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Social Science & Medicine 59 (2004) 931–943
ARTICLE IN PRESS
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doi:10.1016/j.so
The performance of different models of primary care provisionin Southern Africa
Anne Millsa,*, Natasha Palmera, Lucy Gilsonb, Di McIntyrec, Helen Schneiderb,Edina Sinanovicc, Haroon Wadeeb
aHealth Economics and Financing Programme, London School of Hygiene and Tropical Medicine (LSHTM), Keppel Street,
WC1E 7HT London, UKbCentre for Health Policy, School of Public Health, University of Witwatersrand, P.O. Box 1038, Johannesburg 2000, South Africa
cHealth Economics Unit, School of Public Health, University of Cape Town, Anzio Road, Observatory, Cape Town 7925, South Africa
Abstract
Despite the emphasis placed during the last two decades on public delivery of comprehensive and equitable primary
care (PC) to developing country populations, coverage remains far from universal and the quality often poor. Users
frequently patronise private providers, ranging from informal drug sellers to trained professionals. Interest is increasing
internationally in the potential for making better use of private providers, including contractual approaches. The
research aim was to examine the performance of different models of PC provision, in order to identify their strengths
and weaknesses from the perspective of a government wishing to develop an overall strategy for improving PC
provision. Models evaluated were: (a) South African general practitioners (district surgeons) providing services under
public contracts; (b) clinics provided in Lesotho under a sub-contract between a construction company and a South
African health care company; (c) GP services provided through an Independent Practitioner Association to low income
insured workers and families; (d) a private clinic chain serving low income insured and uninsured workers and their
families; and (e) for comparative purposes, South African public clinics. Performance was analysed in terms of provider
cost and quality (of infrastructure, treatment practices, acceptability to patients and communities), allowing for
differences in services and case-mix. The diversity of the arrangements made direct comparisons difficult, however, clear
differences were identified between the models and conclusions drawn on their relative performance and the influences
upon performance. The study findings demonstrate that contextual features strongly influence provider performance,
and that a crude public/private comparison is not helpful. Key issues in contract design likely to influence performance
are highlighted. Finally, the study argues that there is a need before contracting out service provision to consider how
the performance of private providers might change when the context within which they are working changes with the
introduction of a contract.
r 2004 Elsevier Ltd. All rights reserved.
Keywords: Primary care; Contracting out; Public sector; Private sector; Southern Africa; Health systems research
Introduction
Ensuring that service organisation matches health
needs and resource availability is the key challenge in
ing author. Tel.: +44-20-7927-2354; fax: +44-
ess: [email protected] (A. Mills).
e front matter r 2004 Elsevier Ltd. All rights reserve
cscimed.2003.12.015
designing equitable primary care (PC) systems (Starfield,
1998). In low and middle income country (LMIC)
populations, PC coverage remains incomplete and
technical and user-perceived quality often poor. Where
users have a choice, they frequently patronise private
providers ranging from informal drug sellers to trained
professionals (Bennett, McPake, & Mills, 1997). Recent
reviews argue that greater attention needs to be paid to
d.
ARTICLE IN PRESSA. Mills et al. / Social Science & Medicine 59 (2004) 931–943932
improving private services and establishing or improv-
ing relationships between the public sector and private
providers, in particular through contracting out
service provision (eg Giustu, Criel, & De Bethune,
1997; Mills, Brugha, Hanson, & McPake, 2002),
reflecting the debate over the appropriate structure
and management of the public sector as a whole
(Jackson & Price 1994; World Bank, 2003). The
extent to which government hierarchies, business
models or the non-profit sector provide appropriate
models is unclear (Mintzberg, 1996; Salamon, 1993).
Williamson (1975) argued that the appropriate
design of service production should be influenced
by the identity, ownership and motivation of the
actors as well as the nature of the transaction being
governed. Within this overall literature, a key ques-
tion for the health sector has been appropriate
payment mechanisms for doctors (Gosden et al.,
2001).
Very limited information is available for LMICs
regarding the performance of alternative approaches to
PC provision. Bennett (1997) identified only three
studies of efficiency and quality, all comparing
public and not-for-profit providers. With respect to
contracts, there is some country-specific evidence
for hospital and non-clinical services (Mills, 1998),
district health services (Souters & Griffiths, 2003),
and preventive services (Abramson, 1999), but vir-
tually no evidence specifically on contracting out
PC.
In South Africa, contracts between the state and
private firms have been used for many years to provide
long-stay hospital care, and, on a limited scale, for
district hospital care. In 1995, a Committee of Inquiry
(South Africa (Republic), 1995) recommended contract-
ing with accredited private GP practices to provide
comprehensive PC for a defined population, but this has
yet to be implemented.
The aim of the study reported here was to explore
whether the government should continue with the public
hierarchical model of PC provision, or should also
consider contracting-out service provision and if so, to
what type of provider. Performance of a cross-section of
public clinics was compared with a range of privately
owned PC services (some operating under contract,
others being potential contractors) in order to identify
the models’ strengths and weaknesses. The study also
considered influences upon the performance of the
different models (including contract design) and
differences between models which should be taken
into account when writing contracts. While the study
focus was South Africa, the questions asked, and
analytical findings, are of relevance to other coun-
tries which have public provision of poor perceived
quality, and rapidly growing and widely used private
services.
