econ- ct7

Comparative Performance of Private and Public Healthcare Systems in Low- and Middle-Income Countries: A Systematic Review Sanjay Basu1,2,3*, Jason Andrews4, Sandeep Kishore5, Rajesh Panjabi6, David Stuckler3,7

1 Department of Medicine, University of California, San Francisco, California, United States of America, 2 Division of General Internal Medicine, San Francisco General

Hospital, San Francisco, California, United States of America, 3 Department of Public Health and Policy, London School of Hygiene & Tropical Medicine, London, United

Kingdom, 4 Division of Infectious Diseases, Massachusetts General Hospital, Boston, Massachusetts, United States of America, 5 Tri-Institutional MD-PhD Program, Weill

Cornell Medical College/Rockefeller University/Sloan-Kettering Institute, New York, New York, United States of America, 6 Division of Global Health Equity, Brigham and

Women’s Hospital, Harvard Medical School, Boston, Massachusetts, United States of America, 7 Department of Sociology, Cambridge University, Cambridge, United

Kingdom

Abstract

Introduction: Private sector healthcare delivery in low- and middle-income countries is sometimes argued to be more efficient, accountable, and sustainable than public sector delivery. Conversely, the public sector is often regarded as providing more equitable and evidence-based care. We performed a systematic review of research studies investigating the performance of private and public sector delivery in low- and middle-income countries.

Methods and Findings: Peer-reviewed studies including case studies, meta-analyses, reviews, and case-control analyses, as well as reports published by non-governmental organizations and international agencies, were systematically collected through large database searches, filtered through methodological inclusion criteria, and organized into six World Health Organization health system themes: accessibility and responsiveness; quality; outcomes; accountability, transparency, and regulation; fairness and equity; and efficiency. Of 1,178 potentially relevant unique citations, data were obtained from 102 articles describing studies conducted in low- and middle-income countries. Comparative cohort and cross-sectional studies suggested that providers in the private sector more frequently violated medical standards of practice and had poorer patient outcomes, but had greater reported timeliness and hospitality to patients. Reported efficiency tended to be lower in the private than in the public sector, resulting in part from perverse incentives for unnecessary testing and treatment. Public sector services experienced more limited availability of equipment, medications, and trained healthcare workers. When the definition of ‘‘private sector’’ included unlicensed and uncertified providers such as drug shop owners, most patients appeared to access care in the private sector; however, when unlicensed healthcare providers were excluded from the analysis, the majority of people accessed public sector care. ‘‘Competitive dynamics’’ for funding appeared between the two sectors, such that public funds and personnel were redirected to private sector development, followed by reductions in public sector service budgets and staff.

Conclusions: Studies evaluated in this systematic review do not support the claim that the private sector is usually more efficient, accountable, or medically effective than the public sector; however, the public sector appears frequently to lack timeliness and hospitality towards patients.

Please see later in the article for the Editors’ Summary.

Citation: Basu S, Andrews J, Kishore S, Panjabi R, Stuckler D (2012) Comparative Performance of Private and Public Healthcare Systems in Low- and Middle- Income Countries: A Systematic Review. PLoS Med 9(6): e1001244. doi:10.1371/journal.pmed.1001244

Academic Editor: Rachel Jenkins, King’s College London, United Kingdom

Received January 18, 2012; Accepted May 8, 2012; Published June 19, 2012

Copyright: � 2012 Basu et al. This is an open-access article distributed under the terms of the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original author and source are credited.

Funding: No direct funding was received for this study. The authors were personally salaried by their institutions during the period of writing (though no specific salary was set aside or given for the writing of this paper).

Competing Interests: The authors have no competing financial interests. SB, JA, SK and RP are employed at academic medical centers, which receive public sector research finances but also receive revenue through private sector fee-for-service medical transactions and private foundation grants. RP serves on the board of a nonprofit organization (Tiyatien Health) that provides health services in Liberia with approval from and in collaboration with the government and through receipt of private foundation funding, but has received no compensation for this role. SB and JA serve on the board of a nonprofit organization (Nyaya Health) that provides health services in rural Nepal using funds received from both private foundations and the Nepali government; they have also not received compensation for these roles.

Abbreviations: C-section, cesarean section; WHO, World Health Organization

* E-mail: [email protected]

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Introduction

One longstanding and polarized debate in global health

concerns the appropriate role and balance of the public and

private sector in providing healthcare services to populations in

low- and middle-income countries [1]. In recent years, disputes

between the proponents of private and public systems have

become particularly heated, as the global economic recession that

began in 2007 has placed major constraints on government

budgets—the major funding source for healthcare expenditures in

most countries (Figure 1) [2]. The International Monetary Fund

has recommended that countries increase the scope of private

sector provision in health care as part of loan conditions [3], often

to reduce government debt [4]. Criticizing such efforts, the

international nonprofit organization Oxfam, in its report ‘‘Blind

Optimism,’’ concluded that ‘‘to achieve universal and equitable

access to health care, the public sector must be made to work as

the majority provider’’ [5]. The World Bank responded that it

seeks ‘‘more pragmatic approaches that build on what is available’’

by engaging with the private sector in countries where public

sector services perform poorly [6]; the Center for Global

Development similarly argued that the Oxfam report ‘‘ignored

the informal sector,’’ and that poor people ‘‘want to go’’ to private

providers and will ‘‘persist in doing so’’ [7].

Generally, this debate has been divided between those seeking

universal state-based healthcare availability and those advocating

for the private sector to provide care in areas where the public

sector has typically failed. Private sector advocates have pointed to

evidence that the ‘‘private sector is the main provider,’’ as many

impoverished patients prefer to seek care at private clinics [1].

They have suggested that the private sector may be more efficient

and responsive to patient needs because of market competition,

which they indicate should overcome government inefficiency and

corruption [8]. In contrast, public sector advocates have

highlighted inequities in access to health care resulting from the

inability of the poor to pay for private services. They have noted

that private markets often fail to deliver public health goods

including preventative services (a ‘‘market failure’’), and lack

coordinated planning with public health systems, required to curb

epidemics.

Both sides claim their critics are ‘‘ideologically biased’’ [9,10]

and selectively draw on case reports to defend their viewpoints

[5,7]. However, significant conflicts of interest may apply to both

groups [11], as large private international contractors, insurance

firms, and non-governmental organizations may benefit from

expanding the role of the private sector, while academics who rely

on state-funded grant proposals may gain resources from a greater

public sector role.

