Engaging the private sector to deliver COVID-19

tools and achieve Health for All

How to deploy tools of

government that ensure private
sector’s compliance in
delivering COVID-19 services?

Module 8
LEARNING OBJECTIVES

By the end of this module, learners will be able to:

• explain what governments can do in order to create constraints and incentives for the
private sector in health so that its operations are aligned to government policies;
• explain the relevance of the “Tools of Government” to COVID-19 response efforts.

INTRODUCTION

During this course, we have sought to emphasise the important role of government in
establishing and maintaining effective governance of the private sector in health. We have
explained how this role is realised through six governance behaviours. You may recall that one
of these is about “enabling stakeholders” – that is, government choosing to exercise:
• its powers (to authorize, regulate, and finance a diverse range of actors in the health
system in accordance with its strategic objectives);
• its capacities (to collect, analyze and share information and intelligence about (and for)
all relevant actors in the health system); and
• its responsibilities (to promote accountability among health system actors to society, to
citizens, to the populations being served/ targeted).

Of course, governments do not own or control the private sector in health (that is after all what
we mean by “private”!). So, they cannot influence private sector actors through direct
management. Instead, the Tools of Government are used to change the incentives,
accountability structures, and/ or capacities of the private sector in health. Therefore, Tools of
Government are instruments:
• deployed by governments;
• to shape the incentive and accountability environment and/ or the capacities of private
sector actors; and thereby
• support or accelerate the achievement of government-defined strategic objectives.

DEFINING THE SIX TOOLS OF GOVERNMENT

A range of tools are commonly used in health systems. These fall into three main categories.

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Financing tools

As we all know, governments have a unique role in the financing of health-related products and
services. That role is essential, to ensure that people can access effective health services on an
equitable basis. “The “market” cannot achieve this alone – since a market in which government
intervention is entirely absent will distribute services according to demand (that is, the ability
and willingness of consumers to pay) rather than to need – which is a government’s key policy
objective, within a framework of Universal Health Coverage (UHC).

Several policy tools (e.g., taxes, grants, contracts) rely on the leverage that derives from health
financing efforts to influence the private sector’s behaviours. Financing tools can be used to re-
shape the demand for, or the supply of, health products and services – so that the distribution of
services maps more closely to need.

In particular:
• demand-side financing tools, such as voucher payments, can be used to channel
resources to specified populations, increasing their ability to access the care they need
without incurring significant costs; and
• supply-side financing tools, such as contracts, grants and loans, can be used to channel
resources to providers, increasing their ability to provide services to those in need of
them.

Regulatory tools

These are used by governments to encourage or constrain certain behaviours among the
private sector by changing the incentives they face. Regulations may be focused on, for
instance:
• Entry barriers. Which entities are eligible to provide specified services? What do entities
need to do to become and to remain eligible? Licensing, certification and accreditation
are key examples of this form of regulation. They are about constraining who can do
what; and they put pressure on service providers to establish and maintain quality
systems and staffing.
• Economic regulation. Regulation may also focus on the terms on which transactions
between consumers and providers take place. Regulation may do this
o directly, for instance through price regulation, or

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 o indirectly through the capping of revenues or profits, and, still less directly,
through antitrust rules that guard against market power and the formation of
monopolies.

In both cases, regulation needs to be accompanied by an administrative apparatus to define

and enforce the rules and administer sanctions for non-compliance.

Information tools

These are often used, on the demand side, to shape what is demanded in the market, from
whom and/or on what terms. Some individuals may place too little value on health prevention
and promotion. They may even, distrust, and thus be hesitant to utilise, safe and affordable
COVID-19 vaccines. Governments often address problems like this by disseminating
information to improve peoples’ understanding and awareness of the benefits of such services.

These tools can also be used to increase demand for goods and services that benefit health;
and /or direct demand towards providers that have the quality systems and qualified staff in
place to provide such goods and services in a safe and appropriate way, and away from
providers who lack capacity to provide safe, effective care.

Information can also be provided to suppliers – to enable them to allocate their resources, and
to inform their investment decisions, in ways which allow capacity to be directed towards
geographical and/ or service areas of high demand.

USING THE TOOLS OF GOVERNMENT TO CONTAIN COVID -

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 Figure 1: Tools of Government
The figure above illustrates the “toolkit” that governments have access to when they are
seeking the change the operation of the private sector in health. This toolkit can be used- to
enhance responses to COVID-19 within health systems. Let’s see how. In the pandemic
environment, we want to contain and mitigate the health effects of the pandemic, by ensuring
equitable access to quality-assured COVID-19 tools – therapeutics, diagnostics, vaccines.

So, our key goals here concern equity of access, quality, and financial protection, as shown in
the table below.

Objectives related to COVID-19 tools Tools of Government Examples

EQUITY OF Achieve equity of Financing tools. The South African

ACCESS access to/ affordable Contracts and grants government developed
utilisation of can be used to increase new contracting
therapeutics, populations’ access to arrangement to enable
diagnostics, and free/ low-cost private hospitals to provide
vaccine services to therapeutics, COVID-19 treatment to the
their populations, diagnostics, and vaccine population free at the point
including among services in the private of need. These
poorer/ more remote sector. Temporary arrangements included an
populations. reductions to import agreement on a single

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 taxes on COVID-19 price for the government to
tools, deferral of income purchase excess clinical/
tax payments / social bed capacity from the
security contributions, included hospitals.
and access to affordable
loans for working capital
can support the private
sector in sustaining
and/or expanding
delivery.

