Senior Analyst Amanda Schulhofer presenting on Open Development’s TIFA work in the Philippines at the 8th Global Symposium on Health Systems Research
Amanda Schulhofer, Senior Analyst, Open Development
Last month, I had the privilege of attending the 8th Global Symposium on Health Systems Research held in Nagasaki, Japan on November 18-22, 2024. This conference gathered public health experts, practitioners, and researchers to explore the theme, "Building just and sustainable health systems: centering people and protecting the planet." As the global health community grapples with increasing challenges around equity, climate change, and sustainability, the conference provided an invaluable space for learning, collaboration, and reflection on the future of health systems. Throughout the conference, I participated in sessions spanning a wide range of health systems topics, including health workforce development, governance of mixed health systems, and the critical issue of climate resilience.
Reflecting on Private Sector Governance and Engagement
One of the highlights of the conference for me was presenting a poster titled "Leveraging the Purchasing Power of Local Government Units (LGUs) in the Philippines to Contract the Private Sector for Tuberculosis Screening and Diagnostic Services", based on an assessment I conducted through the Tuberculosis Implementation Framework Agreement (TIFA) project with my colleagues at JSI. This presentation was based on interviews my JSI colleague, Marlex Nuguid, and I conducted with city and provincial health offices in the Philippines that navigated the public procurement system to contract private organizations for tuberculosis services. Our assessment demonstrated that despite challenges contracting at the local level, such as a scarcity of providers, local governments were resourceful in identifying solutions and found contracting the private sector to be a valuable mechanism for expanding coverage of TB screening services. The lessons that emerged from this assessment provided new insights into the complexities of contracting private providers, particularly at the sub-national level. During the conference, it became clear that many of the difficulties faced by these local government offices are not unique to the Philippines but are shared by other countries implementing similar contracting mechanisms.
For example, a presentation from the LHSS Vietnam project titled "Assessment of Social Contracting Pilot Implementation in Vietnam for the 2022-2024 Period" also caught my attention. In the Vietnam pilot, community-based organizations contracting with provincial CDCs to provide HIV services encountered challenges such as bureaucratic and time-consuming public bidding processes, eligibility barriers, lack of clear and strict contract terms, and payment delays during implementation. These findings aligned with our observations from the Philippines but were presented from the perspective of private providers (more specifically, community-based and social organizations). Our work through the TIFA project, by contrast, focuses on the local government perspective and exploring the capacity for contracting at the sub-national level. This juxtaposition of provider and purchaser perspectives deepened my understanding of the challenges involved in sustaining and scaling up private sector contracting and reinforced the need for evidence-based frameworks to navigate the complexities of promoting a mixed health system.
Another session that resonated with my current work was a half-day satellite session titled "Perilous or Productive? How to Effectively Govern the Private Sector to Accelerate Progress Towards UHC and Health Security," led by the World Health Organization (WHO). The session presented key findings from the WHO’s scoping review of governance approaches adopted by low- and middle-income countries for the private health sector, examining their effectiveness and identifying key enablers and barriers to adoption across various contexts. The review's findings, particularly on contracting and purchasing approaches, mirrored observations from Open Development’s work in the Philippines and Bangladesh, prompting me to reflect further on strategies for scaling up private sector contracting in these countries.
Key Takeaways: Private Sector Contracting in Health Systems
Three key reflections on private sector contracting emerged from the conference:
Provider Incentives: Private providers need sufficient financial incentive to engage with the government. However, determining appropriate payment terms for private provider contracts is a delicate balance as financial incentives that skew high or low risk inducing over- or under-provision of services. Other commonly reported barriers, such as bureaucratic public bidding processes and delayed payments during implementation, could further hinder private sector engagement. To generate demand from private providers, purchasing entities should ensure that: a) there is an adequate volume of the service to be contracted, b) payment terms are established based on reliable cost data, and c) efficient verification and accounting mechanisms are in place for timely payments.
Measuring Performance: To ensure effective contracting, it is essential to clearly define payment terms, service quality standards, and timelines. Implementing performance-based payments can drive service delivery objectives, but it also requires allocating sufficient resources for verification and quality assurance. Careful consideration is needed to set realistic and achievable targets; such targets can align the contractor's goals with the government's objectives and incentivize contractors to continually improve performance to meet or exceed contract requirements, leading to higher standards over time. For new services lacking performance baselines, targets should be set through both expert input and pulling from context-specific demographic, epidemiological, and program data.
The Role of Pilots: Pilots are crucial for testing contracting mechanisms and assessing the capacity of both purchasers (i.e., government agencies) and contractors (i.e., private sector actors). However, many social contracting and private sector contracting initiatives are donor-funded and health priority- or disease-specific. There needs to be a commitment from donors to allocate sufficient resources for evaluating pilots and developing practical plans to sustain contracting mechanisms beyond the pilot phase.
Future Implications
As many countries move toward universal health coverage and strive for resilient health systems in the face of climate change, the private sector will increasingly play a key role in driving these transformations. However, for the private sector to contribute meaningfully to these goals, there must be a shared understanding of the accountability structures, governance mechanisms, and strategic objectives necessary to engage private organizations in health service delivery at scale.
This conference was a valuable opportunity to reflect on the intersection of governance, climate resilience, and justice and inclusion in health systems. It provided insights into how we, as researchers and practitioners, can work together to build more inclusive, sustainable, and equitable health systems, while also advancing the critical issue of climate resilience. It is clear that collaboration across sectors, alongside evidence-based strategies, will be essential to create such health systems. The conversations, connections, and lessons learned during this symposium will undoubtedly shape my future work in health systems strengthening.
“It can be argued that the key question for many governments is how best to contract, rather than whether to contract, given that private sector contracting may be unavoidable due to gaps in public provision, ambitions for scaling up health coverage, or political realities.”
—Governance of the private healthcare sector in low- and middle-income countries: a scoping review of approaches, effectiveness and enablers.
Geneva: World Health Organization; 2024.