Crucially needed to inform this debate is a systematic review of

existing evidence. As Hanson and colleagues note, ‘‘A strengthened

evidence base on the performance of the public and private health

sectors is essential to guide decision-makers towards policy choices

that are appropriate for their contexts’’ [11]. However, in practice,

studies comparing the performance of private and public sectors are

difficult to implement, for several reasons. First, healthcare services

are not universally dichotomized between public and private

providers, as some practitioners participate in both state-based

and privately owned healthcare delivery systems, and many systems

are dually funded or informal. A wide range of arrangements exist

for how such expenditures are spent in public versus private clinics,

hospitals, and informal settings (see Box 1 for definitions). One

example of this complication is the role of informal payments in

Figure 1. General government expenditure on health as percent of total expenditure on health, 2008. n = 190 countries for which data are available. Source: [114]. doi:10.1371/journal.pmed.1001244.g001

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public facilities. These private–public interactions confound a

simplistic comparison between private and public systems. Second,

state-based healthcare services and private services have coexisted in

many low- and middle-income countries for decades; most countries

have a large fraction (but not all) of healthcare expenditures paid for

by the state, with most of the remainder paid for by households [12].

In this context, simply defining what is private or public is not

straightforward. Private providers are heterogeneous, consisting of

formal for-profit entities such as independent hospitals, informal

entities that may include unlicensed providers, and nonprofit and

non-governmental organizations.

Although these debates have been highly visible, there is a

dearth of reviews on the topic. An initial search of prior systematic

reviews and meta-analyses in the PubMed database revealed one

recent review, evaluating 80 field-based studies that directly and

simultaneously compared service quality in ambulatory public and

private care clinics [1]. The analysis found that private outpatient

clinics often had better drug supplies and responsiveness than

public clinics, but the analysis did not assess other dimensions of

health system performance (such as accessibility). The review

excluded studies of hospitals, case reports, intervention studies

(such as how a sector responded to quality improvement

programs), or statistical studies of population-level data.

The aim of the current study is to evaluate available data on

public and private sector performance across the key domains of

health systems competencies. Our goal is to understand how the

private or public nature of a given healthcare delivery institution

may impact core healthcare delivery goals. We systematically

review published data and studies of private and public sector

performance in low- and middle-income countries against six

health systems themes used by World Health Organization

(WHO), adapted from the 2000 World Health Report [13]. The

six themes are as follows: accessibility and responsiveness; quality;

outcomes; accountability, transparency, and regulation; fairness

and equity; and efficiency [13] (Table 1).

Methods

Search Strategy We searched for primary literature in eight major databases

using the indexed and free-text terms ‘‘private sector,’’ ‘‘privat-

ization,’’ ‘‘public-private sector partnerships,’’ and ‘‘public sector’’

in various combinations, as described in Text S1. Because much of

the discussion and data collection on this topic has been performed

outside of academic circles by international agencies and non-

governmental groups, we supplemented the database search by

conducting the same keyword searches on the websites of the

WHO library database WHOLIS, the World Bank Documents

and Reports repository, the United Nations Children’s Fund, the

United Nations Development Program, the Bill & Melinda Gates

Foundation, the Global Fund to Fight AIDS, Tuberculosis and

Malaria, Oxfam International, and the Kaiser Family Foundation

Global Health Division. The search terms included studies in

English, French, Italian, Spanish, Portuguese, or Russian,

published from 1 January 1980 through 31 August 2011.

Study Selection All titles and abstracts found by the search strategy were filtered

for relevance to the study objective. Studies must have included

data on a population in at least one low- or middle-income

country, defined by the 2010 World Bank criteria of having

current per-capita gross national income less than or equal to

US$12,275 [14]. The full texts of potentially relevant articles were

subject to the inclusion criteria listed in Table 2 to ensure they met

basic minimum methodological standards. Qualitative studies

were included if they specified a systematic methodology for

interviews, focus group analysis, historical or political science

analysis, or ethnographic observation (see Text S2 for the

PRISMA checklist).

Data Extraction and Analysis A data extraction method was designed by three reviewers (S.

B., J. A., and D. S.). J. A. extracted the data using a preestablished

standard data entry format into a database, with verification by S.

B. to ensure consistency of coding. Standard data describing each

study were also extracted, including the country where the study

was performed, study period, study methodology, number of

included participants, primary and secondary outcome measures

and end points, and study limitations. Where disclosed, we noted

the study funders and agencies. Disagreements between the two

reviewers were resolved by consensus among all authors.

The data synthesis was structured into six themes from the

updated WHO framework for health system assessment (see

Table 1 for themes, subthemes, and indicators used to assess each

theme) [13]. Relevant data that did not fall into one of these

themes was separately included in the analysis in an ‘‘other

factors’’ category that is discussed following the principal results.

Reports containing information relevant to more than one theme

were included in all related thematic areas. We did not perform

further subanalysis of the highest quality studies as the authors

could not agree to a vote-counting approach that would apply

across the quantitative and qualitative methods and the six WHO

themes captured in literature using different types of outcome

variables.

Results

The study selection process is shown in Figure 2 as a PRISMA

flow diagram. Of the 1,178 potentially relevant unique citations

from all literature searches, 102 studies met the inclusion criteria.

Box 1. Different Public and Private Healthcare Delivery Agents in Low- and Middle-Income Countries

Multinational and national for-profit corporations: for-profit group practices, sometimes associated with hospitals. Formal individual private providers: individual phy- sicians or other healthcare providers operating in smaller scale healthcare facilities or private pharmacies. Informal for-profit providers: unlicensed, unregulated providers including shop owners, ‘‘injectors,’’ traditional healers, and birth attendants. Not-for-profit providers: civil society, non-governmen- tal, and faith-based groups, charities; and community and social enterprises, with varying degrees of regulation and oversight. Public hospitals, health centers, and clinics: county- and district-level hospitals and clinics, with varying degrees of accessibility and user fees for patients, often having providers that also participate in private sector healthcare delivery. Public–private partnerships: International or national associations that have varying degrees of for-profit or nonprofit status, or collaborations between for-profit and government/nonprofit entities to deliver services. Also have varying user fees for patients and varying levels of public subsidization for delivering healthcare services.

