Innovation in the private sector and


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This presentation was given by Gerald Bloom of the Future Health Systems Research Programme Consortium ( at:
The Prince Mahidol Award Conference 2009
Mainstreaming Health into Public Policies
January 28-30, 2009
Imperial Queens Park Hotel, Bangkok, Thailand

Published in: Health & Medicine
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Innovation in the private sector and

  1. 1. Innovation in the private sector and future trends Gerald Bloom Institute of Development Studies, UK Bangkok January 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
  2. 2. 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
  3. 3. 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
  4. 4. 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
  5. 5. 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
  6. 6. 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 change High 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