Understanding

THE FORMAL PRIVATE-FOR-PROFIT

HEALTHCARE SECTOR
IN URBAN BANGLADESH
Exploring opportunities and challenges for more effective integration
into the urban health system
icddr,b special publication no. 136
December 2017

ISBN: 978-984-551-371-5

Publisher
Health Systems and Population Studies Division,
icddr,b, dhaka
Phone: +880-2-982 7001-10
Fax: +880-2-881 1686
Email: alayne.adams@gmail.com
Web: www.icddrb.org

Cover Design
Rahenul Islam

© icddr,b
Understanding
THE FORMAL PRIVATE-FOR-PROFIT
HEALTHCARE SECTOR
IN URBAN BANGLADESH
Exploring opportunities and challenges for more effective integration
into the urban health system

Authors:
Alayne M. Adams
Rushdia Ahmed
Tanzir Ahmed Shuvo
Razib Mamun
Sifat Yusuf
Gladys Leterme
Zubair Akhtar
Kelsey Dalton
Sadika Akhter
Iqbal Anwar

Acknowledgement:
Julie Evans
Rahenul Islam

Health Systems and Population Studies Division,

International Centre for Diarrhoeal Disease Research, Bangladesh (icddr,b)

68, Shaheed Tajuddin Ahmed Sarani, Mohakhali, Dhaka – 1212, Bangladesh

Phone: +880-2-982 7001-10, Email: info@icddrb.org
GPO Box 128, Dhaka 1000, Bangladesh

 www.icddrb.org  /icddrb  @icddr_b  /company/icddrb

ii Understanding the formal private-for-profit healthcare sector in urban Bangladesh

List of Acronyms and Abbreviations

SL No. Abbreviations Full Form

1 WHO World Health Organization

2 NGO Non-Governmental Organization
3 DGHS Director General Health Services
4 DG Health Director General health
5 BMMS Bangladesh Maternal Mortality and Health Care Survey
6 BDHS Bangladesh Demographic and Health Survey
7 C-section Cesarean Section
8 MBBS Bachelor of Medicine, Bachelor of Surgery
9 ANC Antenatal Care
10 KII Key Informant Interview
11 IDI In-Depth Interview
12 BMDC Bangladesh Medical and Dental Council
13 BMA Bangladesh Medical Association
14 BIRDEM Bangladesh Institute of Research and Rehabilitation for Diabetes, Endocrine and Metabolic Disorders
15 NICU Neonatal Intensive Care Unit
16 OT Operation Theatre
17 ICU Intensive Care Unit
18 BNC Bangladesh Nursing Council
19 SSC Secondary School Certificate
20 HMIS Health Management and Information systems
21 MIS Management Information System
22 SMS Short Message Service
23 MRS Medical Record System
Understanding the formal private-for-profit healthcare sector in urban Bangladesh iii

Contents

Introduction1
Definition of the private sector 1
Trends in the private sector 2
Inadequate regulation 2
Understanding the private sector 2
Engaging the private sector 3
Conceptual framework 4

Study Objectives  5
Methodology7
Study Design and Participants 7
Study Sites 7
Sampling Frame 7
Data Collection 8
Data Analysis 9
Ethical Considerations 10

Results & Discussion 11

Motivations of Private Providers and Owners 11
Business Strategies 13
Patient Perceptions of Private Facilities 17
Rules and Regulations 19
Quality and Equity 23

Conclusions24
Recommendations25
References28
iv Understanding the formal private-for-profit healthcare sector in urban Bangladesh

Acknowledgement

This research study was funded by Department for International Development (DFID). icddr,b
acknowledges with gratitude the commitment of Department for International Development
(DFID) to its research efforts. icddr,b is also grateful to the Governments of Bangladesh, Canada,
Sweden and the UK for providing core/unrestricted support.
Understanding the formal private-for-profit healthcare sector in urban Bangladesh 1

Introduction

Almost all health systems are pluralistic, involving both public and private initiatives to deliver
healthcare services. Publicly financed free services are essential to ensure universal coverage
and to reduce use-inequity (Houweling, Ronsmans, Campbell, & Kunst, 2007). However, private
provision of healthcare delivery is capturing an increasing share of the health market in many
low and middle income countries, especially in urban areas (WHO, 2010). In Bangladesh,
assessing the scale and contribution of the private sector in health is complicated by its overlap
with the public sector, where a large proportion of public sector providers are also involved
in private practice to supplement income (Bennett, McPake, & Mills, 1997). The concentration
of private service provision is greatest in urban areas, and largely unregulated, with related
concerns about the cost, equity of access and the quality of care provided. Despite the size of
the sector and its critical role in health service delivery in Bangladesh, relatively little is known
about its underlying motivations and business strategies. A critical understanding of these is
needed to engage the private health sector around national public health goals of equity of
access, quality services and effective coverage (Aljunid, 1995). This report presents findings
from formative research that seeks to identify points of entry to improve formal private sector
service quality and access, especially to the urban poor.

Much of the formal Definition of the private sector

private for-profit sector
provides services According to the WHO, the private sector is comprised of all providers
who exist outside the public sector (i.e. government), whether their aim is
philanthropic or commercial, and whose focus is to treat illness or prevent
disease. It is commonly classified into three categories: formal for-profit
(private clinics, hospitals and diagnostic centres); informal for-profit
(unlicensed drug sellers and village doctors), and formal not-for-profit
(Non-Governmental Organizations - NGOs). Given the substantial existing
literature on NGOs, and their relatively small contribution to clinical service
provision at the national level, this report focuses on the formal private for-
profit sector only.

