Private Sector Health Services in Bangladesh

Private Sector Health Services in Bangladesh: An Exploratory Study Abul Barkat AKM Maksud Human Development Research Centre (HDRC) Prepared for EngenderHealth, Dhaka February 2003 ACRONYMS BDS BMA BPMPA DGHS DPHE ESP GDP GOB HEU HNPSP HPSP MCH MOHFW NGO PHSA PIP TFR UMIS WHO

Bangladesh Dental Society Bangladesh Medical Association Bangladesh Private Medical Practitioner’s Association Director General of Health Services Department of Public Health and Engineering Essential Services Package Gross Domestic Product Government of Bangladesh Health Economics Unit Health, Nutrition Population Sector Programme Health and Population Sector Programme Maternal and Child Health Ministry of Health and Family Welfare Non-Governmental Organization Private Health Sector Assessment Project Implementation Plan Total Fertility Rate Unified Management Information Systems World Health Organization

: Proposed Scope of Work (Supplied by EngenderHealth) The Medical Practice and Private Clinics and Laboratories (Regulation) Ordinance, 1982 1. Introduction Bangladesh, a small country with a large population of about 130 million contained in 147,570 square kilometres (56977 sq. miles) is almost entirely surrounded by India (North, West, East) except for a short frontier with Myanmar at south-east, and a southern coast line on the Bay of Bengal.

The country has agro-based economy with GDP growing at a rate of 4. 0-4. 5%. The country for administrative purpose is divided into 6 Divisions, 64 Districts (Zilas), 507 Thanas/Upazila (sub-districts) and 4,484 Unions, 87319 villages1. The country has a unitary form of government run by democratically elected representatives of the people. Although there has been success in health services, still more than 60 percent of the population has no access to basic health care. According to government’s documents less than 40 percent of the population has access to basic health care. Other issues include overall poor utilization of government facilities, as well as cost effectiveness, sustainability and quality of public sector services. So the proportion of the global burden of disease carried solely by Bangladesh is enormous. 2. Objective and Methodology As per the Scope of Work, the main objective of this phase 1 work of the two-phased study was to explore development of a profile of the private sector health services in Bangladesh (see SoW, Annex 1). The second phase of the study will deal with costing model pertaining to private sector health services in Bangladesh.

One of the basic purposes of the phase 1 work was to prepare the groundwork for the costing model by identifying status of availability of relevant data and information as well as future requirements for relevant costing exercises. The specific purposes of this study included the following: i) ii) iii) iv) v) To identify the types, number and locations of private sector health facilities. To analyse relevant issues pertaining to the economics of private sector health services. To identify networks of private health practitioners and health facilities.

To identify the government unit’s and professional organization’s regulations to oversee and regulate the private health sector. To explore available health financing approaches in private sector. The major dimensions of methodology including specific objective-wise variables/indicators and source of pertinent data/information is presented below (Table). 1 2 Bangladesh Bureau of Statistics (2000). BBS-Statistical Pocket Book, Bangladesh, 2000, P-3, 81. Ministry of Health and Family Welfare (1998). Health and Population Sector Programme 1998-2003. Part I. Dhaka Private Sector Health Services in Bangladesh: An Exploratory Study Objective 1: To develop a profile of private sector health services in Bangladesh Specific Objective a. To identify the types, number and locations of private sector health facilities Variables/Indicators i. Type of private practitioners ?? ii. Type of maternity centres iii. Type of hospitals, diagnostic and imagine centres, ??? and dental clinics ? iv. Number of private practitioners ?? v. Number of maternity centres vi. Number of hospitals, diagnostic and imaging ??? centres, and dental clinics ???? vii. Distribution of private practitioners by locations ???? viii.

Distribution of maternity centres by locations ix. Distribution of hospitals diagnostic and imaging ???? centres, and dental clinics i. Organized networks of private health practitioners ii. Organized networks of health facilities iii. Informal networks of private health practitioners iv. Informal networks of health facilities v. Donors’ involvement in organizing and supporting networks vi. Mode of financing for operating the networks vii. Promotional activities of the networks ? Activity i. Review of government and non-government health statistics, donors reports and research reports ii.

Collection of statistics from different networks of health professional and health facilities Information Sources i. Health statistics of Government, non-government and donors ii. Research reports iii. Different networks of health professional and health facilities b. To identify and describe networks of private health practitioners and health facilities i. Review of government and non-government health statistics, donors reports and research reports ii. Collection of statistics from different networks of health professional and health facilities iii. Discussion with the concern authorities. i.

Review of government’s rules, regulations and standards ii. Collection of reports on situation of implementing rules regulation and standards iii. Discussion with the concerned authorities. iv. Discussion with network leaders of health professional/ facilities i. Review of government, non-government and donor organization documents ii. Review of documents and statistics of health insurance agencies, NGOs offering health schemes iii. Discussion with private practitioners and clinics i. Health statistics of Government , non-government and donors ii. Research reports iii. Different networks of health professional and health facilities . To identify the government unit’s and professional organization’s regulations to oversee and regulate the private health sector i. ii. iii. iv. v. vi. Existing government units to oversee and regulate private health sectors Government rules to oversee and regulate private health sectors Government standards to oversee and regulate private health sectors Government regulations to oversee and regulate private health sectors Professional organizations (e. g. , medical associations) that oversee and regulate private sector health services (if any) Role of professional organizations (e. . , medical associations) to oversee and regulate private sector health services (if any) i. Government’s rules, regulations and standards ii. Reports on situation of implementing rules, regulation and standards iii. Concerned government authorities. iv. Network leaders of health professional/ facilities i. Documents of Government, nongovernment and donor organization ii. Documents and statistics of health insurance agencies, NGOs offering health schemes iii. Private practitioners and clinics. Objective 2: To explore health financing approaches in private sector a.

