The important role of the private sector in health service provision in low and middle income countries is increasingly acknowledged. Many countries have experienced a rapidly growing private sector, consisting of a heterogeneous mix of for-profit and non-profit orientated entities, which has contributed to filling the gaps and failures of the public sector. The advantages of the private sector are often described as being more affordable, accessible, and more responsive to the needs of the patients. However, their technical quality still remains an area of concern.

In order to benefit from the potential of the private providers for improved coverage of health services, many developing countries are increasingly working with the private actors, especially the private not-for-profit sector. Examples include involvement of private providers of preventive services to combat malnutrition in Madagascar and Senegal; use of private practitioners and franchises in Bangladesh, and under the “sector-wide approach” in the United Republic of Tanzania, where private sector and not-for-profit health organizations are represented in one of the key management reform committees. Overall, there is evidence that effective public-private partnerships can increase access, improve, equity, and raise quality of health services and that governments should engage with private stakeholders to facilitate increased private sector participation and achievement of public health goals.

Contracting as a method of resource allocation, or management and delivery of services may improve health service performance if it is part of a coherent policy framed by the State, especially the ministry of health. To maximize the contribution of private health care providers, including nongovernmental organizations, key capacities need to be developed or strengthened. Governments should have the capacity to articulate a clear policy for working with the private sector in order to undertake stewardship of the health sector, including negotiation and agreement on roles and responsibilities and contracting terms, monitoring on the basis of agreed performance criteria, enforcement of agreed terms, and evaluation of effectiveness.

Introduction: Swiss Tropical Institute (1999, 2003, 2008)