The involvement of private sector is necessary and provides a unique opportunity to advance universal health coverage (UHC). The private health sector is defined as: “all non-state entities (for profit and not-for-profit)”, including providers, insurance mechanisms and business organizations. Private sector growth and investment can open-up doors in many areas resulting in: improved efficiency, cost reductions, equity in service provision, and financial protection. However, when enabling environments and adaptive systems are not in place, it creates a bigger challenge for the health system to respond to needs during crisis. In the Middle East North Africa (MENA) region this is especially true.
What is the situation in MENA that warrants a dialogue around private health sector engagement?
Limited financial protection. The MENA region does not show much change in the financial protection of its population. Many countries do not have a national health insurance program to address this concern, in cases, countries are incentivizing private health insurance growth, that targets the richer population and those working in the formal sector. At a regional average, household out-of-pocket payments constitute approximately 40 percent of total health spending (this can range between 80 percent in countries like Yemen, to less than 20 percent in the Gulf countries). The fragility, conflict and violence (FCV) affected countries are among the worst.
Rising and changing health care trends. The MENA region faces a demographic and epidemiological transition. The region continues to report communicable diseases, maternal and child health (MCH) concerns, and growing morbidity, disability and mortality resulting from noncommunicable diseases (NCD). We see a rising share of NCDs (examples of mental health, diabetes, cardiovascular disease). The Gulf countries, for example, report among the highest share of premature deaths related to NCDs, globally.
In the FCV affected situations including among displaced persons (e.g. Libya, Yemen, Syria), we see re-emerging of some communicable diseases, reversing of some health outcomes such as that for mothers and children (both a result of broken-down public health programs and preventive service) and emerging of new conditions (such as mental health trauma, and violence related injuries).
Service provision choices. The private sector has been an important source of health service provision in some areas and is becoming an even more important source in FCV affected situations. For example, the private health sector is a significant source of care for MCH services throughout the region, pharmacies are important sources for drug and contraceptive provision, and many households, including the poor, rely heavily on private health sector.
Need for private health sector engagement. The recent wave in private health sector growth and potential in the region has resulted from: regional trends and transitions; fragility; health sector evolution; public sector reform or lack of. The private health sector is evolving. For example, many public-private partnerships are forming for hospital clinical and non-clinical care, outsourcing primary health care services; private health insurance schemes are developing; and private health facilities are emerging and/or struggling in FCV affected situations. The MENA region could benefit much from a comprehensive and “inclusive” health systems approach.
Policy environment to address private health sector engagement. Several MENA countries are reconsidering the financing and provision models for health care with the objective to improve efficiency, reduce costs, improve equity in service provision, and financial protection. However, health sector reforms are not fully in place with resiliency built to adapt, and the public sector cannot alone address this changing situation to achieve UHC. The private health sector growth should be aligned with the national health policy needs, and harnessed (and better coordinated) to contribute to overall health system goals.
What needs to be done for private health sector engagement?
What is the role of the public sector?
Legislative change. Reforms are required at both macro- and micro-levels, with appropriate policies, regulatory framework, and governance structures. Policy reforms should not be made in silos. Some policy reforms are required at the sectoral level while others are wider government policies that are overarching and institutional frameworks. Finally, public policies must be aligned with private sector engagement to ensure effective delivery.
Institutional change. Reforms are complex. In reform efforts, while considering the purpose and country context, one needs to also consider trust, cooperation and readiness between public sector and private sector entities, as the reform will impact both. Therefore, the public sector’s capacity must be enhanced to take on and manage: policy and regulation development and enforcement, negotiations and managing contracts, mobilizing financing, facilitating private capital, offering credible incentives, and monitoring performance.
Key decision-making tools. The public sector has a strong role to play in stewardship and monitoring performance of the health system (both public and private). Countries must build their accountability mechanisms and underdeveloped information systems, to ensure information exist to influence policy, regulations, guidelines or to monitor performance and measure effectiveness.
What is the role of the private sector?
Multiple-roles of the private sector. The private sector can play a distinct yet diverse role in job creation, entrepreneurial contributions, and mobilizing private capital. It can be more effective in playing its role if there are clearer parameters set with incentives for its engagement. The private sector is looking to understand public sector objectives and how they can play a role to meet those.
The private sector will enter or exit the market given signals they receive, incentives they receive from the public sector, and the enabling environment created for private investment and growth. The main objective is for the private sector to identify its market niche and operate in an environment that promotes easy access to doing business, easy access to getting financing, affordable credit, risk guarantees, and avenues for investor’s risk reduction/mitigation.
The private sector, as well as the public sector, has a distinct and coordinated role to play. An environment that has policy and governance structures in place, incentivizes financing, space for skills, and opportunities for private sector engagement, is key. If done correctly, this growth in private health sector engagement can help facilitate country economic growth, and advance UHC.