Organizational development and privatization: A Bolivian success story

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Abstract
This article presents a case study of a US Agency for International Development‐sponsored privatization effort in Bolivia. This privatization effort differs from AID's more common approach in that rather than merely helping already existing organizations to expand, this project has created a new organization. More ambitious and encompassing, this approach is also preferable because it directly addresses one of the most serious bottlenecks to economic development, viz., organizational development. The article describes the evolution of PROSALUD, a private, non‐profit network of 17 community‐sponsored health centers. The article describes factors and characteristics which have either conditioned or have directly contributed to PROSALUD's success. First, PROSALUD's health care environment is analysed, starting with a broad brush profile of select characteristics and trends which exist throughout the health setor of Bolivia, then narrows the focus to the local health sector. The structure and operations of PROSALUD are then analysed, focusing on the organization's managerial practices and financing and the series of tradeoffs it has been forced to strike: in its pricing strategy, between striving for financial viability and maintaining access to care; between, on the one hand, responding to community needs and demands and improving coverage by opening more facilities, and, on the other hand, focusing managerial efforts and outreach on a more limited number of clinics and neighborhoods; between providing a socially desirable mix of services—in particular, continuing to provide a great deal of free preventive care—and focusing care on more lucrative curative services; between maintaining commitments to neighborhoods and communities and eliminating the less economically viable (especially rural) clinics.

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