Health Financing in South Asia—The Role of Public–Private Partnerships

Abstract

Millions of households are pushed into poverty every year because of high out-of-pocket (OOP) expenditure on health care. Globally, each year more than 150 million people face financial catastrophe and around 100 million suffer destitution due to OOP payments made for health care. More than 90 per cent of these people reside in low-income countries. In South Asia, impoverishment due to health payments is significant with at least 32 million people in India alone being pushed into poverty annually due to OOP expenditures on health care. In most health care systems in this region, the role of public spending on health and prepaid schemes, such as tax and social insurance, is limited as is the extent of financial risk protection. The problem is compounded by the large informal sector which is a major challenge to attaining universal health coverage in South Asian countries.

Recent literature points to the role of public–private partnerships (PPP) in health care as a viable solution for ensuring equitable access to health care especially for the poor. This article seeks to review the major components of health care financing and reform including financial risk protection, resource generation and pooling, and PPPs in procurement and payment in South Asia. It identifies key lessons across the health financing systems of Asian countries that have attempted to reduce dependence on OOP expenditures, expanded health service delivery and increased pooled health financing mechanisms. It analyses the role and importance of PPPs in mitigating the impoverishing effects of OOP health expenditure in South Asia.