• Contracting out of health care provision

Contracting out of health care provision

How do health indicators between Cambodian districts compare with conventional government provision of health services and those in which the services have been contracted out to non-governmental organisations (NGOs)? This briefing paper from the Asian Development Bank (ADB) summarises findings from an ongoing study that began in 1998 on the feasibility, impact and cost-effectiveness of government contracting with NGOs to deliver health services.

The authors provide some brief introductory statistics relating to health indicators in Cambodia, before explaining how study districts were selected. They differentiate between a ‘contracting-out’ model, in which contractors had full responsibility for the delivery of specified services in a district, directly employed their staff and had full management control; and a ‘contracting-in’ model in which contractors provided only management support to civil service health staff and costs were covered by the government. Results are compared for three contracted-in, two contracted-out and four control districts, based on the efficiency and equity of the services provided.

The results from the study show that:

• Contracting increases coverage – contracted-out districts increased use of public health services to 1.7 contacts per capita per year, and contracted-in districts to 1.2 contacts.
• Contracted-out districts witnessed large increases in immunisation rates and the use of reproductive health services.
• Contracting decreases costs – recurrent costs for contracted-in districts were $26.4 per person per year and $22.7 for contracted-out districts.
• Contracting increases efficiency – people in contracted-out districts lost about 15 per cent less time on illness and seeking health care compared to control districts. The figure for contracted-in districts was five per cent.
• Contracting increases equity – the use of health services by the poorest households was found to be greatest in contracted-out districts. This was due to improved access to health services and lower costs in these districts.

Based on the Cambodian experience, the authors conclude that successful contracting requires:

• predetermined and objectively verifiable performance indicators, coupled with well-defined performance targets
• political support for contracting at both central and local levels
• civil service arrangements that allow government health care professionals to work for NGOs at market wage rates.

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