Health sector regulation - understanding the range of responses from Government.

Abstract

There has been much mention of the factors behind recent growth of the private health sector in developing countries. Global ideological shifts, pressure from international agencies and ballooning public sector debt have all played their role. We sometimes forget, however, that private provision of medical care preceded the existence of the World Bank by a good few millennia. Perhaps a more pertinent question is why do Governments choose the ways that they do to intervene in health care markets. Virtually all developing country governments have used some degree of direct state funding or provision of health care as their primary device to eliminate the health access inequities and inefficiencies that existed as a result of purely private access to care. In most countries, these still form the backbone of the health system. Failure of state health care systems to meet all health care needs has become more acute within the last 20 years or so, however, and with it has come rapid growth in the private funding and provision of care. The response of government to the weakening of its primary policy lever, that of direct provision, and the consequent need for it to develop arms-length, regulatory policy instruments, has differed significantly between countries, however. With some imagination, these differences may also be seen as phases in regulatory maturity. Four papers in this edition examine the interface between private health sectors and government in developing countries. The contributors all form part of a European Union funded international research network studying public‐private mix issues in health care, PPMNet. Figure 1 suggests that most developing country health sectors have found themselves in the pre-regulatory stage at some point in the last 50 years. In some, it is because private health care was banned altogether (such as the Former Soviet Union, Tanzania and China), and any form of regulation of the private health sector would thus have been an admission of failure regarding these attempts at eradication. In others, Ministries of Health have simply not had the capacity to prioritize private health sector regulation given other pressing health and social needs. From the paper by Qingyue Meng et al. (2000; pp. 349‐356 of this issue), it would appear that much of China is still in this pre-regulatory phase. Unsurprisingly, governments that have previously been most heavily involved in the direct provision of services are generally most lacking in regulating the provision of those services by others. China is probably one such case. The extent of economic liberalization has been so great in China that public sector facilities have acquired many of the characteristics that we think necessitate regulation amongst private providers. ‘Paper’ regulations probably precede effective regulation of health sectors in most settings. Here legislative efforts are made to regulate private health care provision, but there is often insufficient impetus to carry these regulations through to actual health care delivery. The form of paper regulations is often remarkably similar between countries with widely divergent health sectors, suggesting that legislation often emanates from a common legislative template, rather than a contextual understanding of the private health sector in the country concerned. Many of the so-called ‘social’ forms of regulation