Much of the formal private for-profit sector provides services associated

with large profit margins, such as diagnostics and basic surgeries, and are
concentrated in urban areas such as Dhaka, as well as larger divisional cities
and towns. By contrast, informal healthcare providers (IHPs) are an assorted
group of unlicensed medical practitioners consisting of village doctors,
drug vendors, traditional or spiritual healers and traditional birth attendants
(Ahmed, Hossain, Rajachowdhury, & Bhuiya, 2011) who are the first point of
care for a substantial proportion of the population, particularly the urban
poor (Bloom, Champion, Lucas, Peters, & Standing, 2009).
2 Understanding the formal private-for-profit healthcare sector in urban Bangladesh
Trends in the private sector
In Bangladesh, the formal private for-profit sector is
substantial and growing. Existing data from the Director
General Health Services (DGHS) show an increase in
the number of registered private for-profit facilities
from 1032 in 2000 to 3026 in 2011, reflecting both a
rise in demand for services, and the inability of the
public sector to generate sufficient supply on its own.
This is particularly true with respect to primary care
in urban areas which is predominantly provided by
NGOs contracted by local government. At the same
time, the number of unregistered clinics, hospitals and
diagnostic centres has increased. Recent evidence
from a comprehensive mapping of all health facilities in
Sylhet City Corporation, finds that 40% are unregistered
(Adams, Ahmed & Islam, 2013).
Trends in health-seeking behaviour corroborate
the growing importance of the private sector. The
Bangladesh Maternal Mortality and Health Care Survey
2010 (BMMS 2012) shows that for treatment of obstetric
complications, only 23% of women visited public sector
facilities and the rest used some kind of private facility
or informal provider as their first source of treatment.
Similarly, study findings from Matlab indicate that 41% of
families visited formal private sector facilities and 26%
visited informal providers as last resort for treatment of
morbidities considered serious enough to visit health
facilities (Anwar, 2009). Given that care-seeking depends
upon the perceived seriousness of the condition as
well as the quality and cost of services, many patients
prioritize perceived quality over cost particularly for
life-threatening medical emergencies (Griffiths &
Stephenson, 2001). For delivery care services the use of
the formal private sector is also increasing. According
to BMMS data, only 2.6% of mothers delivered in private
sector facilities in 2001, compared to 11.3% in 2010, while
use of the public sector increased from 5.8% to 10%
over the same period. The contribution of the private
sector to the explosive growth of C-section delivery is
particularly concerning. According to 2014 BDHS data,
almost 60 percent of all C-sections are taking place
in private sector facilities (NIPORT, 2014). While these
figures imply over-use of these costly services, given the
WHO recommendations that C-sections not exceed 15%
of all deliveries (UNICEF & WHO, 1997), at the same time,
many of the poorest requiring emergency C-section
services cannot afford them.
Inadequate regulation
Although evidence suggests that the formal private
sector is flourishing and represents a vital source
of care in Bangladesh’s pluralistic health system,
the large majority of its providers, both formal and
informal, operate beyond any regulatory framework.
Several regulatory and statutory bodies exist to ensure
quality health services to the people and protect
their rights (Ahmed, Hossain, & Chowdhury, 2009),
but most of these bodies are non-functional and lack
accountability (Ahmed et al., 2009). In the absence of
systematic regulation, concerns about quality of care
and harmful practices are widespread given the fact
that many clients of private sector services are poorly
informed and unable to judge clinical quality and cost
(Bloom et al., 2011). Reports of clients being charged
for unnecessary procedures are quite common, as are
unethical referrals to private facilities via middlemen or
brokers (Kumaranayake, 1998). Equity of access is a
further concern, with higher average costs in the private
sector, and disproportionate use of formal private sector
facilities by the affluent (Anwar, 2009). Irrespective of
these concerns, evidence suggests that people are
generally more satisfied with health services from formal
private providers compared to the public sector due to
perceptions of better quality of health services (Anwar,
2009).
Understanding the private
sector
Despite the size of the private-for-profit sector, and its
critical role in health service delivery in Bangladesh,
relatively little is known about the motivations and
strategies of private sector owners, managers and
providers (Ahmed et al., 2009), including the nature of
formal and informal contracts, and the relationships
that influence business and service delivery practices.
One area of concern is the potential influence of
medical sales and pharmaceutical representatives on
the prescribing practices of private health providers.
Results from a study in nine unions and one township
in Bangladesh suggested that drug prescription
decisions by village doctors are strongly influenced by
the perceived reputation of pharmaceutical companies,
Understanding the formal private-for-profit healthcare sector in urban Bangladesh
credit availability and incentives offered by medical
representatives, together with considerations of disease
type and severity (Ahmed & Hossain, 2007).
Supply side factors are responsible for the rapid growth
of the private sector in health. The low salaries ofdoctors
and midwives in many developing countries encourages
these professionals to seek secondary sources of
income. Informal payments, such as charging patients
for services or supplies that should be provided for
free, are one method of raising income. Dual practice,
whereby publicly employed doctors provide services in
private clinics, is also common (Ensor & Witter, 2001). In
Bangladesh, the 5th Five-Year Plan states that a large
number of publically employed doctors are engaged in
private practice. One study has estimated that 33% of
doctors with a MBBS degree and 51% of public sector
specialists are involved in private practice (Rashid,
Akram, & Standing, 2011). Some suggest that many such
practitioners treat their involvement in private practice
as a business enterprise, where the goal of maintaining
a client base and making customers happy trumps
concerns about “good medical practice” (Cockcroft,
Milne, Oelofsen, Karim, & Andersson, 2011). Evidence
suggests that this strategy is successful. Results from
several studies indicate that consumers are more
satisfied with doctors in the private sector even when
they are the same doctors that provide treatment in
public facilities (Cockcroft et al., 2011).
Engaging the private sector
Efforts to engage the private sector around public
health goals, and integrate them into the formal health
system in Bangladesh, have been limited and relatively
unsuccessful. One of the most ambitious efforts to
date was the Palli Chikitshok Training Program of the
late 1970s. Unfortunately, this Government-run training
programme for non-formal providers was prematurely
terminated due to pressure from medical professional
interest groups (Mahmood, Iqbal, Hanifi, Wahed, &
Bhuiya, 2010). Common in many attempts to reform the
private sector through training is a failure to recognize
and address underlying motivations, institutional
relationships and incentives that determine private
sector behaviour (Bloom et al., 2011). Incorporating
these concerns into the design of training approaches
hold particular promise. For example, in sub-Saharan
3
Africa, interventions that combined training with
measures to modify incentives were the most effective
with medicine sellers of malaria treatment (Bloom
et al., 2011; Goodman et al., 2007). Policy measures
around regulation, accreditation, monitoring, and the
implementation of health insurance systems also offer
promise in ensuring that the private sector provide
quality, affordable care to consumers (Mills et al.,
2002). To date, little has been done in Bangladesh,
despite expert recommendations that context-specific
regulatory and monitoring mechanisms be developed
and applied that more effectively bring the private
sector within existing policy frameworks (Anwar, 2009).
Both the formal and informal for-profit private sectors
play a critical role in urban health systems, but
innovation is needed to effectively harness their energy
towards fulfilling the public health goals of achieving
coverage which is equitable, affordable and of good
quality. These innovations must take into account critical
features of formal and informal private sector practices.
This should include understanding the motivations,
strategies, incentives (pharmaceutical) and regulations
(government) that define private sector practice so that
proposed innovations are realistic and feasible. In the
context of Bangladesh, innovations that improve the
existing private sector model would be ones that are
commercially viable yet supportive of public health
goals to extend quality services to all strata of the
population, including the underserved and poor (Hwang
& Christensen, 2008). Innovations that transform “an
existing market or sector by introducing simplicity,
convenience, accessibility, and affordability where
complication and high cost are the status quo” are said
to be disruptive innovations (Christensen Institute. n.d.).
It is hoped that insights and recommendations from
this report will inform disruptive innovations that enable
private sector engagement around the goal of Universal
Health Coverage in Bangladesh.
4 Understanding the formal private-for-profit healthcare sector in urban Bangladesh

Conceptual framework
As illustrated in Figure 1, the aim of the formative research presented in this
report is to understand the distinctive features of the private for-profit sector
in order to identify entry points and characteristics of disruptive innovations
that will serve the interest of this sector, yet at the same time, help achieve
public health goals. Based on this research, innovations will be selected for
development, testing (Phase 2) and scale-up (Phase 3).

Figure 1. identifies three areas of research focus: consumer demand

(satisfaction, decision making, perceived quality, cost, access to information),
provider supply (motivations and strategies), and incentives and regulations
(role of the pharmaceutical industry, government, and professional
associations). On the supply side, this report will focus on the formal private
sector only, inclusive of private providers, managers and owners and the
facilities they operate. Of particular interest are the underlying motivations
guiding private sector behaviour and the strategies they utilize in making
their business profitable.

These three areas of focus were considered from the perspectives of

private sector actors (providers, managers, owners and pharmaceuticals)
and other stakeholders.

DEMAND SIDE SUPPLY SIDE OTHER INFLUENCES

Private for Profit Healthcare Providers

Regulations
 Client’s satisfaction Formal Informal
 Care seeking decision making  Government
 Perceived quality of care  Pharmaceuticals
 Access to health information  Professional
organizations
Motivations Strategies
Prestige, Services, Profit, Social, Commercial, Service Incentives
Sustainability delivery, Financial, Political

Disruptive Innovations

Public Health
Needs

Quality of care Equity of access Effective coverage

Understanding the formal private-for-profit healthcare sector in urban Bangladesh 5

Study Objectives

Identifying innovative strategies to engage and integrate the

private sector within the broader health system is a critical yet
neglected area of work, and one which is needed if ways are
to be found to overcome the high costs, poor quality care and
inequitable access experienced by urban populations.

The study on which this report is based addressed this gap by exploring the
following objectives:

1
To understand the underlying motivations, business strategies
and incentives governing private sector service provision in
urban areas; and

2
To identify areas of potential points of entry to improve service
quality, coverage and access to the urban poor that also serve
the business interests of this sector.
6 Understanding the formal private-for-profit healthcare sector in urban Bangladesh
Understanding the formal private-for-profit healthcare sector in urban Bangladesh 7

Methodology
Study Design and Participants
A qualitative study was undertaken between September 2013 and March
2014. Forty-seven in-depth interviews were undertaken with private clinic
and hospital owners and providers. Twenty key informant interviews with
health managers and clinic owner association leaders, 30 exit interviews
with patients, and 30 facility observations were also conducted.