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Key characteristics of the included studies are summarized in

Table 3. Fifty-nine studies were empirical research studies and 13

involved meta-analysis, with the rest involving case reports or

reviews. One-third of studies were carried out in the WHO-

defined African region (n = 32) and another third in the Southeast

Asian region (n = 34); most were published after 1990. We found

that about nine out of ten studies directly compared quality of care

in public versus private systems or assessed the demand for or

utilization of services; the remaining studies examined drug

availability or affordability or compared the cost and efficiency

of services.

Theme 1. Accessibility and Responsiveness Six articles documented that a significant proportion of

outpatient services in low- and middle-income countries appeared

to be provided by the private sector [15–18]. However, the

percentage of total visits varied substantially across countries and

income levels [15]. In Viet Nam, the private sector provides 60%

of all outpatient contacts. In India, more than 90% of children

affected by diarrhea are taken to private healthcare providers, but

the income gradient was not specified among studies reporting this

data [17]. Among participants surveyed for HIV testing in 12

African countries, the proportion of patients using the private

sector for testing ranged from 3% to 45% [19].

Several studies disaggregated utilization by income levels,

tending to find that the private sector predominantly serves more

affluent populations. A widely cited study on access of the private

and public sectors was performed by the World Bank in 22 low-

and middle-income countries using Demographic and Health

Surveys [20]. Although interpretation of the findings varies [5,20],

the analysis found that in 19 of the countries studied, both wealthy

and poor families received more care from the private than the

public sector, but only when the private sector included private

drug shops and similar informal providers [21]; when the

composition of the private sector was limited to only licensed

and certified healthcare personnel, the public sector provided the

majority of care in low- and middle-income countries. However,

there were three exceptions: Namibia, Tanzania, and Zambia,

Table 1. WHO health system themes: data organization categories, subcategories, and indicators used.

System Evaluation Category Subcategory Description and Indicators

Access and responsiveness Availability Distance to facility and hours of service availability

Timeliness of service Waiting times from presentation to initial evaluation and subsequent testing, results, and follow-up

Hospitality Patient questionnaire responses regarding treatment of patients by the provider, and patient experiences when navigating the health system

Quality Comprehensiveness of services Availability of all components of WHO package of services

Diagnostic accuracy Rates of correct diagnosis on retrospective review

Management standards Rate of conformity to international disease-specific management standards

Client retention Rate of loss to follow-up or, alternatively, rate of appropriate patient return

Outcomes Treatment success rates Rate of therapy success, controlling for population characteristics and delayed presentation

Population coverage Proportion of catchment population reached by dedicated campaigns (e.g., vaccination rates)

Morbidity Rate of disability to patients, controlling for population characteristics

Mortality Rate of death among patients, controlling for population characteristics

Accountability, transparency, and regulation Data accessibility and quality Availability of data and appropriate use of indicators and statistics

Public health functions Contribution of healthcare system to core public health system functions (e.g., reporting of key diseases, preventative care)

Reform capacity Results of quality improvement initiatives

Fairness and equity Financial barriers to care User fees, under-the-table charges, and pharmaceutical costs

Distributive justice Healthcare availability commensurate with need

Efficiency Cost Absolute dollars spent for a given indication

Redundancy Repetition of diagnostic time, testing, supply chains, and therapy delivery

Fragmentation Separation of core healthcare system functions, generating sluggish management

Delays Time between ordering of tests or therapies and execution of tests and therapies

doi:10.1371/journal.pmed.1001244.t001

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where private sectors are majority providers even when only

licensed personnel are counted. The percentage of visits to the

private sector was lower among the poor than among the wealthy

in these surveys, but the difference was not statistically significant.

Additionally, in Colombo, Sri Lanka, where the private sector

provided more than a quarter of all childhood immunizations

overall, among the wealthiest quartile it provided 72% of

immunizations but among the poorest quartile it provided only

3% [16]. In Uganda, 17.4% of women use private clinics or

midwives for their family-planning-related medical care due to

short distances and low transport costs, according to interviews

conducted among 10,706 women, of whom 57% were in the

country’s lowest wealth quintile [18].

Few studies have investigated ‘‘accessibility’’ per se (i.e., the

ability to access available services). However, wait times were

consistently found to be shorter in private sector than in public

sector facilities [22,23]. One interview-based study in Ghana

suggested that waiting times among public sector facilities could be

longer for the same condition than private sector facilities by one

or two hours [22]. Women living in rural Nigeria also reported

preferring private obstetric services to public services because

doctors were more frequently present at the time of patient

presentation [23].

Patients tended to report worse hospitality from providers at

public than private facilities (13 studies) [24–36]. In Bangladesh,

for example, public providers ranked lower than private providers

on scale-based surveys in which patients assessed the diagnostic

explanation given them, courtesy of staff, cleanliness of facilities,

capacity building, and the availability of certain medical inputs

[36]. A study in India found that patients were seen for longer

durations, were more likely to have a physical exam during their

visit, and were more likely to have their diagnosis explained to

them by private sector physicians than public sector ones [33].

Analysis in several countries suggested that patients in private

sector facilities reported preferring the facilities because of shorter

waiting periods, longer or more flexible opening hours, and better

availability of staff [34].

Theme 2. Quality of Health Care Nine retrospective chart reviews and survey-based studies found

that diagnostic accuracy and adherence to medical management

standards were worse among private than public sector care

providers [37–45]. Most of these studies examined infectious

disease management protocols, including for tuberculosis and

malaria [46]. Private practitioners had significantly worse knowl-

edge of correct diagnosis and treatment. Other disease categories

showed similar patterns of lower quality in the private sector. In

Nigeria, public providers were significantly more likely to use rapid

malaria diagnostics and to use the recommended combination

therapies than private providers [47].

Similar poor adherence to guidelines in prescription practices,

including subtherapeutic dosing, by private sector providers has

been associated with a rise in drug-resistant malaria in Nigeria

[47]. Parallel results were reported from Viet Nam [48]. In an

analysis of outcome data from 24 countries, children with diarrhea

were found to be less likely to receive appropriate oral rehydration

salts and more likely to receive unnecessary antibiotics when

seeing private providers than when seeing public providers [49].

However, a study of 119 private and ten public health clinics in

Uganda found that both private and public providers prescribed

antibiotics incorrectly (including not prescribing them when

indicated), and in this study public providers were worse in

adhering to national malaria treatment standards (14% versus

27%, p = 0.002) [45].

