Can the for-profit private health sector provide accessible, affordable care?

Internationally there is currently a big debate around whether the for-profit private health sector – both formal and informal – can help to solve the problems of health systems in low- and middle-income countries.

My worry is that, whereas the for-profit sector may be able to provide good quality care, it is seldom affordable to more than a relatively privileged few.  Sometimes even the quality of care may be suspect because of distorted financial incentives.  Further, a strong private sector may attract scarce human resources away from the public sector.

Yet perhaps there are models that could work.  It would be wonderful if the efficiencies and innovation of the private sector could be used to benefit the entire population!  … although this would probably mean that the private sector would have to accept lower profit margins … 

What are readers’ opinions?  Does anyone know of examples from low- or middle-income settings where this sort of thing has been achieved?  Let’s start a discussion ….

7 thoughts on “Can the for-profit private health sector provide accessible, affordable care?

  1. Hi Jane,

    Just a quick comment to say that I am really enjoying your blog, and that I think that it is a GREAT way of making research (and data sources) more freely available!

    I am a bit disappointed though that no one has commented on this blog post yet. I don’t know of any examples but have been checking in regularly to see whether anyone else had any ideas.

    Kind regards,

    Nicola Foster

    • Many thanks, Nicola. I am also disappointed that I haven’t been able to start a conversation through this blog but perhaps people are too busy or inundated with other information. I also need to work on my own blogging technique!

  2. Dear Jane

    The blog is a great initiative!

    On the specific point above, given the choice between private and public, my question for anyone with any interest in equity and affordability (which the NHI has to be about) is why on earth would we choose private? Also what is the evidence that the private sector is more efficient as you come close to implying? In South Africa both sectors look inefficient with poor quality for money in the public and higher quality for much more money in the private. It would be a brave and/or foolish person who sought to call which was more efficient.

    Further the objective function in the two sectors is different so we are comparing apples and oranges!


    Gavin Mooney

  3. Thanks for your provocative comments, Gavin. You are right to question whether the private health sector is truly ‘efficient,’ especially when viewed in relation to national health care objectives.

    While the private health sector in South Africa is good at doing certain things, this comes at a price. Here are some facts that demonstrate this:

    • as much as 43% of all health care funds are spent by only 16% of the population on private health care;

    • by 2008, medical scheme contributions per beneficiary were double that in 1996 (after adjusting for inflation); and

    • at the same time, expenditure per private sector beneficiary had grown to six times that spent per person dependent on the public sector.

    This situation can hardly be called sustainable and, as I mentioned in a previous post, the health of South Africans remains poor.

    Nonetheless, I am still interested in thinking through how the efficiencies that do exist in the private sector – such as short waiting periods, sophisticated information systems and dynamic management approaches – can be harnassed under National Health Insurance.

    To end with a question, Gavin, could you elaborate on your point about ‘comparing apples and oranges’? – I think I know what you mean but it would be good to hear it in your own words.


    McIntyre D, Doherty J, Ataguba J. (forthcoming). Health care financing and expenditure – progress since 1994 and remaining challenges. In: Health and health care in South Africa (2nd edition). H. Van Rensburg. Pretoria: van Schaik Publishers.

  4. Pingback: NHI Snippets (3): Will NHI lose jobs? « Health Policy SA

  5. Dear Jane

    All I meant in this context by apples and oranges is that what the private sector and the public sector are seeking to achieve are different and hence comparing them is tricky. Of course they are both interested in health but I suspect health defined differently. And beyond that there will be differences regarding the importance of equity, amenity, waiting, etc.

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