Khulna
divisional capital in
Study Sites
a high-performing*
district The study was carried out in
three major city corporations of
Bangladesh that were purposively
selected to capture a wide range
of performance on key indicators
of healthcare access and utilization
(NIPORT 2011) and, accordingly, a
diverse picture of private sector
experience in healthcare provision.
Dhaka These were:
national capital
and mega city Khulna: divisional capital in a high-
performing* district
Sampling Frame
The study began with key informant
interviews (KIIs) to identify potential
respondents for in-depth interviews
(IDIs). A purposive sampling strategy
was initially employed for KIIs
and IDIs with health care service
providers, managers and owners,
followed by snowball sampling. In
total, we conducted 20 KIIs with
private sector providers/workers, 14
IDIs with formal providers, 16 with
formal owners, and 17 with informal
providers.

Dhaka: national capital and mega Patient experiences were also

city
Sylhet: divisional capital in a low
performing* district
*Performance was determined
based on rates of vaccination
Sylhet coverage, ANC coverage, child
mortality, and maternal mortality
divisional capital in according to BDHS 2011.
a low performing*
district
assessed by means of exit interviews
in the same facilities where
observations occurred. Using a
purposive sampling strategy 30
facility observations were organized
and a total of 30 exit interviews
were performed (15 inpatient and 15
outpatient) based on convenience
sampling.
8 Understanding the formal private-for-profit healthcare sector in urban Bangladesh

Data Collection

Twelve researchers Researchers received ten days of training on the objectives of the study and
study tools and questionnaires prior to commencing fieldwork. Two or three
with social science researchers were involved in each interview: a facilitator, and at least one
degrees were involved note-taker. In addition to detailed hand-written field notes, audio-recorders
were used to record the interviews. These were transcribed verbatim
in data collection into Bangla (Bengali) within 24 hours of interviewing, and field notes and
under the guidance observations were written up in the same time frame. Each researcher
of two supervisors maintained separate text files in MS Word, and back-up files were given
to the team leaders as soon as the transcriptions were completed.
with extensive field Transcriptions were immediately reviewed by senior researchers and, if
experience and needed, instruments were refined or modified to ensure that the question
content and sequence elicited the best data possible. Transcripts were
expertise in qualitative translated into English by skilled translators, and one-page summaries of
methods and analysis. each interview were produced within 10 days of data collection. Finally,
original transcripts were matched with one-page summaries to cross-check
data consistency and fidelity.
Understanding the formal private-for-profit healthcare sector in urban Bangladesh 9

Data Analysis

A team approach to Framework analysis was performed utilizing codes and data displays
to systematically examine emerging patterns and themes. The analysis
analysis was employed process started with the definition of a priori codes and data familiarization,
to minimize individual followed by the application of codes, the creation of data displays, and
their analysis and interpretation. To begin, each transcript was coded
bias with multiple independently on hard copy by two researchers. Initially, seven a priori
analysts involved in codes were prepared and, later, inductive codes were also included in the
coding and interpreting coding framework. After assessing intra-coder and inter-coder reliability by
having two analysts independently code the same sections of text, codes
data. were applied by the research team to transcripts and observations (see
Figure below). Memos were kept throughout the coding process to record
and develop emerging insights. After the coding was completed, three
people were assigned to incorporate coded transcripts into ATLAS-ti. Each
person was assigned a different study site: Dhaka, Khulna or Sylhet. Once
all the transcripts were inputted and merged, code reports were generated
based on a priori themes. In order to better identify patterns in the data, data
matrices were prepared which helped display the data and allow for more
systematic analysis.

Discuss evolving
 Each transcript was themes  Generate code
coded on hard reports
copies by 2 analyzer  Check inter-coder  Do sub-coding in
independently reliability together the code reports
 Code the transcript
into ATLAS-ti
Always keep Prepare data
notes Matrix
10 Understanding the formal private-for-profit healthcare sector in urban Bangladesh

Ethical Considerations
All study participants were asked for written consent prior to interview.
Participation in the interviews was completely voluntary. Participants were
able to stop the interview at any time if they felt uncomfortable. Refusal
to take part in or withdrawal from the discussion or interview involved no
penalty and no loss of services. Arrangements for the place of interview
or discussion were arranged according to participant’s convenience
and choice to foster an environment where they talk freely with privacy.
Permission was taken from participants before recording the interview. In
this report, no individual identifying information is provided.
Understanding the formal private-for-profit healthcare sector in urban Bangladesh 11

Results & Discussion

This section discusses the underlying motivations, business strategies, patient perceptions of the
formal for-profit private health sector in urban Bangladesh, and the implicit and explicit rules and
regulations guiding their activity. Issues regarding service quality, coverage and access of the
urban poor were also considered in light of the business interests of this fast-growing sector.

Table 1. Background/description of study respondents

Dhaka Sylhet Khulna Total

Formal owners 5 5 6 16
Formal providers 4 5 5 14
Key Informants 5 7 8 20
Total 14 17 19 50

Motivations of Private Providers and Owners

To develop a deeper understanding of the urban private sector in health, we examined the motivations of providers
and owners to initiate, maintain and grow their business. The table below stratifies motivational factors by three
categories of respondents: clinic owners, formal providers and stakeholders from the government, BMDC, BMA,
pharmaceuticals and clinic owner’s association.

Table 2. Motivating factors among private owners, providers and other stakeholders

Motivating Factors Clinic Owner Formal Provider Other Stakeholders

(n=7) (n=7) (n=4)
Business (profit)  
Financial solvency 
Service   
Ambition  
Family influence  
Honourable profession  

Two groups of motivational factors, financial and personal, emerged from analysis.
12 Understanding the formal private-for-profit healthcare sector in urban Bangladesh

Financial Motivations Family legacy was another important reason why

Monetary incentives were a strong pull-factor motivating
entry into the private healthcare sector. According to
respondents, the health service sector was financially
lucrative , making it an appealing choice for doctors and
business professionals alike. As a formal health provider
in Sylhet explained “the main reason is business. I worked
in Brahmanbaria. 55/60 private clinics are there in that
small town. All are running well and also gaining profit....”.
There was a general assumption that working as a
doctor in the private sector ensured a high salary and
a good reputation. For some respondents, a job that
provided financial security was important for themselves
and their families, as described by a formal private
provider in Khulna: “The thing that attracted me to this
profession is financial solvency…I assumed that I will have
a superior financial status and I do get that by joining this
profession.”
What is curious about Table 2, is that financial
motivations do not figure across all respondent
categories. The failure of clinic owners to cite this
motivation may be a result of financial interests being so
obvious they don’t warrant mentioning, or respondent
bias, and the concern that admitting the importance of
these motivations would be perceived unfavourably.
doctors’ practiced privately. In some cases, clinics were
family owned, and family members were expected to
continue in the business:
This business is in our family. The forefathers of my
father used to run it, after them, my father used to. I
have been practicing with my father for a very long
time. Then after the death of my father I (took charge).
çç Formal provider, Khulna
The recent death of a family member, and the desire to
do something concrete in their memory, was reported
by another private physician as the main impetus to
opening a private clinic:
When I started my fourth year of medical school, my
mother died. At that time I couldn’t take care of my
mother due to my studies. I established this clinic in the
name of my mother.
çç Clinic provider (and owner), Khulna
Bad experiences with poor quality health care
contributed to some providers setting up their own
facilities, as described by a clinic manager in Dhaka:

Our Director’s child died in a renowned hospital of

Personal Motivations Bangladesh (BIRDEM… because of the carelessness
of the doctors and nurses. So (the Director) decided
In addition to financial motivations, personal motivations to build a NICU where patients will not face such
also played a role in leading providers to enter the kinds of carelessness.
private healthcare sector. First among these was
the desire to provide service, and the fulfilment that
results. A number of respondents noted a particular
commitment to serving the poor, the vulnerable, and
the disadvantaged who would otherwise not have the
chance to receive proper care. This commitment was
identified as an important motivation in deciding to
enter the private healthcare sector, and a reason for
continuing their professional engagement.

