Public and private hospitals are often seen as rivals in the industry, competing for staff and ensuring a wide
variety of patients and services. However, cooperating between the two sectors have been found to reduce
patient waiting time and deliver better patient outcomes, as long as it’s done right.
Traditionally, public hospitals focus on universal access to healthcare, while private hospitals prioritise efficiency and profits, adopting various payment schemes. This clash in objectives leads many to believe the two are incompatible, however recent case studies and game theoretical models have shown that cooperation, rather than competition, may be the way to increase healthcare performance.
One model of cooperation recently demonstrated involves public hospitals outsourcing patients to private hospitals on a case by case basis, based on the procedure. For example, public hospitals facing high waiting lists in Lombardy, Italy cooperated with private hospitals to be able to treat more complex cases efficiently and improve overall capacity. Out of the 900,000 patients monitored, 15,500 were transferred and showed a positive relationship between cooperation and overall patient outcome.
Game theory can be used to explain how cooperation can work. In repeated interaction settings where hospitals work together over time trust and mutual benefit can develop. Public hospitals can gain flexibility, while private providers secure a steady flow of patients, satisfying the objectives of both sectors. But the success of such partnerships depends on well-designed contracts and strong oversight. Without proper incentives and oversight, firms are more likely to revert back to competing. Additionally, private firms may cherry pick patients, only opting for those that payout the most with the lowest amount of effort and cost.
There’s potential for even further benefit via collaboration with hospitals sharing training for new staff and investing together into developing digital platforms for healthcare. In more rural areas, cooperating can lead to more people having access to a higher standard of care.
Ultimately, private and public hospitals collaborating on a large scale may be unfeasible, but on a small scale it very much can benefit locals. As long as there is structure and oversight to the collaboration, combing the public sector’s reach with the private sector’s ability is a surefire way for hospitals to meet the constantly increasing demands from the public.