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Viewpoint (January 2003)

Author: Peter Berman, Professor of Population and International Health Economics, Harvard School of Public Health 

"Health sector reform" in the 1990's definitely had the buzz. Most of the world's wealthier countries introduced or facilitated significant changes in how health care was financed, delivered, regulated, and consumed in efforts to improve health impact, control rising costs, keep consumers happy…or all of those things at the same time.  

The interest spread rapidly to developing countries and the international health policy community. Many middle and lower income countries launched health reform programs in the ensuing years, often with international support. 

Health sector reform can be defined as "strategic, purposeful change" - strategic in the sense of addressing significant, fundamental dimensions of health systems; purposeful in the sense of having a rational, planned basis - to improve health system performance in terms of well-defined outcomes. A wide variety of changes, real and planned, have been labeled health sector reform. More recently, a sharp critique of health sector reform has emerged, with critics arguing that reform may be irrelevant or even may harm health system performance and worsen health outcomes of the poor.

A more nuanced look at reform in developing countries highlights three major types of reform:

  • "Reform" imposed on the health system by changes external to it. This includes the political and economic changes associated with the collapse of communist governments or opening up to the market; major state reforms; and economic reforms such as those associated with significant structural adjustment programs.
  • "Big R" reforms, meaning strategic, purposeful reform programs which introduced substantial change affecting health system performance across several major parts of the system.
  • "Small r" reforms, still strategic and purposeful, but more narrowly focused on only limited parts of the system.


For sure, well-planned health sector reform can go wrong. But much of the bad experience in health sector reform to date is the result of rushed efforts to respond to change imposed from without. Consider, for example, the hasty, unregulated privatization of health care in transitional economies or the poorly planned introduction of user fees in many African countries experiencing sudden fiscal crises. The problems caused are real and serious, but is the fault with health sector reform per se?

Reviewing international experience with explicit health sector programs, "Big R" reform is not that common in lower and middle income countries. Little "r" reform is much more widespread. "Big R" reform, done well, is demanding. It requires information and evidence about health and health system conditions. It also requires institutional capacity and stability to implement significant and sustained programs of change.

Colombia has been held up as a model of Big R reform in the 1990s. Its experience is instructive. Colombia enacted comprehensive health sector reform legislation in response to a fiscal crisis in the publicly-financed social security system and the fiscal opportunity emerging from major new petroleum discoveries. The reform design emerged from a major health systems analytical effort led by a creative and dynamic health minister. It was a program of far-reaching change to achieve universal coverage with health insurance, modeled on the "managed competition" concept that the U.S. was considering at that time.

Colombia has achieved much in its reform program. Insurance coverage has expanded dramatically to more than 65% of the population. Access to care by the poor, especially the urban poor, has increased. New insurance and health care delivery organizations have been developed. But the results have also been hampered by economic and political instability.

Although "little r" reform may appear simpler and more focused, international experience shows repeatedly that design and implementation matter. Conceptually attractive ideas for change, such as decentralization, "new public management" approaches, contracting, and micro-insurance may founder when poorly implemented or inadequately supported. Even modest reform requires sound diagnosis, appropriate design for national and local conditions, and serious attention to implementation.

In recent years, the international discourse on health emphasized poverty reduction and the Millennium Development Goals (MDGs). The MDGs provide quantitative targets for health improvement and control of major infectious diseases. Given past experience, should middle and lower income countries pursue serious system reform as part of their efforts to reduce poverty and address major disease control priorities? My answer is an emphatic YES.

Reformers in middle and lower income countries should embrace the renewed focus on priority outcomes embodied in the MDGs and poverty alleviation targets. The intervention programs that are needed to reach these goals, programs such as integrated management of childhood illness (IMCI), reproductive health, control of major infectious diseases like TB and Malaria, and prevention, treatment, and care for HIV/AIDS, place significant new demands on health systems. These are demands for services of sufficient technical quality, more easily accessible to the poor, and acceptable to them with the capability for sustained contact with families to assure better outcomes. Better health system performance is a necessary condition for achieving these goals and, in many countries, this will mean some type of system reform. To this end, we must do a better job of designing and implementing health reform efforts.

Capacity-building, especially in terms of human resources, is essential. One step in this direction has been the development of teachable, replicable approaches to analyzing health system performance, the causes of poor performance, and ways policy makers can use national and international knowledge and evidence to reform health systems for better performance.

Such capacity building is the focus of the World Bank Institute's (WBI) Flagship Program on Health Sector Reform, including the WBI-Harvard School of Public Health Flagship Course on Health Sector Reform and Sustainable Financing being offered January 13-31, 2003. The course makes extensive use of Getting Health Reform Right (GHRR), a text to help reform practitioners improve the quality of reform design and implementation. GHRR and the Flagship Course include:

  • A guide to ethical theory to help think through the moral basis for policy goals and preferences;
  • Ultimate and intermediate health system outcomes, linked to ethical theory;
  • An introduction to systematic political analysis, because in health reform, politics matters at each step of the policy cycle;
  • A framework of five health system "control knobs" that summarize the intervention options available to reformers (payment, financing, organization, regulation, and behavior) to influence health system performance. These provide the focus for policy development and for analyzing how to achieve better performance;
  • A systematic approach to health system diagnosis that can taught and practiced effectively. This approach is based on the causal model of the determinants of health system performance and the control knobs.
  • Conditional guidance based on global experience in using the control knobs to improve health system performance

Achieving the potential health system contributions to the MDGs and poverty reduction will not be easy, quick, or cheap. More than knowledge and skill is needed and there is evidence that these needs are being recognized. For many countries, the getting health reform right is an essential step in the right direction, now more than ever.

Peter Berman 
Further Reading

  • Berman, P. (1995) Health Sector Reform: Making Health Development Sustainable. Cambridge, MA: Harvard University Press. Also published as special issue in Health Policy, 32(1-3):13-28, 1995.
  • Berman, P. and T. Bossert (2000). A Decade of Health Sector Reform in Developing Countries: What Have We Learned? DDM Report No. 81. Cambridge, MA: Harvard School of Public Health. This and other relevant reports are available from the International Health Systems Group at
  • Mills, A., S. Bennett, and S. Russell. 2001. The Challenge of Health Sector Reform: What Must Governments Do? Oxford: McMillan Press
  • Roberts, M., W.C. Hsiao, , P. Berman and M. Reich, forthcoming, 2003. Getting Health Reform Right. Oxford: Oxford University Press
  • World Health Organization. (2000) Health Systems: Improving Performance. World Health Report - 2000, Geneva at 

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