Impact of low-cost bidding on contracting out in urban primary health care
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In phase III of the Urban Primary Health Care Service Delivery Project (UPHCSDP), a low-cost bidding system and a high cost recovery target were introduced as criteria for NGO selection.
At the service level this translated into fewer free services for the poor, reduced staff training, and an overall compromise in service quality.
To avoid the experience described above, economic planning, risk assessment, and financial management skills are needed for decision making in Contracted-Out (CO) arrangements.