What exactly is the public-private mix in health care?


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I’ve been in quite a few meetings recently and read quite a lot of documents where people have made claims about the relative sizes of the public and private sectors in health care delivery. A recent report from the World Bank Group on the private sector in Africa claims that “the private health sector now provides half of all health services in the region.” A document I reviewed recently claimed that “much” of medical care is provided by the private sector – an assertion I hear quite often.

As far as I can make out, the data underlying such claims reflect a very partial picture. The Africa data are from the Demographic Health Survey which captures only treatment for (outpatient) maternal and child health services (MCH); it also covers only the developing world, and only the poorer part of it. Some claims reflect data for just one country. I’ve heard a lot about India, but these data (obviously) cover just India, and only outpatient visits.

WHS to the rescue

To get the big picture, I thought it might be useful to crunch some numbers from the World Health Survey. (Actually, to be completely honest, I crunched some numbers from a dataset that some coauthors and I have constructed from the WHS for a paper that we’re nearly done writing.)

The WHS was fielded in the early 2000’s in 70 countries – spanning the World Bank’s lower-, middle- and high-income categories. The WHS enumerators asked a randomly-selected adult in each household about his or her use of inpatient care and outpatient care; in the numbers that follow I’ve focused on use in the last 12 months. For both types of care, the enumerator also asked whether the last facility visited was public or private.

The WHS has some drawbacks. The regional coverage varies: it was implemented in most of South Asia, but much more sparsely in Latin America. It is ten years old. We can tell only whether inpatient or outpatient care was received, not the number of contacts. And the public-private information is for the last facility visited only.

Still, it gets us much closer to the big picture than if we focus on MCH outpatient treatment in the world’s poorest countries, or on outpatient care in just one country.

The picture’s actually rather different from what we often hear

The numbers in the maps below show the share of inpatient admissions and outpatient visits delivered in public facilities. Green means mostly public – the darker the shade, the larger the public share. Blue means mostly private – the darker the shade, the larger the private share.

On the inpatient admission map, there’s just one country that’s blue – India. There’s not even much light green on the map. In the developing world, 81% of inpatient admissions are in a public facility. Even in South Asia, the figure is 63%. Globally, the public sector’s share of inpatient admissions is 82%.

There’s more blue on the outpatient visit map. South Asia stands out: in this region, the majority (66%) of outpatient visits are in the private sector, and in all countries except Sri Lanka, the private sector delivers the majority of outpatient care. In other regions – including the OECD – it’s the public sector that delivers most outpatient care: the private sector’s share is just 33% in these countries. Globally, the public sector’s share of outpatient visits is nearly two thirds (62%).

And the Africa report?

What then of the Africa report’s claim? Well, it turns out that in sub-Saharan Africa just 25% of outpatient visits are in the private sector, and only 16% of inpatient admissions are. Both figures are rather a long way from the report’s claimed “half”.

Click here to enlarge



Adam Wagstaff

Research Manager, Development Research Group, World Bank

April Harding
December 02, 2013

We should all be more careful in how we characterize health services provision statistics. We can all frame the available data to make our particular point. If I want to make the private sector seem less significant, I can reference a household survey that asks people about facilities, as the World Health Survey did. If I want to make it seem more significant, I can reference the DHS which asks about careseeking - and therefore captures a much broader set of sources to which people turn when ill (e.g. traditional healers, pharmacies, drug shops and the like). You can look at the aggregate figures from the most recent DHS for SSA here http://www.ps4h.org/globalhealthdata.html Obviously which of these statistics is more relevant depends on what issue you are trying to understand; or which problem you are trying to resolve. The far bigger problem (than strategic data source selection) is that we are turning to household survey data to try to understand health services organization and operation. People's experiences with the health system are certainly relevant and important; however, people do not know much about the organization and operation of health services provision - not even for providers with which they have interacted. The WHS findings on OECD service provision which you reference can serve as Exhibit 1. Primary care organizations are predominantly private in 20 of the 28 OECD countries (see the OECD Health System Institutional Characteristics Survey results here http://www.oecd-ilibrary.org/social-issues-migration-health/health-syst…. Interestingly, Sweden has just tipped over into the private provision dominant category. And, specialist care is predominantly private in about half the countries (same source). The likelihood that 70% of outpatient consultations are in public facilities is nil.
OECD survey respondents likely overstate public outpatient consultations because they are thinking of "private" as referring to "outside the system" provision - meaning privately paid.
To me, their misunderstanding illuminates the much more important issue: the collective delusion we all cling to in thinking that we have a handle on important facts and features of service provision systems from examining household survey results.
I think Will Rogers nailed our problem rather well:
"It isn't what we don't know that gives us trouble, it's what we know that ain't so."

