Strengthening Health Services in Developing Countries Through the Private Sector

This paper discusses the nature of private sector involvement in health service delivery in developing countries, the potential for expanding it, and areas where health sector policy goals might benefit from greater private participation. It takes the wide and rarely occupied middle ground between the extreme pro-public and pro-private approaches to health care delivery. A simple distinction between the private and public sectors is applied -- anything not done by the government itself is treated as part of the private sector. The area of greatest potential for private sector involvement in developing countries is in hospital care. It would require, however, the development of third party payment systems and a re-evaluation in areas where governments are most heavily involved. This would allow governments to retreat to the simpler and more appropriate tasks of financing and regulating health service delivery. Governments probably cannot extract themselves completely form direct provision of curative care, especially in rural areas. Greater reliance on the private sector to supply remaining government facilities, however can stimulate the development of more diversified private markets and supply lines in rural areas.