Volume 19, Number 2 Article by Gyan Prakash and Avantika Singh June, 2007
Outsourcing of Healthcare Services in Rajasthan: An Exploratory Study :
In the context of public health, outsourcing refers to the buying-in of goods and services from external sources instead of providing them in-house. It refers to effecting the purchaser-provider split in the public health system. Whereas the purchaser function is retained with the government, the provision of services is outsourced to private providers and nongovernmental organisations. Under the New Public Management, outsourcing has emerged as one of the several responses to correct the anomalies in the public provision of health care, share the responsibility and increase the penetration of healthcare services. This paper is the outcome of an exploratory study on outsourcing in the public health system of Rajasthan. Data was collected through semi-structured interviews and document analysis. The study aimed to empirically analyse the contract design, monitoring and implementation and the regulatory framework which guides the contracting process for clinical and non-clinical services in the public health system of Rajasthan and verify the existing literature on contracting out of healthcare services in developing countries.
The study revealed that though both ancillary and clinical services are being outsourced in Rajasthan, the outsourcing of clinical services is in a relatively nascent stage, and is not easy to accomplish because of the difficulty in designing and monitoring the contract. Clearly, private providers cannot lead the health sector in a direction likely to maximise its contribution to the health of the population. Hence the state government’s intent to rely increasingly on outsourcing as the preferred method of service delivery entails the need for a strong regulatory framework which promotes competition, incentivises efficient production of services and concomitantly works to keep down costs and smoothen out inequities in the social fabric. This paper underscores the need for strengthening social regulation and laying down basic economic regulation.
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