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Shaping the future of health markets:
Reflections from Bellagio
An initiative of
the Private Sector in Health Symposium

Symposium: Sydney – 6 July 2013
• Since 2009 a group of researchers and policy analysts
working on health markets in low and middle-income
countries have organised a pre-congress symposium
at the biennial conferences of the International Health
Economics Association
• The aim has been to encourage and disseminate high
quality research on the performance of these markets
and on practical strategies for improving access to
safe and effective services by the poor
• The Future Health Systems Consortium is responsible
for organising the 2013 symposium with financial
support from the Gates and Rockefeller Foundations
and SHOPS
www.pshealth.org

This webinar series provides
opportunities to set the
scene before the Sydney
meeting and to ensure that
those who may not be
attending the Symposium
have the opportunity to
participate in debates about
strategies for improving the
performance of health
markets in meeting the
needs of the poor.

Webinar series
• Facilitated by the Future Health Systems
Consortium
• Organised by a number of institutes
• Publicised widely to involve a wide audience
• The next webinar will be held in April

Organisation of webinar
• Introduction to the Bellagio Statement on Shaping
Future Health Markets (Sara Bennett)
• Commentary from:
– Dr Allan Pamba, Director of Public Engagement & Access
Initiatives, GSK
– Kwasi Boahene, Director Advocacy & Program
Development, Health Insurance Fund
– Kelechi Ohiri, Senior Special Adviser to the Honourable
Minister of State for Health, Government of Nigeria
– Guy Stallworthy, Senior Program Officer, Bill & Melinda
Gates Foundation
• Fishbowl discussion
• Question and answer session

What future for health
markets?
Dr. Sara Bennett
CEO
Future Health Systems

Why health markets?
• Health markets are pervasive
– Health related goods and services
– Sub-national, national and global
– Public and private sector actors
• Understanding how markets work will
enable us to intervene in them better,
particularly to protect the poor.

Health markets - The past 20 years
• Have learnt much: heterogeneity of private
providers, “informal” markets, contracting
for services, social marketing
• But much still to learn: scaling up effective
market interventions, improving quality of
services, especially for poor
• Increased importance of health markets:
due to economic growth, new technologies
e.g. ICTs, economic liberalization

Health markets – The next 20 years?
Supplier-side
• Consolidation to
stronger players
• Vertical integration
Consumer-side Governance-side
• New technologies • Push for UHC
• Consumer • Public finance for
education private providers?
• Non-communicable • Oversight
diseases
Evolving
market
dynamics

Process
Landscaping Identification Preparation Bellagio Research
analysis of key topics of meeting uptake
• Document • Regulation of background (December activities
review health markets papers 2012) • Bellagio
• Interviews with • Networking • Scoping papers • Consultation statement
range of providers and literature with diverse • Webinar
stakeholders • Learning in reviews stakeholders • Journal special
health markets issue
• Meeting with
HANSHEP

The Bellagio Statement

Strengthen data
• Lack of data on health markets continues
to plague decision making
• Identify key data that health market actors
should provide
– Require data provision as part of participation
in government financing schemes
• Pilot a market data platform – that draws
together different types of data from
diverse sources (eg. DHS, NHA, market
research)

Experiment with regulatory approaches
• Effective regulation requires bundles of
regulatory approaches
• Dynamic regulatory approaches are
required to respond to dynamic market
situations
• “Learn and do”
– Regulatory experimentation
– Real time, rigorous, assessment of effects
– Adaptation of strategy
– Lessons learned?

Strengthen government stewardship
capacity
• Governments frequently lack appropriate
capacities to manage health markets
• Develop individual skills and organizational
capacity for:
Leadership Technical Collaborative Analytical
skills – capacity – capacity – skills –
to balance to develop to work with to anticipate
powerful market civil society, future
interests information private developments
systems, providers, in health
contract out business markets

Sustain investments
• Donor funding has supported private sector
experimentation e.g. social franchising
• Such initiatives – often small scale, but some
provide critical services to poor
• How will these be sustained going forward?
• While initiative seek to develop sustainable
models, government financing is key to enabling
access for the poor
• Needs to be proactive engagement with
government on future sustainability

Link market and health worker policies
• Connections between health
workers and health markets
insufficiently acknowledged:
–Moonlighting
–Migration
• Future for community health
workers, if governments do not
funding their salaries?

