Sara Bennett

The response of providers to capitation payment: A case-study from Thailand

Those designing payment systems for health care in low and middle income countries are increasingly looking to capitation payment, in order to avoid the cost inflation experienced with fee-for-service payment. However, there is virtually no documentation of the experience of introducing capitation payment, or of its effects. This paper draws on several research studies to explore responses by health care providers at both the market and facility level to the introduction of capitation payment, in the context of a new compulsory insurance scheme for workers in Thailand. The paper ends by identifying lessons for both Thailand itself and for other countries.

Government capacity to contract: health sector experience and lessons

Using case-study material of contracting for clinical and ancillary services in the health care sector of developing countries this article examines the capacities required for successful contracting and the main constraints which developing country governments face in developing and implementing contractual arrangements. Required capacities differ according to the type of service being contracted and the nature of the contractor. Contracting for clinical as opposed to ancillary services poses considerably greater challenges in terms of the information required for monitoring and contract design. Yet in some of the case-studies examined problems arose owing to governments limited capacity to perform even very basic functions such as paying contractors in a timely manner and keeping records of contracts negotiated. The external environment within which contracting takes place is also critical; in particular the case-studies indicate that contracts embedded in slow-moving rule-ridden bureaucracies will face substantial constraints to successful implementation. The article suggests that governments need to assess required capacities on a service-by-service basis. For any successful contracting basic administrative systems must be functioning. In addition there should be development of guidelines for contracting clear lines of communication between all agents involved in the contracting process and regular evaluations of contractual arrangements. Finally in cases where government has weak capacity direct service provision may be a lower- risk delivery strategy. (authors)

Reforming the health sector: towards a healthy new public management

New public management (NPM) ideas have been reflected in the international health sector reform agenda. This paper summarizes the extent and depth of reform in the five countries studied, as reflected in four key policy arrangements, and reviews the various dimensions of capacity which have hindered policy development and implementation. The paper concludes that NPM reforms place demands on government which are not only technically complex but require political leadership, major institutional reform and shifts in organizational culture: it was thus not surprising that none of the case-study countries had undertaken far-reaching NPM reforms in the health sector. Key lessons for capacity strengthening are drawn from the country experiences. Copyright

Profit, payment and pharmaceutical practices: perspectives from hospitals in Bangkok

Means by which to improve the quality of care offered in the private sector have received increasing interest. This paper considers the influences upon hospital physician prescribing practices. It presents data on drug management practices and prescribing patterns in a sample of private for-profit, private non-profit and public hospitals in Bangkok. Clear differences emerge in prescription patterns between the different groups of hospitals: public hospitals exhibit greater use of essential drugs and generic prescribing than either group of private hospital, and prescriptions at private for-profit hospitals tended to have more essential drugs and drugs prescribed by generic name than non-profit hospitals. Prescribing patterns in public hospitals are probably largely explained by national government policy on pharmaceutical procurement. In contrast, prescribing patterns in private for-profit hospitals appear heavily influenced by pressure upon management to contain costs, in circumstances where high drug costs cannot be passed on to purchasers. Hence hospital management have developed policies encouraging the use of generic drugs and essential drugs. These same financial pressures also explain some less desirable forms of behaviour in private for-profit hospitals such as prescribing courses of antibiotic treatment of extremely short duration. Possible measures which government may take to encourage appropriate prescribing within private hospitals are discussed.

