The efficiency of public and private sectors with respect to demand
In most contexts, private-sector facilities are more expensive than public-1 sector ones and will therefore survive only if they offer the population I services which better match their preferences than does the public I sector. From this perspective, it is inevitable that the private sector will I perform better. In Zambia, better perceived quality of private provide« led to them being increasingly chosen as education and income increased, comparing different population groups (Berman et al. 1995a). In Kenya, users of public and private health facilities were asked the reasons for their choice. Users of private facilities predominantly gave quality as the reason while users of public facilities cited cost and proximity (Berman et al. 1995b citing McCann Research 1993). There may be circumstances in which patients knowingly choose higher levels of amenity and convenience in preference to higher technical quality of care. They are more likely to do this in situations where they consider their condition relatively trivial, or easy to treat. In South Africa, amenities in private hospitals were said to be superior to those in public hospitals, and private hospitals offered more personalized medical care with patients having the option to choose their own practitioner (Naylor 1988).
In pattern I type of health systems, the private sector can compete with the public sector on cost and convenience rather than by trying to offer more preferred services in other respects. This explains the prevalence of the private sector at the lower levels of these countries’ health systems where the time and travel costs associated with public-sector services can be large. Unregistered and itinerant providers can undercut these costs, and can also undercut cost-recovery-priced drugs issued through public providers where the costs of adequate doses, quality control, wastage of expired drugs and purchase from manufacturers of minimum guaranteed quality can also be avoided by private provider. Van der Geest (1987) reports that many of the drugs sold through the unregistered sellers in one area of Cameroon originated from un-regulated sources in Nigeria. These costs are also avoided where private-sector sellers obtain stolen drugs from government supplies. The prevalence of this problem in one health facility in Uganda is describe by Asiimwe et al, in chapter 9 of this volume.
All this indicates that people often choose health providers whose activities threaten rather than enhance health. Poor knowledge has been suggested in the previous section to account for the worst examples, and a substantial share of these observations overall. However, some informed choice involving trade-off between cost, convenience and amenity levels on one side, and technical quality of care on the other, is also likely. On the whole, the private sector seems to respond to these trade-offs better than the public sector.
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