About Health Markets
Health markets are the part of the health system where health care decisions are made by both consumers and providers of services. Health markets are increasingly important in many countries, since they take the place of or operate alongside government-sponsored public delivery.
Why are Health Markets important?
Health markets are big. In many countries, private transactions are the way much health care happens—even when governments offer free care at public facilities. In at least 17 countries in Asia and 16 countries in Africa, more than half of all health spending is made up of out-of-pocket payments from consumers.
The poor often rely on health markets. In most developing countries, the poor rely on private health care providers for a large portion of their care. In Sub-Saharan Africa and South Asia, they use the private sector just as much as the rich. According to the World Health Organization, each year, 150 million people suffer financial catastrophe because of payments for health services, and many forgo or delay care because they lack financial resources.
Health markets can create many challenges. Patients do not always seek the kind of care that will make them healthier, and providers do not always act in the patient’s best interest. Appropriate care is often expensive and pushes people further into poverty.
Health markets can be harnessed to improve health for the poor. When well-monitored and regulated, health markets can be a source of creative new approaches with the potential to achieve greater efficiencies, greater quality, and increased access to care for underserved populations.
Read more on this topic in R4D's Public Stewardship of Private Providers report.
What are governments doing about Health Markets?
Countries around the world and development partners are acknowledging that governments must use private providers to achieve their health system goals such as improved health outcomes and better financial protection.
In May 2010, the World Health Assembly passed a resolution: Strengthening the capacity of governments to constructively engage the private sector in providing essential health-care services (A63/25). The resolution urges member states to improve information collection on private providers, strengthen strategies for productive engagement between government and private providers, and develop regulatory frameworks that ensure universal access with social protection.