Poor adherence to guidelines in prescription practices, including

prescribing subtherapeutic doses, failure to provide oral rehydra-

tion salts, and prescribing of unnecessary antibiotics were more

likely to occur among private than public providers [47–49],

although there were exceptions [45]. Higher rates of potentially

unnecessary procedures, particularly cesarean sections (C-sec-

Table 2. Systematic review inclusion criteria.

Aspect Minimum Criteria for Inclusion

Data collection in facilities

If comparison between public and private programs, comparators were randomly selected, or population matched/adjacent.

Sample size For quantitative studies, must include .20 patients per facility or program described, or more than 100 persons if community-based household surveys. If questionnaire-based, must include .50% response rate.

For qualitative studies, must include description of interviewees and systematic selection criteria.

Data description For quantitative studies, must include data selection criteria, population demographic description, data collection method, and statistical analysis description.

For qualitative studies, study must include population selection results based on specified criteria, data collection approach, and data synthesis strategy involving more than one author-reviewer if using a grounded-theory approach.

For household surveys, study must include census of households or random selection from list of available households.

For economics/cost-effectiveness studies, must specify data sources for costs and QALYs, specify model parameters and transition probabilities, conform to gold standards for CEA analysis [113] and specify discounting rates and method of summing costs across specified population.

Data presentation Data and tables should add up and be consistent.

Absolute numbers must be given, or denominators must be available for percentage results.

Exclude if obvious data errors; inquire from authors in case of suspected typos.

If statistical tests were performed, the tests need to be appropriate for the type of data being analyzed.

Bias No other important issues in design, conduct, or analysis that could introduce bias considered on an individual basis, e.g., amount of potential bias if using different methods for collecting data between private and public providers.

No unusual events occurred during study that could introduce bias.

CEA, cost-effectiveness analysis; QALYs, quality-adjusted life years. doi:10.1371/journal.pmed.1001244.t002

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tions), were also reported at private than at public settings [50,51].

One analysis of the Peruvian health system found significantly

higher rates of C-sections after the privatization of delivery. The

pre-reform rates in the private sector were already higher than the

WHO recommended rate of 10%–15%; after reform, the rate

exceeded 50%. The same has been found in South Africa, where

62% of women delivering in the private sector had C-sections,

compared with 18% in the public sector [51]. Studies in Mexico

suggested that fee-for-service payment structures (which are more

heavily present in private than in public care delivery settings)

incentivized increased C-sections [23].

Two cross-sectional studies documented a lack of drug

availability and service provision at public facilities. A semi-

structured questionnaire distributed to 24 health secretariats and

directors of 39 city hospitals and 26 referral and teaching hospitals

revealed that 76% of state facilities and 67% of city facilities lacked

Figure 2. Flow diagram of study selection. doi:10.1371/journal.pmed.1001244.g002

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assisted reproductive technologies that were widely available in

private sector facilities (though the exact percentage among such

private facilities was not evaluated) [52]. In Tanzania, a semi-

structured questionnaire distributed to 80 randomly selected

patients and 45 health facility personnel staff working in diabetic

clinics found that private facilities tend to stock more types of oral

hypoglycemic agents than public facilities [53]. However, studies

did not make clear whether the additional types of drugs were

related to better outcomes or were simply additional brands of

equivalent medication on hand.

Some studies of quality of care were performed in the private

sector without having a comparative public sector group. Two

studies in South Africa found that the majority of private general

practitioners were not aware of the recommended medications,

doses, or durations for treatment of sexually transmitted infections

[54,55]. Reviews in Nigeria and Laos reported similarly

widespread use of ineffective therapies for malaria in the private

sector [56,57]. Sexually transmitted disease management in

private clinics and drugs shops in Uganda revealed that 93% of

cases were not properly managed per national guidelines, and the

cure rate was 47% [58].

Dispensation of unnecessary medications and procedures was

also reported to be higher among private sector providers

according to four reports based on chart reviews. The most

Table 3. Characteristics of included studies.

Characteristic

South Asia, East Asia, and Pacific

Sub-Saharan Africa Latin America Other

Multiple Continents/Not Context-Specific Total

Study year range

1980–1989 0 0 1 0 0 1

1990–1999 2 5 2 1 2 12

2000–2009 29 23 8 5 13 78

2010–2011 3 4 2 0 2 11

Report type

Empirical research 29 21 5 4 0 59

Review/commentary 2 5 4 0 11 22

Meta-analysis/data synthesis 1 4 2 2 4 13

Case study 2 2 2 0 2 8

Primary study purpose (research studies)

Describe or compare quality of private and public services

18 11 3 6 4 42

Assess drug availability and affordability 1 4 1 0 2 8

Assess demand for, access to, or utilization of services

13 14 9 0 11 47

Compare costs or efficiency of services 2 3 0 0 0 5

Facility types

Hospitals 1 1 2 1 0 5

Outpatient clinics 3 4 0 1 0 8

Pharmacies 1 1 2 0 0 4

Multiple types 24 18 8 2 11 63

Not specified 5 8 1 2 6 22

Service type

Promotive or preventive 3 3 1 1 1 9

Curative, rehabilitative, or palliative 20 15 5 3 4 47

All types 11 14 7 2 12 46

Disease category

CD 19 17 4 2 4 46

NCD 3 2 5 1 2 13

Both CD and NCD 12 13 4 3 11 43

Population age

Adults 7 12 6 2 2 29

Children 4 1 0 1 2 8

Both adults and children 23 19 7 3 13 65

CD, communicable disease; NCD, noncommunicable disease. doi:10.1371/journal.pmed.1001244.t003

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common incidents involved the unnecessary use of antibiotics for

treatment of diarrheal diseases and non-complicated acute

respiratory infections [32,49]. Reports from Africa and Laos

suggest ineffective and sometimes harmful pharmaceuticals are

being distributed in the private sector [56,57].

Surveys of patients’ perceptions of care quality were mixed.

While two survey-based studies suggested that patients perceived

higher quality among private practitioners, possibly due to

frequent prescribing of medications and more time spent with

patients [20,34], three interview-based studies suggested that

patients perceived public sector healthcare workers as more

competent [32,59,60].

