Managing Markets for Health: Governance in Mixed Health Systems

This is the final post in our series on Managing Markets for Health. 

The final two days of the Managing Markets for Health workshop took a closer look at governance structures and high level strategies that governments can use to think about and manage private sector involvement in the health system. Day four began with a constructive discussion between Dr. A. Venkatraman, an expert in the field of public private partnerships in India, and the participants of the course. He answered questions from participants about the right way to form partnerships and who is in the right place to form them.

According to Dr. Venkatraman, the nature and type of partnership between the public and private partners should vary, depending on the objective of the partnership. There is never one correct way of partnering with the private sector. Those who work in the health department may not have the skill sets required to form every single kind of partnership. A transaction advisor or an independent consultant can be involved when the required skill set is not available within the health department. The consultant or transaction advisor will provide inputs on market research, analysis of feasibility, value for money, costing of health services, and monitoring and evaluation techniques. It is important for the public partner to have the capacity to ask the right kind of questions from the transaction advisor to make sure that the partnership and the nature of the engagement address the rationale for the partnership.

Barbara O’Hanlon, of O’ Hanlon Health Consulting, introduced participants to three types of governance regimes: exclusive, selective, and inclusive. In an exclusive regime, the government achieves its healthcare goals by investing in and operating a fully public health system. In this type of regime, the government has minimal interaction and control over the market.

When the government involves both the public and private systems to achieve public health goals, this is considered an inclusive regime. This system requires active regulation and monitoring of the private sector. A selective regime is one where governments choose to include the private sector for specific health areas to achieve certain target goals. In a mixed health system, it is important to move toward inclusive governance to make optimal use of both public and private resources.

Somil Nagpal, a senior health specialist from the World Bank, discussed the topic of social insurance. We saw how general social health insurance programs have improved access to services and reduced out of pocket payments for covered illnesses as well as reduced the associated financial barriers to healthcare. Publicly funded health insurance in India is governed by an inclusive regime. The emerging model for insurance contracts is one in which public agencies form autonomous bodies or trusts. For example, the government of Andhra Pradesh set up the Dr. NTR Vaidya Seva Trust to facilitate the implementation of the Dr. NTR Vaidya Seva Health Insurance Scheme. Under this structure, both public and private hospitals compete for patients in the network, and payments are tied to outputs.

The diagram to the left shows how government sponsored health insurance programs in India affect the private health sector. Ownership is marked toward the far right, toward one hundred percent, because the private sector is given fair amount of operational autonomy to organize itself according to changing needs. The second domain, customer competition, is marked “high” because private sector players are highly governed by competition among themselves. Price influence is market driven in the private sector, as shown in the third bar. There are no barriers to entry into the private sector market, so the entry barriers category is marked closer to the right side. Social funding is marked on the far right. Most care in the private sector is paid for out of pocket. The last domain, contract conditionality, is marked at the far left. The private sector is not subject to pressure from any form of contract conditionality.

On the final day of the workshop, Ms. O’Hanlon focused on the implementation of policies under an inclusive governance regime. She introduced the participants to a four step process for policy implementation: understand, mobilize, orchestrate, and modulate.


During the first step, understand, the government must gather information about the overall health sector, analyze select health markets, and generate market information to inform all future stages of the policy process. We need to look at the market from the perspective of the private players as well as understand the health seeking behaviors of consumers and determine the feasibility of the partnership.

The second step is to mobilize the players. When partnering in a collaborative manner, several important preconditions exist. These include trust, shared values, and understanding. The government should play the role of “fixer” to ensure that the design and architecture of the partnership is strong.

The third step is to orchestrate to engage with the private sector. This step requires getting everyone to play his or her role. The policymaker will need to establish the direction, set the tone, and enable each actor to play his or her role according to his or her ability.

The final step in the policy implementation process is to modulate. This step focuses on observing progress, assessing whether the tools are creating the desired impact, making midcourse amendments, and learning from successes and failures.

LV Subramaniam, Special Chief Secretary for the Government of Andhra Pradesh, offered his insights based on his experience handling the B. Braun partnership for hemodialysis in United Andhra Pradesh. The B. Braun partnership was the particular case that we studied on the final day of the course. Participants examined the working relationship between the Andhra Pradesh government and the private player, B. Braun. Partiipants also explored the efforts of B. Braun to build this relationship.

 One of the key lessons from this session was to understand the significant differences between inclusive implementation of policy from an exclusive approach. In an inclusive regime, implementation requires command and control. governance involves multiple public agencies and a range of private actors.

 At the end of the course, the participants had the opportunity to reflect on the value of the Markets for Health framework and the policy tools presented to improve health interventions in their own states and countries. After learning about the theoretical nuances of the policy tools, the participants were able to apply the tools to specific submarkets in their states and country contexts as the course progressed through group sessions and discussions. Most of the states and countries that attended the course are in the process of implementing interventions that range from government sponsored health insurance programs to contracting with the private sector to achieve specific objectives.

ACCESS Health is forming an alumni network that will include the first set of participants who attended course. The network will help us collect constructive feedback about the course and document the key takeaways and long term impact of the course.