Conceptual framework and methods
A series of case studies were conducted of the different
models, using quantitative and qualitative methods of
data collection within an overall qualitative case study
design. Comparisons are not made statistically but paint
a picture of key features of service delivery, enabling
useful consideration of similarities and differences.
Performance was defined as technical quality (in terms
largely of structure and process aspects), acceptability to
users and cost of service delivery. Fig. 1 outlines the
framework developed to assist in understanding the
influence of the context in which a provider was
operating, as well as differences in the nature of
providers. As the figure shows, performance is affected
by a combination of influences upon both the demand
for services and the supply of services.
Factors influencing demand are the socio-economic
and demographic characteristics of the population, and
their preferences for different provider characteristics.
Whether clients are insured, have to pay fees or can
access state-financed services, and the degree of choice of
alternative providers, are also likely to be important
influences on demand. Supply side factors encompass
the size and location of providers, and capacity issues
such as provider resources and expertise, and the
financial and non-financial incentive structure which
determines how resources are used.
A distinction is drawn in Fig. 1 between incentives
within hierarchical organisations (salaried employees in
the public or private sector) and within private ‘owner
managed’ providers (GPs in solo or group practice).
Private ‘owner managed’ providers benefit directly from
the incentives created by each payment method, as well
as being subject to non-financial incentives which may
be personal or professional (Palmer & Mills, 2003).
Within hierarchical organisations, the incentives faced
by employees are different, and potentially more
influenced by salary level and management style and
competency than the manner in which the provider
organisation is remunerated. Demand and supply
factors affect the performance of providers both
directly, and via their influence on the nature and size
of their workload.
Models of PC available for study, and especially of
contracted out PC, were quite limited. Two public/
private contracts were studied, together with two models
of PC delivery existing within the private sector which
were judged to offer potential for contracts with
government in the future. Public provision of PC was
also studied, as the current dominant policy choice.
Community-based NGO approaches were excluded
since they served very specific populations with a limited
range of services. Table 1 summarises the five models
chosen and the purposive selection of the sample within
each model. The models demonstrate a range of
ARTICLE IN PRESS
Fig. 1. Demand and supply factors affecting the performance of PC providers.
A. Mills et al. / Social Science & Medicine 59 (2004) 931–943 933
providers (private GPs, commercial companies, public
providers); offering various mixes of PC services (doctor
or nurse-led; large and small clinics); over a cross-section
of settings (rural and urban in different parts of South
Africa); and to a range of clients (uninsured and low
income insured).
Using a range of data collection tools, a picture was
built up of the nature of service delivery in each model.
Methods were standardised across the research sites,
including costing methods. Table 2 summarises data
collection tools, data sources, and the aspects of
performance addressed (for more detail see Palmer,
Sinanovic & McIntyre, 1998). Capital items were valued
at replacement cost and annualised using an 8%
discount rate and appropriate life-spans. The different
service mixes of the models was allowed for by
estimating service-specific costs: drug costs were allo-
cated to each service (e.g. sexually transmitted infections
(STIs), chronic care), and staff time was apportioned in
relation to the relative lengths of different types of
consultation. Sensitivity analysis was performed to allow
for different valuations of the time of self-employed
GPs. The very variable quality of patient records posed
the greatest problem with respect to data quality, and
was addressed by using multiple sources of quality data.
Analyses were done for each model and compared
across models on a number of dimensions. Where there
were two sites for a model, results are presented for
individual sites. Where the number of sites was greater
than two, results report an average across sites.
Description of models
Table 3 summarises key features of each model and its
patient population. The public model, which encom-
passed large urban polyclinics and small rural clinics,
was grouped into large and small clinics.