Some respondents claimed that their decision to pursue

private practice were motivated by family or personal
ambitions that they become doctors, in addition to the
status associated with the profession in Bangladesh. As
a formal provider from Sylhet explained: “I have come to
this profession because of my family. It was both mine and
my family’s desire (that I became a medical doctor)...”.
Understanding the formal private-for-profit healthcare sector in urban Bangladesh 13

Business Strategies
Private formal health sector providers, managers and owners were found to
adopt multiple strategies to ensure the success and sustainability of their
medical practice.

Private formal health Agents

sector providers, Medical brokers or “Dalal” are commonly employed to convince potential
managers and owners clients to use services provided by a specific private facility or provider, and
were found to adopt thus increase patient flow. Often these Dalal operate near the entrance
of public hospitals, or in areas of the city where new migrants first settle.
multiple strategies to Interestingly, informal providers located near private clinics sometimes act
ensure the success and as Dalal for formal private clinics, and were paid according to the number
of patients referred, or in other cases, receive a percentage of the service
sustainability of their charge. Private clinic managers from two cities explain the importance of
medical practice. this strategy:

Many (patients) come via reference (through) representatives (agents or

brokers). Relatives of a patient who have received services from us (in the
past), (also) help to increase our publicity. (In return) we give them services
actually at low cost.
ç Clinic manager, Dhaka.

I worked in Brahmanbaria. Almost 60 private clinics are there in that small

town. All are running so well and also gaining profit (as) brokers bring
patients in each clinic.”
ç Clinic manager, Sylhet.

Formal providers also act as middlemen and refer patients to other facilities,
and like Dalal, receive a commission for referral. While some of these
referrals may be clinically indicated, a number of stakeholders noted that
this practice of “referral for commission” was widespread among private
sector doctors, diagnostic centres and clinics, and used to boost revenue
through collusion. A top-ranked government health officer in Khulna
described the involvement of doctors in referral and the financial benefits
that are accrued:

Suppose I am an owner of a diagnostic centre. Many brokers are

available to me. I will tell them to collect patients from wherever they can,
(and) they will be given a percentage. If, Doctor [X] sends patients to me
for pathology (testing), I will give him a 40% or 50% commission. If I get
2000 taka by doing the pathology, then 1000 taka is for me and the other
1000 is for the doctor. Then Doctor X is happy and I am happy too. If 10
patients are sent daily, Doctor X will receive 10,000 taka. (Likewise), if I
refer patients to Doctor X’s facility, he will send patients to my diagnostic
service for tests.
14 Understanding the formal private-for-profit healthcare sector in urban Bangladesh
Although these practices increase patient flow,
unnecessary referrals may be contributing to the cost of
treatment and, therefore, the patient’s financial burden.
Unnecessary referrals might also lead to unnecessary
treatment, with negative health consequences. It
should be noted, however, that several providers
reported passing up the monetary benefits of referral,
and offering discounts to patients instead. One formal
provider in Dhaka explained:
“…If I refer a patient to somebody and they order a test
worth 20,000 taka it will not help. I usually think about
the financial capacity of the patient and their ability
to pay. I try to think about what doctor I might send
them to who would send them a 50% discount. (For
example), one patient came to me last week for an
ultrasonogram, a 13 aged boy with Kidney disease...I
was little concerned because I didn’t know how to
help him. Finally, I referred him to my teacher and also
requested that he provide treatment free of cost. (This)
is how we can support poor patients.”
Health Care Package System
Another widely adopted strategy is the provision of
health packages for clinic services that bundle services
and products together at a fixed price. Almost all
clinic managers and owners acknowledged use of this
strategy. Usually the price of the health package is less
than the cumulative price of individual services, and, in
some instances, can be negotiated between clinics and
clients.
One of the strategies to make profit is the provision
of fixed packages. (Rather than a) separate profit for
seat rent or OT charge, in a fixed package the profit is
counted altogether.
çç Clinic manager, Dhaka
The package system is intended to increase patient flow
by offering clients an attractive price for basic services.
However, this method of payment can be detrimental
to private sector providers/clinic owners, particularly
when increased costs are incurred as a result of patient
complications. This had led to some providers opting out
of the provision of health packages:
No, we don’t offer packages here. We had a bad
experience with packages. A patient took a simple
package of 30,000 taka, (however) when she went to
OT an unexpected situation happened. The patient
started bleeding. Although it was a 30,000 taka
contract, we had to take her to the ICU. If not, she
might not have survived. The total bill including ICU
was 250,000 taka, (however), the patient’s family
refused to pay any amount above the 30,000 taka
package rate. From (that point onwards) we decided
that there will be no packages. Patients will pay
according to what they can afford.
çç Hospital manager, Dhaka
In addition to the package system, private practitioners
indicated a widespread practice of offering patient
discounts. The motivation behind providing discounts
was reported as both strategic, in terms of creating
customer loyalty, and philanthropic, allowing poorer
patient to access services they could not usually afford.
One private sector provider stated that discounts for
poor patients were given regularly by management:
“There is not fixed percent, but they do so according
to the state of the patient.. Normally we grant 15% for
tests and 10% for the bed rent. Sometimes we have
to grant more – sometimes above 50%.”
Referral
Referring patients to other facilities was a common
strategy employed by private providers, with the
majority directing patients to public hospitals and
medical colleges. The most reported reason for referral
was the deteriorating health condition of the patient who
could no longer be managed in the current facility.
Treatments for serious (complicated) patients are not
always available here. If they come we give primary
treatment and then we refer them to another place. In
the same way, if a patient comes with pain we lessen
the pain. If patient comes with injured hand we send
them after sewing or giving first aid because it is not
possible to provide full treatment here.
çç Clinic manager, Sylhet
Understanding the formal private-for-profit healthcare sector in urban Bangladesh
We don’t take the risk of keeping critical patients. They
are referred to other hospitals e.g. the Government
Hospital, where there are ICU facilities. We refer them
to facilities based on their (financial) ability.
çç Formal provider (and owner), Khulna
Referral of complicated cased to government or
private sector tertiary facilities is a widespread strategy
utilized by private sector clinics to protect themselves
from accusations of malpractice should a patient’s
condition deteriorate in their care, and to preserve their
clinic’s reputation. This practice also highlights broader
limitations in critical care capacity within urban areas
that needs to be addressed.
These gaps are particularly problematic for poor
patients, as their financial situation is a major factor
determining where they are referred. Even if a private
hospital is closest, many provider’s stated that they were
more apt to refer poorer patients to public facilities or
medical colleges, while better-off patients were referred
to closer private facilities. Patient’s desires, frequently
motivated by perceived quality of services, was a further
factor influencing referral patterns:
(Sometimes) a patient says that he / she can afford
and needs a good specialist, or an ICU is needed
for operation. If we do not (offer such services), but
Osmani Medical College does, we tell them to go there.
But some don’t want to go there. According to them
the quality of care is not good, and (if) their financial
condition (permits), they prefer private facilities. So we
refer them to where there is ICU such as Mount, IBU,
and SUUA. We never hold patients.
çç Formal owner, Sylhet
 
