What are the comparative advantages of public and private health care providers in Bangladesh?

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A report by the World Bank titled “Comparative Advantages of Public and Private Health Care Providers in Bangladesh” attempts to provide new evidence on the comparative advantage of public and private providers in order to explore the alternatives for the Government of Bangladesh (GOB) with regards to which health services it might consider to contract-out, if any. The findings of this study are intended to be of use to policy makers, GOB officials and health service providers. Important recommendations may be drawn for national policy- for example, results suggest that there could be potential benefits, in terms of value in contracting-out certain health services, and also for facility management- for example, data show that private providers keep less medical records than their public counterparts..

This vibrant private health care system exists along with the health care through the public health system. In fact 50% of the population from all income segments are already seeking treatment care from the private sector. In view of the limited public resources as well as the widespread presence of the private sector, the government is currently reviewing its health policies to evaluate the usefulness of contracting-out the provision of certain health services to the private sector (both not-for-profit and for-profit). However, high prices in the private sector and their potential impact on access to services by the poorest as well as quality issues remain a concern for the government.

The inpatient facilities for both the private and the public sector are similar, but the average size of private facilities is one-fifth of that of public hospitals. While the public sector is useful for inpatient services and preventive care, the private sector handles most of the outpatient services. The following table illustrates the percentage of visits in each sector:

Distribution of curative visits by type of provider, for the poor and non-poor, 2000

The extent of service provided also varies by location and region. The most advanced health care services, both public and private, are in the major metropolitan areas. There are generally few inpatient or specialized services below the upazila level. A large majority of services at the village level are offered by trained private individual or untrained health practitioners.

Both the public and the private sector have their own set of strengths and weaknesses. However, existing evidence on this is scattered and non-conclusive. This study, therefore, aims to provide the government with new and concrete information on the relative performance and comparative advantages of public and private providers to help decide on the desirability of contracting out certain health services.

The following five crucial dimensions of performance have been analyzed by the study team to evaluate the relative strengths and weaknesses of the different health care providers:

• Cost: The relative cost of providing health care services in the public and the private-for-profit and not-for-profit sector.
• Price: The relative price paid by patients for health care services and associated elements (e.g., transport etc.)
• Quality (Perceived and technical): The relative quality of health services delivered on the basis on identifiable characteristics.
• Accessibility: The accessibility of the health care providers by taking into account distance from residence, transport time and costs.
• Value (Perceived and derived): The value that patients attribute to the health services received.

The primary source of information consisted of a survey with a sample of 50 facilities, including public, private and NGO facilities at the upazila level, and public and private facilities at the district and national levels. In each facility, quality, price, accessibility and cost information were collected from three sources: interviews with facility personnel, exit polls, and direct observations of six selected services.

Main findings indicate that from the users’ perspective: (i) Public facilities tend to deliver services of lower quality than NGO and private facilities, but at a much lower price; and (ii) NGO facilities show some of the best performances.

The study concludes that there are good prospects for contracting-out certain services at certain administrative/facility levels. For instance, at the upazila level NGO facilities yield the best value indicators, as well as the best accessibility indicators from the perspective of patients. Thus, in principle government could purchase from Private/NGO sector certain preventive, promotional, or simple curative services, at low additional cost and with large quality improvements.

Finally the study identifies a number of possible areas in which the government might consider to undertake certain initiatives:
• Guaranteeing the quality of service delivery in the public sector, particularly in terms of medical treatment protocols, cleanliness, etc.

• Guaranteeing the structural quality of public health facilities, in terms of maintenance status and infrastructure.

• Implementing a quality control system for both the public and private sector health providers/facilities.

• Implementing a certification system for private and NGO health facilities.

• Working closely with NGOs to better understand the factors leading to their good performance.

• Assessing the costs involved in any eventual contracting-out initiative considered.

The Government recognizes the importance of harnessing better the comparative advantage of non-public sector providers so as to improve access to and consumption of health services. As stated in the Government’s recent Strategic Investment Plan (SIP) July 2003-June 2010, the Ministry of Health and Family Welfare (MOHFW) with assistance of its development partners, is committed to promoting comparative advantage and moving towards more diversified service provision through public-private partnerships.

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Contacts
 
Rezwan Ul Alam (8802) 815-9015, Ext 4242,  E-mail:  salam3@worldbank.org
To obtain a hard copy of the report, please contact Ms. Razia Rouf at the World Bank
To download a soft copy of the report, please visit:
www.worldbank.org.bd\bds
For more information on the World Bank in Bangladesh, please visit :
www.worldbank.org.bd & www.worldbank.org