Providers under contract to the public sector
Individual GP contract
The part-time district surgeon arrangement has been
in existence for many years in rural towns, and
originated in the need to provide forensic medicine,
medical cover for the hospital, and curative PC for
‘state’ patients (those below a certain income) in areas
where full time public doctors were either not needed or
could not be recruited. Provinces contracted private GPs
part-time. For PC services, they were remunerated at
sessional rates, based on an assumed time per type of
service (eg 10min for a PC consultation), plus a flat fee
per prescription. GPs usually provided facilities for
public patients in separate areas within their private
practice. Separate, nurse-based, public clinics provided
preventive care. Since the removal of user fees for public
PC in 1996, contracted GPs have been delivering services
free to users and demand for services has therefore been
high, with some practices seeing daily over 100 public
patients. Others were turning patients away as their
province had imposed a daily cap on the number of
ARTICLE IN PRESS
Table 1
Models and characteristics of sites studied
Model Individual GP
contract
Company contract IPA Clinic chain Public integrated
model
Services provided PC physician in
individual or group
practice providing
PC services and
drugs
Commercial
company running
PC clinics for
construction sites
and local
communities,
providing PC
services, drugs, lab,
X-ray
PC physician in
individual or group
practice providing
PC services and
drugs
Commercial
company running a
chain of clinics
providing PC
services; drugs; lab
tests; X-ray
PC clinics
providing PC
services, drugs, lab
tests (some clinics),
X-ray (some
clinics)
Funding/payment
mechanism
Contracted by
provincial
authority to
provide free
services to the
general public (also
receive income
from private
practice)
Contracted by
construction
company funded
by parastatal
company
Capitated patients
enrolled in IPA-
managed insurance
scheme (clinics also
see fee-paying
patients)
Fee-paying patients
both insured and
uninsured;
capitated patients
enrolled in their
employer’s
insurance scheme
Global budget
from either
provincial or local
authority
Sites studied 2 provinces; 4 sites
in Western Cape
and 5 in Eastern
Cape
2 sites in Lesotho 2 sites in Eastern
Cape
1 site in Gauteng; 1
in North West
province
7 sites: Western
Cape (3), Eastern
Cape (2), Gauteng
(2)
Reasons for model
and site selection
Provinces:
contracted GPs
important service
providers in
selected provinces;
these provinces
historically used
the same contract
The most recent
and the longest
established clinics
One site in low
income area with
few capitated
patients and one
site in centre of
town with higher
proportion of
capitated patients
Typical examples
of the most up to
date service
provision
Chosen to
represent the range
of circumstances in
the public sector
including location,
size, range of
services, and
availability of
doctor
Sites: cross-section
of: areas, types of
town, number of
GPs per town, and
contractual history
A. Mills et al. / Social Science & Medicine 59 (2004) 931–943934
patients reimbursed. Patients were predominately poor,
with little education.
Company contract
Large scale mining or industrial enterprises frequently
provide medical care services to their workers (often
through contracts with medical care firms), and some-
times also to local communities. In the model evaluated
here, a Lesotho parastatal company was funding major
construction works, and included in the service specifi-
cation the running of PC clinics for workers and the
local community. The Ministry of Health reimbursed
the cost of drugs, and other costs were covered by the
contract. Community members paid a user fee of 15
Rand, which was 1.5–3 times higher than that charged in
Lesotho government or church clinics; relatively few
patients attended per day.
Pure private sector models
Independent practice association (IPA)
Urban areas in South Africa have large numbers of
GPs practising privately, their income coming both from
fee-paying walk-in patients and from insured patients
whose medical scheme pays either fee-for-service or
capitation, depending on the scheme. This IPA offered
ARTICLE IN PRESS
Table 2
Data collection tools and sources
Tool (sources) Aiming to measure To shed light ony Target sample size per site
Semi-structured interviews
(facility and company
managers, public sector
purchasers, key informants at
national level)
All aspects of managerial and,
where relevant, contractual
relationships
Organisational structures and
management systems
Contract design
All relevant personnel
Operational details of clinics
e.g. services, opening hours
Manager and provider
motivations and capacity
Nature of service delivery
Cost analysis (facility and
office records; clinic
observations)
Total cost and cost per visit Efficiency of resource use Not relevant
Exit Interviews (patients
leaving clinics)
Experience and perception of
users
Process quality 50
Socio-demographic profile of
users
Structural qualitya
Observation checklist and
Interview (observation at
clinics; clinic managers)
Resources and services
available
Structural qualitya Not relevant
Waiting and consultation
times (timing patients in
clinics)
Adequacy of resources
Duration of consultation
Structural qualitya 50
Process quality
Reviews of STI, diabetes and
hypertension patients (patient
records)
Medical practice Process quality 30 per tracer condition
Adherence to standard
treatment guidelines
Quality of records
Proxy for outcomes
Structural qualitya
Focus Group discussions
(groups of women aged over
20 living adjacent to study
sites)
Experience and perception of
users and non-users of service
Range of treatment options
available
Acceptability to users (adult
women chosen as most
frequent users of PC)
23 purposively sampled to
cover all models
aThese were combined in a structural quality index, with scores attached, in order to summarise the adequacy of resources for service
delivery.
A. Mills et al. / Social Science & Medicine 59 (2004) 931–943 935
an insurance plan to local employers which provided
comprehensive cover at low cost, using IPA member
surgeries as gatekeepers. Practices were generally busy
with a mix of insured and fee-paying patients. The IPA
reinsured for hospital care and specialist services and
paid GPs monthly according to the number of people
registered with their practice; deductions were made for
specialist referrals, visits to other GPs and auxiliary
services. Although most patients of these practices were
employed, their incomes were relatively low.
Clinic chain
The profits to be made from the urban PC market
have begun to attract commercial companies providing
standardised services in chains of branded clinics,
usually concentrated where there are many low
income employed workers (e.g. near townships). The
example studied was a chain providing PC services, X-
ray and laboratory testing. Its functioning is described
more fully in Palmer, Mills, Wadee, Gilson, and
Schneider (2003). Patients were filtered through a
series of health care providers, starting with a PC
worker, then a nurse clinician, and finally a doctor if
necessary.
