Small and medium private providers are missing from UHC initiatives

Woman standing in front of shelf with awardsThe private health sector is an important partner in scaling up health financing programs that support family planning and other health goals, too. On average, one in three modern contraceptive users obtains her family planning method from a private source, according to a recent SHOPS Plus analysis of 36 countries. By complementing and expanding capacity of the public health system, private providers can help reduce unmet need for family planning. One way this happens is when private providers participate and enter into contracts with expanding government-sponsored health insurance programs that cover (or plan to cover) family planning.

Contracting between private health providers and health financing programs can enable private providers to transition traditional cash-based practices, which rely on out-of-pocket spending, to new, sustained sources of revenue from programs that collect and pool funds on behalf of larger numbers of people. In the Philippines, many midwives benefited in recent years from increased client visits and reliable, adequate payments for family planning and other reproductive health services after contracting with the government’s social health insurance program, PhilHealth.

Challenges for program implementers

Why, then, aren’t there more of these public-private partnerships, and why don’t they attain greater scale and reach?

One reason is that the private health sector is typically large, diverse, and not well understood. Its members comprise numerous cadres, functions and affiliations. Some private health sector actors such as manufacturers and distributors supply health products. Others, including hospitals, clinics, pharmacies, drug shops, and individuals such as doctors, clinical officers, nurses, midwives, and community health workers, provide family planning and other health services. Private health providers can operate as for-profit or nonprofit entities; they may be single, independent providers or affiliates of faith-based organizations, social franchises, or other networks or associations.

Statistics are scarce and methods to classify and count private health providers differ across contexts, but a substantial proportion of them are small to medium in size, comprising one to several practitioners. Many of these providers care for low-income and other vulnerable populations, and are a first point of access for members of underserved communities.


man standing in front of clinic


Challenges for providers

Small-to-medium private providers confront numerous challenges to engage with health financing programs. Many do not have the resources and knowledge to evaluate, enter into, and manage contracts with purchasers. They lack access to capital and business skills, and may need to expand their clinical skills to deliver a full range of modern family planning methods (such as insertion of implants). They may also lack access to affordable family planning commodities.

Once contracted, a key issue small-to-medium private providers wrestle with is timeliness of payment, and contracts that may not compensate providers adequately (i.e., rates don’t cover operating costs). Alternatively, the payment mechanism (e.g., capitation) may provide a financial disincentive to the provider to deliver a full range of family planning methods to clients who want them. Often, complying with licensing and reporting requirements and administrative bottlenecks pose additional disincentives to participation.


Female nurse seated in a clinic



So, easier said than done. But small-to-medium private providers and purchasers they contract with can promote effective partnerships for family planning and other health goals. For small-to-medium private providers, participation in health financing programs can spur needed investment in quality and accountability. An intermediary, such as a social franchisor or other third party that aggregates small-to-medium private providers, can enable participation. In Kenya, the SHOPS Plus project partnered with PS Kenya to support small-to-medium private providers that provided family planning to contract with schemes operated by Kenya’s National Hospital Insurance Fund. PS Kenya also supported the digitization of clinical and administrative functions to improve the operating efficiency of practices.


Government counterparts can apply strategies to partner more extensively with the private health sector—including small-to-medium private providers—to accelerate progress toward UHC and to reduce unmet demand for family planning through health financing initiatives. To do this, they can:

  • Invest in data (such as census data) to shed light on the total health system, including small-to-medium private providers
  • Incentivize family planning providers to offer full method choice for family planning. Payment mechanisms and rates must cover costs of counseling and other family planning services, and be timely and reliable
  • Be efficient—streamline contracting and operating processes and work with intermediaries to engage small-to-medium private providers to provide family planning
  • Be flexible—one size does not fit all; tailor accreditation and other participation criteria to align with small-to-medium private providers

Download the SHOPS Plus brief, Opening the Door to Health Insurance Programs: Experiences of Small and Medium Private Providers.

Learn about SHOPS Plus’s work in health financing.

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Sustaining Health Outcomes through the Private Sector (SHOPS) Plus is a five-year cooperative agreement (AID-OAA-A-15-00067) funded by the United States Agency for International Development (USAID). This website is made possible by the generous support of the American people through USAID. The information provided on this website is not official U.S. government information and does not represent the views or positions of USAID or the U.S. government.

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