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Future Health Systems is a research consortium working to improve access, affordability and quality of health services for the poor. We are a partnership of leading research institutes from across the globe working in a variety of contexts: in low-income countries (Bangladesh, Uganda), middle-income countries (China, India) and fragile states (Afghanistan) to build resilient health systems for the future. After a successful first five-year phase from 2006-2011 (see our success stories), we are entering a new six-year phase of research, funded mainly by UK aid.

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Shaping the future of health markets

Future Health Systems

Ideological debates about private and public sectors in health have gotten in the way of understanding how health markets work. This is despite the fact that most countries recognize that they have “mixed health systems”, with a variety of public and private providers and mechanisms for financing health goods and services. This was the starting point for a weeklong meeting convened by Future Health Systems with support from the Rockefeller Foundation at their centre in Bellagio, Italy last week.

The meeting brought together a small group of policy-makers, entrepreneurs, academics and funders to discuss the changing face of health markets, and in particular to consider future trends in such markets. The meeting report is now available.

The group that met at Bellagio were careful to explain that they take an agnostic view about health markets. They do not advocate for privatization or the expansion of private market share as a public health goal, but they do recognize the pervasiveness of market relationships in health systems, and the need to employ market analyses in order to develop a clearer understanding of market functioning, and how interventions can shape health markets for public policy goals.

At the meeting, participants reviewed the evolution of health markets, identified key drivers of and gaps resulting from their rapid development, and highlighted critical issues that must be tackled to ensure the poorest have access to safe, affordable, effective and equitable health services.

“Engaging with health markets is going to be critical for governments in the future, especially given the recent UN resolution,” noted FHS CEO Sara Bennett, referring to last week’s UN resolution urging countries to work towards affordable Universal Health Coverage. Many country governments will need to purchase services from both public and private providers to achieve universal health coverage, and this may present a real opportunity to shape health markets of the future. At the same time governments need to guard against arrangements that may enable powerful stakeholders to consolidate their position in a health system that provides ineffective services at an unnecessarily high cost. 

The group highlighted several issues regarding health markets:

  • Incomplete information: Spotty data is available for government regulators in most low- and middle-income countries. The group therefore proposed that governments identify data that market actors should be required to provide on a routine basis, through, for example, routine reporting by private providers.
  • Regulatory experimentation: The group identified a wide variety of market shaping strategies to improve the delivery of a comprehensive range of health services and products. But they argued mainly for regulatory approaches packaged into “bundles”, which they felt were more likely to succeed despite being more complex to implement and to evaluate.
  • Building capacity among potential regulators:  As markets continue to expand and evolve, governments are playing “catch-up” in fulfilling their stewardship roles. To act as effective stewards, governments need to have organizational capabilities and staff that are skilled in understanding key market players, their interests and functioning, and have the ability to create rules and guidelines that can actually be used by market players.
  • Sustaining investments in health markets: Donors have subsidized the development of market mechanisms, such as social franchising and social marketing schemes, with the dual aims of making quality services more accessible to the poor and establishing effective mechanisms for shaping health markets. Public financing will need to play an important role in ensuring the maintenance of such quality services for the poor in the future.
  • Health worker markets: During the past decade much attention has been given to the global health worker crisis and in particular the imbalance of health workers between countries (rich and poor), rural and urban areas, and different cadres of health workers. Unfortunately the connections between health markets and the health workforce are rarely fully acknowledged, but are critical in many respects. For example, without sustained government funding newly trained cadres of community health workers will likely become the informal care providers of tomorrow.
  • Business models and entrepreneurs: A growing number and variety of business models and entrepreneurs in the health sector have emerged in recent years. It remains to be seen whether currently low-income markets will experience a transition from small, independent and often informal practices, drug shops and laboratories to larger chains and group practices (as seems to be occurring in many middle-income markets), whether transnational and vertically integrated models will develop, and what the consequences of such changes will be for equity and efficiency.
  • Networks and quality of care: Networks are important intermediaries between government and a disorganized private sector. Networks can help address information asymmetries, which may result in consumers having difficulty in judging the quality of care, by setting and enforcing quality standards. Networks can also facilitate the distribution of subsidies for the provision of preventive and public health services.
  • Toward a health market research agenda: Areas where research and evaluation could lead to rich returns include: the effectiveness of new regulatory approaches, the impact of informational interventions upon consumer behavior, and the effectiveness of alternative mobile and informational technologies. A more coordinated approach to identifying health market research priorities would be helpful.

In conclusion, the group recommended that: (i) work be done with a small group of countries to establish systems to collect basic data on health markets, and to develop ways to institutionalize such systems into locally relevant policy and management processes; (ii)  proposals be solicited to support research on building theory and empiric information on health market systems; and (iii) a challenge fund be created to encourage the development of effective regulatory approaches, bringing together different key market actors within countries to develop bundles of regulatory interventions, the information systems to monitor and evaluate their application, and support for rapid learning cycles that enable the application of emerging knowledge. The group intends to pursue some of these discussions with HANSHEP, a group of development agencies and countries that seeks to improve performance of the non-state sector in delivering health care for the poor.