To explore health i. Existing health financing schemes in NGO and financing private health sector approaches in ii. Performance of the schemes private sector iii. Institutions tested the identified schemes iv. Types of health services covered v. Cost for services vi. Cost determination process vii. Cost sharing pattern in the scheme viii. Advantages and disadvantages of the scheme from different points of view ? If data is available private practitioners will include both qualified (modern and traditional) and non-qualified (e. g. quacks)). Otherwise MBBS will be covered. ??

Maternity centre may provide other medical services ??? Hospitals may provide diagnostic and imaging services. If detailed such data is not available, only hospital data will be sought. ???? If available, data will be provided up to the lowest administrative units. Private Sector Health Services in Bangladesh: An Exploratory Study 3 3. Concept of Private Health Sector In Bangladesh, the private sector in health is generally understood to refer to private, for-profit, medically trained providers. Their range of practice varies from solo practice, small nursing homes, to large hospitals.

The private sector also offers ancillary services such as diagnostic centers, ambulance services, and pharmacies. However, a much broader set of nongovernment actors is involved, that may be categorized according to organizational type (nonprofit or profit), size and scope of service (solo practice, small nursing home, large specialized hospital), or system of care (Bangladesh indigenous system of medicine – auyervedic, unani; or western medicine – allopathic). Many non-qualified and untrained providers offer a combination of systems of medicine, but allopathic tends to dominate.

In addition, there are a large number of private actors offering services or managing other inputs to the health sector through private initiatives (consulting firm, construction firms etc. ). Many see the process of privatization as a remedy for the problems inherent in the public sector financing of health, and a way to strengthen their policies and strategies. It is considered that private endeavours are free from political constraints normally associated with the public sector run by bureaucracy, and the privatization will lead to improved resource management, thereby resulting in efficient and effective delivery of services.

There is also the belief that privatization could free scarce government resources which could be utilized to improve provision of health services to the poor. On the other hand, it is assumed in opposition to privatization, that imperfect market conditions and relevant distortions in the health sector will lead to outcomes such as over-supply of services and excessive investigation, leading to cost escalation and unnecessary cost to patients. Concern is also expressed that privatization will lead to wide disparity in people’s ability to access quality health care.

A conceptual framework showing the functioning of private health care sector is presented below in Figure-1. Figure-1: Conceptual framework showing functioning of the Private Health Care Sector Private Health Care Sector Actors, Functions, and Outcomes People Demand Financing Input management Health Status Financial Protection Responsive to Public Oversight Private Sector Actors The State Service Delivery Private Sector Health Services in Bangladesh: An Exploratory Study 4

The objective of health system activities by the private health care sector is to promote, maintain and to recover people’s health. In the private health care system, three broad categories of actors e. g. “People”, “The State”, and “Private Sector Actors” are considered as major stakeholders. “People” are considered at the centre of this system. The “State” is represented by the Ministry of Health and Family Welfare, Directorate of Health, Directorate of Family Planning at the central, state, and local levels, whose primary activities relate to the health sector.

There are other important public bodies that affect the health system, including the judiciary, Ministry of Finance and Planning, and other sectoral ministries such as Women and Child Affairs, Education, Water Resources, Social Welfare etc. The health system also responds to demand, which is not so much a function of the health system as it is a function of people. Demand for each health services creates one of the most important health sector markets. The functions of private health care system include financing, input management (non-financial), and health service delivery.

The main financing functions are the collection of financial resources, pooling of funds (e. g. through insurance), and the allocation of these resources for purchasing of services. The management of inputs is related to generating and using resources for health such as human resources, knowledge and software, drugs, medical equipment, supplies, and capital (e. g. buildings). Service delivery functions are divided among ambulatory clinical services, inpatient, hospital-based, clinical services. In Bangladesh, the prominent nature of private health care services are diagnostic, preventive and therapeutic.

The fourth main function, oversight, is largely a responsibility of the State. The concept of oversight goes beyond the conventional idea of regulation, or setting and enforcing rules, to other functions such as developing policy and providing strategic direction to the health system. The other oversight role of state include mediation of actions between different actors, developing partnerships or networks with different providers or financiers in health sector, inform the people and providers about performance, quality, or pricing, and monitoring and evaluation of health sector performance.

Health status, financial protection and consumer responsiveness are three major types of outcomes in health sector. Health status is generally determined by several indicator e. g. mortality, fertility, nutrition, illness, disability etc. The second health system outcome, financial protection, is a measure of the financial loss due to illness, which can include direct costs of health care and lost earnings due to illness. Consumer responsiveness of the health system is measured by how satisfied the public is with various aspects of health services.

