Policy Plan 13(2): plying Insecticide Treated Nets in Children Aged Un- 107-120. der 2 years in Tanzania: Community Cross-sectional Burkhalter BR. 1998. "Employer-based Maternal and Study. BMJ 322:270-273. 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Health Libr Rev. 17(4):203-8. 29 Appendices Appendix 1.The Importance of the Private Sector in Child Health--Available Evidence ............... 32 Appendix 2.The Performance of the Private Sector --Available Evidence ..................................... 34 Appendix 3.Strategies to Work with the Private Sector for Child Health ...................................... 36 31 Working with the Private Sector for Child Health 32 Appendix 1 33 Working with the Private Sector for Child Health 34 Appendix 2 35 Working with the Private Sector for Child Health 36 Appendix 3 37 Working with the Private Sector for Child Health 38 Appendix 3 39 Working with the Private Sector for Child Health 40 Appendix 3 41 Working with the Private Sector for Child Health 42 Appendix 3 43 Working with the Private Sector for Child Health 44 Appendix 3 45 Working with the Private Sector for Child Health 46 Appendix 3 47 Working with the Private Sector for Child Health 48 Appendix 3 49 Working with the Private Sector for Child Health 50 Appendix 3 51 Working with the Private Sector for Child Health 52 Appendix 3 53 Working with the Private Sector for Child Health 54 Appendix 3 55 About this series... 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