Many respondents noted that an absence of a
formalized approach for referral contributed to poor
health outcomes. A lack of a clear referral system
meant that many patients went to formal providers at
a very late stage in their illness when treatment was
difficult for doctors to provide. Unnecessary medications
were given to patients by informal providers such as
drug sellers, which could be avoided if formal care was
sought earlier.
Several private sector providers suggested the need for
a system of referring primary care physicians who direct
patients to private or public specialists as appropriate.
Training and continuing education for both formal and
informal providers were also proposed as a means of
avoiding misdiagnoses, and ensuring that complications
were addressed in a timely manner:
15
I say to them that, when you feel it is complex, then
refer them to another place.
çç Clinic owner and provider, Khulna
While no systematic pattern of referral was apparent
from respondent’s interviews, most admissions to private
clinics appeared to occur with the recommendation of
a private practitioner. Whatever the referral destination,
exit interviews with patients emphasized the importance
of trust between patient and provider. The greater the
trust between patient and provider, the more likely a
patient would follow medical advice and seek care as
recommended.
We consulted with our private doctor here. The doctor
transferred us here. We depend on his choice and
support.
çç Inpatient exit interview, Sylhet
Provider Behaviour and Attitudes
Another well-established strategy adopted by private
providers were deliberate efforts to make patients
feel valued and comfortable, and forge trust in and
commitment to the doctor-patient relationship.
While provider behaviour and attitudes are ultimately
subjectively perceived by patients, providers felt that
they had an important impact on whether patient’s
would adhere to treatment, or return for subsequent
visits.
The first aim is that the patient gets cured, (however)
my behaviour is also important…We, the doctors…
tell our students that all diseases are not organic.
Some are psychosomatic. (As a result) our behaviour
with patients is a major factor in providing care.  The
patient (must) have faith in a doctor that he will be
cured, Inshallah. The doctor will have to create such
faith (through) conversations and discussion time (with
patients)…
çç Formal provider, Sylhet
While so called “good behaviour” by private sector
providers is reported as an effective strategy to sustain
or increase clientele, observational data suggests
that patient consultations averaged only 6-7 minutes
in duration largely due to high demand for services.
Although consultation times are longer on average than
the public sector (Anwar, 2009; World Bank, 2005), it is
16 Understanding the formal private-for-profit healthcare sector in urban Bangladesh
unclear whether such a brief encounter is sufficient to
ensure thorough clinical assessment, and quality of care.
Human Resource Strategies
A widespread practice by private clinics was the use of
medical staff from the public sector to provide specialist
and general services. While consultants were often
public sector specialists, duty doctors included medical
staff with less experience, including honorary trainees,
postgraduate medical students and occasionally
interns. Office hours in public hospitals typically extend
from 8 am to 2 pm, meaning that public sector doctors
engaged in private sector practice were, in theory, only
available later in the day. Some clinic owners noted how
shortages of staff during this period, limited the services
they could offer, and sometimes affected patient care
especially when specialized services were required:
The consultants are mostly from the public medical
college. So, we face this (doctor shortage) problem
from 8:00am-3:00pm.
çç Clinic owner, Sylhet
However, it was also revealed that some public sector
doctors attend patients at private facilities during official
office hours.
This is not ethical that, in some clinics of this area,
the doctors and trainees of the Government Medical
College see patients in between office hours.
çç Clinic manager, Dhaka
An interesting related strategy to overcome doctor
shortages during daytime hours was the widespread use
of on-call doctors. These doctors are typically practice
in public sector facilities in close proximity to the private
sector clinic that calls on their services. The use of on-
call doctors was a popular strategy among private clinic
owners given its cost savings relative to the standard
practice of recruiting three doctors to cover a 24-hour
service and having to pay a salary to each, or having to
hire specialist doctors full-time when their services are
not always needed:
Within a few minutes (of being informed) we come to
see the patients. Within five to ten minutes the (on-call)
specialist also comes here… to manage everything.
çç Provider (and clinic owner), Sylhet
We have no professor in the gynae ward. Professors
don’t sit (here), we only have them on call. When we
have such patients we bring them on call.
çç Clinic owner, Sylhet
Many private clinics rely on commonly performed
surgeries to ensure financial sustainability, including
c-sections and procedures such as appendectomies.
Some of these common surgeries may result in
complications. In cases where these complications are
life threatening, however, reliance on on-call doctors,
who may be five to ten minutes away, may substantially
heighten risk to patients.
Recruiting and retaining qualified nurses was also
identified as a major challenge by many private sector
respondents. As a result, nursing care was often
provided by unqualified or untrained persons, as a clinic
owner in Sylhet explained: There are so many clinics, but
the number of nurses is insufficient and the number of
diploma nurses is (even more) inadequate. Nurses are not
available even after giving money.
According to private sector respondents, the use of
unqualified nursing staff was the outcome of inadequate
numbers of qualified nurses on the market, and to the
higher salaries they command:
It is impossible for me to keep 6 nurses (on staff); it
is not possible for any clinic to give 60,000 taka for
their salary (10,000 for each). Maybe it is possible for
(large hospitals like) Apollo and Square, but not for
me. (Instead) we hire secondary school certificate
girls (and train them) for 6 months…
çç Clinic owner from Dhaka.
Incentives from Pharmaceuticals
Private practitioners reported receiving different types
of incentives from pharmaceutical companies to buy
their drugs, although this practice is prohibited by the
Code of Pharmaceutical Marketing Practices which states
that “no gift or financial inducement shall be offered
or given to members of the medical profession for
purposes of sales promotion”. Incentives in the form of
money, samples and gifts were reported to influence
the prescription pattern of practitioners, sometimes
promoting unnecessary and irrational prescribing
patterns. For example, one clinic owner explained
how incentives from pharmaceutical representatives
Understanding the formal private-for-profit healthcare sector in urban Bangladesh
influenced doctors’ prescription practices:
…different companies pay them (doctors) month after
month for recommending their medicines…. even
giving cash…now if doctors recommend (these drugs),
we have little choice (but to keep them in our store)
çç Clinic owner, Sylhet
Another provider described how pharmaceutical
representatives influenced his prescription decisions,
and noted that very often patient follow-up does
not occur, so that the effectiveness of drugs are not
monitored:
I generally prescribe those medicines which work
effectively; still there are some influences such as
medical representatives (who) come frequently. They
come in the morning, in the evening, automatically we
need to keep their medicines …we use those, prescribe
those, but we don’t (always) check whether they work
or not.
çç Formal provider, Sylhet
A pharmaceutical representative described how the
relationship with doctors is established:
I see which pharmaceutical company’s medicine
the doctor is prescribing... We get data from different
sources. Some are paid paid 100,000 taka annually
,5000 taka monthly or if 3000 taka is given, the doctor
(concerned) will prescribe the product being promoted.
Then I request him to kindly give me a chance and
make him a monetary offer. If he agrees then I provide
him the agreed amount monthly or yearly. Then he
writes our drug in the prescription.
çç Pharmaceutical representative, Khulna
The influence of the pharmaceutical industry over
prescription patterns may contribute to the development
of drug resistance and financial impoverishment by
obliging patients to purchase expensive and sometimes
unneeded medicines. According to respondents, this
type of practice may also promote the prescription of
low quality drugs. Clinics often decide which drugs
should be kept based on the price of the drug and
the company from which they receive discounts, and
not what is best for the patient concerned as regards
treatment cost or efficacy.
17
…there are some companies whose medicines do
not get sold out in the market. So they (medical
representatives) give them some discount and they sell
the product to medicine shops at a discounted rate […]
they then motivate them (drug sellers and doctors) not
to sell another company’s product as they will not get
any benefit from them
çç Senior manager of a pharmaceutical business
Patient Perceptions of Private
Facilities
Patient perceptions of private care are fundamental
to understanding the sector and its motivations and
success in urban areas. The factors influencing patient
perceptions ultimately determine their choice of and
loyalty to a provider, hence, the importance of making
patient satisfaction a central focus in terms of business
strategy. Patient exit interviews highlighted three
important components of private healthcare provision
that influence patients’ perceptions of care. These were:
cost, provider’s attitude and behaviour, and service
provision.
Cost
While the private sector remains the preferred choice
for healthcare, there is a higher cost associated with
the use of these facilities. Among the most significant
of these costs is the consultation fee, which can range
from 400 to 700 taka depending on the experience
and reputation of the provider. Study findings indicate
that private sector providers frequently consider the
socioeconomic status of the patient before determining
the consultation fee, adjusting it in relation to the
financial capacity of the patient.
In the case of an old patient it costs 200 taka, and
many poor patients gave 100 taka or 200 taka, it
depends on their economic conditions and their
mental conditions.
çç Formal provider, Sylhet
In addition to the consultation fee, patients may also