It also includes consideration of whether health services treat people with respect, and whether they are provided with protection against malpractice and exploitation. 4. Types, Number and Locations of Private Sector Health Personnel and Facilities 4. 1. Private Medical Practitioners and Human Resource Situation for Health According to the Director General of Health Services source, the total number of registered physicians in Bangladesh is 33,326.

However, the number of private practitioners registered with the Bangladesh Private Medical Practitioners’ Association (BPMPA) is 10,529 and that with the government is around 9,000. Thus it is difficult to ascertain who constitute the rest, 13,797 registered physicians (33,326 – 19,529). According to BPMPA, except 9000 government doctors the rest 24,326 doctors are either private practitioners or serving in non-governmental facilities, but among these 24,326 practitioners only 10,529 doctors are members of BPMPA. Private Sector Health Services in Bangladesh: An Exploratory Study Specialty General Pediatrician ENT (specialist) Skin and VD Specialist Ophthalmologist Urologist Surgeon Gynaec and Obs Anesthesiologist Radiologist Ultrasonography Specialist Pathologist/Microbiologist Hospital Management Medicine Specialist Tropical Medicine Specialist Nutrition Specialist Endocrinologist Nephrologist Cardiologist Chest Physician Orthopaediatic Physiotherapist Psychiatrist Dental Practitioners Total Male 5000 500 10 12 1600 100 200 20 300 25 250 60 4 49 50 4 2 3 8 12 40 5 8 707 8969 Female 400 200 20 28 50 0 45 130 20 100 50 60 0 50 50 6 0 0 2 8 0 0 2 339 1560

Total 5400 700 30 40 1650 100 245 150 320 125 300 120 4 99 100 10 2 3 10 20 40 5 10 1346 10529 Source: Bangladesh Private Medical Practioner’s Association (Upto December, 1998) and Bangladesh Dental society. Human resources situation for health in Bangladesh is poor. The ideal ratio of doctor, nurse and paramedics should be 1:4:10, but the present ratio of the same is 1:0. 6:0. 2. At present there are 33,326 doctors, 18,435 nurses and 7,757 paramedics, but it should be 38,326 doctors, 1,53,304 nurses and 3,83,260 paramedics in number3.

In addition to the above mentioned professionals there are 1,462 registered dental surgeons, 26,912 Pallichikitsoks and 435 registered Homeo and Ayurbedic doctors serving for health of the people. Currently 12,689 nurses, 4,884 paramedics are working under the government services. Sl. No. 01 02 03 04 05 06 07 08 09 Category Registered Doctors, 2002 Registered Dentist, 2002 Registered Nurses, 2002 Paramedics (Passed) Pallichikitsok (Rural Non-qualified Medical Practioner): Persons practicing allopathic medicine without formal education and registration to do so.

Dentist under health services (created post) Nurses under health services Paramedics under govt. service Registered Homeo and Ayurbedic Doctors Number 33,326 1,462 18,435 7,757 26,912 594 12,689 4,884 435 Sources: Ahsanullah (2002); UMIS, (2001); Health and Population Statistical Report 1999-2000. 3 Ahsanullah, A. B. M. , Director General of Health Services, (2002), Is Our Medical Education Addressing Sectoral Objectives and Current Health Problems. Private Sector Health Services in Bangladesh: An Exploratory Study 6

In the existing reports and literature there is no statistics on the number of public sector doctors who also work in the private sector. But it can be said that a large part (share is unknown) of the public sector doctors in Bangladesh practice privately before and after their official working hours. The number of registered medical doctors in 1997 was 26,6084 and it was 33,3265 in 2002. Therefore, it can be concluded that the average annual number of graduates from medical schools over the 5 years is 1344. 4. 2 Number of Medical Professionals in Private Medical Colleges and Institutions

A large number of doctors and specialists are working in the private health sector. Most of them are working on part-time basis. According to a recent survey, the following private medical colleges/institutions have a total of 1606 doctors. Sl. No. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 Name of Private Medical College Number of Medical Professionals Male Female Total 100 42 142 111 19 130 55 10 65 53 10 63 25 10 35 43 18 61 54 17 71 40 12 52 110 10 120 35 20 55 14 6 20 10 5 15 50 13 63 32 9 41 732 201 933 251 60 2 116 35 464 1196 90 21 7 71 20 209 410 341 81 9 187 55 673 1606

Bangladesh Medical College Zahurul Islam Medical College Community Based Medical College Z. H. Sikder Women’s Medical College Jalalabad Ragib Rabeya Medical College Uttara Women’s Medical College Dhaka National Medical College Shaheed Mansur Ali Medical College Institute of Applied Health Science North East Medical College Al Sefa Medical College University Dental College Pioneer Dental College City Dental College Sub-Total Other Institutions 1 BIRDEM (Diabetic Hospital) 2 Children’s Hospital, Dhaka 3 Model Satellite Clinic 4 Red Crescent Hospital (Holy Family) 5 Shishu Hospital, Chittagong Sub-Total Grand Total

Source: Bangladesh Health Bulletin 1997, UMIS, DGHS, MOHFW, GOB, Dhaka, 1999 4 5 Ministry of Health and Family Welfare, Government of Bangladesh (1999). Bangladesh Health Bulletin 1997. Ahsanullah, A. B. M. , Director General of Health Services, (2002), Is Our Medical Education Addressing Sectoral Objectives and Current Health Problems. Private Sector Health Services in Bangladesh: An Exploratory Study 7 4. 3 Registered Private Hospitals/Clinics by Number of Beds and Medical Human Resource by District

According to Bangladesh Health Bulletin 1997 there are 483 hospitals and clinics, 8246 beds, 1104 doctors and 4058 nurses engaged for serving in private health care sector in Bangladesh. Among the private hospitals and clinics around 50 percent of those are located in Dhaka division and rest are located in other divisions. Apart from the other divisional features in Dhaka there are 753 cabins in the hospitals in Dhaka.

