According to International Finance Corporation and World Bank figures, between a third and half of the US$16.7 billion spent on health in sub-Saharan Africa in 2005 was spent in the private sector, often by the poorest people who cannot get government services. This huge capacity is ignored by donors, who for ideological reasons prefer to work directly with governments.
Donors should be embracing this massive capacity, offering competitive contracts to deliver health services. Non-profit groups, government and, crucially, the private sector should all be competing to deliver a broad set of services, such as improving maternal health. This competitive stimulus would give a powerful incentive to improve standards.
This has already happened in Cambodia, where NGOs have competed since 1999 to provide health services to the rural poor. Coverage and standards improved so rapidly the government has rolled the program out to cover one in 10 Cambodians. In 2005, The Lancet compared 10 different contracting programs around the world and found the majority out-performed the government in cost, quality and coverage, finding “improvements can be rapid” in countries as diverse as Bangladesh, Guatemala, Haiti, India, Bolivia, Madagascar and Senegal.
This process works particularly well for the rural poor, who are frequently neglected by governments. Where they were once a headache for bureaucrats in health ministries, they could suddenly become a business opportunity.
There is enough evidence that the current aid model does not work. There are also encouraging clues as to what can work. G8 leaders have committed billions of their citizens’ taxes to helping other; their duty is to ensure it is no longer wasted.
Philip Stevens is the author of Foreign Aid for Health: Moving Beyond Government, published by the Campaign for Fighting Diseases.
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