Theme 3. Patient Outcomes Public sector provision was associated with higher rates of

treatment success for tuberculosis and HIV [61–64] as well as

vaccination [65,66]. For example, in Pakistan, a matched cohort

study in Karachi found that public sector tuberculosis care resulted

in an 85% higher treatment success rate than private sector care

[63]. In Thailand, patients seeking care in private institutions had

significantly lower treatment success rates for tuberculosis, which

was attributed to a three to five times greater likelihood of being

prescribed non-WHO-recommended regimens than in the public

sector [61]. In South Korea, tuberculosis treatment success rates

were 51.8% in private clinics as opposed to 79.7% in public clinics,

with only 26.2% of patients in private clinics receiving the

recommended therapy, and over 40% receiving an inappropri-

ately short duration of therapy [62]. Similarly higher rates of

treatment failure were observed for private than public system

patients on antiretroviral therapy for HIV in Botswana [64]. In

India, an analysis of over 120,000 households, adjusted for

demographic and socioeconomic factors, found that children

receiving private health services were less likely to receive measles

vaccinations [65]. Similar findings were reported from Cambodia

[66].

Studies comparing pre- and post-privatization outcomes tended

to find worse health system performance associated with rapid and

extensive healthcare privatization initiatives. In Colombia, follow-

ing major privatization reforms in 1993, population vaccine

coverage declined for several diseases in the country, and

tuberculosis incidence rose significantly [67]. In Brazil, privatiza-

tion of fertility control services led to increased abortions,

sterilization, and improper use of oral contraceptives (obtained

without medical consultation), ultimately linked to higher mortal-

ity rates among young women [68]. However, a slower pace of

privatization of health care services did not appear to correlate

with a substantial worsening in patient outcomes among Latin

American countries [69].

Theme 4. Accountability, Transparency, and Regulation Data on this theme tended to be unavailable from the private

sector. No papers were found to describe any systematic collection

of outcome data from entirely private sector sources. One recent

independent review of Ghana’s private sector referred to the

private sector as a ‘‘black box,’’ with a dearth of information on

delivery practices and outcomes [22]. Tuberculosis and malaria

case notification to the public health system was particularly poor

among private sector providers as compared to public providers in

a number of countries [28,48,70]. However, while national vital

statistics databases collected from public sector clinics and

hospitals were widely available, they varied considerably in quality

according to external assessments [22,71].

Public–private partnerships also lacked data. A systematic

review of data from public–private partnerships (including

arrangements among governments and private, for-profit contrac-

tors) found few reported data that were of sufficient quality to

assess the impact of partnership services and programs [72]. Poor

data availability was observed in another systematic collection

from several countries’ private–public partnerships for sexual and

reproductive health services. Most data available showed that after

brief training of health providers, provider responses to question-

naires improved in accuracy, but no assessments were made of

health outcomes [71]. An exception was a partnership in India

that demonstrated increased birth attendant coverage from 27%

to 53% over 7 mo among a cohort of 97,000 women [73].

Several reports observed significant public spending being used

to regulate the private sector in order to improve patient care

quality, particularly in African countries, and with limited

effectiveness [22,74–76]. The effectiveness of these regulations of

the private sector was found to vary, often depending on public

monitoring and enforcement [17,34,77]. Regulations to reduce the

sale of unnecessary breast milk substitutes by private drug shops in

Laos had limited impact until government inspectors visited sites

to ensure appropriate sales and provided sanctions for legal

violations [17]. In Indonesia, Kenya, Pakistan, and Bihar, clinical

education programs to improve distribution of oral rehydration

salts and reduce inappropriate antibiotic prescribing were found to

have a greater impact when patients also received education, and

when community healthcare workers were involved in monitoring,

than when education was given only to clinicians [17]. Reviews in

Zimbabwe and Tanzania identified anti-competitive practices and

sales of inappropriate drugs [75]; attempted regulations in

Zimbabwe were ineffective [76]. One review in Ghana indicated

that the key public agency in charge of such regulation was unable

to identify a large number of private providers in order to assess

accreditation and quality: 2,612 of 11,430 drug shops were

registered but had not received licenses [22]. A private–public

partnership in South Africa to educate providers about national

guidelines for sexually transmitted disease prevention and control

had no effect on practice [77]. In Egypt a comparative assessment

of clinical education programs found greater improvements in

public sector practices than private sector practices [34].

Theme 5. Fairness and Equity Financial barriers to care, particularly user fees, were reported

to be prevalent in both private and public systems. A World Bank

study in Ghana concluded that there was no systematic evidence

indicating whether user fees in the public sector were different

than in the private sector [78]; however, the data presented

showed that out-of-pocket user fees for patients were highest for

private not-for-profit, lowest for public, and intermediate for

private self-financed providers [22]. Hence, the conclusions of the

report appear to be disputed by the data within the report.

As noted in the preceding sections, private sector health services

tend to cater more greatly to groups with higher income and fewer

medical needs (an illustration of the ‘‘inverse care law’’), resulting

in disparities in coverage [35,79–85], although findings varied in

several cases [86,87]. Some studies suggested there was a

systematic bias against indigent patients in terms of both quality

and access. Exclusion of poor patients by the private sector was

observed in South Africa [80] and Paraguay [81]. Poor patients

were as likely as wealthier patients to seek care from private

providers in Laos, but poorer patients received service from less

qualified providers, with limited-quality services (no exam or

advice, only medication dispensing) [35]. While most reports

described income-based stratification in access, one report

described stratification based on gender in addition to income. A

nationally representative, cross-sectional, cluster-sample survey of

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7,308 children in randomly selected rural and urban populations

across Bangladesh observed that over 90% were taken to the

private sector. However, when patients arrived at private clinics,

children from higher income households and male children were

significantly more often (p,0.001) directed to a licensed provider

and treated with oral rehydration solution or an antibiotic than

female or poor children [85].

Several studies suggested that the process of privatizing existing

public services increased inequalities in the distribution of services.

Analyses of the Tanzanian and Chilean health systems found that

privatization led to many clinics being built in areas with less need,

whereas prior to privatization government clinics had opened in

underserved areas and made greater improvements in expanding

population coverage of health services [82–84]. Privatization in

China was statistically related to a rise in out-of-pocket expendi-

tures, such that by 2001, half of Chinese surveyed reported that

they had forgone health care in the previous year due to costs; out-

of-pocket expenses accounted for 58% of healthcare spending in

2002 compared with 20% in 1978 when privatization began. The

cost burdens of privatization related to an increase in disparities in

healthcare coverage and infant mortality between urban and rural

areas [79]. One survey-based study using Demographic Health

Survey data from 34 sub-Saharan African countries found that

privatization was associated with increased access, and reduced

disparities in access between rich and poor [86]. A second analysis

of the same dataset, however, found no change in inequality in use

of modern contraceptives with the expansion of the private sector

[87].

