Health markets and future health systems: innovation for equity

Abstract

M any low-and low-middle income countries have pluralistic health systems, characterized by widespread and often highly segmented markets offering a diverse range of health-related goods and services 1,2,3. Out-of-pocket payment for health care averages more than 50% of all health spending in these countries 4 , with non-state providers, both private and not-for-profit, typically providing the majority of outpatient curative care 5,6. If health services are to benefit the poor, it is essential to gain a detailed understanding of such markets that can both inform attitudes towards them and guide innovations that attempt to engage with them to improve health outcomes. The spread of market relationships in the provision of health services has coincided with the growth of markets in other sectors. In some countries this has been associated with economic liberalization and economic growth. In others, its emergence is linked to economic decline and the failure of state-provided services to meet popular expectations. In many circumstances the spread of markets has been much faster than the capacity of the state and other key actors to establish regulatory arrangements to influence their performance. A large proportion of market transactions now take place outside a legal regulatory framework or in settings where regulatory regimes are poorly implemented, particularly for the poor. In addition, the boundaries between public and private sectors have become blurred. In many countries users routinely make informal payments for services or drugs at public facilities, or consult government health workers privately 7. In others, public providers are officially encouraged to generate income in order to supplement often very limited government subsidies 8. The marketization of health services has created both opportunities and challenges for poor people. They may have greater choice about where to seek drugs and medical advice, but cost is often a barrier to access. There are examples of excellent services but, as Das et al 9 document, the quality of services that both public and private health workers provide is often flawed, partly in response to perverse incentives. Such incentives also result in an emphasis on medical care at the expense of prevention and health promotion. It is widely recognized that both government and other intermediary organizations can play important roles in altering these incentives and improving the performance of these markets. There is less agreement on what those roles should be in different development contexts and how health systems can construct the institutional arrangements for them to play these roles effectively. The spread of market relationships has advanced so far in many countries that official policies often have limited relevance to the realities that poor people face when coping with health problems. We propose an approach which explores the operation of health markets in order to help explain how health systems are changing, identify potential opportunities for intervention and innovation, and guide the design of monitoring systems that can track and learn from both the intended and unintended consequences of such innovations. We then examine different types of emerging innovations, and focus on two in Nigeria and Bangladesh. Conceptual framework This section describes an approach for analysing and understanding health markets in low-and middle-income countries. It draws on the framework for understanding markets that poor people use presented in a recent paper by Elliot et al 10 and summarized in Figure 1. The authors of that paper place at the centre the relationship between providers and consumers, that is in our case, the relationship between health service providers and patients. Those relationships are greatly influenced by a multi-dimensional and complex environment made of formal and informal rules and of agencies that undertake a number of supporting functions. Strategies for change need to take into account the diverse components of this context as well as ways to improve the management of a single organization or intervention. They also need to acknowledge the importance of conflicts of interest and the degree to which power relationships influence the organization and functioning of relevant markets. For example, many health-related markets are segmented, with well-regulated components used mostly by the better off and unregulated ones used by the poor 2. An important aspect of the relationship between providers and patients concerns the transfer of the benefits of medical expert knowledge to the latter. This transaction is characterized by varying degrees of asymmetry of information 30