Learn about and manage networks
• Business models are evolving – greater
networking and integration of previously
disorganized private providers?
• Networks can help to correct failures
typical of health markets:-
– Informational asymmetries
– Facilitate distribution of subsidies
• But, networks can also create monopolies
and exert political influence

Promote learning in health markets
• Better coordination and more consolidated
research on health markets needed
• Priorities?
Effects of
New Mobile and
information
regulatory informational
on consumer
approaches technologies
behavior
• Real time learning – need for alternative
evaluation approaches

Next steps

Next steps
• HANSHEP – knowledge priorities group
• Collaborate with developing countries to
pilot data collection systems for health
markets
• Create a challenge fund to support
experimentation and learning on health
markets
• Broaden the debate, in particular including
more market actors

Dr Allan Pamba

A shifting global landscape
Global economic downturn Market opportunities
Donor Developed
funding markets
Role of African
(and other
private emerging)
sector markets
Need to create a vision for future health markets and
create an enabling environment to support this transition

Challenges and opportunities
Challenges Opportunities
• Cultural shift towards • Reductions in public
private sector sector funding
• Alignment on • Rising middle class in
approach Africa
• Bridging between
existing solutions and
new markets
• Technology and
innovations
Need strong leadership

Next steps
Sharper Catalyse
Get health
framing of change Supporting
higher on
the issues through emergent
government
that need targeted innovation
agenda
addressing support

Dr Kwasi Boahene

Context
• Health care is a public good and it is the primary
responsibility of governments to ensure that
proper care is provided to their citizens.
• But, sub-Saharan African (SSA) countries have a
chronic lack of resources for health care.
• Thus, supporting and involving the private sector
in the delivery of health care to achieve universal
health coverage (UHC) is complimentary.
• The weak States and the large informal sector
that characterize SSA means that rights and
laws are not consistently enforced.

Contributions of the Bellagio
Statement
• Must understand market dimensions, where
supply and demand apply and citizens make
choices.
• Addressing failures in health markets can
help minimize financial risks and improve the
capacity to deliver quality.
• Availability of data and effective analysis will
improve the functioning of health markets.
• A transnational, cross-sectoral community of
practice can be reinforced by initiatives that
support capacity building, policy making,
research and the development of business
models at local-level.

Conclusions
• Government and donor countries should recognize the
need to stimulate trust and investment, and avoid
crowding out.
• The private sector is important in the delivery of health
care.
• Access to capital and technical assistance is vital to
improving quality of care.
• Promotion of public-private partnerships (PPPs) in
health care development is key.
• The group in Bellagio overestimates the importance of
„development partners‟ in the development of
healthcare markets.
• Discussions on the healthcare package for UHC
should be central to initiatives and policies for
developing health markets

Dr Kelechi Ohiri

Outline
• Overview of the health
sector
• Addressing market
constraints
• Perspectives and moving
forward

Nigeria is a federation with 6 zones spanning 36 states and a diverse
population of over 160 Million people …
Region/state map of Nigeria
Sokoto Population in mn
(3.6) Katsina
▪ Constitutional structure
(5.7) Jigawa is a Federal system
Zamfara 4.3
(3.2)
Kano Yobe Borno with 36 states, 774
Kebbi (2.3)
9.3
(3.08) (4.1) LGAs and 9,565 wards
Kaduna Bauchi Gombe
▪ The Federal
6.0 (4.6)
(2.3) Constitution divides
Niger
(3.9) Adamawa
responsibility for
FCT
Plateau (3.1) healthcare across the
Kwara Abuja (3.1)
(2.3) (1.4) Nassarawa three tiers of
Oyo
(5.5)
(1.8)
Taraba government
Ekiti Kogi (2.3)
Osun (2.3) (3.2) Benue
▪
(3.4) (4.2)
Ogun
(3.7)
Ondo
(3.4) Enugu
The 1999 Constitution
Edo
Lagos (3.22) Anam-
(3.2)
Ebonyi
placed „Health‟ on the
(9.0) bra Cross
(4.1)
(2.1)
river concurrent list with no
North west (35.8)
Delta Imo Abia
(3.9)
(2.8)
North east (18.9)
explicit delineation of
(4.0) (2.8)
Akwa North central (18.8) responsibilities
Bayelsa
(1.7)
Rivers
(5.1)
lbom
(3.9)
South east (21) amongst tiers of govt
South South (16.4)
South west (27.5)
SOURCE: Nigeria Population Census 2006

There is a call to action to address health systems and structural
challenges, unlock the market potential of the private health sector
▪ High maternal, newborn and Expected vs actual level of engagement
Suboptimal child mortality rates with private sector
health ▪ Inequalities in health outcomes
outcomes and utilization
▪ Poor quality of health care
services in public and private
facilities
▪ ~23,000 health facilities
Mixed
health ▪ Private sector accounts for 50%
of healthcare service provision. Business environment in Nigeria vs SSA
system average
It is fragmented; variable quality
938
644
Insufficient ▪ Health insurance coverage is
457
317
protection minimal. Most payment remains 31 44 79 96
from out of pocket
financial ▪ National health insurance
Time to
enforce
Time to Time to start
prepare and a business
Cost of
start up (%
risk scheme currently covers mainly contract pay taxes (days) of income
the formal sector (days) (hours per yr) per capita)

