There is an urgent need for emerging economies to invest in their healthcare systems. The 2014-2015 Ebola outbreak in West Africa and the 2015-2016 Zika epidemic in Latin America serve as troubling reminders of the persistent threat from epidemics.
At the same time, cardiovascular diseases, cancer and diabetes are on the rise. In middle-income countries, deaths caused by non-communicable diseases in people under the age of 16 have risen from 3 million in 1990 to 5 million in 2015, and could rise to around 6 million in 2020 if the current trend continues.
While facing growing health and financial challenges, emerging economies have a three-pronged opportunity to build resilient, equitable, effective and sustainable health systems faster and more cost-effectively than ever before.
- Disruptive innovations. Emerging economies have all sorts of new technologies and operating models that were not available when developed economies first began designing their health systems. Examples include mobile-based solutions, telemedicine, online training platforms, generic drugs and community health workers.
- Rising health expenditures. In 2014, emerging economies contributed 23% to global health expenditures, and this number is expected to reach 33% by 2024. It means $4 trillion is being invested in health every year per year.
- Less entrenched interests and structures. Most emerging economies have fewer sunk costs of existing infrastructure and equipment, lower fixed costs from building overcapacity, weaker vested interests and a less divided public opinion (as compared with developed economies).
Many global health programmes – of which the best-known trio are Aids/HIV, tuberculosis and malaria – have achieved extraordinary success over the past decade, but there is growing recognition that we need broader, more comprehensive programmes that are able to address multiple dimensions of a health system. System approaches will also be needed for maternal health and the rise of NCDs in emerging countries, which in turn requires a broader group of stakeholders and more complex partnership models.
Lessons on leapfrogging
From its work in the field of health, the World Economic Forum has learned three important lessons that could be relevant for innovators around the world. These insights come from interviews with leaders of NGOs, international organizations, private companies and governments; they are also based on a survey of more than 100 leaders of public and private organizations engaged in global health; and from supporting concrete leapfrogging programmes in Nigeria, Kenya and South Africa.
- Collective design of smart and holistic solutions. No one can make change happen on their own, and collaboration should start from the design phase. Private stakeholders must avoid trying to replicate “pre-cooked” solutions, often based on solutions from developed countries, but rather work from the beginning with governments and local communities to create innovations that are tailored to the local means and context. One example is the M-Tiba initiative in Kenya, where less than 20% of the population is covered by health insurance. This mobile-based “health wallet” allows patients to save, borrow and share money for healthcare at low cost using their mobile phones. Public and private payers can use the mobile app to offer healthcare financing such as vouchers or low-cost insurance to specific segments of the population. Providers receive payments quickly and reliably, and the donor community can reach targeted populations more directly and gain greater transparency into the use of the healthcare funds they disburse.
- Financial sustainability through new business models. Traditional sources of funding for global health can only go so far, and innovators need new tools and business models to mobilize resources. Social impact bonds are an emerging tool that allow private investors to fund interventions to improve social outcomes, and let them be rewarded by donors, governments or even health-insurance providers if outcomes improve.
For example, Social Finance Israel is developing a social impact bond that raises capital to deliver interventions for type 2 diabetes. The goal is to reduce development of the disease in high-risk pre-diabetics by offering a one-year, personalized intervention programme. This includes support from nutritionists and dieticians, free gym and fitness services, exercise and lifestyle counselling, and a personalized electronic device to monitor fitness levels. When targets are achieved, the government and insurance companies provide a return to investors.
Another example could be the International Red Cross, which launched a Humanitarian Impact Bond at Davos earlier this year to develop refugee camp infrastructure.
The Health Credit Exchange (HCX), announced by GBCHealth at the 2015 Financing for Development Conference in Addis Ababa, is another interesting approach to global health financing. Although not yet operational, under the HCX, companies would purchase “credits” on the exchange and direct them towards interventions aligned with their priorities.
Creation of such credits opens new possibilities: it would be possible to provide tangible value to companies for their credits, such as fast-tracking the regulatory review or registration of new products; and eventually create a scheme similar to the Carbon Trade Exchange platform in Europe for global health.
- Evidence-based decision-making. Everyone involved in creating a new health system needs to define upfront what data to collect, how to do it in a reliable way, and how to use the data to assess impact and define concrete corrective actions. Data management and project management are increasingly becoming core skills in global health, and they require dedicated resources and rigorous analysis across a project’s entire lifecycle.
In order to seize the triple opportunity in health of emerging economies, a new level of public-private cooperation is required. Investing in private, one-off, micro-level innovations and expecting them to independently grow into transformative and inclusive solutions is ambitious in health systems where the private sector is fragmented and the public sector still controls the lion’s share of resources and serves as the guardian of social equity.
On the other hand, budget and political constraints limit governments’ capacity to be the driver of innovation. Both sides need to find innovative ways to work together to overcome their limitations.
This article is part of our Africa series. You can read more here.
The World Economic Forum on Africa is taking place in Kigali, Rwanda from 11 to 13 May.