In addition, a number of non-government organizations (NGOs) are operating at almost every level throughout the country, but according to UMIS of DGHS no statistics is available on NGO’s operating health facilities in the country. Sl. No. District Number of Hospitals/Clinics 2 9 15 1 2 2 4 16 2 5 4 2 3 13 80 7 4 9 12 3 2 14 3 29 1 5 89 Number of Beds 253 20 135 180 10 18 23 37 202 16 54 38 20 30 253 1289 112 35 78 107 28 22 172 29 333 10 52 978 Number of Doctors 60 6 28 53 3 5 6 11 50 5 16 11 6 8 60 328 28 10 21 30 8 7 47 8 85 3 13 260 Number of Nurses 107 12 60 116 5 11 11 21 101 10 29 22 12 18 107 642 55 17 39 51 11 12 91 15 166 6 26 489

Rajshahi Division 01 Panchagarh 02 Thakurgaon 03 Dinajpur 04 Rangpur 05 Nilphamari 06 Lalmonirhat 07 Kurigram 08 Gaibandha 09 Joypurhat 10 Bogra 11 Serajgonj 12 Pabna 13 Natore 14 Naogaon 15 Nawabgonj 16 Rajshahi Rajshahi Division Total: Khulna Division 17 Kushtia 18 Meherpur 19 Chuadanga 20 Jinaidah 21 Magura 22 Narail 23 Jessor 24 Satkhira 25 Khulna 26 Bagerhat 27 Perojpur 28 Jhalkathi 29 Barguna 30 Patuakhali 31 Bhola 32 Barisal Khulna Division Total: Private Sector Health Services in Bangladesh: An Exploratory Study 8 Sl. No. District

Number of Hospitals/Clinics Number of Beds Number of Cabin Number of Doctors Number of Nurses Dhaka Division 33 Shariatpur 34 Madaripur 35 Gopalgonj 36 Faridpur 37 Rajbari 38 Manikgonj 39 Dhaka 40 Munshigonj 41 Narayangonj 42 Narshigdi 43 Gazipur 44 Tangail 45 Jamalpur 46 Sherpur 47 Mymensingh 48 Kishoregonj 49 Netrokona Dhaka Division Total: Sl. No. District 2 195 3 3 3 3 2 22 233 Number of Hospitals/Clinics 20 4321 33 32 270 32 20 218 4946 Number of Beds 753 753 Number of Doctors 2036 8 9 56 8 6 64 193 6 2029 16 17 91 16 11 120 2312 Number of Nurses 0 Sunamgonj 51 Sylhet 52 Moulvibazar 53 Hobigonj 54 Brahmanbaria 55 Comilla 56 Chandpur 57 Laxmipur 58 Noakhali 59 Feni 60 Khagrachhari 61 Rangamati 62 Chittagong 63 Bandarban 64 Cox’s Bazar Chittagong Divisional Total: Country Total: 16 2 8 9 2 1 7 4 2 29 1 81 483 7 25 89 102 22 10 70 36 164 493 15 1033 8246 57 7 22 28 6 3 19 9 32 136 4 323 1104 112 11 46 55 12 6 40 20 51 259 3 615 4058 Source: Bangladesh Health Bulletin 1997, UMIS, DGHS, MOHFW, GOB, Dhaka, 1999 Note: The most recent Bulletin published in 2001 does not provide up to data on these issues.

Statistics provided by Directorate General of Health Services regarding number of private clinics and recent statistics provided by Bangladesh Private Clinic and Diagnostic Centre Owners’ Association show that the growth of private health care sector seems to be very high. According Private Sector Health Services in Bangladesh: An Exploratory Study 9 to the information provided by the Bangladesh Private Clinic and Diagnostic Centre Owners’ Association, the scenario of private health care sector is as follows: There are around 700 registered clinics and 3000 diagnostic centres in Bangladesh.

However, the same source claims that the number of unregistered clinics and diagnostic centres could be three times than the registered ones; In those private clinics and hospitals there are 15,000 beds for inpatient services; Around 8,000 doctors are working with the private clinics and hospitals; Around 10,000 diploma and trained nurses are working with the private clinics and hospitals; Around 10,000 health technicians are serving in the private clinics and hospitals; Apart from doctors, nurses and technicians, the private health care sector has generated employment for around 175 thousand people; More than Tk. 0 billion has been invested through private health care sector; and Around one thousand specialist doctors are providing services through these private clinics and hospitals. Lack of available data on the above issues made us think that these are the trends of the private sector but our observations give us reasons to assume that the magnitude of the sector could be wider than the figures presented. A survey is needed to conduct to ascertain the number of private clinics in Bangladesh, because we did not find the exact number of private clinics in recent official statistics of Ministry of Health.

