Carrot and stick: state mechanisms to influence private provider behaviour

The behaviour of private sector health care providers will depend critically on the environment within which they operate. A bewildering array of possible regulatory and incentive setting structures exist. Most developing countries have the basic legislation for regulation, but there are frequently difficulties in enforcing such controls. While process aspects of quality of care regulation are often the responsibility of professional organizations, these organizations may have limited incentives to be active in ensuring high quality medical care. There has been less experience with the use of incentives to encourage appropriate behaviour amongst private providers: this appears a promising area for further work. Above all, adequate information is essential both for the enforcement of regulations and the application of incentive mechanisms.