need to cover the costs of diagnostic tests, which vary
according to the type of test.
18
It has been a little tough for me. I paid 800 taka
yesterday, then he requested an x-ray, and he took
more money to see the report. This is not right but I
cannot speak up to the doctor.
çç Patient, Dhaka
One strategy used by the private sector to lessen patient
costs were service packages. These packages were
offered for major surgical procedures such as caesarean
sections and appendectomies, and related medical
costs including anaethesia and drugs. The inclusion of
services and total package costs were often determined
by negotiation:
The consultation fee ranges from 50-200 taka
(depending on the client). C-section is about 10,000
taka and 8000-10,000 taka [in addition) for medicine,
cabin, anaesthesia and other all charges.
çç Formal owner, Khulna
Packages did not include the costs of food,
transportation and accommodation for patient families,
nor additional informal payments to hospital staff to
ensure better service.
The first day I was brought to the bed, they were
standing here. They were not leaving. They wanted
money. Later my husband gave them 50 or 100 taka
that I divided among the 4 or 5 people.
çç Patient, Sylhet.
Research findings suggested there was substantial
variation in patient costs between private healthcare
facilities. The burden of these costs, which
include consultation fees, diagnostic test fees, and
other expenses, impacted patients’ ability to pay,
particularly among those from lower socio-economic
circumstances.
Provider Behaviour and Attitudes
The behaviour and attitudes of providers affected the
level of healthcare satisfaction experienced by patients,
an issue which was understood by providers themselves.
Most respondents interviewed when exiting the clinic
indicated positive experiences based on provider’s good
bedside manner and attentiveness to their needs. The
large majority of respondents reported understanding
the advice provided by the doctor and the reasoning
Understanding the formal private-for-profit healthcare sector in urban Bangladesh
behind the recommended treatment. Patients who
received an explanation of their condition had a better
understanding of their illness. Respondents also
indicated that a number of doctors scheduled follow-
up care at the time of visit. Doctors’ attentiveness and
polite and respectful communication when advising on
effective treatment approaches was also reported to
increase patients’ willingness to wait for services, and
to seek services with the same doctor in future, as the
following quotes demonstrate.
... she give us a lot of time there. She was very polite
with us, and listened ... with full attention. You know
she is not too senior (yet) didn’t even address us with
anything except ‘baba’ ‘ma’.
çç Patient, Dhaka
The doctor is good. So I have to wait. On average he
gives 20-25 min to each patient. He is good. Waiting
time is not a problem.
çç Patient, Sylhet
In addition, some patients noted that certain providers
lower the cost of services depending on the individual
patient’s financial situation, further increasing their
satisfaction and loyalty:
Haven’t I said that I am a poor person? I asked to
decrease the cost and then they made it less.
çç Patient, Dhaka
However, not all respondents interviewed while exiting
private sector establishments, had a satisfactory
experience. Unclear instructions from a doctor, and
rude and dismissive behaviour were noted by some
patients and contributed to their perceptions of lower
satisfaction:
I asked him twice, then he got angry. He said ‘Why are
you asking repeatedly? Did I [not] tell you that I will go
and give it to the reception? You will take it from there.
çç Patient, Dhaka
Applying different strategies, they tried to convince us...
[saying] we are not educated, we do not understand.
Doing all these...showing their attitude, we did not like
it.
çç Patient, Dhaka
Overall, study results suggest that patient satisfaction
Understanding the formal private-for-profit healthcare sector in urban Bangladesh
with private sector care is importantly determined by
their perception of provider behaviour. While most
patients reported positive experiences with private
sector care, even greater focus on improving providers’
behaviour will optimize willingness to follow-up or
comply with treatment and, ultimately, secure patient
loyalty and subsequent patronage.
Standards of Service Provision
In addition to service costs and provider behaviour,
the standard of service provision also influenced
perceptions of quality of care. In particular, issues of
sanitation and doctor availability were highlighted by
exit interview respondents as important components
of quality service provision. Just as providers noted the
efforts they took to maintain standards of cleanliness
within their facilities, these efforts were also recognized
by patients:
This place is good as there is a prevailing silence.
This place is neat and clean. I got support from both
doctors and nurses.
çç Patient, Sylhet
The timely and efficient attendance of medical
staff appeared to play a critical role in how patients’
perceived service quality. In addition, some patients
noted that they were reassured to see doctors or nurses
present in the wards, and perceived this as an indicator
of good service:
Actually many renowned and senior doctors come
here. The nursing is also good.
çç Formal provider, Sylhet
The things that I like the most about this place (is) the
way doctors come to visit us.
çç Indoor patient, Dhaka
On the whole, most patient respondents indicated their
awareness and appreciation of efforts to maintain high
standards of cleanliness and hygiene. The availability of
qualified medical staff also appeared to impact patients’
perception of service provision in a positive manner,
although improvements in this area are to some extent
being gained at the expense of doctor absenteeism in
the public health sector. Little discussion of technical
19
quality of care was noted in exit interviews, which
probably reflects the inability of non-medically trained
respondents to make these judgements. As such,
technical quality remains an important concern in the
private sector that needs to be addressed.
Rules and Regulations
Appropriate and constructive regulation of the private
health sector in Bangladesh offers a practical way
forward to improve the quality of services. However,
regulation presents significant challenges given the
sector’s diversity, complexity and size. In this section,
we discuss the experience of formal private sector
providers with regard to the ways in which existing rules
and regulations, intended to maintain standards of care,
are implemented.
Licensing/Registration
The Bangladesh Medical and Dental Council (BMDC)
is responsible for providing registration to medical
practitioners in Bangladesh which permits the legal
practice of medicine in both public and private sectors.
Similarly, the Bangladesh Nursing Council (BNC), in
conjunction with the a Directorate under the Ministry of
Health and Family Welfare, oversees the registration and
licensing of nursing professionals, as well as midwives,
family welfare visitors and assistant nurses.
Private clinics in Bangladesh must be also licensed,
according to law (The Medical Practice and Private
clinics and Laboratories (Regulation) Ordinance, 1982,
slightly modified in 1984). In addition to this license
to practice, clinics also require a drug license, a trade
license and a tax identification number (Veras, Caldas,
Araujo, Kuschnir & Mendes, 2008). The methods of
obtaining a license differ between municipalities.
Clinic owners and managers from Dhaka reported
that a clinic license is obtained from the government
authority directly (DGHS), while respondents from Sylhet
and Khulna reported that a license must be obtained
through the local authority first. All provider respondents
understood the need for registration and what is
required to maintain necessary licenses. However,
the licensing process was challenging for many clinic
owners:
20 Understanding the formal private-for-profit healthcare sector in urban Bangladesh
Our monitoring authorities are many…one is DG
health that gives (clinic) license (as well as) …
separate licenses like environment license … from the
Environmental Department, from fire brigade, from
the Labour Ministry, and then from the Atomic Energy
Commission; because we have risk. We also need
clinical and pathology licenses… The City Corporation
gives trade licenses and for private medical colleges
another license (is needed from) Ministry of Health.
Then BMDC approval is also needed. And BNC
approval … if nursing care is provided. So (at least)
12/13 licenses are needed. Maybe one or two more
might have been missed out. I can’t remember at this
moment. So many licenses are required that have to
be renewed every year. It is very hard to maintain all of
these. This is a big challenge (for us).
çç Clinic owner, Khulna
Our data suggests that the requirements for establishing
and acquiring a license for private hospitals were similar
to those for clinics, but with additional requirements,
such as getting clearance from the environmental and
narcotics departments.
For setting up this private hospital, we needed
authorization from DG health. Right now we are
processing the application with Dhaka University for
our medical college (part of the hospital) and it may
get approved within the month. Normally to establish a
hospital, a license from the Health Ministry is needed;
we obtained that too (for a hospital with 250 beds).
Beside that you need license to establish a laboratory.
We also have clearance from the environmental
department. We also got the fire clearance and
the clearance for using Pethidine, Morphine in the
operation theatre.
çç Hospital manager, Dhaka
The multiplicity of authorities responsible for the
provision of licenses of the private health sector was
reported to make compliance both difficult and time
consuming.
Regulation of Private Healthcare
Practice
The regulation of private practitioners in Bangladesh
is governed by national legislation laid out in the “The
Medical Practice and Private clinics and Laboratories
(Regulation) Ordinance, 1982” and the “Bangladesh
Medical and Dental Council Act, 2010” (BMDC, 2010).
This legislation (Ordinance, 1982) governs when private
practitioners are allowed to practice and the restrictions
if a doctor has responsibilities in the public sector. For
example, public sector doctors should not neglect
their duties in public sector health facilities in order to
profit from private sector work. While the legislation
specifically states that medical practitioners in the
public sector must not carry out private practice during
office hours, it is well-known that public sector doctors
supplement income by attending private chambers
during their working day.
Furthermore, contrary to the 1982 Ordinance, clinic
