Shaping the future of health markets: Reflections from Bellagio

An initiative ofthe Private Sector in Health Symposium

@psinhealth#healthmkt

www.pshealth.org

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

Dr. Sara Bennett

CEO

Future Health Systems

What future for health markets?

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

Evolving market

dynamics

Consumer-side• New technologies• Consumer education• Non-communicable

diseases

Supplier-side• Consolidation to

stronger players• Vertical integration

Governance-side• Push for UHC• Public finance for

private providers?• Oversight

Health markets – The next 20 years?

Process

Landscaping analysis•Document review•Interviews with range of

stakeholders

Identification of key topics•Regulation of health markets•Networking providers•Learning in health markets

Preparation of background papers•Scoping papers and literature

reviews

Bellagio meeting (December 2012)•Consultation with diverse

stakeholders

Research uptake activities•Bellagio statement•Webinar•Journal special 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 skills –

to balance powerful interests

Technical capacity –

to develop market information systems,

contract out

Collaborative capacity –

to work with civil society, private providers,

business

Analytical skills –

to anticipate future developments in health

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?

• Real time learning – need for alternative evaluation approaches

New regulatory

approaches

Effects of information

on consumer behavior

Mobile and informationa

l technologies

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

Need to create a vision for future health markets and create an enabling environment to support this transition

Donor funding

Role of private sector

Developed markets

African (and other emerging) markets

Global economic downturn Market opportunities

Challenges and opportunities

Challenges•Cultural shift towards

private sector•Alignment on

approach

Opportunities•Reductions in public

sector funding•Rising middle class in

Africa•Bridging between

existing solutions and new markets

•Technology and innovations

Need strong leadership

Next steps

Sharper framing of the issues that need addressing

Get health higher on government agenda

Catalyse change through targeted support

Supporting emergent innovation

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

Sokoto

Kebbi(3.08)

ZamfaraBornoYobe

GombeBauchi

Kano

Jigawa

Oyo

Kwara

Osun

Ogun Ondo

Ekiti

Lagos

Kaduna

Niger

Nassarawa

Taraba

Adamawa

Akwalbom

FCTAbuja

Kogi

Benue

Crossriver

Delta

(5.1)

Bayelsa

Plateau

Edo Enugu

Ebonyi

Imo

Anam-bra

Abia

Katsina(3.6)

(3.2)

(5.7)

9.3

4.3

(4.6)6.0

(3.9)

(2.3)(1.8)

(3.2)

(4.2)

(3.1)

(2.3)

(2.3) (4.1)

(2.3)

(3.1)

(5.5)

(3.7)

(9.0)

(3.4)

(3.4)

(2.3)

(3.22)

(4.0)

(2.8)

Rivers

(1.7)

(1.4)

(3.9)(2.8)

(3.2)

(2.1)(4.1)

(3.9)

North west (35.8)

North east (18.9)

North central (18.8)

South east (21)

South South (16.4)

South west (27.5)

Nigeria is a federation with 6 zones spanning 36 states and a diverse population of over 160 Million people …

Region/state map of NigeriaPopulation in mn

SOURCE: Nigeria Population Census 2006

▪ Constitutional structure is a Federal system with 36 states, 774 LGAs and 9,565 wards

▪ The Federal Constitution divides responsibility for healthcare across the three tiers of government

▪ The 1999 Constitution placed ‘Health’ on the concurrent list with no explicit delineation of responsibilities amongst tiers of govt

There is a call to action to address health systems and structural challenges, unlock the market potential of the private health sector

Suboptimal health outcomes

Mixedhealth system

Insufficientprotection from financial risk

▪ High maternal, newborn and child mortality rates

▪ Inequalities in health outcomes and utilization

▪ Poor quality of health care services in public and private facilities

▪ ~23,000 health facilities

▪ Private sector accounts for 50% of healthcare service provision. It is fragmented; variable quality

▪ Health insurance coverage is minimal. Most payment remains out of pocket

▪ National health insurance scheme currently covers mainly the formal sector

Expected vs actual level of engagement with private sector

7931

938

457

9644

317

644

Time to enforce contract (days)

Cost of start up (% of income per capita)

Time to start a business (days)

Time to prepare and pay taxes (hours per yr)

Business environment in Nigeria vs SSA average

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 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

SOURCE: Interviews, consultations with the private health sector

▪ Most private health institutions are unable to qualify for regular bank 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

▪ Current regulations do not actively foster private health sector development.