Public integrated model
Public sector PC in South Africa is provided and
financed by the state and is currently free at the point of
use to all uninsured patients. Historically, provincial
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Table 3
Service and user characteristics
Model Individual GP contract Company contracta IPA Clinic chain Public integrated model
Setting and clients Rural towns; low
income groups
Remote rural area;
local communities
Urban; low income
insured workers and
their families
Urban; low income
workers and families,
some insured
Large urban and peri-urban
areas; rural towns and
districts; non-insured
people
Services provided Doctor-based service; curative
only (preventive care done
by adjacent public
clinics)
Doctor based service;
limited preventive
activities
Doctor-based service;
immunisation,
MCH, ANC
Nurse screening; full time
doctor available; limited
preventive services
Comprehensive PC; doctor
based service (1); nurse
based service (1); sessional
doctor (4); full time
doctor available (1)
W Cape E Cape Site 1 Site 2 Site 1 Site 2 Site 1 Site 2 Large Small
Mean patient
workload per FTE
health worker per day
127 98 13 40 96 33 164 127 370 89
% completed
primary education
17 20 33 94 59 80 41 44
% with household
income oR500/mth
65 78 66 17 10 14 7 55 51
Utilisation (%):
Curative care 46 60 83 62 59 75 73 49 50
Chronic care 30 35 14 12 10 13 12 27 25
ANC/MCH/FP 2 2 2 9 11 12 14 6 12
ANC: antenatal care; MCH: maternal and child health; FP: family planning.aDue to the small volumes of patients at one clinic, data from both clinics were analysed together.
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clinics were tasked with providing curative services while
local government clinics undertook the provision of
‘preventive’ PC (including treatment of STIs and TB);
services have yet to be fully integrated. Users were
generally poor, with the majority not having completed
primary education.
Performance of the alternative models
Prior to considering performance across the models, it
is important to re-emphasise key differences between
them, as summarised in Table 3. They include differ-
ences in provider mix, with some services doctor-based
and others involving nurse screening; very different sized
clinics in terms of staff quota and daily workload; a
greater share of chronic patients in the individual GP
contract clinics and the public clinics; and, not surpris-
ingly, a more educated and relatively less poor popula-
tion using the pure private models.
Cost of care
Table 4 summarises the cost per visit for the different
models, showing the breakdown by input. Small public
clinics had much lower costs than large public clinics.
The IPA and the company contract costs were not
competitive with any of the public clinics. However, the
contracted GPs and the clinic chain had costs that were
highly comparable to public costs. Valuing GP time in
terms of potential income lost from private consulta-
Table 4
Costs to provider (Rand 1998/1999)a
Individual GP
contract
Company
contract
W. Cape E. Cape
n ¼ 4 n ¼ 5 n ¼ 2
Input shares (%)
Clinical staff 42 48 27 33
Medical and surgical
supplies
38 24 21 19
Recurrent costs 89 85 81 87
Capital costs 11 15 19 13
Unit costs (Rand)
Clinical staff/visit 17.28 20.44 42.53 53.07
Medical and surgical
supplies/visit
15.58 10.14 32.69 29.51
Recurrent cost/visit 36.94 35.96 128.58 139.14
Capital cost/visit 4.25 6.05 29.49 20.18
Total cost/visit 41.19 42.01 158.08 159.32
aR1=$12.74.
tions reduced the GP contract cost to close to that of
small public clinics (data not shown). Service-specific
costs reflected a similar pattern of differences between
the models (data not shown).
The IPA model cost was considerably higher than the
contracted GPs’ cost, with spending on drugs and
supplies twice as high. The company contract model had
extremely high costs relative to the other providers in all
categories. Contract specifications required clinics to
have 24 h operation, full doctor cover and an array of
emergency equipment in order to meet health and safety
standards for the construction workforce (though
facilities exclusively for construction workers were
excluded from the costing). Clinical staff costs per visit
and capital cost per visit were at least double those of
other providers. The ‘cost plus’ contract design appeared
instrumental in encouraging high expenditure, as re-
flected in the average cost of drugs prescribed.
Despite the similarity in overall cost per visit between
public clinics, contracted GPs and the clinic chain, the
input mix differed considerably especially for drug costs,
staff costs and capital expenditure. Expenditures on
drugs and medical supplies were roughly comparable
between these models, although large public sector
clinics and some contracted GPs were spending rela-
tively high amounts (data not shown). Expenditure on
clinical staff in small public clinics and the clinic chain
was much below the other models, reflecting their
greater reliance on PC nurses. Lastly, capital expendi-
ture both in absolute terms and as a proportion of total
expenditure was greatest for the clinic company and the
IPA Clinic chain Public integrated model
Large Small
n ¼ 2 n ¼ 2 n ¼ 4 n ¼ 3
23 32 23 29 40 29
41 29 23 15 23 31
95 90 79 79 81 88
5 10 21 21 19 12
19.58 29.62 9.17 12.92 21.32 9.44
34.76 26.95 9.06 6.76 12.44 10.80
81.18 84.43 31.41 35.84 44.48 29.37
4.60 9.11 8.27 9.48 10.44 3.85
85.78 93.53 39.68 45.31 54.92 33.21
ARTICLE IN PRESSA. Mills et al. / Social Science & Medicine 59 (2004) 931–943938
large public clinics. Management costs were also higher
for the clinic chain (data not shown; see Palmer et al.,
2003).
