Contracting is increasingly recommended to developing countries as a way of improving the efficiency of the health sector. However, empirical evidence regarding its effectiveness in this respect is almost completely absent. In Zimbabwe, a long standing contract exists between the Ministry of Health and Wankie Colliery to provide clinical services in the Colliery`s 400 bed hospital. This paper details a study of the Zimbabweans` experience with the contract. Its success is assessed using comparisons with a neighbouring government hospital of the price of services vs the cost in the government hospital; the situation of hospital workers; and the quality of services delivered. The Colliery has established a monopoly position for hospital services in the district. However, it appears to offer services of at least as good quality at prices which are lower than the unit costs of the government hospital when capital costs are included. Nevertheless, the contract cannot be considered a success due to the failure to contain its total cost. Approximately 70% of provincial non-salary recurrent expenditure is consumed by the contract while only a minority of the province`s population have access to the Colliery hospital. Screening patients, both with respect to their ability to pay and to their need for secondary level services does not take place with the result that utilization levels are not controlled. The study highlights a number of important issues affecting contracting in developing country setting: First, contracted institutions attain powerful bargaining positions if there are no viable competitors and the government does not itself retain capacity to offer an alternative service. Second, specific skills are needed for the management of contracts at all levels. If the process of contract development responds to a crisis driven agenda resulting from civil service retrenchment and public expenditure cuts, it is unlikely that adequate consideration will be given to the development of such skills and the retention of key personnel. If such details are neglected, otherwise feasible efficiency gains will prove elusive.
Social Science & Medicine (1995) 411): 13-24 [doi:10.1016/0277-9536(94)00303-B]