Adam Wagstaff
December 03, 2013

April, Many thanks for your comments. I actually had no intention of making any particular point. I’m quite intrigued that you even thought that might be the case! I’m afraid there’s no getting away from it – the DHS picks up a tiny sliver of the care that a health system delivers, and is really not a good guide to the public-private mix. The WHS may not pick up everything, but it’s much more comprehensive and has very general questionnaire: if someone went to a traditional healer or to a pharmacy, they can say so. I'm surprised people ever thought they were going to get anything other than just a very partial picture using the DHS! I’m also not sure I agree with you that people misunderstand what “private” really is. I suspect people might have a fairly clear idea of what private means, and one that may make some sense. I suspect they’re thinking of a facility where users pay out-of-pocket or through private insurance, and where the provider has a high degree of autonomy on pretty much everything, is the residual claimant, and fully bears the risk associating with operating the facility. A traditional healer fits the bill as a does a Harley Street physician. By contrast, a British GP isn’t thought of as private, nor is a Canadian hospital. These lack too many of the defining features of a private facility for respondents to think of them as private: users don’t pay out-of-pocket or through private insurance; the provider’s autonomy is limited in a lot of areas; there are limits on what they can do with any profits; and their financial exposure is limited. Perhaps we can think of the map as capturing the extent of the “pure private” sector, and simply realize that what’s “public” is a bit of a hotchpotch? Best, Adam

December 02, 2013

Adam -- thanks for the interesting post. I was surprised to see that the WHS found that most outpatient care in the OECD region is public. In 2009, 21 of 29 OECD countries reported that primary care is predominantly private. The picture is more mixed for outpatient specialist care, where it's closer to 50-50, since many countries deliver this through public hospitals. At any rate, perhaps the WHS had a smaller (and biased) sample of OECD countries.
On a separate note, in Sri Lanka times have changed since the WHS... now slightly over half of outpatient care is delivered by the private sector, bringing it closer (for better or worse) to the South Asia norm.

Adam Wagstaff
December 03, 2013

Thanks, Owen. Please see my reply to April above. Adam

April Harding
December 02, 2013

PS: I should have clarified, that, at the PS4H weblink in my previous comment, you can see the most recent DHS data on careseeking aggregated for each region, and broken down by wealth quintile.
If you click through to see the Africa region data, you will see essentially the same stats as are quoted in the IFC report - slightly updated, as a few DHS results have come in since the IFC report was published. Basically the same figures though-approximately half the time someone is ill, or their child is, they seek care from private sources.

December 03, 2013

Interesting, for me especially the India in blue. Various figures are quoted and requoted in public health literature. The most often quoted one that I have seen is 90% outpatient care being private sector provided in India. Indian government documents put it at 80% and the figures for my state (Karnataka) from a recent survey of about 4000 households puts it at 69%. Of course, there is wide variation within India on such figures. There are vast regions even in the relatively better-off districts and states in southern India with very sparse private sector presence. The average has a strong message nonetheless.

December 03, 2013

Concerning SSA, the claim that the most people access healthcare services from the private sector is widespread and almost "accepted as a given" by most people. From what you have just presented, 25% outpatient and 16% inpatient admissions are from the private sector. What is really at the base of this "misconception"?

Adam Wagstaff
December 03, 2013

Thanks, Andy. Not sure whether there are other data out there contributing to this perception, but partly it seems to come from the DHS data with their almost exclusive focus on MCH-related ambulatory care. A.

