Privatizing Health Care
Posted by nadeem on March 2, 2007
what holds true of financial or educational institutions holds equally true of the health care sector. the benefits of privatization in reversing the negative effects of a cumbersome public administration, with its complex and, far too often, outdated regulations, lack of incentive or efficient quality assurance measures, have been clearly proven time and again in select nations.
the Saudis, who already operate some of the most advanced health care facilities in the region, have recently announced that in the next year all 200 public hospitals will be turned into for-profit corporations. this is part of the Kingdom’s vision to raise the standard of care and attempt to standardize the quality of care throughout their health care system. click here for more info
following in their footsteps is Dubai’s Department of Health and Medical Services (DOHMS) which plans to privatize its four hospitals to overcome massive losses incurred from years of (dys)functioning as not-for-profit organizations. per the Gulf News report, the hospitals generated revenues covering a mere 20% of their total expenditures. click here for more info
ways governmental agencies can undertake such privatization activities are numerous and include:
- selling health care facilities to private enterprises
- leasing the facilities to privately held management firms
- outsource key activities to specialized firms
- joint operating agreements whereby the government agency maintains some degree of presence but relinquishes managerial or administrative responsibilities
the Reason Foundation recently published its 2006 annual privatization report entitled “Transforming Government Through Privatization”. in it, the prominent public policy think tank blames the increasing cost of public health care on the rigid hierarchical structure of public institutions, the lack of accountability, inadequate accounting, the lack of a marketing approach, the absence of state-of-the-art information technology which has rendered private institutions more productive and helped cut costs as well as improved patient safety by reducing medical errors, among other things.
Dr. Marc Roberts, professor of political economy and a leading authority on health reform, and his colleagues of the Harvard School of Public Health discuss the caveats and benefits of privatization in their 2004 publication “Getting Health Reform Right”. Roberts argues that in a well-structured and well-trained public health care administration devoid of corruption, the value of privatization is minimal. on the contrary, the large network of patients covered by the public sector may end up inappropriately fragmented secondary to privatization. furthermore, the blind “handing over” of health care institutions to socially irresponsible, ill-willed private entrepreneurs will most certainly have a negative impact on a fragile system.
we know for a fact, however, that, particularly in our region, significant change often comes from private sector initiatives. examples surround us in numbers and include the Weill Cornell Medical College in Doha, the Dubai Healthcare City in Dubai, the Johns Hopkins’ management of Tawam Hospital in Abu Dhabi or the successful corporatization of the King Faisal Specialist Hospital in 2002. the list of Joint Commission International (JCI) accredited facilities includes many of the above-mentioned corporations and represents, to some extent, their success in upping the local standards to that of other, well-recognized international institutions. with the right mix of public/private sector involvement, similarly successful schemes may be put together in our nation. the reasons why i believe that privatization may be a viable solution to our health care crisis are many:
the MOH’s administrative process is vastly outdated and uses an inefficient, far too complex bureaucracy employing poorly trained workers. the lack of incentivized wage schemes further slows the process and prohibits innovation. a public-private collaboration would introduce a more cost-effective administrative process ridding the system of unnecessary hierarchical levels and regulations. administrators trained in health care management, policy making and business administration would help cut costs and restructure the health care budget refocusing funds to deficient areas. this profit-oriented thought process would lead to the establishment of quality assurance measures and effective remediation tactics for the non-compliant employees.
the critical lack of information technology further impedes on the efficiency of the entire system. this essential tool not only helps speed the administration of health services in obvious ways but also has become a proven tool in improving the provision of care to our patients. indeed, by consolidating patient data, tracking provider prescribing habits, utilizing provider order entry software to order tests, administrators and managers can easily pinpoint deficiencies within the workflow and create protocols to overcome them.
more importantly, introducing competition into the system will both impress change onto the public sector and, ultimately, raise the quality of care provided to our people. hospital systems will compete with each other by advertising improved outcomes through innovative and more efficient protocols, state-of-the-art equipment, recruitment of highly qualified providers and collaborations with elite foreign health care institutions.
i insist that, in order to avoid reinventing the wheel, a process we Kuwaitis are far too proficient in, we need to elicit the support of international leaders in health policy and management. their evaluation of our system and recommendations for improvement will be crucial in accelerating the steps towards improvement.
as always, i await your comments on the matter and remain hopeful that by unifying our efforts, our voices will someday be heard.
