Innovation in the private sector and future trends

Gerald BloomInstitute of Development Studies, UKBangkokJanuary 2009

Rapid spread of markets for health-related goods and services

Out-of-pocket payments account for a large proportion of health expenditure in many countries

Emergence of pluralistic health systems with a variety of providers of health-related goods and services in terms of skills and relationship to legal framework

Blurring of boundaries between public and private sectors and increased role of market relations within the public sector

Increased channels for health related information through education, mass media, information technologies and promotion of drugs

Segmentation of health markets

Unorganised providers of drugs and a variety of health-related services

Regulated providers of drugs and medical care

Large national and transnational service delivery companies

Very large R&D-based manufacturers of special medical goods and equipment

Performance of poorly organised health markets

Overemphasis on curative services

Dangerous practices (sub-standard drugs, iatrogenic illness)

Ineffective treatment, unnecessary costs and late referral

Highly unequal access by different social groups

Understanding market systems (M4P)

Relationship between providers and purchasers of goods and services

Performance influenced by formal and informal rules and a variety of agencies

Local and global markets are linked

Interventions need to bridge micro and macro and take into account power and the existence of segmented markets

Health-related markets

Information asymmetry and trust-based institutional arrangements

Path dependency, increasing returns and the importance of history

Emergence of pluralistic health systems and the challenge of creating organised markets

A turning point in global health markets

The health knowledge economy and the creation of market order

Spread of markets faster than creation of appropriate institutional arrangements

From low efficiency equilibrium to well-organised markets

Organisations: ownership, motives, incentives and reputation

Institutions: partners, co-production and the balance between social and individual interests

Organisations for better provider performance

Informal providers and the creation of market order

Building and maintaining reputations (branding, franchises and accreditation)

Knowledge and communications intermediaries

Co-production of organised markets for health-related goods and services

Local and national government

Traditional accountability structures

Faith-based and philanthropic organisations

Trade and professional associations

Citizen and community groups

International organisations (market, philanthropic and government actors)

Where innovations arise

Spread from advanced market economies (investment and training)

Adaptation to different contexts

Emerging markets and new sources of innovation and regulatory challenges (eg drugs)

Pro-poor innovation in unorganised markets and bottom-up approaches

Learning approaches to innovation and scaling up

New organisations and new understandings of their role

Co-production of institutions, rules and ethical norms

Risk, unintended consequences, interests and the importance of path dependency

Little systematic evidence on alternative strategies for improving provider performance

Monitoring studies for design and redesign to adapt to context

Evaluation, learning and development of indicators for regulation

A time of challenge and changeHigh political priority of health-related issues

A move beyond ideological understandings of the roles of states and markets

Growing influence of private and state actors in emerging markets

Economic crisis and implications for health finance, government regulation, competition for markets and the role of regulatory issues in international trade negotiations

Responding to a window of opportunity