December 04, 2013

Dear Adam -- Thanks for the interesting blog post. It is good to see that the 'Healthy Partnerships' Report on Africa you refer to (of which I was the lead author) continues to spark debates about the evidence regarding public- and private health care provision. As you remind us in your post, and as also April's comments emphasize, the question of what the public-private mix is for an entire region is not an easy one to answer. In order to help tackle this challenge in developing the Report, we assembled an advisory panel that included experts from across the World Bank Group, think tanks, academia, and the WHO to think through the (dis)advantages of the available indicator sets, including DHS and WHS. The decision to go with DHS was supported by the panel for a number of reasons, but the higher country coverage of DHS was a particular factor. Even with the higher country coverage, as you point out correctly and importantly (this can get lost when communicating the 'headline' only), the DHS data represent only a partial view; especially the regional average. Of course, this is true for the WHS data also, which is available for 18 countries in the region. It excludes for example, Nigeria, where 18% of the region’s population resides and where the private health sector dominates. For a population-weighted average, this is not trivial. -- But aside from the pros and cons about such averages, which you and April have articulated in detail, I'd like to recall the context in which the cited 50/50 average appears in the 'Healthy Partnerships' Report. The section is titled "The private health sector in Africa is too large to be ignored, though it is only partly and often poorly integrated in the health system". I trust we can agree that this statement holds true, even as the debate on the precise public-private split continues, as it should. The private health sector is something governments should pay attention to and be strategic about. It is important to be reminded, as you did here, that regional averages should be enjoyed with appropriate caution, whether DHS or WHS, especially for a region as diverse and dynamic as Africa. The repeated scrutiny of such numbers is most welcome, and it points to the need for improved research and analysis of the role of private sector in health. [I might add, it would certainly be a most fruitful conversation here in Indonesia.] -- Connor

Adam Wagstaff
December 05, 2013

Hi Connor, thanks for the comment. I totally take the point about the DHS giving a fuller picture in terms of country coverage. The problem is that MCH ambulatory care accounts  for such a small sliver of care episodes especially when we weight them by the expenditure involved. Childbirth isn't cheap but MCH accounts for a tiny share of total health spending. So while it's interesting that the private sector is a big player in the small MCH subsector of the health system in Africa, it's fantastically misleading to go on say “the private health sector now provides half of all health services in the region.” I'm not saying the private sector is bad, or should be ignored, or scaled back, or anything like that -- they're different questions. I'm simply wanting to straighten out the facts. Best, Adam

Anna Marriott
December 09, 2013

Thank you Adam for this extremely useful post. Our experience at Oxfam chimes with yours – at conference after conference, and in paper after paper we see and hear the same figures being quoted about the size of the private sector, often coming back to the very same source – the IFC reports. The serious concern is not only that the figures used overstate the size of the private health care sector in developing countries but that they are themselves being used as justification for a greater allocation of public resources to private health care.
Oxfam has also criticised the figures used by the IFC for unhelpfully merging the informal and formal private sector to come up with the false claim in their ‘Business of Health in Africa’ report that ‘A poor woman in Africa today is as likely to take her sick child to a private hospital or clinic as to a public facility.’ Our analysis of the same figures found that 40% of the care labelled as ‘private’ by the IFC was in fact informal and unqualified (http://bit.ly/1bwnQd3). Another distinction which we think is critical but so often ignored, is between profit-making and non-profit private providers. Profit-making brings the inherent risk of market failure which must be acknowledged and responded to. Lumping together church facilities which do often make up a large portion of health care in sub-Saharan Africa for example, with elite profit making facilities designed only for the wealthiest makes little sense for those interested in really understanding the risks, roles and contributions of different types of non-state providers.
Wherever one stands in the spectrum of positions on what role the private sector can and should play in health care systems in developing countries one thing that should unite us is a call for robust and meaningful new data collection on the role and contribution of public and private (profit and non-profit) providers. In the mean time the use of such misleading figures to justify greater investment in profit-making private health care in some of the poorest countries in the world is in our view extremely dangerous.