Technical quality of care
Table 5 presents indicators of technical quality.
Consultation times were short overall, with contracted
GPs the shortest and the IPA model, clinic chain and
small public clinics the longest. Structural quality scores
revealed considerable differences. Amongst private
providers there was a considerable range, with both
the best and the worst structural scores (company
contract and contracted GPs respectively). In terms of
physical environment, contracted GPs’ low scores
reflected a lack of investment in terms of space, building
maintenance, and availability of toilets and equipment.
Practices were often cramped, in a poor state of repair
and lacking disabled access. The company contract
clinics in contrast were well equipped, furnished and
maintained, and their staff were operating under less
pressure. Public clinics tended to score well on physical
infrastructure and environment but suffered from long
waiting times and excessive workload. Smaller public
clinics scored higher because their resources were not so
over-stretched, and their workload was more appro-
priate to their size.
The structural quality index sought to capture
elements of service standardisation such as whether all
parts of South Africa’s proposed essential package of
PC services were offered, and whether the facility had a
copy of the government Essential Drug List (EDL). No
private sector provider was offering more than 75% of
what the government considered essential services and
none could show a copy of the EDL. Services typically
not offered were antenatal care and immunisation, as
well as more specialised services such as physiotherapy
and social work. In the case of contracted GPs, this was
because such service provision was done by adjacent
public clinics. In the case of the Lesotho clinics, the
purchasers considered these services were included in the
contract but providers were not keen to deliver them,
arguing this would duplicate the work of public clinics,
and create problems when contracts ended. Many public
clinics also did not provide the full package of services
expected, due to the historical divide between curative
and preventive care. Emergency cover was not provided
by the IPA GPs, the clinic chain or the smaller public
clinics.
The indicators of quality of care for the three tracer
conditions (STIs, diabetes and hypertension) showed
that knowledge of correct STI treatment was poor
amongst private providers, with the exception of the
company contract, and some public providers. Record
reviews noting what proportion of STI patients were
diagnosed syndromically and treated correctly (in line
with government guidelines) reflected poorly on all
models except small public clinics and the clinic chain,
which were the only two models to score over 80%. In
the two IPA clinics, very few STI patients had been
diagnosed syndromically or treated correctly. Such data
were not available for contracted GPs due to their poor
record-keeping, but in interviews their correct treatment
knowledge averaged 50%. Large public clinics’ perfor-
mance fell between the best and the worst of the private
providers.
Care of chronic conditions reflected a different
pattern. Here, the clinic chain scored markedly below
the other models, notably on continuity of care. It gave
adequate treatment (or treatment in line with other
models) to those chronic patients that attended, but a
high proportion of patients with hypertension and
diabetes made less than 25% of expected visits. This
pattern probably reflected some combination of finan-
cial access barriers, plus the often relatively good
reputation of public chronic disease services.
Acceptability to users
Acceptability of services to users is a key element of
quality, though one that is particularly difficult to assess
(Schneider & Palmer, 2002). Total time spent at the
clinic was taken as one indicator. The longest was an
average of three hours at the company contract clinics,
due to a ‘tiered’ system where all construction workers
and their families were treated before local residents.
Total time for GP contract and public models, which
had no financial barrier to access and were the most
crowded, was around 2 h. In contrast, service users
could access consultations and drugs at the IPA in
around half an hour, and at the clinic chain in one hour.
Despite their highly situated and relative nature, data
from FGDs are crucial for shedding light on the human
dimensions of service acceptability. FGD participants
spoke about all their experiences of health services,
public and private, and discussed a number of common
issues including accessibility (waiting times, queues,
likelihood of being sent away without being seen); and
attitudes and practices of staff (politeness, perceived
competence, willingness to explain, amount of time
spent examining/discussing problem, confidentiality).
