Academic journal article
By Perrot, Jean
Bulletin of the World Health Organization , Vol. 84, No. 11
Contractual relations based on delegation of responsibility
Contractual relations based on delegation of responsibility are set up so that rather than directly managing the health services it owns or undertaking to develop health coverage itself, the state delegates an entity to take over this task.
Contracts delegating responsibility to private actors
In some instances, rather than setting up and managing the health service itself, the state negotiates with a private actor and adopts one of the types of contract discussed below.
Contracts for the devolution of a public service
A private organization (company, association, foundation or mutual society) manages a public health service on behalf of the state. On the basis of an agreement, this entity runs the public service and is furnished with terms of reference specifying the conditions. Examples include contracts for the management of public hospitals awarded to a private firm in South Africa and the Menontin health centre in Benin. Mall has adopted a more systematic approach since its national health policy stipulated that the state should no longer manage primary health centres but confer the management functions on community health associations.
Delegated management of public health establishments may take various forms which are linked to national legislation:
The private entity receives existing resources from the ministry of health--in the form of buildings and equipment--in their current state, to carry out the public service mission. In general, maintenance and renovation work are shared between the authority delegating power and the entity to which it is delegated in accordance with the arrangements provided for under the contract. In technical terms, and under French law, this is referred to as affermage (leasing) and under common law as a "lease contract." These resources remain the property of the state.
The private entity undertakes the construction of buildings and acquires equipment. These revert to being the property of the state at the end of what is generally a long-term contract. In French law, the term used is concession (concession) while common law refers to "build, operate, transfer" (BOT).
In all cases, the state remains the owner and negotiates directly with the executing agency. This type of contracting does not necessarily lead to a withdrawal of the state but to a change in its involvement.
Contracts relating to the concession of a geographical area
Much like an oil exploration or forestry lease, the state may grant a lease for an inadequately covered geographical area: examples include contracts to set up primary health care services in urban areas of Bangladesh, (1) a concession contract for an entire health district awarded to a nongovernmental organization (NGO) in Cambodia, (2,3) and contracts for setting up young physicians in rural areas lacking health facilities in Madagascar and Mall.
Since the early 1990s public-private partnerships (PPPs) have been set up in certain developed countries. (Note that the public-private partnerships described here are unrelated to the use of this expression in the context of contractual relations between a ministry of health and NGOs or associations.) PPPs differ from the types of contracting described above mainly in that the private operator is not paid by users or the general public but by the public entity which entered into the contract with it. For example, a ministry of health wishing to build a new hospital may turn to a private partner (or a group or consortium of private actors) who in turn will take on all of the following functions: financing, design, construction and maintenance. To use that infrastructure, the public actor will pay a fee to the private actor. In this way, the hospital is able to free itself of all its "administrative" activities related to building and maintenance obligations and to concentrate fully on its principal care function. …