Contracting private hospitals: Experiences from Southeast and East Asia

- Contracting has not been fully leveraged yet as for example neither strategic provider selection mechanisms nor preferred provider systems are employed.
- Capacity development, especially regarding contract and relationship management, is important.
- The potential of institutional contracting arrangements should be explored further as these can support countries in their quest for universal health coverage.

In resource-scarce settings governments have increasingly looked at ways of engaging the private sector in achieving national health system goals. This study is a comparative analysis of institutional contracting for hospital services in three southeast and east Asian countries, namely Thailand, the Philippines and South Korea. In addition, the case of Singapore, where public hospitals are corporatized, is reviewed. Primary data were collected through in-depth-interviews and analysed under a triangulation approach. Institutional contracting is only used in three out of four countries. In these three countries, institutional contracting inter alia aims at increasing access to hospital services, although the scale of private hospital participation depends on contextual factors. Neither strategic provider selection mechanisms nor a preferred provider system is part of the institutional contracting models reviewed. In Thailand and the Philippines, performance-based rewards or sanctions have played a limited role so far and there is relatively little dialogue between contract parties, indicating that the contracting tool has not been used to the fullest extent possible and suggesting that capacity development especially regarding contract and relationship management is needed. Although there is virtually no information available about the cost of contracting, the findings of this study suggest that the potential of institutional contracting arrangements should be explored further to improve health system outcomes and thereby support countries in their quest for universal health coverage.