Private health care provision in developing countries: a preliminary analysis of levels of composition

Despite decades of public investment to assure public provision for basic health care services, private provision is significant, often dominant and expanding rapidly for many services, but how do developments in the less-planned and less-regulated private health care sector affect national health care systems and health generally? This paper provides some initial data and analysis on these issues.

The authors, based respectively at the Harvard School of Public Health and at the London School of Hygiene and Tropical Medicine, articulate a practical definition of private health sector providers (PSP) and a conceptual framework to distinguish between different types of providers according to their commercial orientation, and to the complexity of the services they offer. They then present the evidence available on the levels of private health care provision in several countries, showing that it is in general larger than we would expect, particularly in curative, ambulatory services. However, the available evidence presents some major limitations, and new more systematic studies to evaluate the role of PSP are needed. Analysis of existing data includes the following findings:

• Whilst average private sector share of total doctors is about forty per cent and private hospital beds is about twenty four per cent, variation from country to country is considerable.
• There is little evidence that private sector share of the supply of either doctors or hospital beds is related to income. Factors appearing important in determining the relative size of the sector include population density and secondary school enrolment. Infant mortality rates, life expectancy at birth and the public-private composition of financing do not appear important.
• Whilst evidence suggests that public and private doctors act as substitutes for each other, results are inconclusive for public and private hospital beds.

Finally, the paper considers whether public and private provision tend to develop as complements to each other, or in a more competitive model as substitutes. Systematic differences in structure between the two sectors are explored. The paper finds that institutional features may be the most important predictors of the number of private health care providers and the public-private composition of care, however data is simply not available to quantify this proposition. The collection of more accurate data is therefore required.