Private healthcare mirrors education
Education and healthcare are the two services most necessary for human development. It has traditionally followed, moreover, that they are best provided by the state. In the developed world we now take state provided healthcare and education for granted, regardless of our opinion on their quality, and private provision is the exception, not the rule. Yet across Africa, South Asia and some parts of the Middle East this is far from the case.
In much of the world education, when available, comes at a cost, and is unlikely to extend beyond secondary level. Access to healthcare is probably worse. But people are still desperate for these services, so it is no surprise that the private sector is stepping up to the plate. In education, the state’s failures are leading to a burgeoning of private places, which can cost as little as $1 a week, reports The Economist.
Private groups have taken the lead in a number of areas. Choice and accountability are always attractive, but private schools have also been busy innovating to offer education at cheaper prices. They have more flexibility on hiring policies, curriculum, funding and are more open to publishing results and using technology. “[Technology’s] potential to transform education is unlikely to be realised in state institutions, where teachers and unions resist anything that might increase oversight or reduce the need for staff,” says The Economist. Sound familiar?
Healthcare is also plagued by vested interests and the growth of the private sector is fuelled by statutory failures. There is also an increase in healthcare chains with strong brands that have a reputation for quality. And just like private schools in Ghana are hardly competing with Eton, private hospitals in emerging markets are not always competing with Harley Street: many operators are specialising in low-cost solutions. Finally, transparency may also be a key selling point.
There are differences. Both industries are relatively labour intensive, but this may not extend to the da Vinci laden upper echelons of quaternary care. Few would complain of more stringent regulation in healthcare. Seven years of university education is also not a great investment for a teacher’s salary, and the shortage of medical personnel far outstrips its pedagogical cousins. So healthcare has to sweat its skilled labour much harder.
The evidence on the performance of private education is mixed. Its nature as a positional good, the poor quality of testing, and a shortage of competition still hampers the workings of the market. Healthcare is equally beset by market failures, so the jury is still out on the desirability of this trend. And a number of poor countries are already making huge strides with universal health coverage, led by public operators. But how many countries are ready to follow in their path? Many people will benefit from private healthcare and education before we can find out.
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