Public-private interaction in Mexico: Effects of contracting on obstetric services provision

Public-private partnerships (PPP) present an innovative option of financing and delivering health services, but there is little evidence on the effectiveness of private provision using public monies. Following the recent Mexican health reform, the state of Jalisco implemented a contracting model where nine private hospitals provide obstetric services to patients traditionally attended in public facilities. This policy analysis assesses the effectiveness of the contracting model in achieving process and outcome objectives. Specific objectives evaluated were 1) accomplishing a workload decrease in public hospitals, and 2) providing patients high quality care through appropriate services provision. Results show that the contracting model was implemented as intended, but certain aspects such as the fee-for-service payment mechanism have resulted in unintended outcomes, specifically an extremely high cesarean section rate. Compared to the state average of 27%, c-sections as a percentage of all deliveries ranged from 72% to 95% in the contracted private hospitals, despite the provision of services to less complicated cases in these facilities. Services, referrals, and outcomes from 2006 were obtained for public hospitals and private contractors and were compared to figures from pre-contracting years. Interviews with key informants including state officials, two maternal-child public hospitals, and three contracted hospitals provided information on contract components, advantages, and disadvantages. Health reform and PPP options place policymakers and providers in a position to positively impact population health. This contracting model may be replicable for other situations and types of health services, but challenges remain including provider selection methods, provider payment options, and monitoring systems.