Is contracting-approach to public health and privatization same? Can it improve relations between fund-holders and health service providers, and improve health systems?

Contracting and Public Health: The delivery of healthcare in almost every country involves some form of public-private partnership. Within a health system, large-scale use of contracting almost automatically involves forms of regulations. We believe that by drawing up national policies on contracting, it will be possible to address all its facets and to determine sound guidelines and strategies, which will be taken up by all those involved in healthcare. Contracting is a tool that formalizes the relationships and obligations between the different actors in health system, though it is not clearly limited to health. While contracting has been used to specify the relationships between government and the private sector, its potential uses are much broader. The overall aim is to improve health system performance by clearly specifying the obligations and expectations of different actors in the health systems. There is a huge untapped potential of contracting in public health, as well as the risks and pitfalls. If poorly implemented, contracting may harm health systems performance, but if managed well, the benefits can be immense. Contracting is used more and more to formalize the relationships between different levels of government. The idea of contracting has been gaining increasing attention among both donor agencies and governments, and recognizes the potential value of contracting to improve health system performance.

Contracting is increasingly being used to enhance the performance of health systems in both developed and developing countries. In recent years the way health systems are organized has changed significantly. To remedy the under-performance of their health systems, most countries have undertaken reforms that have resulted in major institutions overhaul, including decentralization of health and administrative services, autonomy for public service providers, separation of funding bodies and service providers, expansion of health financing options and the development of the profit or non-profit private sector. An example of Public-Private partnership: the ministry of health may decide that it will no longer provide certain services and instead will use the funds at its disposal to purchase those services from providers. Several countries in Latin America (Colombia, Costa Rica, Dominican Republic, Guatemala, and Peru) have drawn up contracts with NGOs to extend health coverage or to improve the quality of care. In the countries where health financing passes through autonomous or private insurance systems, contracting is used to define the relations between these insurance bodies and the service providers. These relations cover rates, reimbursement arrangements, customer care and quality of care. Alliances lie at the heart of "working together". The success of agreements requires the active participation of the partners as well as understanding between resources, technology and know-how. Contracting is thus actually much broader and richer than the notion of "contract" in the legal sense of the word. Contracting should not be reduced to a mere management tool used to cut health costs. It is an approach that should lead the various participants to offer to the public health services that are increasingly efficient, effective, superior and fair.

Contracting in health systems is extremely diverse in the terms of types of participants that use it, the types of contractual relationships that are established and the purposes thereof. However, one must never lose sight of the fact that contracting is a tool that should be evaluated on the basis of its impact on the performance of a health system, and ultimately on people's health.

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