Public vs. Private Health Care No Longer a Dichotomy
It’s time to harness and align the private with the public sector to achieve universal health coverage in Asia and the Pacific.
For many of us working in the health arena, the words ‘private sector’ are traditionally—rightly or wrongly—synonymous with good quality and efficient but expensive and first and foremost, profit-oriented. Yet, we need to look beyond the surface to think more innovatively about how the public sector can better harness the private sector to achieve universal health coverage. This was the topic of a meeting convened last month by ADB during the Prince Mahidol Awards Conference in Bangkok.
Individuals of many ADB developing member countries rely heavily on the private sector for their health needs. Take malaria for example. Malaria-related commodities such as bed nets, insecticides and diagnostic tests are generally more readily available in the private sector. Demand for the private sector is high too - the vast majority of individuals first go to private sector pharmacies, most likely because of convenience, and perception that the sector has more availability of good quality medicines, despite higher prices. Meanwhile, the public sector is seen as difficult to physically access, with inadequate medicines and low-quality services.
How do we move beyond this traditional dichotomy of pubic versus private? At the meeting, several possibilities for collaboration were discussed in four key areas:
- Financing. We should look at alternative mechanisms of collecting, pooling and channeling money and other resources through philanthropy, private health insurance firms and innovative funds. Work is this area is preliminary, and invites more innovative thinking and exploration. For example, to what extent could private health insurance be subsidized by the public sector? In Abu Dhabi, the national health insurance system has sold a 20% equity share to a private health insurance company that is then tasked to professionally manage the system. Similarly, India and Colombia both subsidize purchasing private health insurance for the poor informal sector population.
- Service delivery. Health service delivery is challenged by the availability of human resources and how to provide specific treatments, including dental care and laparoscopies. These typically missing markets in the public sector are ones where the private sector (especially non-profit organizations) has embraced with increasing success. For example, many social franchises have been able to operate in remote areas, providing services such as family planning, testing and treatment of malaria, TB and HIV/AIDS.
- Medicine. Given the large proportion of people in developing Asia who spend out-of-pocket on medicines, Gilead and Novartis shared how both companies are currently improving access to drugs for the poor. Medicines are sold at favorable yet minimal profit margins, with reductions that virtually slice off zeros compared to the prices charged in developed countries. Better still, an example from the Philippines showed how national health insurance systems might incorporate government medicines access programs. Yet, challenges remain. Making access sustainable requires improved vertical integration, such as assuring reliable infrastructure and distribution chains. When the Global Fund set up the Affordable Medicines Facility for malaria, prices were subsidized to slash them from $6-10 to $0.20-0.50 per treatment. However, without a reliable distribution chain, stockouts were common and full price reductions were not necessarily passed onto consumers. Although change is slow, big pharma appears to have moved beyond the traditional CSR model, instead using mechanisms that are shown to have longer-term impact.
- Management and accountability. In the debate on how to include the private sector to boost access and availability, PharmAccess showed how it provides affordable capital from the private sector to increase the pool of money in health systems while stimulating both the supply and demand side by providing loans for projects conditional on quality improvement.
These sessions provide a strong foundation upon which to discuss other possibilities for private sector engagement in developing Asia’s health systems. No doubt, the role of government still remains crucial for aspects such as regulation, provision of basic services, and setting up the framework for national health insurance. But the two sectors should no longer be seen as dichotomous. Instead, if we harness and align the private with the public sector for universal health coverage, the opportunities for collaboration and innovative thinking are diverse and plentiful.