It is also required to conduct a participatory research study to explore the underlying reasons and conditions that contribute to the growth of the private sector. 5. Networks of Private Health Practitioners and Health Facilities There are several networks of private health practitioners and health facilities. The major ones are mentioned below: (a) (b) (c) (d) (e) Bangladesh Medical Association (BMA) Bangladesh Dental Society (BDS) Bangladesh Private Medical Practitioners’ Association (BPMPA) Bangladesh Private Clinic and Diagnostic Center Owners’ Association Association of Homeopathic, Ayurbedic and Unani Practitioners.

All these associations are government approved and are operated by their own constitutions. Discussions with the resource persons of the mentioned organizations indicated that these organizations are membership based professional organizations. All the organizations do not perform any activities, which are related to regulatory functions for private health care sector. Almost no service delivery network exists in Bangladesh except National Health Network (NHN) of Bangladesh Diabetic Association.

National Health Network operates a network of around 50 district level clinics especially for the diabetic patients. These district level clinics provide limited curative services and diagnostic facilities. Private Sector Health Services in Bangladesh: An Exploratory Study 10 6. Health Policies in Bangladesh Bangladesh inherited the pre-independence policies of health services with priority assigned to the development of hospital service care particularly in urban areas.

The first five-year plan (1973-78) envisaged the need for expanding the health care coverage in the rural areas through the establishment of a 31-bed hospital with other preventive care (specially Smallpox Eradication, TB Control and Malaria Control) at the Thana level under a scheme called Integrated Thana Health Complex (ITHC). During the Second Five Year Plan (1980-85), Bangladesh being a signatory to the Alma Ata Declaration, adopted the Primary Health Care concept. During the same period, family planning activities were integrated with MCH services and initiated implementation through integrated programme.

Multi-sectoral population control activities was also launched through involvement of nine different ministries (other than Health and Family Welfare). During the Third Five-year Plan (1985-90), focus was on primary health care services including the immunization and nutrition education programme under “Health for All Programme by the Year 2000”. The main strategies taken were to pursue the delivery of immunizations to rural areas, to ensure the awareness of environmental health, and nutrition education to the rural households in order to make the delivery of primary health care successful.

In the Health and Population sectors, the objectives of the Fourth Five Year Plan were to enhance the physical infrastructure network upto union levels through construction of more Upzilla Health Complexes, Union Health and Family Welfare Centres, and enhancing number of beds at secondary and tertiary level hospitals. In addition to the infrastructure development, during this period, emphases were given to Primary Health Care with specific programmes on MCH-based Family Planning and expanded programme on Immunization, communicable disease control6.

During the Fifth Five Year Plan7 period government has adopted the National Health Policy. The main aim of the National Health Policy is in pursuance of the Article 15(A) of the Constitution“Supply of basic medical requirements to all levels of the people of the society”, in pursuance of the Article 18(A) of the Constitution- “Improvement of nutrition of the people and public health”. During the early Fifth Five Year Plan period the Government drafted a Health and Population Sector Strategy (HPSS) in collaboration with the development partners and NGOs.

The main sectoral objectives of the HPSS were (a) maintenance of the momentum of efforts in Bangladesh to lower fertility and mortality; (b) reduction of maternal mortality and morbidity; and (c) reduction in the burden of communicable diseases. The Essential Services Package (ESP) identified in the HPSS consists of basic reproductive and child health services, including family planning, maternal care and immunization as well as control of selected communicable diseases, limited curative care and behavioral change communication.

The ESP has been planned to be delivered through different levels of primary health care systems (Community, Unions and Upzilla levels). In July 1998, the government has formulated a five year Programme Implementation Plan (PIP) for the Health and Population Sector Programme (HPSP), based on the principles of HPSS. 6 7 Barkat, Abul and Murtaza Majid, 2002, Position Paper on Health, Population and Family Welfare Sector, paper prepared for Planning Commission, Ministry of Planning of the Government of the People’s Republic of Bangladesh Fifth Five Year Plan 1997-2002, Planning Commission, Government of Bangladesh, March, 1998.

Private Sector Health Services in Bangladesh: An Exploratory Study 11 During the preparation of HPSP a logical frame work approach was used to strengthen the design process. The major components of the programme are: (i) essential services package; (ii) service wide management system; (iii) integrated support service system; (iv) improved hospital management; (v) sector wide management system; (vi) policy and regulatory framework; and (vii) other health and nutritional services. HPSP has already completed almost five years of its implementation and has achieved limited success.

There were some design flaws and gaps in HPSP. The government has taken initiative to address these design flaws and gaps in its newly proposed Health, Nutrition, and Population Sector Programme (HNPSP). The goal of the proposed HNPSP (2003-2006) is supposed to be sustainable improvement of health, nutrition and family welfare status of the population of Bangladesh, especially the most vulnerable – poor, women, children and the elderly. The present government’s development objective for the health sub-sector is to ensure quality services at every level (primary to tertiary including specialized hospitals).

