By Benjamin Goodair, M.Sc. and Aaron Reeves, Ph.D.
The Lancet Public Health, March 2024
Summary: Over the past 40 years, many health-care systems that were once publicly owned or financed have moved towards privatising their services, primarily through outsourcing to the private sector. But what has the impact been of privatisation on the quality of care? A key aim of this transition is to improve quality of care through increased market competition along with the benefits of a more flexible and patient-centred private sector. However, concerns have been raised that these reforms could result in worse care, in part because it is easier to reduce costs than increase quality of health care. Many of these reforms took place decades ago and there have been numerous studies that have examined their effects on the quality of care received by patients. We reviewed this literature, focusing on the effects of outsourcing health-care services in high-income countries. We found that hospitals converting from public to private ownership status tended to make higher profits than public hospitals that do not convert, primarily through the selective intake of patients and reductions to staff numbers. We also found that aggregate increases in privatisation frequently corresponded with worse health outcomes for patients. Very few studies evaluated this important reform and there are many gaps in the literature. However, based on the evidence available, our Review provides evidence that challenges the justifications for health-care privatisation and concludes that the scientific support for further privatisation of health-care services is weak.
Effects on health outcomes: At an ecological level, high rates of privatisation and outsourcing almost always corresponded with worse health outcomes in the studies included in this Review. Two articles looked at regional levels of privatisation for an entire country and both found that increases in the percentage of outsourcing corresponded with higher avoidable mortality rates than before outsourcing took place. The only other article that assessed mortality rates did so in incarcerated populations, and also found increased avoidable mortality rates as the proportion of outsourced health care increased. Additionally, outsourced cleaning services corresponded with higher rates of inpatient infection than internal cleaning services. More nuanced results were found in Sweden when outcomes in avoidable hospitalisations improved across the country after a privatising reform to primary care; results from this study did not show dose-response variationāie, areas that reformed first or had the highest increases in private providers did not show the biggest improvements in quality of careāand this factor therefore is not attributable to finding causality.Ā No studies in this Review found that increased privatisation corresponded with better health outcomes for patients. None of the articles that assessed hospital conversions included health outcomes, an important gap in the literature identified in this Review.
Conclusion:Ā There is only a small number of studies addressing the effect of privatisation on the quality of care offered by health-care providers, and yet within this small group of longitudinal studies, we find a fairly consistent picture. At the very least, health-care privatisation has almost never had a positive effect on the quality of care. But outsourcing is not benign either, as it can reduce costs, but seems to do so at the expense of quality of care. Overall, our Review provides evidence challenging the justifications for health-care privatisation and concludes that the scientific support for further privatisation of health-care services is weak.
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