Public Delivery of AIDS Treatment In South Asia: A Timidly Heroic Assumption

My new working paper makes a foray into disputed territory by examining the case for public sector delivery of anti-retroviral therapy for AIDS in South Asia.

Oxfam's latest publication characterizes as illogical and unethical the view that governments could serve their people by facilitating and regulating a private sector contribution to health care delivery. My colleague, April Harding takes issue with this view in a recent blog. Her blog has engendered more comments than most of our recent blog postings, so this must be a hot topic. Some people seem to harbor a really visceral suspicion and fear of anyone who makes a profit from health care delivery or who proposes that private sector providers could have a role in health care delivery. At the other extreme are those who view public sector health care in developing countries as fundamentally and irredeemably corrupt and incompetent.

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Mead Over

Senior Fellow Emeritus

Given the strong views on either side of this issue, my paper rather timidly suggests that, at least for antiretroviral therapy (ART), there is a role for public as well as private provision in South Asia. As I document in the paper, in countries like India, the private health care sector is industrious, entrepreneurial and accounts for most health care delivery. However, its quality is extremely varied. This variability of quality is less of a problem when health care addresses non-infectious health problems, like broken arms or diabetes. For these problems, lower quality care may be better than no care at all. So even if the government were able to successfully ban all the lower quality health care providers, as the U.S. effectively did by implementing the recommendations of the "Flexner Report" closing "low-quality" medical schools in the early 20th century, the results might be to make health care less accessible to the poorest people and thus worsen their welfare. Arguably those who most benefited from the closing of the lowest quality American medical schools were the physicians who graduated from the few schools that remained open: they had enhanced market power to charge high fees for their care.

However, there are some health care services for which low quality may actually be worse than no treatment. This is when low quality care not only provides fewer benefits for the patient, but also generates substantial negative spillover effects for the entire population. This is the case when poor quality of care can facilitate the development of a resistant strain of an infectious pathogen. For tuberculosis, malaria and HIV/ AIDS the public has a strong interest in assuring that drug treatments are designed and followed so as to minimize both the development and the transmission of drug resistant strains. The work at the CGD on drug resistance and global health is here.

The proposition I advance in this paper is that public sector delivery of ART can be justified not only because it protects poor AIDS patients from catastrophic health expenditures, but also because it might differentially "crowd out" the cheapest (and therefore perhaps the worst) of the private sector AIDS treatment. If this crowding out slows or postpones the development and spread of drug resistant HIV, this is an important reason for preferring public to private sector delivery.

But here by the water cooler, April has responded that I may be wrong in my assumption that expanding public provision of ART is the best way to enhance coverage and quality in India and perhaps in some other countries where the low end of the private sector is particularly likely to engender resistant strains of HIV. Referencing the evidence from evaluations of experience with health services contracting (especially with performance-based payments), she suggests that in many settings contracting may be a more effective means of expanding coverage AND ensuring quality.

I agree that some combination of medical education of private providers, direct supervision, franchising and performance contracting could productively engage the private sector in ART delivery. But I am less certain that these options should substitute completely for public sector ART delivery in south Asia. I believe that the public sector docs needed to properly regulate, and contract ART delivery with, private sector practitioners can best maintain their competence by also delivering ART themselves. In the words of Flexner as quoted on the Wikipedia site, "An education in medicine involves both learning and learning how". Such docs can improve the private sector not only by monitoring and regulating it, but also by competing with it for patients. (And vice-versa by the way.)

I am assuming that South Asian governments can effectively monitor and regulate the quality of PUBLIC sector ART. Since evidence abounds of poor quality health care in pubic settings in south Asia, this may seem an heroic assumption. I adopt it timidly, awaiting evidence on whether South Asian governments can in fact deliver high quality ART and whether they can target these services to the poor so that they crowd out the worst private sector care.