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The messy reality of health markets

Future Health Systems

[Editor's note: This blog was originally published on the PSinHEALTH website and has been cross-posted here with permission]


During the wrap up session at the end of the Private Sector in Health Symposium 2013, an eminent health economist reflected on a number of the interventions presented at the symposium which revealed the messy reality of the health sector in many countries. He suggested that we really did not seem to know what we meant by the “private sector” – it seemed to cover everything from transnational companies, large and small NGOs, small private clinics, suppliers of health-related goods and services operating outside any legal framework.

This was an important challenge to the research community. The categories of “public”, “private” and “not-for-profit” health service providers are clearly defined in law and in practice in most advanced market economies. These institutions were built over a century of social development. This is not the case in many low and middle-income countries, where the regulatory framework is rudimentary and where many laws are simply not enforced.

A recent paper by David Leonard et al in World Development argues that there is little point in trying to draw a clear boundary between the categories of public and private. Rather, the authors suggest it is better to frame the question in terms of an analysis of the functioning of health markets and of measures to improve their performance in providing safe, effective and affordable services. They conclude that “improvements in the quality of services offered to the poor in LMICs are most likely to be found by using, extending, and reforming the particular institutions a country already has, rather than attempting to import some allegedly universal best practice”.

One of the major conclusions of the symposium was that research needs to move beyond descriptions of the size of the private sector and evaluations of relatively small pilot projects. There is a need for high quality research to understand the factors influencing the performance of complex, pluralistic health systems and to test and assess alternative policy options. This is a major and challenging research agenda.

The current efforts to achieve universal health coverage through reforms to financing systems are unlikely to succeed without effective mechanisms to ensure that providers of health-related goods and services respond to increased resources by providing safe, effective and affordable services. The design of these mechanisms will rely on the findings of research on health markets. I look forward to the next symposium and to the continuing development of this important area of research.