Private Sector

The private sector increasingly is being recognized as a vital partner in global efforts to provide reproductive health (RH) and family planning (FP) services and commodities.  Private sector providers can expand people’s access to services and products, and reviews of public and private sector service data have challenged a number of assumptions about the clients who utilize these services, particularly by their level of income. Whereas a substantial number of people in the highest income quintiles utilize subsidized government health services, many people in the lowest income quintiles go to the private sector for their RH and FP needs (Gwatkin et al., 2004; Marek et al., 2005). 


In recognition of the importance of partnerships with the private sector, the World Bank Africa Strategy acknowledges that unless Ministries of Health (MOH) harness the potential of the private sector providers, they will be unable to reach their public health goals.  The magnitude and challenges of RH and FP needs are too great for any one country, organization, or sector to address alone, and global partnerships are emphasizing shared responsibilities for improving health outcomes, for example in achieving the Millennium Development Goals.  The Global Health Initiative (GHI) has specified ‘strengthening and leveraging key multilateral organizations, global health partnerships and private sector engagement’ as one of its seven core principles (USAID, 2010). Currently, USAID is working to develop a private sector health strategy for GHI, as well as, the metrics for monitoring and evaluation.  


What is the private sector? 

The private sector is defined as all the providers, suppliers, and ancillary and support services that lie outside the public sector. These include commercial or for-profit entities, non-profit organizations, community groups, informal vendors, and a small but growing number of private providers, such as doctors, pharmacies, and hospital staff (Armand et al., 2007).  


The means by which the private sector may increase clients’ access to services and products can range from having more convenient hours and locations, maintaining supplies when public sector providers experience stock outs, using generic products to reduce prices, to utilizing alternative approaches, such as mobile units to reach underserved areas.  In many cases, the private sector may be contracted and financed by the public sector to provide services, particularly in underserved and low-prevalence settings. Most health systems in the developing world are a mix of public and private providers.  The support of private sector expansion for fully sustainable commercial products and services can foster a segmented market that promotes purchase of FP services by clients who can afford them and frees up MOH resources to serve the poor. 


USAID's Involvement 

USAID has been working closely with the private sector in RH and FP sponsoring the Private Sector Partnerships-One (PSP-One) project followed by the current Strengthening Health Outcomes through the Private Sector (SHOPS) project.  These initiatives have been working to involve NGOs and for-profit entities in increasing availability, improving quality, and expanding coverage of essential health products and services in FP and RH through the private sector.  Based on findings from the PSP-One project in Europe and Eurasia, Armand et al. (2007) identified four basic guiding principles that can be applied to any program aiming to leverage and motivate private sector interest in achieving RH/FP goals: (1) taking a whole market approach; (2) determining the optimal public/private mix; (3) strengthening the stewardship role of the public sector; and (4) developing public/private partnerships.


The whole market approach ensures co-ordinated coverage of the entire market of clients ranging from those who require free supplies in the public sectors to those who can and will pay for commercial products in the private sectors (Armand, 2007). Donors and global partners are also very concerned about market and program sustainability in public and private sectors, especially where donor assistance funds are being reduced.


Limitations and Challenges 

Donors and global or country-level partners also need to recognize some of the limitations and challenges in involving the private sector in RH and FP services. Because the private sector tends to make decisions in terms of costs and returns on investments, there may not be much incentive to provide FP products for the poor, especially in untapped markets (Armand at al. 2007). It is much more cost-effective for the private sector to focus on densely populated urban areas and to promote products that have the highest return on investment.  It is unrealistic to expect the private sector to ensure a balanced method mix or guarantee affordability of all commercially sold contraceptive brands.  Laws, regulations, and policies impact the feasibility and costs of doing business and directly affect the provision of FP services in the private sector (Armand et al., 2007).  The public sector is faced with the challenge of how to balance regulations, policies, and quality control, while simultaneously fostering conditions that encourage private sector provision of FP services and products. 

Given the importance of the private sector in providing FP services, effective approaches for monitoring and evaluation are essential.  The core indicators selected for the database are derived largely from the PSP-One Performance Monitoring Plan (PMP) and the Expanded SHOPS PMP indicators (see Abt, 2005; Abt, 2009).  PSP-One developed a three-level results framework for increasing the private sector involvement and tested an accompanying set of 18 indicators to measure private sector impact on health, where possible drawing upon existing data sources, most notably the DHS (Abt. 2005; Abt, 2009). SHOPS has continued to use these field-tested indicators and is working toward standardizing measurement of private sector involvement and impact. 


Indicator Selection


The subset of indicators selected for this database focus on public sector approaches for supporting and strengthening the private sector, access and quality of services, and the knowledge and use of private sector services by the target population (women and men of reproductive age).  As with the overall SHOPS indicators, the selected indicators for FP are designed to be used for evaluation of country and regional policies, programs, and interventions, and to measure and follow trends in private sector service provision and utilization.




Abt Associates. 2005. Performance Monitoring Indicators for the Private Sector Program (PSP), with Explanatory Notes. Bethesda, MD: Abt Associates, Inc.


Abt Associates, 2009, Strengthening Health Outcomes through the Private Sector (SHOPS) Project:  Performance Monitoring Plan (PMP), Year 1. Bethesda: MD: ABT Asociates, Inc.

Armand F., O’Hanlon B., McEuen M., Kolyada L., and Levin L. March 2007. Private Sector Contribution to Family Planning and Contraceptive Security in the Europe and Eurasia Region. Bethesda, MD: Private Sector Partnerships-One project, Abt Associates Inc.

Gwatkin, D., Bhuiya, A., and Victora, C.  2004. Making health systems more equitable. Lancet 364: 1273–80

Marek, T., O’Farrell, C., Yamamoto, Ch., Zable, I., et al. 2005. Trends and Opportunities in Public-private Partnerships to Improve Health Service Delivery in Africa. Africa Region Human Development Working Paper Series. Human Development Sector, Africa Region, The World Bank.

Reproductive Health Supplies Coalition. 2009. Reproductive Health Supplies Coalition: Monitoring and Evaluation Framework (2007-2015). Brussels, Belgium.

USAID, The Global Health Initiative (GHI). 2010. Implementation of the Global Health Initiative: Consultation Document, Washington, DC: USAID.

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