NextBillion - An Initiative of the William Davidson Institute at the University of Michigan

As a managing director at Results for Development Institute and leader of its Center for Health Market Innovations (CHMI), Gina Lagomarsino has unique insight into what’s working in global health – and what’s not.

Under her leadership, CHMI has catalogued more than 1,200 innovative health care programs that serve the poor in 110 countries, and it’s working to facilitate the scale-up of successful programs. An expert in health system design and financing, Lagomarsino has a particular interest in expanding health coverage and promoting national health insurance reforms in low- and middle-income countries, and creating vibrant health markets that include high-quality, widely accessible private care.

She’ll be a panelist at the William Davidson Institute’s BoP Summit Oct. 21-23, in a plenary moderated by WDI’s Prashant Yadav. And if you’re at SOCAP this week, you can catch her speaking on two panels, one on scaling global health innovations and another on impact investing. She recently spoke with NextBillion Health Care about how to create health care models that are sustainable and scalable. In Part 1 of our interview, she discussed how health care businesses are approaching the BoP and how governments are increasingly embracing the private sector. In Part 2, she talks about whether BoP health care solutions can be applied in the developed world, and the challenges of coordinating donors and the private sector in health promotion efforts.

James Militzer: What health care models have you catalogued at CHMI that you are most excited about?

Gina Lagomarsino: Well, when we look for innovations, we look for both innovative new business models, but also innovations in policy, regulations, financing mechanisms and other things that we think actually promote market building.

In terms of innovations on the delivery side of health care, primary care chains are something we are seeing a lot. We also see things like low-cost maternity hospitals that are using highly efficient processes – often using cross subsidies between the rich and the poor. We see models that are utilizing telemedicine and various forms of communication via mobile devices to deliver care, in place of a traditional visit to a doctor or clinic. And in some cases those models are also working to create relationships between patients and providers between visits, to get patients to take their AIDS medication or to stay healthy while they’re pregnant, for example.

JM: Could you talk about some of the innovations you’ve seen in health policy or financing mechanisms?

GL: It’s difficult for people at the low end of the pyramid to actually cover their full health care costs. So the traditional models that just rely on out-of-pocket spending often don’t work very well. They might be able to work for a very narrow health product like eyeglasses, which people can purchase relatively cheaply. But comprehensive primary and secondary health care is something that’s difficult for poor people to afford themselves. So there really does need to be some way of channeling subsidies to the innovative provider organizations – which is exactly what happens in every high-income country around the world that has a decent health system that involves the private sector.

(Left: Gina Lagomarsino)

So a lot of what we’ve been looking at is trying to figure out how you can link innovative revenue financing mechanisms with innovative delivery of care. And I think one of the most exciting trends that we’re seeing is a number of countries really trying to create national health insurance system models. And many of those countries are thinking about how national health insurance can actually become a revenue stream for private providers. This is new for a lot of countries in the developing world, where traditionally ministries of health have focused on building their own public hospitals and clinics, and hiring their own doctors. I think more and more countries are recognizing that there’s a need to embrace the private sector and think about how public financing can support better development of the market.

India’s a great example. In 2008 they launched the RSBY health insurance model, which targets (low-income) customers and essentially provides them with free care. So there’s government financing, people are enrolled, they get a card that allows them to go to a network of hospitals – and when they swipe the card the hospital gets paid. What that has done is create purchasing power associated with a group of people who in the past didn’t have purchasing power, and that’s leading to more private providers wanting to move into districts and regions where the population is generally poorer. So it’s creating an environment where innovators can actually have a revenue stream that can support their delivery of care. We’re seeing this happening in a number of countries, and I think that’s very exciting.

JM: In countries with low-income populations, do you notice any U.S.-style, right-left fault lines emerging, with some people adamantly opposed to a public solution to health care, and others equally opposed to putting it in private hands?

GL: Honestly, I hear that more at the global level than at the country level. I think in most countries people are fairly pragmatic about what exists. They recognize that the private sector is already quite involved, and therefore try to think about how they can leverage that. There’s still a camp that believes that health care is better delivered by the public sector. But I think that’s a group that’s getting smaller, just because of the realties – people get care from the private sector regardless of their income level in most countries already.

The challenge is when you have institutions that have been around for a long time, changing the way they do things or changing their role takes a while. If you’ve got ministries of health who traditionally have built and staffed hospitals and procured drugs through that kind of a system, they obviously have an interest in keeping that going. So switching to a new model where maybe the ministry of health’s role is to be a steward of the entire health system, thinking about both public and private providers, and trying to set up systems to make sure people get high-quality care that’s not too costly – it takes a while for that shift to happen.

JM: Do you see a role for foreign-owned business to come into BoP countries and address health care delivery, or is it mainly businesses that emerge from within those countries that are taking that on?

GL: I think in the landscaping that we have done through CHMI, we have not seen a lot of activity in terms of foreign companies, especially on the health care delivery side. Clearly, there are a lot of foreign companies that manufacture medical products and pharmaceuticals that are trying to enter emerging markets. But on the delivery side, we don’t see a lot of that at all.

What we have seen are some of these product companies – the big global pharmaceutical and medical products manufacturers – are quite interested in what the delivery system looks like in those emerging markets, because they obviously have an interest in getting their products out. So they are some of the big users of our CHMI database, because they are trying to better understand the market that they’re trying to sell to. And through some mix of corporate social responsibility and emerging market business mindsets, a few of those organizations have gotten interested in supporting investments in some of the local delivery chains and business models that are emerging. Because they think this could lead to higher quality care in those countries, and frankly, it would be a great way to distribute their products as well.