Views on the attitudes and competence of public
service providers ranged across the spectrum from
excellent to unacceptable. Contracted GPs and the
public sector (large clinics) were most criticised with
frequent mention of waking early to get to a facility, and
waiting until afternoon only to be told to go home and
return next day. The longer measured waiting times of
these models support these views. Public nurses in large
urban clinics were criticised for their attitude and
treatment of patients, rudeness, lack of confidentiality
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Table 5
Technical quality of care indicators
Individual GP contract Company contract IPA Clinic chain Public integrated model
Western
Cape
Eastern
Cape
Large Small
n ¼ 4 n ¼ 5 n ¼ 2 n ¼ 2 n ¼ 2 n ¼ 4 n ¼ 3
Total consultation
time
Mean (min) 3 5.1 7.7 7.9 9.5 9 N/A 6 9
Structural quality
scores
Infrastructure (%)a 68 66 94 97 61 79 100 74 83 71
Access (%)b 54 76 80 93 80 70 88 70 75 82
Patient environment (%)c 68 50 78 78 90 95 90 90 72 80
Drugs (%)d 60 56 55 75 55 55 55 31 75 95
Total (%) 68 64 80 85 69 75 90 83 83 84
STI treatment Correct treatment knowledge of
providers (%)
51 48 91 46 67 52 44 72 80
Syndromic diagnosis (%) N/A N/A 95 8 0 77 93 51 79
% treated correctlye N/A N/A 37 31 14 97 97 59 96
Diabetes
treatment
% of patient actual visits with BGL
recorded X75%
66 76 50 94 47 82 9 61 89
% of patients p25% expected visits 7 0 0 10 8 74 59 2 1
Hypertension
treatment
% of patient actual visits with BP
recorded X75% of times
50 84 92 72 33 94 96 72 93
% of patients p25% expected visits 3 0 0 0 0 48 48 5 0
N/A: not applicable; BGL: blood glucose level; BP: blood pressure.aFor example, adequacy and state of repair of buildings, adequate emergency equipment, adequacy of toilets.bFor example, opening hours, range of services offered, access for disabled people.cFor example, time spent in the clinic, adequacy and comfort of waiting area, patient privacy during the consultation, whether appropriate health education materials were on
display.dFor example, supply at the time of visit of basic checklist of essential drugs and some drugs specific to tracer conditions such as STIs, diabetes and hypertensione In terms of Department of Health guidelines.
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and blatant favouritism towards those that they knew or
perceived to be better off patients.
They pick and choose people, it depends if you have a
sister or someone that they attend church with, then
you will be helped soon and given a good service
One woman described how a nurse had yelled at and
threatened to smack her son when he struggled as she
was giving an injection; others said:
nurses shouldn’t be allowed to scold patients
nurses at [large urban clinic] like yelling
In other areas, often smaller or rural clinics, the
perception of public nurses was different and they were
praised for their sympathy and involvement with the
community:
the relationship between the sister and the commu-
nity is good. She lives here and she knows what most
people’s circumstances are like
they are always able to handle my problems and
they are not short tempered. They are always there
for you when you need them and they give you good
medication
Some participants explained that in the public sector
it was a matter of luck which nurse you saw and that
some were sympathetic and helpful whilst others ‘had no
care’. In several groups it was suggested that problems
arose not because the nurses were themselves cruel or
uncaring but due to the pressure under which they
worked and a lack of resources:
I think the problem started when the basic medical
services became free of charge. In the past the nurses
used to handle the patients the right way, but now
they become impatienty
Contracted GPs were viewed in a similar fashion as
public sector nurses, with some complaints:
it isn’t about the patients’ well-being, it’s about the
money that he will get at the end of the month
and some praise:
I like the attention that he gives. He doesn’t just ask
me what the problem is. He also examines meygives
me medicineytells me to come back
The attitudes of staff in other private providers,
contracted or not, was barely criticised.
They make you feel important. Their reception is
good.
You don’t have to wait in long queues, you walk in
and they help you
Favourable comments on the clinic chain centred
on their equipment and willingness to do diagnostic
tests:
They provide many services, sonar, better than
private doctors. Optometrists. Dentists
They check you thoroughly, but if you go to a
government clinic, they just give you Panado, they
don’t even check your urine
It is unclear to what extent the favourable views of
private providers may reflect the experience of paying
for care, and the creation of patient expectations that
treatment would, as a result of payment, be better.
Antenatal care was universally highlighted by FGDs
as a gap in the services offered by all private providers.
Private GPs in the IPA were also criticised for not
always being available when their surgery was open (e.g.
when they were doing sessions at the public hospital), or
over the weekend and for emergencies.
Discussion
Findings
Whether private providers can deliver services of
higher quality at a cost comparable to public sector
delivery is the crux of debates around contracting out
services. In this study, two of the private sector models
examined were delivering services at comparable cost to
the public sector—the contracted GP model and the
clinic chain. However, the two other private sector
models were delivering services at much higher cost,
demonstrating the importance of examining the private
sector model by model. The relatively high cost of the
company contract and IPA models reflected dramati-
cally higher drug spending (more than twice the highest
of any other model) as well as high clinical staff costs (a
staff mix favouring physicians over nurses). The design
of the company contract was based on cost plus
reimbursement and specified very high standards of
equipment, thereby creating clear incentives for the high
costs and emphasising the importance of payment
mechanism design (Gosden et al., 2001). In the IPA,
provider interviews suggested that competition for
patients was based on quantity of drugs dispensed, long
consultation and short waiting times. Competing on
these dimensions entailed relatively high clinical staff
and drug costs.
Returning to the models with unit costs comparable
to those of the public sector, underlying these similarities
were a variety of cost structures, revealing differences in
provider behaviour. In the case of the contracted GPs,
their own salary and drug costs dominated the cost per
visit: few GPs employed extra staff, preferring to see
ARTICLE IN PRESSA. Mills et al. / Social Science & Medicine 59 (2004) 931–943 941
patients themselves, and capital investment was very
low. In contrast, the clinic chain’s costs showed lower
expenditure per visit on both drugs and staff, but the
company invested in management systems to monitor
staff performance, and capital equipment both to attract
patients and monitor staff. They provided a less highly
trained medical cadre to see the majority of patients,
whilst maintaining the perception amongst service users
that access to a doctor was always possible. In the public
sector, patterns of spending were varied, but usually had
a higher capital share than was the case for contracted
GPs.
