A public‐private partnership based model for regulating out‐of‐pocket expenditures to strengthen primary care system

In developing countries like India, the cost of health care is largely borne by patient out‐of‐pocket payments. Recent studies have reported that patients skip public‐funded clinics providing free consultation for distant private care providers. Some of the reasons identified for such behaviour include longer waiting times, perception regarding quality of care, etc. Therefore, optimal allocation of existing and new capacity is critical for a greater public interest. This article presents a decision‐making framework towards this intent for strengthening the existing government primary healthcare network. In this article, a mixed‐integer linear programing (MILP) model is developed for optimal reconfiguration of the existing government primary healthcare network to minimise patient out‐of‐pocket expenditures (OOPE). The model involves three types of facilities: Primary Health Centre (PHC), Community Health Centre (CHC), and Private OPD (outpatient department). Implementation of the proposed model can help in reducing out‐of‐pocket expenditures. The optimization model proposed in the article is unique as it incorporates for the first time, patient out‐of‐pocket expenditure, capacity reconfiguration, and public‐private partnership decisions in the primary healthcare system. A solution algorithm is also proposed for the optimization model. The model would be useful for theory development and also in policy‐making.