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Leadership Forum (June 2004)

Author: Eric de Roodenbeke, seconded by French government, with both WBI ( training activities) and AFTH2 (operation support,) to assist country client governments in the hospital reform and health care financing agenda.

Before formulating hospital policy in low income countries policy makers need to consider some major characteristics related to epidemiology, the health care system, and hospitals.

In low income countries, an awareness of epidemiological trends helps to understand the current decision making process. The epidemiological situation is related to the prevalence of major communicable diseases and to poor sanitation, both having a high impact on morbidity and mortality. For these reasons basic socio-demographic indicators are usually used to measure the outcomes of the health system. Moreover much progress on these can be achieved through low cost interventions with high impact (immunization, nutrition, anti-vectors campaigns).

In low income countries, as in rich countries, in reforming the health care system, hospitals are part of the debate. However, this debate does not have the same meaning in countries where :

  • Public financing covers only a minor part of health expenditures ;
  • Health insurance barely exists and third party payment is absent and ;
  • Donors and multilaterals often support the health sector more than national budget does.

In addition to these two characteristics, improving hospitals is a challenge largely because of a weak information system which is giving an inaccurate picture of hospital activities. Moreover, in most of the countries, hospitals have major difficulties in operating resulting in low quality of care and high costs, and using too large a share of insufficient national human resources.

With these three major characteristics, and in a context where national resources, in addition to international aid, are not sufficient to make the health system fully comprehensive, there are no other alternatives than to choose priorities for health expenditures. Hospitals been considered poorly efficient (mobilizing a major part of public resources without a significant effect on socio-demographic indicators) all efforts to support health care systems have been focused on primary health care (PHC) with a strong move toward a district approach and the implementation of the Bamako Initiative after the mid eighties.

The poor results from projects supporting referral hospitals and the encouraging results of PHC policy have pushed hospitals from the forefront of the health system reform agenda. In the meantime, however,

  • Most countries, though supporting the Alma Ata priorities (under pressure from donors), still devote the major share of the public health care budget to hospital sector.
  • Along with support to PHC, most of the donors recognize the importance of first referral hospitals within the district health care system.

In such a context, district hospitals have benefited from the abundant literature covering the implementation of district health systems through the 1990s. There is also a major difference between the scope of interest and the effective flow of money: a very large share of resources still goes to hospitals, although this pattern does not reflect policy commitment. Most of these resources finance capital investment but not always within comprehensive plan of support to health districts. When hospitals are mentioned in the health system reform, it does not necessarily mean that there is a clearly identified hospital policy. Usually hospitals are considered through other components of health care policy targeting: better quality of care, upgrading human resources, better geographical allocation of resources, search for better performance with more autonomy or extension of the private sector. This means that, instead of reforming hospitals, health policies just board hospitals in a broader agenda.

Since the end of the 1990s, although the major burden of HIV, the World Bank's Higly Indebted Poor Country Initiative, and the U.N. Millennium Development Goals have shifted most attention toward poverty reduction and essential health care, but there is a dawning perception that the role of hospitals should be reconsidered in health system reform. Considering the large part of public spending devoted to hospitals and the political sensitivity of hospitals in public awareness, continuing to ignore this major provider and cost driver of care seems foolhardy. Within the health sector reform framework, there is room for a hospital policy. Including the hospital sector would represent a major shift toward constructive thinking and away from using criticism of hospitals as an additional argument to concentrate support on PHC and district health services.

To address hospital reform, major attention has been given on upgrading the poor performance of hospitals as organizations. Most of the focus is on deficient use of inputs and weakness in service delivery: unreliable provision, uncommitted staff, weak operational infrastructure, shortages of equipment, low-quality care, low attendance, or inadequate utilization.

Responding to these challenges, strong emphasis has been put on organizational change becoming a core component when dealing with hospital reform:

  • How to reform public hospitals and their importance relative to the private sector
  • Privatization and the corporatization of public hospitals using cookie-cutter mechanisms pretty much the same from one continent to another.