These differences in cost structure had clear con-
sequences for quality and acceptability of care. In the
case of contracted GPs, low capital outlay was reflected
in sparsely equipped, cramped premises in poor repair,
in contrast to the high quality facilities of the clinic
chain. Contracted GPs’ high workload resulted in long
waiting times, short consultations and infrequent
performance of standard procedures such as regular
BP measurement of hypertensives. The clinic chain
limited the services it offered, not providing out of hours
or emergency cover.
Amongst all private providers, even those working
under a public contract, standardisation of services in
line with government guidelines was lacking. This limits
comparisons of service quality to those commonly
delivered by all. For STIs, technical quality of care
appeared to be on average better within the public
sector, with private providers offering an extreme range
of practice. GPs (both contracted and in the IPA) scored
particularly poorly on treatment knowledge, probably
reflecting lack of opportunities for continuing medical
education and contact with peers. In contrast the clinic
chain exercised greater control over service standards
and treatment protocols. Results on the continuity and
quality of care for chronic conditions were mixed for all
providers, and it is likely that charges were an important
deterrent to use for the clinic chain. Overall, smaller
public clinics scored better than the large ones.
The principal consistent advantage of pure private
models appeared to be their greater acceptability to
service users, as found elsewhere (Mills et al., 2002). This
resulted from greater politeness of staff, cleaner facilities
and shorter waiting times, all aspects of a service that
appeared to value users as ‘customers’ and was
adequately resourced for the volume of services deliv-
ered. Pure private models reviewed had little else to
consistently recommend them in terms of quality of care.
As emphasised at the beginning of this paper, these
findings must be understood in the light of the context in
which different providers were working (Fig. 1). Starting
with the demand side, and the characteristics of users,
the clinic chain and IPA were seeing fewer, and less
poor, service users than the public sector or contracted
GP models. These service users were also more powerful
in that they could readily switch to another provider.
These models had higher levels of patient acceptability,
and shorter waiting and longer consultation times.
Where services were state financed, waiting times were
higher, consultation times shorter, and the acceptability
of care to users suffered correspondingly. State pur-
chased services had two, closely related, features: the
user did not pay for the service, and there was generally
excess demand. These both had adverse implications for
the care offered.
A further influence on demand, the degree of choice of
alternative providers, was a function of geography
(urban areas had competitive markets for private PC)
and also of whether services were privately or publicly
funded. Publicly funded services faced a clientele that
had little choice, either because of low income or place
of residence, removing the opportunity to exit from
services that were considered poor quality. This trans-
lated into a lack of incentives to attract patients or
ensure the acceptability of services, as the volume of
demand could be expected to be high.
Supply factors to note were the structure of providers
(public hierarchies, commercial companies, solo practi-
tioners), and related incentives. Each structure gave rise
to different incentives, with implications for health
worker behaviour and service delivery. Findings on
treatment knowledge and practice within the public
sector appear an endorsement of hierarchical structures,
which could effectively ensure standardised clinical
procedures, but their ‘down side’, in terms of behaviour
of providers and perception of service users, was equally
demonstrated. In the pure private models, two very
different incentive structures were evident. In the clinic
chain, the management structure and systems were
devised to keep costs down while still attracting
customers—for example, through computer software
which guided prescribers on best practice (and low cost)
diagnosis and prescribing. Within the IPA, GPs saw all
patients themselves, made clinical decisions indepen-
dently, and bore most financial risk, in terms of both
their own treatment practices and referral decisions.
Financial incentives were clearly important. For
instance, the effect of the fee for service design of the
GP contract was to encourage high volumes of patients
but minimal investment in inputs such as other staff or
equipment (as this was not reimbursed). However, other
factors are also important. As explored in depth in
Palmer and Mills (2003), differences between contracted
GPs suggested that individual factors play an important
role in determining the relative performance of provi-
ders; that is, different providers working under the same
structures and organisational incentives can deliver care
of different cost and quality. This effect is likely to be
stronger for individual providers, such as GPs, than for
those within a well controlled hierarchy such as that of
the contracted company or clinic chain.
ARTICLE IN PRESSA. Mills et al. / Social Science & Medicine 59 (2004) 931–943942
Limitations of the study
The study examined a range of real life examples of
PC delivery, enabling it to highlight some of the
practical strengths and weaknesses of models of public
and private provision and the potential for public/
private contracts. However, attempting to compare
across such a varied population of cases also has
disadvantages. Firstly, the study was able to explore
only a limited number of models and sites, though it did
encompass the main models relevant to current policy
options and there is no reason to believe that the sites
were atypical. Moreover, given lack of knowledge, the
aim was to obtain a comprehensive in depth picture of
all aspects of each model, rather than more limited
information on certain aspects of a large number of
sites. Secondly, the study could provide only a snapshot
of performance for each model and each site at one
point in time, and therefore can only speculate on how
this may alter when some of the demand and supply
factors highlighted in Fig. 1 change, including changes
in purchasing arrangements. Moreover, some perfor-
mance data, for example from the company contract,
reflect more the perverse nature of current incentives
than the potential efficiency or quality of services which
a provider could deliver under different circumstances.
