“Even though in many developing countries the private sector is much bigger than the public system, contracting is a struggle.”
Interview with Dave Clarke, Health Law and Governance Specialist, WHO
For governments, knowing how to contract smartly with the private sector to procure health services is no easy feat and many of them have struggled during the pandemic, both in emerging and developed economies. We spoke with Dave Clarke, a health policy and governance specialist at the World Health Organization (WHO) who is working to mobilize the private sector for the COVID-19 response, to get a better understanding of the challenges and how to overcome them. The WHO has recently teamed up with IFC to produce a guidance note on this very topic.
How did the WHO’s private sector strategy come about?
WHO has been doing some work with the private sector on a programmatic basis for some time—for example with our teams on tuberculosis and malaria. Then in 2018 we decided to do something more systematic. We set up an expert advisory group to devise a more strategic approach with the goal of effecting change at the population level. So we set up an expert advisory group and developed a new strategy to help strengthen member states’ efforts to govern the private health sector.
How did the IFC-WHO guidance on health service contracting with the private sector come about?
When COVID started, one of the first things we did was to look at the different challenges that countries were facing. We saw that a lot of them didn’t have the knowhow to contract with the private sector and this inspired us to write something on the topic. We decided to partner with IFC because of its longstanding experience in contracting in many different countries. It has been a very positive experience overall and I think the IFC-WHO guide to contracting for health services during the COVID-19 pandemic is a very useful document.
What is the key to ensuring a positive outcome when concluding and executing a health services contract in a pandemic? Can you give an example?
A lot of it is about capability and knowhow—knowing how to do contracts. That’s why the countries we focused our efforts on were ones that didn’t have a long history of contracting. We wanted to make them aware of the risks that come with contracting. We also focused on the need to get it done quickly to respond to the emergency rather than going through a long and elaborate process. We found that the countries that are good examples of how to do private contracting tended to be the ones that were already doing this. For example, the Philippines redesigned an existing contracting process to capture the COVID challenges such as testing and treatment while also maintaining essential health services.
Has the pandemic brought to the fore divergent views on the private sector’s role in health systems?
COVID has amplified philosophical differences over whether the public system should work with the private system. In countries where the tools for the two working together are weak, it has been very difficult to use the private sector to support public health care aims like Universal Health Coverage (UHC). In other countries, they simply didn’t know what the private sector could do so they were scrambling, trying to figure it out. In other countries, the private sector itself came together and said ‘this is what we can help you with’, whereas in others they were not so pro-active. So it has been a real mix, with not much consistency. The public and private health sectors are often parallel worlds that are not very well connected or interoperable. One of things we stress in our strategy is the need to mobilize the political will to work with the private sector and to build a structured dialogue where they can figure out what they can do together. In many countries, we see that the COVID crisis is accelerating their willingness to sit down and work together.
What are the biggest mistakes being made in COVID-related contracting?
Some countries have paid too much for whatever it is they are buying. Another issue is buying the right amount: some are buying too much, some not enough. Some countries have moved too slowly and have missed out in procuring essential equipment, while others moved too fast and ended up getting bad deals. You do need to cut some corners in an emergency but some countries, including some high-income ones, have not had the best experience. Overall, I don’t think most of them were ready. They didn’t have emergency contracting procedures in place at the onset. We need to do more work in this area in future because you don’t want to be going in learning on the job.
In emerging markets, how widespread has contracting been and how well has it worked?
It’s becoming more widespread and we anticipate this trend will continue with the vaccine rollout. This is an area where capacity needs to be built up not just because contracting a good way to buy goods and services but because in lower and middle-income countries, where they don’t have strong regulatory schemes, it can also be an effective way to influence and regulate the private sector. It’s often overlooked as such a mechanism—it’s probably easier to get a contract in place than it is to pass a new law and enforce it.
In many emerging markets, healthcare is mostly provided by the private sector. Does that make it easier to contract with it?
No, not really. Even though in many developing countries the private sector is much bigger than the public system, it’s a struggle. And it’s a complicated picture. For example, in a country with a lot of large private hospitals and clinics, it can be easier to contract. But in countries where people are going to small drugstores or to individuals for goods and services, it’s much harder to contract and you need a different kind of approach because you potentially have thousands of contracts to do. In such countries where the private sector is very fragmented, intermediaries are emerging that bring the small shops together to make it easier for the government to deal with them all.
Can we apply the contracting lessons learned during the pandemic more generally in the future, or are they specific to a health emergency context?
The pandemic is providing us with some lasting lessons. It is highlighting the importance of longer-term reform when it comes to engaging the private sector. That is why we pushed out the new strategy on governance of the private sector for UHC in the middle of it. What we hope for is that the institutional arrangements established around COVID-related public-private sector engagement will last beyond COVID. We also hope that it will help countries to develop a clear policy on what they want to do with the private sector. This will become even more important in future given the shrinking fiscal space. The lessons learned will be applicable both during a pandemic and during business-as-usual.
This interview has been edited for length and clarity