Public health needs the private sector?

In response to the news of the Bill and Melinda Gates Foundations massive investment in the eradication of polio this week, Terry Kosdrosky at the University of Michigan Ross School of Business wrote an interesting piece about the important role that private corporations can have in investing in health as a public good. Kosdrosky quotes Dr. Tachi Yamada, the president of the Bill and Melinda Gates Foundation Global Health Program:

“If we can’t think of this problem in terms of a moral tragedy, we can think of self-interest,” Yamada said. “From a commercial standpoint, the emerging world is the emerging market. Real opportunity for industries, stable industries throughout the world, is in the developing world — south Asia, Africa.”

Kosdrosky goes on:

“From an economic perspective, not solving these problems will deprive businesses of a huge market, now and in the future, as mature markets see slower growth.

…there are limits to what even well-funded government programs can do. For example, Yamada recently visited a clinic in a remote part of Ghana. It was well-staffed, the professionals were well-educated, and it was fully equipped with medicine. The county has a national health insurance plan. But the clinic was only seeing about 150 people a month, or five a day.

A visit to a nearby village showed him why. The people there said very few of them went to the clinic for several reasons. For one, it took a long time to be seen because of red tape associated with the national health insurance program. If you pay cash, you can be seen right away, but the cost is prohibitive. Second, a medicine seller came by the village every so often. People would report their symptoms and he’d sell them medicine at low prices.

It tells you the public sector by itself can’t do it,” Yamada said. “It’s necessary, but not sufficient, to deliver care… The delivery channels for care are there for the private sector in a way they’re not available to the public sector.”

Of course, coming from a business school,  Terry Kosdrosky emphasizes using market forces to drive the creation of efficient health systems. I have no doubt that engaging the private sector and leveraging massive corporate resources will be essential to building true global health equity. But, I think that the fundamental position that patient = customer, or that we are all consumers of health care as a product, is fundamentally flawed. In my mind it conflicts directly with the notion that health is a fundamental human right.

How can we use market forces to drive the efficiency and quality of health systems without erroding our ultimate goal of equity?


5 Responses to “Public health needs the private sector?”

  1. 1 Laura January 22, 2009 at 4:11 pm

    I think another way that the market can influence public health in a positive fashion is through micro-credit, such as through the work of, among many others, Muhammad Yunus. Micro-credit has the ability to empower impoverished people, namely women, to become less economically dependent. It’s been shown that women who are more self sufficient have greater decision making power in the household and ultimately are able to improve health outcomes for their families. Micro-finance initiatives may be another way that the private sector may work together with and improve public health.

  2. 2 Allen Taylor January 22, 2009 at 4:15 pm

    Nice writing. You are on my RSS reader now so I can read more from you down the road.

    Allen Taylor

  3. 3 Ankur January 22, 2009 at 5:50 pm


    I think you hit it on the head when you ask how we can get the ‘benefits’ of market forces (continually improving efficiency and quality) while not losing out on the important viewpoint that health care cannot be a commodity. An interesting analysis presented by Michael Porter (a Harvard Business School prof.) states that one of the fundamental problems in U.S. health care is that there is not competition on results. He argues that value in health care should be measured as ‘health outcomes per dollar spent’. Now, in a business context with such inefficient systems, this mentality can simply lead to reducing dollars spent rather than improving health outcomes. However, if the same measurement for value as ‘health outcomes per dollar spent’ was used by the public sector — with the framework that health is a right –to measure health outcomes (and ‘compete’ so to speak) then we might be able to continue to drive much needed innovations in efficiency forward.

  4. 4 James BonTempo January 22, 2009 at 6:41 pm

    “A medicine seller came by the village every so often. People would report their symptoms and he’d sell them medicine at low prices.”

    I recently learned of Positive Deviance and couldn’t help but think of it when reading this sentence. Maybe part of the solution lies in bringing into the “market” those effective players and processes currently operating outside it. How might coordination with the medicine sellers and other “deviants” improve the health system?

  5. 5 jonshaffer January 24, 2009 at 10:24 pm

    Hi James,

    Interesting idea. I hadn’t heard of Positive Deviance before and after a quick wiki search, I would still like to learn more. Do you have any suggestions for websites, books, or articles that I should check out? Perhaps after a bit more reading I can respond to your question!

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Welcome to the Students for Global Health Equity (SGHE) blog. Published by university students, the SGHE blog seeks to explore news and issues related to global health.

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