Similarly, the high demand faced by some GP contract
and public clinics may have overwhelmed otherwise
adequate performance by these providers.
Finally, the study suffered from the usual challenges
of health systems research, in that performance was hard
to define, tools to measure aspects such as quality of care
hard to design, and data scarce. The range of models
studied exacerbated these problems, but added to the
value of the overall results for policy making by
demonstrating the diversity of settings and performance
in a middle income country health system.
Concluding comments
These points provide a challenge for what can usefully
be said from the research to aid policy makers in their
decisions. The following appear the most relevant.
1. Two models involving private providers, contracted
GPs and the clinic chain, were delivering care at a
cost comparable to that of the public sector.
2. No model involving private providers consistently
demonstrated higher overall technical quality than
public clinics; GP care suffered from a lack of
standardisation; and the clinic chain, while posses-
sing the potential for standardisation, failed to
deliver this for chronic care due to low patient
contacts.
3. Private providers (except contracted GPs) were
perceived by users to offer much higher quality of
service.
4. Both examples of public/private contracts suffered
from weakness of contract design and implementa-
tion, which affected performance adversely.
Given differences in contextual factors, drawing
conclusions across providers must be done very cau-
tiously. In particular, the assumption that either publicly
or privately owned providers can be assumed to have
defining features in common appears questionable.
Other dimensions of difference between providers, such
as location, size, organisational and management
structure, and population served, appear equally im-
portant influences on performance. With this in mind, to
consider the desirability of further involving the private
sector in public service delivery, it is helpful to reflect on
how both supply and demand factors shown in Fig. 1
might change.
On the demand side, it is important to consider how
the responsiveness and acceptability of private providers
might change if public sector levels of demand are faced.
For instance, contracting with the public sector would
increase the volume of patients seen by providers such as
the clinic chain. This could shorten consultation times
and lengthen waiting times, thus changing the attitude of
staff and reducing the general attractiveness of the
facilities, unless the contractor is allowed to expand
capacity to the same degree. Given public budgetary
constraints, there is the risk that public purchasers
would impose budget limits that might inhibit the
adjustment of supply and demand.
On the supply side, any increase in supplying public
sector services through the private sector needs to
address issues of contract design. Findings from this
study have highlighted the importance of acknowledging
the variety of private providers with whom contracts
might be made, and their different structures and
methods of operation. These have implications for
contract design:
1. At a minimum, a payment system is required that
does not create perverse incentives.
2. The power of users needs to be strengthened, where
possible, for example through mechanisms to enable
exit (e.g. vouchers) or strengthen voice (e.g. commu-
nity management).
3. The choice of service provider needs careful con-
sideration, given the difficulties of monitoring provi-
der performance even in the presence of a contract.
The comparison of models in this paper suggests that
clinic chains may have some advantages given their
internal mechanisms of control, though skilled
contract management would be required to counter-
balance their for-profit orientation.
ARTICLE IN PRESSA. Mills et al. / Social Science & Medicine 59 (2004) 931–943 943
The research reported here represents only an initial
start in exploring these very important policy questions
in South Africa. Future research would benefit from a
larger sample size for models studied, and more specific
exploration of hypotheses, building on the initial
differences between models identified in this research.
While the context of PC provision in South Africa
may appear highly specific, there are many other
countries in a similar position of poor or inadequate
public PC, and relatively abundant, but also varied,
resources in the private sector. The study’s findings
demonstrate the importance of understanding variations
in performance within each provider’s context and
structure, and emphasise the importance of a case by
case judgement on the merits of contracting out (Mills,
1998). Each model was influenced by the nature of the
demand it faced; by the nature and organisational
structure of the provider; by any contractual arrange-
ments that existed; and finally by the individual
preferences of service providers, especially where owner
and provider were the same.
Policy questions around the desirability of contracting
out services are rooted in theoretical arguments about
the incentives offered by different organisational struc-
tures (Williamson, 1975; Mintzberg, 1996), and practical
questions about the relative performance of specific
providers in any given setting. This study emphasises the
variety that can be contained within the standard
‘public–private’ dichotomy, and documents both good
and bad clinical practice and resource use across both
public and private providers, and sometimes within the
same type of provider. Policy makers should beware of
exhortations in favour of either public or private sector
provision that do not allow for such diverse experience.
Acknowledgements
The UK Department for International Development
(DFID) supports policies, programmes and projects to
promote international development. DFID provided
funds for this study as part of that objective but the
views and opinions expressed are those of the authors
alone. We acknowledge the contribution of Khethisa
Taola, Bongani Magongo and Vishal Brijlal to data
collection and analysis.
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