The objective towards nutritional improvements will focus on reducing moderate and severe malnutrition and improving the nutritional status of the people, particularly women children and under five and elderly. The objective of the family welfare programme is to maintain the momentum of efforts of Bangladesh to lower fertility and mortality; reduce maternal mortality and morbidity; and strengthen these activities with a view to reducing the TFR from its present static status. The capacity of the private sector to assume a larger role will be assessed under the upcoming HNPSP.

The areas include the current extent of private provision of services in the essential service package, the type of provider (allopathic, homeopathic, unani, ayurveda practices, etc. ), the cost of and quality of such services, and their sources of financing. Based on such investigation, a more effective involvement of the private for profit sector in health and population will be sought. In this regard, the MOHFW will develop principles for partnership with private sector and also collect baseline information on costs, efficiency, capacity of ESP delivery and training needs. It should be mentioned here that no private provider or provider’s network offer a full ESP. 7. Government and Professional Organization’s Regulations to Oversee and Regulate the Private Health Sector In the framework of health system there are three broad categories of actors e. g. “People”, “The State”, and “Private Sector Actors”. People are placed at the top of the health system, since we consider the promotion, maintenance, and recovery of people’s health to be the defining characteristics of health system activities.

There are other important public bodies that affect the health system, including the judiciary, Ministry of Finance, the Planning Commission, and sectoral ministries such as Women and Child Affairs, Education, DPHE etc. The rapid development of the private sector has improved access by the population to medical care, especially in the urban areas. The 1982 Private Clinic and Laboratory Act provides guidelines for regulating the private sector. Other than MOHFW’s regulations, trade licensing procedures, taxation systems, regulation of recruitment of manpower and staff development, access to bank credit, procedures for utility connections etc. procurement of equipment and 8 Ministry of Health and Family Welfare, Government of Bangladesh (1998). Health and Population Sector Programme (1998-2003), Part I. p. 63. As part of promoting the Public-Private partnership in health, the World Bank and other development partners are now in the process of undertaking various studies e. g. World Bank’s AAA (Analytical Advisory Assistance) framework. Private Sector Health Services in Bangladesh: An Exploratory Study 12 supplies; and adopting medical ethics etc. all together affect the private sector and have significant impact on it. The 1982 Medical Practice and Private Clinics and Laboratories (Regulation) Ordinance (No. IV) of 1982 (Annex-2) defines the main elements of the regulatory framework regarding the private provision of health care services in Bangladesh. The 1982 Ordinance specifies that no person shall establish a private clinic without a license (from the Ministry of Health and Family Welfare) under this Ordinance. There are some conditions and procedures for getting a license for operating a private clinic. The MOHFW will grant a clinic a License if it has: Proper accommodation with hygienic environment for the patients.

At least 80 square feet of floor space for each patient. An air-conditioned operating theatre. Up to 37 types of specified essential equipment (ranging from an autoclave to bedpan). Adequate supply of life saving and essential medicines. Round the clock presence of one registered medical practitioner, two nurses and one sweeper per ten beds. Specialists for the operation, treatment and supervision of patients. These conditions are predominantly input based with no mention or scope for monitoring the actual quality of clinical care provided.

But much of the focus of international health reforms in the late 1980s and 1990s has been to redirect attention away from input based public sector provision towards health systems that pay more attention to the quality of health care services and outcomes. If an owner wants to register his/her clinic then application needs to be addressed to DirectorGeneral of Health with a registration fee of Tk. 5,000. The ordinance does not specify any time period during which a licensing decision will be made. Private health care sector is still governed by the Medical Practice and Private Clinics and Laboratories (Regulation) Ordinance, 1982.

This twenty years old ordinance still exist as the latest regulation regarding private health care sector. Moreover, there is no new laws or regulations that are under development or debate at this time. Directorate of Health Services of the Ministry of Health and Family Welfare is responsible for overseeing private health services. 8. Economics of Private Sector Health Services: Some relevant issues The basic motivation for promoting private sector development and public-private “partnerships” in health is the incentive that profit motive creates for efficient production of goods and services.

Profit maximizing firms use inputs efficiently, innovate and use technology to reduce costs and improve quality and respond to consumer demands. 9 Ministry of Health and Family Welfare, Government of Bangladesh (1998). Health and Population Sector Programme (1998-2003), Part I. p. 56. Private Sector Health Services in Bangladesh: An Exploratory Study 13 Studies shows that there is generally a low price elasticity for health services for households with higher incomes levels (see studies in footnote 12). International experience also suggests that expenditure on health care services increases faster than rate of economic growth.

The data on the growth in private clinics suggests a steady long term growth from 1977/78 to 1989/90 but then an accelerated growth pattern, above this trend, in the 1990s10. The possible explanations would be interesting in any future planning. While Bangladesh has experienced increased economic growth in the last ten years, this alone is unlikely to have stimulated the high attributed rate of increase in clinics. Relatively less stringent application of the 1982 Ordinance may be contributed to such change. But this is unlikely to explain the total change.

The scope for higher profits than experienced elsewhere in the economy is likely to have played a role since 1990. However, there is another factor to be considered. The clinics that were established in the 1980s and are still in existence are by definition robust, with a longer track record of profit. It is possible that the increase in new clinics will be offset by unknown number of clinic closures. A clearer picture could be possible if the DGHS were able to keep a more up to date and comprehensive account of clinics. Studies report increase in prices for private clinical services well above the rate of inflation.