Conclusions: From evidence to action

1. Health, Economic Development and Household Poverty: The Role of the Health Sector Part A: Health, Development and Poverty 2. The Consequences of Population Health for Economic Performance 3. Illness and Labour Productivity: A Case Study from Rural Kenya Part B: The Effectiveness of Health Care Systems in Addressing the Needs of the Poor 4. Access and Equity: Evidence on the Extent to Which Health Services Address the Needs of the Poor 5. Illness, Health Service Costs and their Consequences for Households 6. Coping with the Costs of Illness: Vulnerability and Resilience among Poor Households in Urban Sri Lanka Part C: Restructuring Health Care Systems to Reach the Poor 7. Alternative Approaches to Extending Health Services to the Poorest 8. Targeting Services Towards the Poor: A Review of Targeting Mechanisms and their Effectiveness 9. Protecting the Poor from the Cost of Services through Health Financing Reform 10. Building Voice and Agency of Poor People in Health: Public Action within Health Systems 11. Improving Equity in Health Through Health Financing Reform: A Case Study of the Introduction of Universal Coverage in Thailand 12. Promoting Access, Financial Protection and Empowerment for the Poor: Vimo SEWA in India 13. Conclusions: From Evidence to ActionThis chapter goes beyond the traditional economic thinking about the relationship between health and income – simply stated: wealth is needed to achieve health – by presenting evidence that population health is an important factor in strengthening economies and reducing poverty. The worlds overarching framework for reducing poverty is expressed in the UNs eight Millennium Development Goals. Three of these eight goals pertain to health: reducing child mortality, improving maternal health, and combating HIV/AIDS, malaria, and other diseases. These potentially huge improvements in health are extremely important goals in themselves, and they serve as beacons toward which numerous development efforts are oriented. But these potential improvements in health are not only endpoints that we seek through a variety of means. The improvements are actually instruments for achieving economic growth and poverty reduction. That is, better health does not have to wait for an improved economy; measures to reduce the burden of disease, to give children healthy childhoods, to increase life expectancy will in themselves contribute to creating healthier economies.

Reforming Health Sector Reform

The previous chapter addressed both the capacity problems faced by those case study countries that had considered or introduced specific reforms, and how capacity might best be increased. It left largely unaddressed the fundamental question of the relevance of these reform measures to particular countries, and indeed the relevance of what is widely perceived to be an international health sector reform agenda based on NPM principles. While the evidence that capacity constraints are a severe barrier to the implementation of reforms provides a prima facie case for questioning those reforms, it is also important to address directly the relevance of reforms.

Taking Account of Capacity

The introductory chapter to this book set out a framework for analysing capacity which was used for data collection and analysis in countries. This conceptual framework emphasised: Internal and external aspects of capacity — the distinction between aspects of capacity internal to the implementing organisation such as the skills and systems present in the Ministry of Health, and external aspects of capacity including the broader political, social and economic environment. It was suggested that development of internal capacity needed to be congruent with the external environment; for example, problems would occur if new financial systems developed by the Ministry of Health did not satisfy government-wide financial regulations. The task-specific nature of capacity — for example, the capacities required for government to directly finance and deliver health care may be very different from those required for government to contract out services. An assessment of capacity therefore needs to be linked to the tasks to be performed.

Explanations of Performance and Reform Responses

This chapter provides an overview of health sector reform in the five study countries. The policy context, content and process are each analysed (Walt and Gilson 1994). New Institutional Economics emphasises that most institutional change is incremental and slow and hence the historical structure of institutions will affect the speed and success of reform. Accordingly, the following section on context explores in some detail the historical development of the health system in the study countries. The contextual section also addresses macro-economic and social issues, describing trends in economic and social indicators and the design and implementation of structural adjustment programmes. Consideration of these broader contextual issues helps explain the health system performance described in the previous chapter.

Government Purchase of Private Services

This chapter explains the rationale for contractual agreements with the private sector to provide both clinical and non-clinical health services, and the expected benefits. Evidence from the four country case studies and from Thailand is used to analyse the extent to which this policy has been adopted, the forms the policy has taken and the likely problems associated with this reform measure. Particular attention is paid to the demands the policy makes on government capacity. The chapter draws conclusions on the factors constraining the more widespread adoption of contracting out, and speculates on its relevance in different country contexts.

Health Sector Reform and the Role of Government

There has been much substantive debate about the appropriate role of government during the past decade. While initially much of this debate took the form of a very polarised discussion of the strengths and weaknesses of government, in recent years the debate has become more nuanced. Analysts have explored the extent to which ownership alone can influence performance, and the extent to which a competitive environment or an effective regulatory framework affects the desirability of government involvement. Services have been broken down into constituent components, some more suitable than others for government provision. Current analyses of the role of government recognise that there are likely to be failures in both government and private markets. In the health sector, it is clear that while governments have made many significant achievements, including improving infant mortality rates, rapidly increasing trained local health staff and expanding health services to rural areas, there are also common negative aspects to government performance (Bennett, Russell and Mills 1996, Mills 1997a, World Bank 1987, World Bank 1993). Traditional public sector bureaucracies are often plagued by a multiplicity of problems which, in the health sector, manifest themselves in inefficient, inequitable, unresponsive and poor quality public health services.