What is the equity impact of using private sector contracts for the delivery of primary health care as an alternative to government provision? This World Bank paper uses pre- and post-intervention data from a large scale contracting experiment in rural Cambodia between 1998 and 2001. The results suggest that poor people living in contracted districts were more likely to receive primary health care services than similarly circumstanced people in government districts.
The Cambodian Ministry of Health (MOH) awarded competitively tendered nongovernmental organisation (NGO) contracts in five districts and included four government districts in the trial for comparisons. Districts were randomly assigned one of three health care delivery models: contract-out, in which contractors had complete line responsibility for service delivery; contract-in, where contractors worked within the MOH system; and government provision, in which management of services remained with the district government.
The 1997 baseline survey demonstrated inequitable distribution of health care services in all districts, largely to the disadvantage of the poor. An equity goal to target services to the poorest half of the population was mandated for all districts in the trial:
- Although all districts increased health care service coverage, the contracted districts outperformed the government districts, even when controlling for other factors.
- Both contracted-out and contracted-in districts showed movement toward improving equity in the provision of health care services. In contrast the government districts largely showed movement towards a nonpoor distribution of services.
- Contracted districts better targeted the poorest half of the population compared to government districts. District managers in contracted districts appeared more responsive and effective at the organising and monitoring service delivery to the poor.
- In all districts being poor was and still is associated with a lower likelihood of receiving health services. Few health care services are well targeted to the poor in any of the districts, contracted or not. Results suggest that better educated mothers are positively associated with a higher likelihood of a child’s chances of receiving health care services.
This was the first known large-scale test with suitable baseline and follow-up data to examine systematically whether NGO contracts are effective in providing health care services that reach the poor:
- The study is unable to identify the differences in underlying motivations, resource allocation decisions, incentives and district manager’s service delivery and monitoring methods.
- Further research is needed to address these issues and their impact in relation to observed differences in the distribution of health care services. This applies to the Cambodian case and other large-scale contracting projects, for example in Bangladesh, Afghanistan and Pakistan.
- It is difficult to generalise the results of the Cambodia study to other countries due to the particular circumstances of the country and its healthcare system.
- The results of other large-scale contracting projects could help answer the question of whether the Cambodian experience provides an effective model for other developing countries.