According to a study, this not only demonstrated the lack of regulation but also the existence of super-profits and non-competitive market behaviour associated with localised oligopolies. 11 However, due to lack of time series on prices it is difficult to support or refute this observation. Evidence of oligopolistic behaviour does come from discussions with clinic owners. They confirmed the tendency for competition with other clinics to take place through improvements in quality of care rather than reductions in prices for inpatient treatment.

In addition, casual evidence of the cost of out-patient visits to general practitioners, which is in theory regulated, supports the suggestion of price increases well beyond the rate of inflation. Consultation fees of Tk. 500 and Tk. 1,000 have been quoted in the press, which far exceed the Tk. 40 set out in the 1982 Ordinance. Information containing in the HEU study suggests that most clinic owners do operate as cost minimisers and profit maximisers. It also suggests that smaller clinics are the optimal size to establish given market demand and management capacity.

For private clinics, the average return on capital, expressed as a function of total variable cost, is 37. 8% (profit can not be ascertained due to lack of information on fixed cost). Rates of return to capital vary considerably as summarized below: The return on capital is highest for: Registered clinics 42% Polyclinics – 39% Doctor owned – 38% Clinics classified under quality group B. 40% Clinics in Dhaka, Dinajpur and Pabna – 50% The return on capital is lowest for: Non-registered clinics 26% Maternity clinics – 21% Non – Doctor owned – 36% Clinics classified under quality group D. 5% Clinics in Chittagong 18%, Noakhali 22% and Sylhet – 25% Source: MOHFW (1999). Health Economics Unit, “Private Sector Medical Clinics and Hospital Survey”. Note: The above rates of return are indicative of existence of super profits from an imperfect market. 10 11 The Health Economics Unit, MOHFW (1999). Private Sector Medical Clinics and Hospital Survey. Khan, MM. (1996). Development of Private Health Care Facilities in Dhaka City: Impacts on Costs Access and Quality. Private Sector Health Services in Bangladesh: An Exploratory Study 14

The government survey of private medical clinics provides mixed evidence on the market behaviour of providers. Localised competition exists in some towns and districts with higher income levels or population densities or better accessibility. This competition does contribute to lead clinics to operate at a level where average costs are lowest. The qualitative evidence suggests competition is manifested in product differentiation through improvements in quality rather than price reductions. Indirect estimates suggest a return to capital that is comparable with and marginally higher than that attained in other sectors.

This may explain the recent increase in the entry of new clinics, although further information on the number of clinics closing is required to confirm the growth level. Based on the analysis of the available studies12 for private sector medical clinics and hospitals, the following having high policy utility can be concluded: 1. Distortion in National Policy. The private health care sector suffers from policy distortions that discourage firms to grow in size. Policy distortions also focus attention on inputs and not the quality of care per se.

This has detrimental implications on improving the financing of the health care in the private sector and the size of operation and as a result the national coverage. Moreover, the existing policy encourage rent seeking behaviour in the public sector. 13 2. Location and Ownership of Private Sector Health Facilities. Private medical clinics appear where there are significant masses of medical college professors to own and operate them, indicating that it is an important issue that determines their coverage. 3. Public-Private Partnership. When the proportion of beds provided by private edical clinics exceeds a threshold percentage of GOB Beds in a geographical area, then “publicprivate partnerships”, become feasible with potential for technical and allocational efficiency gains. 4. Higher Autonomy Matters. Private clinics show lower lengths of stay and higher occupancy rates than public clinics of comparable size indicating a greater degree of resource efficiency than comparable public clinics. This suggests that there is a scope for efficiency gain by providing autonomy or contracting out the facility with appropriate cost recovery schemes and service mix. 5. Private Clinic profitability and Market Structure.

There is some potential for efficiency gains from private pubic partnerships in some locations in Bangladesh where competition is stronger. Although private clinics exhibit some aspects of competitive behaviour, careful pilot testing of public private partnerships is required to ensure that consumers capture efficiency gains. Again, private operators seem to operate more efficiently at smaller clinic sizes, which calls for taking into consideration the issue of scales while anticipating efficiency gains. 12 MOHFW (1999). Health Economics Unit, “Private Sector Medical Clinics and Hospital Survey”; Kawnine N. , Thomas N. Killingsworth J & Vincent K (1997). “An assessment of the flow of funds in N the Health and Population Sector in Bangladesh”, Research Paper No. 5 Heath Economics Unit (Dhaka: MOHFW, January 1997); Mahmud M Khan (1996), “Development of Private Health Care Facilities in Dhaka City: Imapcts on Costs Access and Quality”; Mahmud M Khan (1998), “The Regulatory Environment faced by the Private Health Care Sector of Bangladesh: First Draft,” (ICDDR,B: Dhaka); Rahman Talukdar (1997), “Private Health Sector Facilities in Bangladesh”, Report by the Institute of Economic and Private Sector Development (Dhaka: IEPSD, 15 October 1997).

