After years of disease-focused initiatives in global health, there is a growing interest in strengthening health systems so that they work better for the poor. Low- and middleincome countries have mixed health systems, often with large private sectors widely used by the poor. The lack of availability, high out-of-pocket expenses, and poor quality of care in these systems result in low utilization and suboptimal health outcomes. Harnessing the existing private sector—a mix of licensed for-profit and nonprofit organizations as well as informal providers—may be an efficient way of improving services. The example of social enterprises that aim for social impact, financial sustainability, and rapid scale-up has created enthusiasm to explore the potential of investments in this sector in health, with specific efforts from the International Finance Corporation and the Rockefeller Foundation. We have undertaken an extensive review of print and online sources to identify private sector organizations that have used innovative business models to improve care for the poor, in order to characterize their models.
Organizations that have demonstrated impact (improved availability, affordability, or quality of care for the poor) and that have been imitated or scaled up from initial pilots were identified. Using a purposive sample of information-rich examples, we developed 11 case studies. Starting from a health care delivery value chain and the cases, we developed a framework for characterizing innovations in generic business processes (marketing, finance, and operations) and medical processes (prevention, diagnosis, intervening, rehabilitation, monitoring). Marketing strategies were mostly in mass communication, customer orientation, and franchising. Financial strategies focused on reducing capital and operating costs; high-volume, low-cost models; and cross-subsidy from rich to poor. Operating strategies included extensive use of paramedical staff, knowledge development, and novel delivery mechanisms to reach patients more effectively. Medical process innovations focused on the areas of screening and intervention, with one example of rehabilitation.
All but one of these organizations innovated across all three business processes mentioned above, suggesting that there is no single effective strategy, and a portfolio approach is favored. Most organizations had a vertical orientation; that is, they used effective medical protocols with a narrow disease focus (for example, eye care or heart surgery) with innovative business processes to support them. These organizations often stand alone and are highly flexible in their finance and operating strategies, which have allowed them to experiment and expand. Some organizations have deep innovations in certain usiness processes that can be translated from private sector organizations to public health systems. One organization developed a novel marketing strategy that became the basis for a successful national HIV/AIDS awareness campaign. None of the organizations attempted more horizontal approaches to address the spectrum of population health needs rather than a particular disease.
This study reviewed many examples of private sector organizations that have improved care for the poor and created a model to characterize their business and medical process innovations. These organizations all innovate across marketing strategies aimed at more closely targeting the poor, financial models to dramatically reduce costs, and novel delivery processes to make services more available. Their work can be expanded to fill gaps in health services, and elements of these models can be replicated or promoted by governments or foundations to improve care in other institutions. Future work should assess the degree to which leadership and organizational culture have contributed to their success. Though most organizations have a narrow disease focus and have filled gaps in public service delivery, some of their approaches could integrate with or be adapted to horizontal public services. In this respect, they may act as a complement to the public system rather than an alternative.