To bring about the desired improvements, most efforts involve triggers for better performance:

  • the legal framework for the public and private sectors and the introduction of market mechanisms to achieve optimal production or cut down on waste of major inputs
  • training of managers in skills now lacking almost everywhere These managers are expected to use sound management tools.
  • Human resource policy combining better training and outcomes incentives (usually measured by the activity and/or revenues)
  • Financing schemes to motivate performance improvements and to orient production toward priority areas.

Overall, when hospital reform is mentioned as part of health sector reform, most of the attention focuses on the legal framework to improve hospital efficiency.

Concern about the organizational change to boost hospital performance is critical, but not sufficient. It hides another major question: what do hospitals contribute to the health care system? This question shifts the perspective from the individual organization to the specific production of the institution: for which products is the hospital the sole supplier? For which products do hospitals have a competitive advantage? How important are these products for the population?

The debate on hospital performance as an institution is at the heart of current research in Western Europe, but data collection to furnish evidence is still going on. Most information about hospital performance is still related to medicoeconomic analysis of major pathologies. Such an approach, which is little documented in low-income countries brings an interesting insight on hospital performance. However, institutional performance cannot be addressed through these analysis because a comprehensive framework is missing.

When the hospital is analyzed as an institution, the major concern starts with its mission. Which tasks are most relevant? Which tasks can be done efficiently, only in hospitals?
Looking at hospitals from this perspective, the indicators chosen to measure hospital production have to be revisited. With the major attention given to sociodemographic indicators to measure health system outcomes, it is no wonder that hospitals do not appear at the forefront: hospitals have a very low impact on these indicators.

After more than 25 years of advocacy, PHC has shown its limitations, although poverty reduction strategies have reemphasized the importance of basic health care. Hospitals do not fit neatly into today's prism, but that is a poor reason to ignore where they do fit.

  • The hospital, as an institution, can be considered a public good for the population it serves. Its existence provides the population with security to face health risks (emergency care is an example of this dimension). The hospital, as an organization, provides privates services to individuals.
  • The hospital is a safety net for high risks. This net can be more or less available depending on financing schemes and access to care. When present, it has an important role for solidarity within a community.
  • The hospitals plays a major role in training health workers at every level. This production is not usually measured, and the dominant organizations often separate the responsibility for delivering care from the responsibility for training. This dichotomy can explain part of poor performance of university hospitals.
  • The hospital complements PHC. Expansion of PHC should induce growth of demand for hospital care. Curative care is vital for the credibility of the health system.
  • The hospital has to be considered in relation to urban growth and the dynamic of development. Hospitals are relevant when a market area is large enough for a positive return in scale. The scope of service can be expanded to cure more diseases.

For none of these dimensions are there any indicators to measure hospital contribution to human development. Measures of human well-being are elusive. Years of life without disabilities can be counted, but the hospital's contribution to lowering suffering is intangible.

PHC is certainly legitimate, but its advocacy has focused too exclusively on trends in the basic sociodemographic indicators. These indicators, which have been used to promote investment in health, could shove hospitals out of the picture.

With the growing importance of the HIV pandemic, previous approaches are outdated; many approaches have to be combined. Prevention and basic care remain a priority, but it involves also other sectors besides health. Treatments are vital, and hospitals play a central role in organizing it, mostly on outpatient basis, and the importance of technical diagnostic assistance is growing.

Hospital reform cannot focus exclusively on ownership. A broader perspective is imperative, one that combines the evolution of the organization with the role of the institution as a responder to population needs. Hospital system reform must also consider the diversity of hospitals beyond this generic word. Hospitals have various assignments depending on their position in health system and on the geographic concentration of the population they serve. Making a better typology of hospitals should contribute to the evolution of thinking on hospitals as both organization and institution.

There is a lot of room for further thought about the future of hospitals, adding perspectives from different value systems to better fulfill human development.

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