Private contracting and social franchises showed potential for

expanding private sector coverage to impoverished groups,

although conclusions are tentative because comparisons to the

public sector were unavailable. One World Bank study in

Cambodia reported improvements in healthcare coverage in poor

districts after contracting out services to private companies

specifically to increase coverage. When contracts explicitly

included targets for reaching the poor, contractors improved

health services for the most marginalized groups, although

comparison was not made to the results of a similar investment

in public sector services [88]. Several related World Bank

initiatives took the form of social franchises, in which private

providers pay a fee and are provided training, managerial

assistance, and certification in a provider network [20,89,90].

Several case studies of social franchises [20,89,90] found higher

care utilization among the lower socioeconomic groups of private

franchisers than of control private clinics for contraceptive use,

HIV counseling, antenatal care, and vaccination [17,91,92].

Theme 6. Efficiency Several reports observed higher prescription drug costs in the

private sector for equivalent clinical diagnoses [33,36,53,67,93–

96]. In a survey study of prescription costs in India, costs were

higher for every class of visit in the private sector [33]. Two-thirds

of outpatients in the private sector, compared with one-third in the

public sector, received an injection for similar presentations, but

the study did not investigate what fraction was unnecessary [33].

Both generic and brand-name drugs were found to be higher in

price in the private sector [96]. Tanzanian private facilities

typically used more brand-name oral hypoglycemic agents, but

even generic medications were five times higher in price [53].

Similar findings were reported in India [96]. A study in

Bangladesh found that private sector healthcare prices in the

country—not just those associated with medications—have been

growing far above the inflation rate [36].

There is also evidence that the process of privatization is

associated with increased drug costs [36,53,67,93,94,96]. A study

of the Malaysian health system found that increasing privatization

of health services was associated with increased medicine prices

and decreased stability of prices [93]. Healthcare costs in

Colombia rose significantly following privatization reform in

1993, and 52% of capitation fees were spent on administration

[67]. Similar privatization in some parts of South Africa were

associated with a 13% to 32% cost increase in overall health

spending, without associated increases in coverage or indications

[94]; costs of prescriptions were significantly lower in the public

sector, likely due to generic substitution, prepackaging of

medications, and use of treatment protocols [95].

Higher drug costs are in part associated with disease compli-

cations attributable to delayed diagnosis or incorrect disease

management [97,98]. In Bolivia, seeking care in the private sector

was associated with longer delays in tuberculosis diagnosis and

greater costs [97,98]. It was estimated that in Mexico, Brazil, and

South Africa, unnecessary C-sections increased delivery-related

health costs in the private sector by at least 10-fold [23]. In

Bangladesh, private contracting of health services appeared to

increase costs related to complications and delays in service access

[36].

Several World Bank studies found significant fragmentation in

purchasing and distribution across and within the public and

private sectors, resulting in higher drug prices and redundant

treatments that increase overall healthcare costs [22,99]. The

absence of reliable distributors for pharmaceuticals in a study in

Ghana led to several intermediary groups being used to distribute

medications, increasing prices between 5% and 200% [22]. The

large number of small-scale hospitals and clinics in some sub-

Saharan African countries fragmented delivery, such that patient

diagnoses and treatment histories were unavailable between

institutions [22,99], often significantly delaying care, and resulting

in redundant tests and sometimes administration of incorrect

medication to patients. Several private primary care providers

reported difficulties referring their patients to public sector

secondary care facilities, as public facilities did not accept the

diagnoses made by the private providers and often required the

patient to restart the consultation process [99].

Competition between public and private delivery tended to

decrease drug prices. One large multilevel analysis of the content

and cost of 700 medication transactions observed in 14 private and

public settings in Mali revealed that private providers were more

likely to prescribe brand-name drugs, injectable drugs, and more

antibiotics; however, the availability of drugs in the public sector

decreased prices in the private sector [100].

Contracting of public healthcare services to private providers

has also been estimated by the World Bank to reduce costs of and

waiting times for contracted services [36,101], although the effects

of contracting differ markedly by the type of healthcare service and

across countries [17,102]. In Cambodia, contracted districts had

costs of $22.7 per person per year versus $26.4 among non-

contracted districts, although there were no tests of statistical

significance [36]. One highly cited secondary analysis reported this

outcome as a 17% savings resulting from contracting [101]. Peer-

reviewed studies of contracting in Zimbabwe and South Africa

found that costs were unchanged by contracting in South Africa

but were lower after contracting in Zimbabwe [17]. One review of

contracting experience in Madagascar and Senegal found that

large expenditure from public sector ministries was necessary to

manage and supervise private contracts, increasing overall costs in

those two countries by 13% and 17%, respectively [102].

Private and Public Healthcare Performance

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Other Observed Factors A few key findings reported in articles did not clearly fit into the

WHO health system themes, mainly involving recent reports of

complex ‘‘competitive dynamics’’ between private and public

health sectors. First, a ‘‘crowding out’’ effect appeared to occur

between private and public sector services for expanding delivery.

This process involved the transfer of public funds and personnel to

private sector development, followed by reductions in public sector

service budgets and staff availability. In Ghana, new private

services in urban middle- and upper-socioeconomic populations

were found to reduce revenues for public sector hospitals that also

provided care to poorer populations [22]. At times, however, the

process was a passive privatization: public sector funds were

increasingly allocated to private–public partnerships without

accompanying shifts in demand, so that the public sector’s

effective budget per patient was reduced. This dynamic was

observed in post-apartheid South Africa [103], as well as in

Uganda [104] and Brazil [105]. Public–private partnerships and

private contractors were often involved in such scenarios, but did

not typically disclose the data necessary to fully evaluate these

arrangements.

Public and private sector interactions also had implications for

delivery, staffing, and disease control. Interviews of Indian patients

suggested that several private practitioners who work in both

public and private sectors advised patients to visit their private

clinics or requested further payments in order to continue

providing care in the public clinic [106]. Doctors tended to

migrate towards private sector and urban jobs, depriving the

public sector and rural areas of physicians [107]. However, private

hospital systems often subsidize or provide healthcare technologies

to patients who cannot obtain these services from public hospitals.