observations revealed that the costs of services
provided by private clinics were not routinely displayed
to clients.
While the Bangladesh Medical Association exists to
guide the professional practice of medical doctors,
respondents suggested that it acts more as a political
than a regulatory body, thereby limiting its impact on
promoting the quality of care provided by the private
sector. This was acknowledged by a senior official in the
Bangladesh Medical Association, who noted that “there
is no fixed role of BMA to monitor doctors. We (only) help
them in cases like false allegations...”.
Stakeholder interviews revealed that adherence
to the rules and regulations of medical practice,
including issues of registration and malpractice, was
challenging and inevitably resulted in some private
sector establishments finding ways around the law by
practicing without registration and, if caught, renaming
their facility to enable the business to be restarted:
Nobody can practice without the registration from
the BMDC, … it is in the laws of our country, … Some
(however) are practicing without registration: giving
a new name (when they are closed by authorities),
sometimes the government looks into this but again
some can escape … Some are not being caught…
çç Formal provider, Sylhet
Understanding the formal private-for-profit healthcare sector in urban Bangladesh
A shortage of government personnel to perform the
regulatory oversight needed to ensure good medical
practice was also noted, which is especially concerning
given the pace at which the urban private health
sector is growing. Moreover, it was reported that
district level authorities located in urban areas were
not only responsible for urban facilities, but also for
the regulation of health facilities in surrounding rural
sub-districts. This heavy workload made effective
implementation almost impossible.
If we talk about the divisional level... we have the
health administrator. (Then) there are the clinics at
the upazila (sub-district) level …where the (monitoring)
workload … is heavy. After doing their job, the authority
can’t do this additional monitoring work up to our
expectation.
çç Civil Surgeon from one of the three study areas
Interestingly, private sector respondents universally
supported government regulation as a means to help
improve the quality of services and, ultimately, their
business. However, the absence of adequate oversight,
combined with failure to enforce laws correctly, was the
cause of much frustration. One provider noted,
They (Government) have made the laws for everything,
proper enforcement of law has to be there; in case of
miss-enforcement good law becomes useless.
çç Key informant, Khulna
Private providers noted how regulation, when it was
enforced, tended to be unnecessarily punitive without
helping facilities to take steps to improve the quality and
performance of their services. There was widespread
agreement that non-punitive supervision and monitoring
would be more effective in improving quality and
performance:
….They punish us if things are not right…but if monitoring
was done in a way that helped to correct our mistakes,
then it will be good…
çç Formal provider, Sylhet
21
Government Inspection
Inspection of clinics in Bangladesh is also governed
by “The Medical Practice and Private clinics and
Laboratories (Regulation) Ordinance, 1982”. The
Director General is authorized to inspect clinics, and the
failure of a clinic to meet inspection guidelines can lead
to cancellation of a license, imprisonment or a fine.
At first we check if that clinic is neat and clean. Then
we check if it has a bathroom, a waiting room and
a counselling room. Especially if it is a clinic, if there
are O.T. rooms, doctors, nurses, ayas, cleaners – but
most of the time there aren’t full time doctors. Our
government doctors work there in the evening.
çç Civil Surgeon (inspector)
Almost all clinic owners, managers and representatives
from government bodies in our study reported that
inspections occur, but noted a lack of regularity in
implementation:
They come here any time to observe, they come here
suddenly.
çç Formal clinic owner, Khulna.
Corruption during inspection of clinics was also
reported. Some owners and managers noted that these
inspections were not conducted according to guidelines,
and in many cases have little impact on the quality of
care provided.
The DG health inspectors come sometimes. I have
seen them 4 times in last 2 years. But sometimes they
come, have a talk with chairman sir (owner of the
facility) and then just leave. I don’t know what they talk
about but they don’t do any inspection those times.
çç Clinic manager, Dhaka
22 Understanding the formal private-for-profit healthcare sector in urban Bangladesh
Mobile Court Inspection
In addition to routine inspections, mobile courts
occasionally performed inspections. Regulation of the
private sector through the use of mobile courts includes
a special arrangement of the court which moves from
place to place to adjudicate laws (Hosen & Ferdous,
2010). The supervision of private health facilities is
guided by the Mobile Court Act 2009, which is executed
by the district magistrate accompanied by one health
person from the Government.
Among clinic owners, managers and providers, there
was widespread fear of mobile courts as well as
scepticism about the extent to which such inspections
helped to improve quality. Respondents noted that
mobile court inspections often occurred without notice.
Mobile courts come suddenly. They come without
letting us know. They visit and observe the ward,
observe equipment, observe neatness and cleanliness.
çç Formal provider, Sylhet
If the court found issues that contravened requirements
in the Ordinance, immediate punitive measures were
taken, including fines and imprisonment. Some
respondents were supportive of mobile courts as a
means to strengthen regulation, while others suggested
that the mobile court was not objective nor consistent in
its assessments:
When a mobile court visits the clinics, often it seems
someone innocent will get punishment and someone
guilty will be forgiven.
çç Key informant, Sylhet
Interestingly, the Mobile Court Act of 2009 does not
provide any detail on how the private health sector
should be monitored. Like the general inspections,
respondents indicated that the mobile court team is
accompanied by a government health official. However,
there were few overt references to discrepancies or
corruption, as was the case for inspections.
Regulatory Challenges
Oversight of the growing urban private healthcare
sector is divided among a variety of legislative bodies
and instruments, thus increasing the complexity of both
implementation and compliance for providers, and
limiting opportunity for the effective coordination of
regulatory efforts.
Existing legislation excludes key elements of private
sector regulation, including details on the processes and
procedures of facility inspection. This was apparent in
reports from respondents that the standards being used
to assess their performance during inspections were
neither systematic nor clear, and that guidance about
the timeframe of inspections was not readily available. A
widespread sense of confusion prevailed among private
sector providers and owners about the mechanisms of
accountability.
Key informant interviews with Government regulatory
authorities also revealed a lack of clarity regarding
procedures related to the monitoring of private health
facilities. No one authority has specific responsibility
for oversight of this rapidly booming privately
owned healthcare sector, and although legislation
around licensing, registration and inspections exists,
responsibilities regarding their implementation are not
clearly assigned.
Furthermore, while some rules and regulations were
documented on paper, respondents suggested that
these were not implemented in practice:
But they do not do it in practice; (rules and regulations
appear) in documents but (are not) implemented, (and)
no one is monitoring them.
çç Formal provider, Sylhet
The Bangladesh Medical Association, the professional
body responsible for supporting the concerns of
medical practitioners as regards issues of medical
practice and education, is also affiliated with the
Bangladesh Private Clinic Diagnostic Owner’s
Association, and is recognized by the government as a
body intended to support private clinics and diagnostic
centres. The extent to which the BMA fulfilled this role,
however, was questioned by several respondents:
I think they might play many roles but till now I saw
nothing. I never saw any response from BMDC or BMA.
If monitoring is taking place regularly, corruption
would be diminished automatically.
çç Formal clinic owner, Dhaka
Understanding the formal private-for-profit healthcare sector in urban Bangladesh
The BMA is totally politically biased. Their role in
monitoring and supervision is zero. They do not have
any desired role.
çç KII, Dhaka
While a proliferation of regulations and regulatory
bodies exist to govern medical practice within
the private sector in Bangladesh, our interviews
demonstrated a clear need for major reforms to
streamline and clarify responsibilities and expectations
for providers and regulators, along with building stronger
implementation mechanisms throughout the health
system.
23
Quality and Equity
Apparent across all private sector respondents in the
study, was an interest in improving quality of care.
Concerns were expressed that variable service costs
affect their business interests as well as consumer
access to services. Other quality of care issues including
issues of inappropriate referral and unnecessary
diagnostic testing, and challenges in engaging qualified
human resources, were openly acknowledged. As one
clinic owner from Sylhet opined:
“Quality care is very difficult. But, still we have to work. All
of us, all people in the medical profession; doctors, nurses,
technicians, technologists, people from paramedical and
non-medical and those who are supporting have to ensure
quality care by trying sincerely.”
Interestingly, the large majority of respondents
acknowledged the need for regulation around quality
and cost issues, and the necessary role of government.
Issue of access of the poor were also noted, and
apparent in the reported widespread practice of
informal subsidies for the poor. Even more interesting
was that almost 15% of private sector respondents
suggested the introduction of health insurance as
a strategy to help increase access and utilization of
services by the poor.
“Insurance should be made obligatory. To bring
each and every person under the medical services,
be it rickshaw puller, farmer or even your housemaid,
insurance is the only option. If these people can pay
mobile phone bills per month, then I don’t believe
they can’t pay the premium for insurance every
month.”
çç Clinic owner, Dhaka
24 Understanding the formal private-for-profit healthcare sector in urban Bangladesh