Ensure all population Regulatory tools. Use Jordan regulated the

groups are aware of economic regulation prices of pharmaceuticals
the benefits (e.g., price regulation, and other medical supplies
of accessing COVID- profit caps, anti-trust related to COVID-19 in
19 tests, treatments, enforcement) to mitigate order to protect hospitals
and vaccines. opportunistic behaviour – against price gouging (the
e.g. price gouging. use of market power to
increase prices above a
“fair” level).
Information tools. Tunisia government
Improve information- launched a major
gathering / dissemination communication campaign
to consumers about in collaboration with the
service availability in the private sector to raise
qualified private sector. awareness of COVID-19
Address vaccine risks and the importance of
hesitancy among the practicing preventive
population. measures.

QUALITY Increase the number Financing tools. Seed

and scope of funding, financing for
qualified, competent R&D
COVID-

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19 therapeutics, Regulatory tools. Prohibit Iraq, the Islamic Republic
diagnostics, and non-qualified private of Iran, and Jordan issued
vaccine services sector entities to provide temporary licenses to
available in the therapeutics, quickly register companies
private sector. diagnostics, and vaccine who could import COVID-
services through 19 medicines and supplies
strengthening of and waived standard
regulatory framework. purchasing procedures
Encourage qualified accelerate the importation
private sector entities to process.
provide COVID-19 tools
Ensure that suppliers via licensing, certification
have the information and accreditation.
they need to deliver
services in line with Information tools (supply Uganda partnered with the
national/ international side). Increase private Uganda Healthcare
standards; and that sector capacity to deliver Federation to develop an
consumers have high-quality therapeutics, eLearning course to rapidly
knowledge about/ diagnostics, and vaccine disseminate information
awareness of which services by sharing and knowledge on COVID-
private providers information (national/ 19 clinical protocols to
are available and WHO clinical guidelines both public and private
qualified to offer and related training). healthcare workers and
COVID- plan to develop a similar
19 therapeutics, course when private
diagnostics, and providers are authorized to
vaccine services. administer the COVID-19
vaccine.
Information tools
(demand side). Improve The Philippines
information-gathering government formed the T3
and dissemination to Task Team to coordinate
consumers about which all vaccine related
providers can, and communications to tackle

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 cannot, be relied upon to growing vaccine hesitancy
deliver high-quality and encourage public
services. uptake. COVID-19
communications rely on
private partners’ expertise
and capacities, including
tapping into social media
platforms, working with
telecoms providers and
developing software
solutions.

FINANCIAL Increase affordability Financing Tools. Reduce Ghana engaged with

PROTECTION of COVID- out of pocket payments mPharma to implement an
19 therapeutics, by ensuring availability of employer-sponsored
diagnostics, and prepaid/pooled funds to vaccination programme
vaccine services. pay for private sector modelled on a “Buy one,
delivery of COVID-19 Give one” principle that
services (vouchers, ensured that each
explicit coverage for vaccinated employee
COVID-19 related resulted in another person
services in basic vaccinated for free.
packages/ social Government received a
Reduce incidence of insurance packages). 50% allocation of all doses
out-of-pocket procured by the
payments and Information Tools programme at no cost. The
catastrophic (demand side). vaccines are administered
expenditures related Consumers’ insurance by 20 private hospitals that
to utilisation of high- coverage awareness. were selected on the basis
quality COVID- of their ultra-low freezer
19 therapeutics, capacity.
diagnostics, and
vaccine services. The Iranian Health
Insurance Organization set
up a hotline to respond to

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 consumer queries on
health insurance issues
and provide COVID-19
information.

Let’s take EQUITY OF ACCESS first. We want to achieve equity of access to COVID-19 related
therapeutics, diagnostics, and vaccine services among the population, including among poorer/
more remote groups. For this, finance tools, such as contracts and grants, can be used to
increase access to free/ low-cost services in the private sector. Regulatory tools, such as price
regulation, profit caps or anti-trust enforcement, can be used to mitigate opportunistic
behaviours such as price gouging. We might want to further support these efforts by deploying
information tools – for example, providing consumers with information to enhance their
awareness of the benefits of utilising COVID-related services.

We may want to use finance tools to lower the cost-of-service delivery, for instance by imposing
reductions to import taxes on COVID-19 supplies, deferring taxes, or enhancing access to
affordable loans for working capital – all of this can support the private sector to sustain and/or
expand delivery during the pandemic.

At the same time, we want to promote QUALITY OF CARE. We may want to increase the
number and scope of qualified, competent private sector providers able and available to deliver
COVID-19 therapeutics, diagnostics, and vaccine services (alongside the public sector). We
may use regulatory tools, which can constrain low quality private sector entities, while
encouraging high quality private sector entities, e.g., licensing, certification and accreditation,
are likely to be relevant here.
We may want to support this by use of information tools - to improve the information held by
consumers about which providers can, and cannot, be relied upon to deliver high-quality,
effective health products and services.

Finally, in terms of FINANCIAL PROTECTION, we may aim to increase affordability of COVID-19

services; and reduce the incidence of out-of-pocket payments and catastrophic expenditures.
We may do this by recourse to financing tools – for example, to reduce out of pocket payments
by ensuring availability of prepaid/pooled funds to pay for private sector delivery (vouchers,

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explicit coverage for COVID-19 services in social insurance packages), alongside supporting
this with information tools, to increase consumers’ awareness of the benefits of coverage; or to
increase suppliers’ awareness that insurance packages will cover patients for related services.

CONCLUSION

As the examples in the above table illustrate, it is becoming clear during the COVID-19
pandemic that, through the Tools of Government, policymakers are able to exert considerable
influence on entities that it does not own or control – shaping what they do, how well they do it,
for whom, and on what terms.

In doing so, they can enable a broad range of stakeholders in the health system to contribute
effectively to COVID-19 response objectives.

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