One way that many countries have tried to increase market exposure of hospitals is to
“outsource” or “unbundle” some hospital activities. Experience so far in this area has been
mixed. For example, there has been some success in outsourcing the maintenance of medical
equipment in Thailand, management services in South Africa, and routine custodial,
dietary, and laundry services in Bombay. Most of these activities benefit from the efficiency
gains that can be provided by external suppliers that specialize in a given service. But with
few exceptions, outsourcing is much more difficult with clinical services because of loss of
strategic control over part of the production process, cost shifting, and difficulties in monitoring
the quality of the outputs (58).
Many public health interventions, such as malaria control programmes, nutrition programmes
in Senegal, and reproductive health programmes in Bangladesh, are now carried
out through long-term contracts with nongovernmental providers rather than rigid vertical
programmes under a central hierarchical bureaucracy. And there has been a marked increase
in the autonomy and privatization of general practitioners, dentists, pharmacists
and other ambulatory health care workers in central and eastern Europe, with both good
and bad consequences.