Conclusions
In urban Bangladesh, the private sector plays a crucial role in meeting the growing demand for
health care in a context where the capacity of government to deliver health services is weak.
This report aims to enhance readers’ understanding of the underlying motivations and strategies
employed by the urban private sector so that informed efforts can be made to engage them
around health systems goals of quality, equity and universal coverage.

Results indicate The study also surfaced many challenges experienced by the sector, some
of which affect the health system as a whole. These include a scarcity of
that private health full-time qualified health professionals (the human resources needed for
care sector is health), especially nurses; the lack of standardized service charges and
largely motivated by fees for different kinds of services; providers with different qualifications;
confusing and ineffective systems of regulation that makes compliance
commercial interests, difficult; inconsistent and politically biased enforcement of these regulations
due to insufficient regulatory capacity; and the absence of supportive
approaches to quality improvement.

The study found remarkable consensus around the need for government to
play a regulatory role. At the same time, there was recognition that reforms
in the regulatory system were urgently needed, which should include more
supportive approaches to quality improvement. A more structured system
of referral was also proposed for the entire health sector, with primary,
secondary and tertiary levels of care, and MBBS doctors acting as the first
point of contact.

First a patient has to go to a simple MBBS doctor and he has to provide

the patient an honest service. He will tell the patient about his illness like-
you have diabetes, so you should go to a diabetes specialist. You can go
to a public hospital or you can go to a doctor who is practicing in private.
If the patient got some cardiology problem then he will advise him to go
to a cardiologist.

ç Formal provider, Khulna

In the table that follows, these challenges, and associated solutions

and recommendations, are offered drawing on contributions from study
informants, as well as key experts who reflected on the various issues raised
by the report at a recent dissemination workshop.
Understanding the formal private-for-profit healthcare sector in urban Bangladesh
Recommendations
Issue Urban challenge
Agents/ brokers »» Paid agents used to bring clients to private
facilities which may not be appropriate given
patient needs and financial capacity
Referral »» A weak referral system within the private sector
contributes to poor healthcare
»» Patients seek care with formal providers at a
very late stage and treatment costs escalate
»» Inappropriate treatment arises due to improper
referral practices
Human resources »» Scarcity of qualified human resources:
»» Unavailability of full time consultants
»» Use of poorly trained and/or newly graduated
Business strategies
doctors
»» Post grad doctors cluster in certain cities
»» Lack of qualified nurses
»» Dual practice is impacting doctor availability and
service quality in both private and public sectors
Pharmaceuticals »» Pharmaceutical representatives influence
doctor’s prescribing patterns and interrupt
patient consultations
25
Suggestions
»» Develop standard operating procedures for the use of
agents/ brokers
»» Improve the quality of services and advertise improved
services rather than depend on agents
»» Develop and implement a structured system of referral
with MBBS doctors as the first point of contact
»» Encourage informal providers to refer patients in an
appropriate and timely manner (incentives?)
»» Require facilities to indicate the health conditions they
can manage
»» Apply and enforce accreditation requirements for
training institutions
»» Establish new training institutes to produce qualified
HR – especially nurses and paramedics
»» Prioritise medical education reform to improve quality
»» Provide mentoring during internship, and in-service
training or continuing education
»» Decentralise post-graduate opportunities in smaller
cities to improve distribution
»» Institute standard, tiered salary structure
»» Increase use of assistant nurses (post SSC exam) and
paramedics
»» Office hours of public sector doctors should be strongly
regulated
»» Institute a Medical Council (with public and private
reps – 2 yr term) to develop guidelines on when and
how pharmaceuticals can access healthcare facilities/
providers
»» Strengthen capacity of Drug Administration for better
monitoring and regulation
»» Continuing education to reduce influence of
pharmaceutical companies on prescribing behaviours
»» Advertise and promote corporate social responsibility
26 Understanding the formal private-for-profit healthcare sector in urban Bangladesh
Issue Urban challenge
Service costs »» High degree of variation in service charges
and fees impacts business interests and limits
consumer access
Patient concerns
»» Current legislation (Ordinance No. lV of 1982)” is
out of date.
»» People with political connections request
discounts and refuse to pay service charges
Regulation »» Corruption is reported around registration of
facilities, inspection visits and in renewal of
licenses etc.
»» Strong interest among private sector for greater
regulation and enforcement
»» Confusion created by the multiplicity of
regulatory bodies making compliance difficult
»» Shortage of human resources for regulation
»» District level authorities manage dual burden of
monitoring at sub-district level and urban areas.
Rules and regulations
Monitoring and »» Very limited participation of private sector in
evaluation national HMIS
»» Little routine monitoring is occurring even within
private sector facilities
Suggestions
»» Build support from stakeholders for revision of
Ordinance and other legislation
»» Fix service rates according to type of service and
qualification of providers
»» Implement updated policy which requires that service
costs be standardized and publicized
»» Dialogue between government and private sector
stakeholders around regulatory reform efforts
»» Feasibility assessment of current and proposed laws,
regulations and regulatory bodies
»» Build an effective regulatory workforce to implement:
train, deploy and monitor
»» Empower sub-district personnel to monitor at that level
»» Greater supervision of regulatory bodies
»» Make health management and information systems
(HMIS) mandatory for all private facilities
»» Monitor and evaluate the performance of the MIS using
key indicators
»» Develop supervision and complaint mechanisms
through SMS or phone
Understanding the formal private-for-profit healthcare sector in urban Bangladesh
Issue Urban challenge
Quality of Care »» Quality perceived importance by private sector,
yet non-punitive methods of quality improvement
preferred
»» Inaccurate reports provided by diagnostic
centres resulting in inappropriate treatment
»» Some private providers request further costly
investigations due to distrust of accuracy of
diagnostic reports
»» Consumers bear unnecessary costs and risks of
inappropriate diagnosis and poor quality.
Quality and equity
Universal Health »» Growing demand for services due to rapid
Coverage urbanization – much of which is driven by in-
migration of the rural poor
»» Inequitable access to private facilities in terms of
geographic location and cost
»» Urban private sector facilities report a wide
variety of discounts and subsidies for patients
with limited means, however, applied in an ad
hoc fashion
27
Suggestions
»» Develop supportive (non-punitive) supervision and
quality monitoring system to improve quality in
collaboration with quality and monitoring cell of
government
»» Involve private clinic and hospital owners association in
quality monitoring and evaluation
»» Promote use of open MRS to increase quality and
continuity of patient care
»» Provide continuing education to build capacity of
private healthcare providers and personnel involved in
diagnostic procedures
»» Invest in on the job training, infrastructure and
management to improve quality of care
»» Promote high volume low cost private sector services
for all – with government support/subsidies
»» Institute planning process around the number and
location of new private facilities to increase equitable
coverage
»» Assess experience with and willingness for public-
private partnerships around health insurance
»» Pilot insurance schemes in select private sector
facilities
28 Understanding the formal private-for-profit healthcare sector in urban Bangladesh

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