Many developing countries face acritical gap between the demand for health care services andtheir supply. Public resources often fall short of what isneeded to provide universal health care, and the typicalincentive structure in the public sector may not always beconducive to expanding access, improving the quality ofcare, and ensuring efficient use of limited funding andexpertise. This Note defines options for mobilizing privateresources to achieve public health objectives. A governmentseeking to encourage private participation in health careprovision can choose among six basic policy and regulatoryoptions that vary widely in the risks and responsibilitiesborne by the private (for-profit or nonprofit) entity. Atone end of the spectrum the private sector takes on limitedresponsibilities while the public sector remains the primaryprovider of health care services. At the other, thegovernment establishes a policy environment in whichqualified private entities may freely enter and exit thehealth care market. In this option private providers assumethe full risks and responsibilities associated with serviceprovision, and the public sector limits its role to regulation.
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