• The case for M4P in the healthcare sector
Development funders can make better use of market systems approaches in the healthcare sector

The for-profit private sector cannot be ignored if the overall healthcare system is to function well. Take Kenya, where healthcare spending is dominated by the private sector: according to World Development Indicators 61.9% of health expenditure is private, and most low income people use the for-profit private sector when seeking care. A similar pattern can be found in other emerging economies such as Nigeria.

A comprehensive strategy for healthcare delivery to low income people should combine public, private, and hybrid systems. The private healthcare sector complements and supplements the public sector; the two structures coexist. However, past programming funded by the development community has tended to consider only the public health agenda. The for-profit private sector is often viewed as an opportunistic outsider and marginalised in overall healthcare strategy. Whereas the private sector has regularly been used as a vehicle to deliver public goods (i.e. PPPs), very little development programming has considered healthcare as a complex market system that incorporates a business agenda.

In 2013, DFID launched an innovative project in Kenya to explore the markets in which poor people pay for-profit providers of healthcare. The Private Sector Innovation Programme for Health (PSP4H) is an action research project with the objective to learn lessons from how a market systems approach might benefit pro-poor health interventions. When PSP4H launched, M4P in health was an almost undocumented field with scant research literature, and only two health programmes in Africa followed the methodology. A year later, the experiences of PSP4H show that M4P in health does indeed work and is a valid approach for technical assistance to the for-profit private healthcare sector. The market systems framework doesn’t need to be radically altered to operate in the healthcare sector.

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