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Contracting out diagnostic facilities in rural hospitals, West Bengal
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Subject Area="Public / private partnership (including NGOs)." Objective="Improved hospital services."
Details for Reform Option "Contracting out diagnostic facilities in rural hospitals, West Bengal"

Background: In almost all Block Primary Health Centres (BPHCs) the only tests carried out are for malaria and sputum tests. Even at most of the Rural Hospitals (RHs) [also known as Community Health Centres or CHCs] only very basic tests are undertaken. At the same time, referring patients to the private sector or testing could have problems of its own, such as high prices and uncertain quality. Action: The Government of West Bengal has decided to set up diagnostic laboratories at RHs and BPHCs through public private partnership. It has developed the Standard Operating Procedures (SOPs) on the basis of which the partnership takes place. The agreement is made between the District Health and Family Welfare Societies (DHFWS) in each district and the private partner. [for more on district societies, see entry on Establishment of District Health Agencies] The DHFWS would provide rent-free ready to use space and free water at the RHs and Block PHCs while the private partner would have to install the furniture, refrigerator and other equipment at its own cost. A separate electric meter would have to be set up by private partners and electricity bills have to be paid by them. The private provider would conduct free tests for patients below poverty line up to a total of 20% of each type of test conducted every month (the criteria for free testing is based on a recommendation from the concerned Block Medical Officer of Health at the hospital). User charges would be collected for the rest of the cases as per the rates decided by the DHFWS. They would be free to charge market rates from patients referred by private practitioners. Nineteen such partners in 123 districts were identified and a government order was issued on 1 April 2004, indicating the same. At present (November 2004) operations have started in one place. Others are in the process of being finalised. Results: No evaluation has been undertaken since this is a very new initiative.

Cost The Government only provides the space; all other costs are borne by the private partner.
Place Rural Hospitals of West Bengal initiated the reform in April 2004. The next step would be to initiate this at Block Primary Health Centres of the State.
Time Frame Since this initiative required a lot of evaluation like identification of sub-optimally functioning rural hospitals, selection of private partners, it took the department approximately 10 months for completion of the assessment and issue of the Government order.

Improved access: to better quality services for the masses at low cost and free of cost for the poor. Utilisation: better utilisation of existing facilities at the hospitals expected.


Possible opposition: from other private diagnostic providers in the locality.


Issue of Government Order and Standard Operating Procedure. Private agencies willing to carry out such work.

Who needs to be consulted

Officials of the Health & Family Welfare department. RH doctors and NGOs.



Expected to be good due to: Large patient turn out at rural hospitals. Non-beneficiaries are also allowed access at existing market rates. Sample collection centres are at PHCs, enabling easy accessibility to patients. Provides greater reach through reference from block samities.

Chances of Replication

Similar initiatives in the private sector in West Bengal were found to be a success: Red Cross societies were running such a service at the district headquarters where the rates charged were less than 50% of the prevailing market rate. An NGO – Jalpaiguri Welfare Organisation also runs a diagnostic centre at rates between one and two thirds of market prices.


The West Bengal Health & Family Welfare Department has brought out a policy document on ‘Health Sector Reform’ and developed a ‘Strategic Framework’ which has dealt at length on partnership with private sector and NGOs. It has developed a ‘Draft policy for Public Private Partnership in the Health Sector’ which is available on their website for public feedback. See entry on “Establishing a Public Private Partnership Policy, West Bengal”.


Submitted By

Sara Joseph, Researcher, ECTA, New Delhi, November 2004.

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