The health sector is currently laden with market failures on the supply
and demand side with policy and regulatory constraints
▪ The private health sector is fragmented, dominated by small clinics and
Supply side hospitals, that are largely sole proprietorships
▪ Minimal scaleable platforms across the healthcare value chain
▪ Poor quality of care in facilities, inadequate health workforce and
frequent stock outs of essential commodities
▪ Most private health institutions are unable to qualify for regular bank
Demand side loans / investments, due to little financial / business management and
planning capacity among the majority of private health sector
organisations
▪ High cost of capital / hurdle rates for loans to the health sector
Public sector ▪ Inadequate organisation among private providers
engagement ▪ Minimal formal engagement with the public sector
▪ Limited organised advocacy platforms for communicating with policy
makers
▪ Current regulations do not actively foster private health sector
Regulation and development.
institutions ▪ Common challenges faced include, but are not limited to the following:
1) lack of enforced and enforceable quality standards; 2) constraining
regulations; 3) Bureaucratic bottlenecks
SOURCE: Interviews, consultations with the private health sector

However, there are opportunities to unlock the market potential of the
health sector by addressing critical constraints and shaping the market
1 ▪ Review of fiscal and monetary policies that affect the health sector;
Fiscal policy including import duty and tariffs of medical equipment, drugs &
consumables; tax regimes and other duties
2 ▪ Development of quality of care standards and accreditation system
Regulatory ▪ Review/clarify on regulations to provide consistent interpretation
environment ▪ Strengthening the regulatory framework of NHIS
3
▪ Innovative financing for health investments such as a healthcare
Access to intervention / investment fund; healthcare bond;
capital ▪ Capability building for business and management skills in the sector
4
▪ Revise Healthcare PPP Policy
Model ▪ To develop private sector led model PPP transactions that could yield
investment demonstrable and visible impacts in the health sector
projects
5
Engaging ▪ Activate the Nigeria Private Sector Health Alliance to mobilize business
broader private leaders towards a multisectoral approach to improving health outcomes
sector

Bellagio meeting proved to be timely and relevant and the output of the
meeting should be taken forward
Perspectives Steps for moving this forward
▪ Most of the issues were familiar and very
▪ Research agenda to
Issues
relevant to the country context
resonated generate evidence on
▪ Need for clarifying and framing the issue
health markets
▪ Health markets are complex adaptive
When not systems, evolving with pressures on
▪ Country „labs‟ for testing
regulatory innovations
what if? governments (Internally – responsiveness;
and contextual factors
externally – universal coverage).
▪ Governments can either engage now, within
the window of opportunity, or play catch up
▪ Community of practice
for sharing experiences
▪ Lack of routine data remains a key and learnings
Information challenge and must be addressed
is key ▪ Type of data needed from both private and ▪ Link all these initiatives
public sector should enhance stewardship to results using
function of government accountability
frameworks such as
▪ Regulatory innovation/evolution scorecards
Innovation ▪ New business models e.g. networks, low
cost models of care
▪ New labor market dynamics

Guy Stallworthy

It is quite possible to believe that...
On the one hand… And also…
• Healthcare delivery can be • People have a right to decent
usefully understood as a health and healthcare services
mixed (public and private) • The state is ultimately
system that has some responsible for the health of its
features of markets: citizens
– Transactions • Collective, public or mandatory
funding is the most effective,
– Interaction of supply and efficient and equitable way to
demand finance healthcare (financing ≠
– Customers exercising provision)
choices • Market outcomes are usually far
– Incentives from ideal; markets are to be
• Some things are best done managed
by non-state actors • People are not only motivated
by profit maximization
• Privatization is not an
appropriate goal

It is quite possible to believe that...
The private health sector is terrible: The private health sector is terrific:
it is a large part of the problem. If it: it is a large part of the solution. If it:
• Is self-interested and driven mainly by • Is particularly customer-friendly
profits, not public good • Is ubiquitous
• Is the source of much misuse of • Can do things to unprecedented
antibiotics and drug resistance scale
• Often exploits ill-informed patients • Is inherently results-based
• Routinely misdiagnoses patients and • Tends to be innovative and dynamic
provides inappropriate or even
dangerous care • Tends to be efficient
• Often plunges the poor into financial • Is often opposed for ideological
crisis reasons rather than for public health
efficiency and effectiveness
• Is often promoted for ideological
reasons rather than for public health
efficiency and effectiveness
The opposite of a fact is a falsehood, but the opposite of one profound truth may
very well be another profound truth. - Niels Bohr

Submit questions
How to submit
• Via the „Questions‟ box in
the GoToWebinar Control
Panel
• Via Twitter using the
hashtag #healthmkt
Be sure to include your name,
organization and location
with your question!

‘Fish bowl’

Questions?
How to submit
• Via the „Questions‟ box in
the GoToWebinar Control
Panel
• Via Twitter using the
hashtag #healthmkt
Be sure to include your name,
organization and location
with your question!