## Notes from 30 June 2025 [[2025-06-29|← Previous note]] ┃ [[2025-07-01|Next note →]] Today I read a paper that really resonated with what I’ve long suspected—both from personal experience as a user of Brazil’s public health system and from many conversations with professionals working in it. It’s called _[Public Services under Private Management](https://www.dropbox.com/scl/fi/hw0h8sspwg59mszv314q7/OSS_paper_CFR2025.pdf?rlkey=gqffi94nbna2hs8y1typ9umge&e=1&dl=0)_, by Maíra Coube, Luiz Felipe Fontes, and Rudi Rocha. The study looks at a model known in Brazil as _Organizações Sociais de Saúde_ (OSS), where nonprofit organizations are contracted by the government to manage public hospitals. These hospitals remain publicly owned and funded, and continue to offer care free of charge, but their management is handed over to nonprofits through multi-year performance-based contracts. Using a difference-in-differences approach, the paper shows that when hospitals transition to OSS management, productivity improves significantly - more admissions, higher bed turnover, and shorter average length of stay. Crucially, these gains come without sacrificing quality or equity: mortality and readmission rates stay stable, and the patient profile doesn’t change. In fact, municipalities with OSS-run hospitals see a drop in overall mortality, especially in cases where people previously couldn’t access care. The model preserves the universalism of Brazil’s public health system ([[Public Healthcare in Brazil (SUS)|SUS]]), while allowing for more responsive management. What really stands out is the mechanism: these gains weren’t the result of major capital investments or fancy equipment. They came from better use of existing resources—especially human resources. OSS managers had autonomy to recruit and dismiss staff, offer more flexible contracts, and reorganize clinical teams based on performance. More experienced nonprofit managers made better decisions and achieved greater impact. The paper shows clearly that organizational capacity and the freedom to act on it (especially in hiring and procurement) make all the difference. This speaks directly to one of the core themes I’ve been exploring: delivering results in the public sector requires a combination of good leadership and an enabling operating environment. You need people in charge who know what they’re doing _and_ have the tools to make decisions. What this paper captures so well is the value of [[Executive Decisiveness|executive decisiveness]] in exchange for clear performance expectations. It’s not a story about privatization - it’s about designing institutional arrangements where capable managers can actually lead. When that happens, even longstanding public systems like SUS can perform much better. **P.S.** This reminded me of a Chilean study showing that hospitals led by CEOs chosen through the country's merit-based senior executive system ([[Sistema de Alta Dirección Pública (SADP)|SADP]]) had lower mortality rates than those with politically appointed leaders (_[Otero & Muñoz, 2022](https://cristobalotero.github.io/files/JMP_CO.pdf)_).