▪ 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

▪ Inadequate organisation among private providers▪ Minimal formal engagement with the public sector▪ Limited organised advocacy platforms for communicating with policy

makers

Supply side

Demand side

Public sector engagement

Regulation and institutions

However, there are opportunities to unlock the market potential of the health sector by addressing critical constraints and shaping the market

Fiscal policy

Regulatory environment

Access to capital

Model investment projects

Engaging broader private sector

▪ Review of fiscal and monetary policies that affect the health sector; including import duty and tariffs of medical equipment, drugs & consumables; tax regimes and other duties

▪ Development of quality of care standards and accreditation system ▪ Review/clarify on regulations to provide consistent interpretation▪ Strengthening the regulatory framework of NHIS

▪ Innovative financing for health investments such as a healthcare intervention / investment fund; healthcare bond;

▪ Capability building for business and management skills in the sector

▪ Revise Healthcare PPP Policy▪ To develop private sector led model PPP transactions that could yield

demonstrable and visible impacts in the health sector

▪ Activate the Nigeria Private Sector Health Alliance to mobilize business leaders towards a multisectoral approach to improving health outcomes

1

2

3

4

5

Bellagio meeting proved to be timely and relevant and the output of the meeting should be taken forward

Issues resonated

▪ Most of the issues were familiar and very relevant to the country context

▪ Need for clarifying and framing the issue

When not what if?

▪ Health markets are complex adaptive systems, evolving with pressures on governments (Internally – responsiveness; externally – universal coverage).

▪ Governments can either engage now, within the window of opportunity, or play catch up

Information is key

▪ Lack of routine data remains a key challenge and must be addressed

▪ Type of data needed from both private and public sector should enhance stewardship function of government

Innovation▪ Regulatory innovation/evolution ▪ New business models e.g. networks, low

cost models of care▪ New labor market dynamics

▪ Research agenda to generate evidence on health markets

▪ Country ‘labs’ for testing regulatory innovations and contextual factors

▪ Community of practice for sharing experiences and learnings

▪ Link all these initiatives to results using accountability frameworks such as scorecards

Steps for moving this forwardPerspectives

Guy Stallworthy

It is quite possible to believe that...

• Healthcare delivery can be usefully understood as a mixed (public and private) system that has some features of markets:– Transactions– Interaction of supply and

demand– Customers exercising choices– Incentives

• Some things are best done by non-state actors

On the one hand… And also…• People have a right to decent

health and healthcare services• The state is ultimately responsible

for the health of its citizens• Collective, public or mandatory

funding is the most effective, efficient and equitable way to finance healthcare (financing ≠ provision)

• Market outcomes are usually far from ideal; markets are to be managed

• 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: it is a large part of the problem. If it:

The private health sector is terrific: it is a large part of the solution. If it:

• Is self-interested and driven mainly by profits, not public good

• Is the source of much misuse of antibiotics and drug resistance

• Often exploits ill-informed patients

• Routinely misdiagnoses patients and provides inappropriate or even dangerous care

• Often plunges the poor into financial crisis

• Is often promoted for ideological reasons rather than for public health efficiency and effectiveness

• Is particularly customer-friendly

• Is ubiquitous

• Can do things to unprecedented scale

• Is inherently results-based

• Tends to be innovative and dynamic

• Tends to be efficient

• Is often opposed 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

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• 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!