For example, in Botswana, private hospitals often receive cancer

patients from public hospitals that are unable to provide radiation

oncology services [78]. In some cases, however, the services in

differing sectors undermined performance of one or both sectors.

Several studies found that poor reporting of diseases in the private

sector impeded public sector control of communicable diseases

[28,48,70].

Discussion

Our systematic review of comparative analyses of public and

private healthcare systems in low- and middle-income countries

found strengths and limitations in both sectors for each of six main

WHO health systems framework themes. Private sector healthcare

systems tended to lack published data by which to evaluate their

performance, had greater risks of low-quality care, and served

higher socio-economic groups, whereas the public sector tended to

be less responsive to patients and lacked availability of supplies.

Contrary to prevailing assumptions, the private sector appeared to

have lower efficiency than the public sector, resulting from higher

drug costs, perverse incentives for unnecessary testing and

treatment, greater risks of complications, and weak regulation.

Both public and private sector systems had poor accountability

and transparency. Within all WHO health system themes, study

findings varied considerably across countries and by the methods

employed.

The review has several limitations, which reflect the existing

data and literature purporting to compare the healthcare

performance of public and private sectors. First, existing studies

have focused on isolated topics where data are more abundant,

and as a result have overlooked important dimensions of health

sector performance. To address this limitation, we drew on a

broader range of data, including reports from non-governmental

organizations and international agencies like the World Bank. This

step was particularly important for acquiring data from the private

sector, since such data are relatively unavailable in the peer-

reviewed academic literature. Thus, some studies included were

not peer-reviewed. Our review involved a detailed analysis of

methodological criteria for these studies to ensure they met similar

standards of data analysis and reporting as peer-reviewed research.

Second, although it was not possible to perform a quantitative

meta-analysis because of variations in coding and outcomes, we

were able to identify unsubstantiated claims in several cases, which

appeared more prominent among non-peer reviewed sources. For

example, the World Bank has made strong claims that investing in

public–private partnerships will improve efficiency and effective-

ness in the health sector [108], yet several of its publications

revealed that these assertions were either unsupported by data or

the data was not provided in sufficient detail to pass minimal

inclusion criteria required for this review [20,78]. Efforts are

needed to address potential conflicts of interest of such agencies

and their implications for research and data reporting, particularly

as their analyses are often very highly cited in the academic

literature on health system assessment and performance.

Third, our reliance of the WHO health system themes enabled

the analysis to address systematically and comprehensively the

existing research on public and private sectors. However, a

limitation of the thematic framework, for example, is that several

elements of the patient experience in healthcare settings, such as

waiting times, are not systematically cataloged in current

assessments. This implies that future research in the area should

include a focus on how experiential aspects of care are relevant to

healthcare seeking and outcomes (such as the likelihood of follow-

up among patients requiring return visits) for differently structured

care environments. Fourth, the review identified mixed results in

several cases and was unable to account for a range of potential

modifying factors, partly as a limitation of the broad WHO health

system components that do not incorporate contextual factors. For

example, treatment of infectious diseases in public settings may be

more efficient than in private settings because of higher volume,

and greater use of systematized protocols due to that higher

volume. Such differences limit the ability of existing work to

compare fairly the public and private sector for differing disease

categories and in differing social and economic contexts of

healthcare delivery.

Although it was not the focus of our research, we observed that

some of our findings in low- and middle-income countries

mirrored existing evidence from high-income countries. For

example, the lack of data from private sector groups was similar

to the situation in the UK, where the privately run Independent

Sector Treatment Centres was unable to provide healthcare

performance data when required [109]. However, our evidence

also indicates that contextual factors modify the relationships we

have observed, so that it is not straightforward to transpose health

system evidence from high-income countries to low- and middle-

income countries. Importantly, we observed that regulatory

conditions interact with the effectiveness of public and private

sector provision, but in low- and middle-income countries

regulatory capacity is much weaker. As one example, the reviewed

data suggest that systems that incentivize more procedures (rather

than better outcomes) tend to lead to inefficiencies and poorer

health outcomes. One extensively studied alternative system in

high-income countries is pay-for-performance remuneration sys-

tems. It remains unclear what effects such programs may have in

low- and middle-income countries as compared to high-income

countries.

Private and Public Healthcare Performance

PLoS Medicine | www.plosmedicine.org 10 June 2012 | Volume 9 | Issue 6 | e1001244

Our study has important implications for future research and

policy. Future research is needed to address several important

methodological limitations of existing studies. Many analyses were

excluded from the review because they lacked a systematic

approach to cataloging health system quality. Ideally, analyses

should be comparative and should include a ‘‘counterfactual’’ in

order to make causal claims about the effects of the particular

benefits of providing services in one sector or the other. For

example, social franchising to engage private providers in an

organized regulatory system, which has been extensively piloted,

has yet to be analyzed over the long term using outcome data and

a comparison with commensurate investment in public sector

development [88]. Studies also need to specify carefully the

definition of the private and public sectors. When the private

sector included unlicensed physicians, it was found to provide the

majority of coverage for low-income groups, but when only

licensed providers were included, the public sector was found to be

the main source of healthcare provision in low- and middle-

income countries. While some commentators report a higher

number of absolute healthcare workers in the private sector, and a

higher number of visits among the population to the private sector,

these observation may be artifacts of improperly coding a large

portion of private ‘‘providers’’ who are not actually qualified

healthcare personnel, but rather drug store salespeople [1,5]. Most

studies fail to capture the full scope of effects of reforms on the

healthcare system, focusing on an isolated health system compo-

nent. A reform may enhance public sector performance but

compromise the market in the private sector, or vice versa.

Standards may need to be developed for health system research for

identifying what is ‘‘safe’’ and ‘‘effective’’ overall for patients across

socioeconomic strata, just as we do for pharmaceutical safety and

efficacy.

Some authors have highlighted the lack of regulatory infra-

structure available in low- and middle-income countries to

monitor the performance of private healthcare contractors [110].

Despite the lack of data about private sector performance, recent

initiatives by the World Bank’s International Finance Committee

are underwriting the expansion of private sector services among

low- and middle-income countries. For example, in sub-Saharan

Africa, the International Finance Committee has created a private

equity fund to make 30 long-term investments in private health

companies. These conflicts of interest pose a potential threat to the

validity of World Bank–sponsored studies and raise the need for

independent scrutiny.