Several other IEPSD reports were also reviewed but not used in this document. 13 Barkat A (1998). “Governance of Public Health in Bangladesh”; in R. Sobhan (ed). Crisis in Governance: A Review of Bangladesh’s Development, Centre for Policy Dialogue and UPL: Dhaka. Private Sector Health Services in Bangladesh: An Exploratory Study 15 9. Health Financing Approaches in Private Sector Health financing mechanisms include public financing, health insurance, user fees, donor financing, non-State collective non-profit-making financing and development loans.

Allocation of financial resources is a major issue in a country with limited resources. The World Bank also calculates that total annual spending of eight dollars per person is more than enough to provide acceptable standards of clinical care14. As envisaged in the ” Macroeconomics and HealthInvesting in Health for Economic Development” — Report of the Commission on the Macroeconomics and Health, December 2001, WHO, the level of the health-spending in the low-income countries is insufficient to address the health challenges they face.

According to the recent estimate by the WHO Commission on Macroeconomics and Health (2001) the set of essential interventions costs, on average, about $34 per person per year, which is much higher than the current level of public spending of around $5 recorded for Bangladesh. The huge resource gap in financing the health needs of the poor cannot be met without additional resource mobilization from external resources15.

The sources of health financing in Bangladesh include government allocation, loan from World Bank and other financial institutions, International Development Agencies, financial assistance from NGOs, community participation in cost-sharing, health insurance system, health cooperative systems, private investment by business entrepreneurs, income-generating mechanisms, bank loan, joint ventures etc. The largest proportion of funding for healthcare comes from household expenditure 63%, followed by 18% MOHFW Development Budget, 13% MOHFW Revenue Budget, 3% Non-Profit NGOs and Donors and 3% Other Public Revenues16.

However, experts differ on this issue. Many experts in public fora have claimed that household health expenditure (out-of-pocket expenses) may be as high as 80% of total health expenditure; over 80% of the incidences of morbidity is treated by private health providers, etc. In revenue and development budgets of 2002-2003, the allocations for health are 5. 53 percent and 9. 44 percent respectively, which were 5. 42 percent and 9. 02 percent respectively for 20012002. So, health budget has increased slightly but it is inadequate comparing to the needs.

In the budget (both revenue and development) of 2002-2003, the total allocation for health sector is Tk. 31368. 60 million which is 7. 27 percent of the total budgetary amount of Tk. 431. 72 billion. In Bangladesh, private sector health financing includes household expenditures, private nursing home investments and drug funds from non-governmental organizations (NGOs). Most Bangladeshi usually obtain majority of their drugs from the private sector. Private nursing homes, doctors in private clinics and other health practitioners prescribe medicines to patients who must buy them at full price.

Private expenditures for pharmaceuticals in developing countries typically account for 50 to 90% of all expenses on drugs. Even for the rural people and the urban poor, the most common source of drug is direct out-pocket purchase from the private market17. 14 15 World Health Organization, Access to Drugs and Finance, Geneva, 1991. p. 1 Economic Relations Division, Ministry of Finance, Government of the People’s Republic of Bangladesh, 2002, A National Strategy for Economic Growth and Poverty Reduction. p. 35. 6 Ministry of Health and Family Welfare, Health and Population Sector Programme (HPSP), NICARE and The British Council, (2000), Public Private Partnership – A DFID Supported Component of HPSP 17 World Health Organization (1998). Health Reform and Drug Financing, p. iii Private Sector Health Services in Bangladesh: An Exploratory Study 16 It is estimated that there are thousands of traditional healers, such as faith healers, Ayurvedic and Unani practitioners, who are examples of private sector participation in rural health care even if the quality of such care remains unassessed.

Moreover, growing numbers of private pharmacies in the country indicate increasing private sector involvement in health care. In the informal sector there are large number of “unqualified” private practitioners who are dispensing drugs without any authority and training. Most poor patients go to these people and pay large amount of money even for minor illness. There are also qualified medical practitioners providing services to the people. Majority of middle class people go to them as first point of contact.

In order to make the existing hospital services more attractive and of better quality some services, especially in large hospital (e. g. medical college hospitals), is expected to contract out to private sector. The services will include maintenance, cleaning, laundry services, security services, hospital waste management, diet and food supply etc. According to knowledgeable sources e. g. Private Clinic and Diagnostic Laboratory Owners’ Association and Bangladesh Private Medical Practitioner’s Association (BPMPA) currently no government-private as well as private-NGO partnership exist in the health sector.

In recent years GO-NGO collaboration has developed. In the field of health service delivery especially in Family Planning Government provide logistics support to a large number of NGOs. For ensuring access to urban health services of the city dwellers, especially the poor, the Government has developed partnership with several NGOs in the 4 city corporation areas under Urban Primary Health Care Project (UPHCP). EngenderHealth, an international NGO is currently working with District and Upazila level GOB health facilities for strengthening sterilization and other clinical FP methods.

Concern, Bangladesh, an NGO workers with a few Municipalities and Upazila Health Complexes for capacity building of health workers. In recent years some joint ventures of private sector and foreign investors are seen in the process of development. Already some hospitals are in operation which has established jointly with foreign partners, and foreign specialist doctors come to work in those hospitals. Private financing is the predominant funding mechanism in Bangladesh’s health system. Private sector funding consists almost completely of direct payment by households. The role of NGO financing is small (