How to intervene in health markets
How can we intervene in health markets to achieve health system goals, particularly equity?
In the previous step you saw that there are a number of regulatory approaches that can be used to manage the private sector, with (limited) evidence that some of these approaches can improve service coverage and quality. In this step, we review two perspectives on how we might identify the systemic problems of mixed health systems and go about addressing them, with a focus on improving equity.
In 2010, Sania Nishtar theorised that poor performance in mixed health systems is due to an interplay between:
- Insufficient state funding for health
- Lack of an appropriate regulatory framework for the private sector
- Lack of transparency in governance.
Bloom and colleagues (2008) correlate growth in private health markets with the growth of markets in other sectors. this is sometimes linked to economic liberalisation/economic growth, sometimes linked to economic decline and the failure of state-provided services to meet popular expectations. Private sector expansion is often faster than public sector ability to regulate the sector; and there is often a blurring between public and private domains, with dual practice by practitioners and use of user fees in the public sector. They make a key point that government can constructively intervene in the functioning of health markets to improve their “performance”. From both authors’ perspectives, “performance” means equity.
For Nishtar, mixed health systems syndrome is diagnosed through compromised quality and equity, lack of “fairness in financing”. This means that when “care is predominantly provided by the private sector, management and performance problems are manifest in the public system” (p.74).
Nishtar is arguing that we cannot consider the performance of the private sector in isolation – that the characteristics of the private sector are related in some way to the performance of the public health sector.
She sees three main treatments for mixed health systems syndrome:
- Address the broader political-economy constraints such as public service reform, transparent governance and debt limitation.
- Building technical capacity in stewardship and regulatory agencies.
- Broaden the base of public financing for health, for instance, through incremental increases in revenues earmarked for health to support essential services.
She advocates doing these in a phased way, with the first step being the creation of appropriate policy and legal frameworks, and thereafter piloting and scaling up appropriate interventions.
“Limited capacity, the short-term outlook of governments in most developing countries and lack of transparency in governance create impediments and so need to be addressed in tandem with health system reform” (Nishtar, 2010, p.75).
Bloom and colleagues give a conceptual framework for thinking about how to intervene in health markets (see figure 1 below). At the heart of the framework is the practitioner-patient relationship (supply and demand).
*Figure 1: Conceptualising market systems (Bloom et al, 2008, p.31).
Using this framework, they propose that government should intervene based on the following, rather than advocating specific interventions (as Nishtar did):
- Understand and address market systems as a whole to achieve sustainable change: attempts to achieve long-lasting change through the efforts of a single organisation or individual tend to be unsuccessful.
- Reforms should begin with markets in which poor people are already engaged (usually informal providers/local agencies such as provider associations, citizen groups and local accountability structures).
- Interventions intended to benefit the poor should take into account the influence of power and conflicts of interest on their outcome.
- Interventions that focus solely on providers of health services are unlikely to have a great impact on the poor unless they are linked to measures that provide more equitable access to government funding and donor financial flows.
In summary, we cannot consider the performance of the private sector in isolation – the characteristics of the private sector are related in some way to the performance of the public health sector. There is a consensus that the private sector should be managed by government to achieve equitable access to quality healthcare for the poor. There is emerging consensus about how this management should be approached.
“Reforms should begin with markets in which poor people are already engaged” (Bloom et al, 2008, p32).
In your setting, what are the private providers who are already widely utilised by people who are poor/disadvantaged? Are there existing approaches to regulate these providers? What other approaches could be considered for these providers? Please comment below.
Bloom, G, Champion, C, Lucas, H, Rahman, MH, Bhuiya, A, Oladimeji, O & Peters, DH, 2008, ‘Health markets and future health systems: Innovations for equity’, in Global Forum Update on Research for Health, vol. 5, pp. 30-33.
Nishtar, S, 2010. ‘The mixed health systems syndrome’, Bulletin of the World Health Organization, vol. 88, pp. 74-75.
© Nossal Institute for Global Health at the University of Melbourne