Our review indicates that current data do not support claims

that the private sector has been more efficient, accountable, or

medically effective than the public sector [8]. The review also

identifies several areas of focus for quality improvement. In the

private sector, benefits may accrue from enhancing medical

knowledge for appropriate diagnosis and disease management,

drawing on specific quality improvement programs for continuing

medical education that may serve as models [17]. It is also

important to address conflicts of interest from physician-induced

demand, particularly when prescribers are also drug store owners.

Regulation and consumer education have been more successful

than a reliance on clinical education alone in Pakistan and Bihar

[17]. In the public sector, quality improvement may need to

address incentives to perform at high standards among providers

who may not feel threatened by a lack of business in the manner

that private practitioners do. One proposed approach is to link

provider compensation with results from patient outcomes,

weighted by baseline disease risk in the patient population [111].

More generally, policy research needs to determine how targeted

interventions might address these core weaknesses among both

private and public delivery environments, including the lack of

disclosure of outcome and performance data; as a measure of

accountability, public transparency can be considered a vital sign

of system performance (particularly for those systems receiving

public subsidies; [112]). While there is no clear definition of a

‘‘basic minimum dataset’’ for countries to capture health sector

performance, we did notice several common themes in our data

review. In many of the countries studied, surveillance of disease

treatment outcomes among adults, and particularly noncommu-

nicable disease, was found to be limited. Furthermore, we found

further data gaps in health system performance around the issues

of waiting times, financing changes (e.g., to further characterize

the ‘‘competitive dynamics’’ we described), and outcomes of

quality improvement efforts within each sector.

A critical challenge in years to come is how to address

competitive dynamics between private and public realms, so that

public sector facilities are not stripped of resources that are given

to the private sector as subsidies, and so that the ability of public

clinics and hospitals to retain skilled healthcare workers is not

compromised, especially as both types of systems attempt to

coexist in the healthcare delivery environment of low- and middle-

income countries. These findings are consistent with earlier

findings of an ‘‘infrastructure inequality trap’’ in some countries

[103], in which government funding is increasingly attracted

towards private hospitals and away from the public sector

hospitals. This occurs when private patients can afford to pay

for greater infrastructure at private hospitals. Those hospitals then

report greater ‘‘absorptive capacity’’ for future funds, and higher

numbers of healthcare personnel, thereby attracting more funding

from government institutions, shifting budgets away from public

sector facilities that struggle to maintain human and physical

infrastructure. Furthermore, we found evidence that many public–

private initiatives involve public sector funding being dedicated to

monitoring and preventing corruption in the private sector.

Overall, the data describing the performance of public and

private systems remains highly limited and poor in quality,

suggesting that further investigations should more systematically

make data available to track the performance of both public and

private care systems before further judgments are made concern-

ing their relative merits and risks.

Supporting Information

Text S1 Search strategy.

(DOC)

Text S2 PRISMA checklist.

(DOC)

Author Contributions

Conceived and designed the experiments: SB JA DS RP. Performed the

experiments: SB JA. Analyzed the data: SB JA. Wrote the first draft of the

manuscript: SB JA DS. Contributed to the writing of the manuscript: SB

JA DS SK RP. ICMJE criteria for authorship read and met: SB JA DS SK

RP. Agree with manuscript results and conclusions: SB JA DS SK RP.

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Editors’ Summary

Background. Health care can be provided through public and private providers. Public health care is usually provided by the government through national healthcare systems. Private health care can be provided through ‘‘for profit’’ hospitals and self-employed practitioners, and ‘‘not for profit’’ non-government providers, including faith-based organizations. There is considerable ideological debate around whether low- and middle-income countries should strengthen public versus private healthcare services, but in reality, most low- and middle-income countries use both types of healthcare provision. Recently, as the global economic recession has put major constraints on government budgets—the major funding source for healthcare expenditures in most coun- tries—disputes between the proponents of private and public systems have escalated, further fuelled by the recommendation of International Monetary Fund (an inter- national finance institution) that countries increase the scope of private sector provision in health care as part of loan conditions to reduce government debt. However, critics of the private health sector believe that public healthcare provision is of most benefit to poor people and is the only way to achieve universal and equitable access to health care.

Why Was This Study Done? Both sides of the public versus private healthcare debate draw on selected case reports to defend their viewpoints, but there is a widely held view that the private health system is more efficient than the public health system. Therefore, in order to inform policy, there is an urgent need for robust evidence to evaluate the quality and effectiveness of the health care provided through both systems. In this study, the authors reviewed all of the evidence in a systematic way to evaluate available data on public and private sector performance.

What Did the Researchers Do and Find? The researchers used eight databases and a comprehensive key word search to identify and review appropriate published data and studies of private and public sector performance in low- and middle-income countries. They assessed selected studies against the World Health Organization’s six essential themes of health systems—accessibility and responsiveness; quality;

outcomes; accountability, transparency, and regulation; fairness and equity; and efficiency—and conducted a narrative review of each theme. Out of the 102 relevant studies included in their comparative analysis, 59 studies were research studies and 13 involved meta-analysis, with the rest involving case reports or reviews. The researchers found that study findings varied consider- ably across countries studied (one-third of studies were conducted in Africa and a third in Southeast Asia) and by the methods used. Financial barriers to care (such as user fees) were reported for both public and private systems. Although studies report that patients in the private sector experience better timeliness and hospitality, studies suggest that providers in the private sector more frequently violate accepted medical standards and have lower reported efficiency.

What Do These Findings Mean? This systematic review did not support previous views that private sector delivery of health care in low- and middle-income settings is more efficient, accountable, or effective than public sector delivery. Each system has its strengths and weaknesses, but importantly, in both sectors, there were financial barriers to care, and each had poor accountability and transparency. This systematic review highlights a limited and poor-quality evidence base regarding the comparative performance of the two systems.

Additional Information. Please access these websites via the online version of this summary at http://dx.doi.org/10. 1371/journal.pmed.1001244.

N A previous PLoS Medicine study examined the outpatient care provided by the public and private sector in low- income countries

N The WHO website provides more information on healthcare systems

N The World Bank website provides information on health system financing

N Oxfam provides an argument against increased private health care in poor countries

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