Health markets are stuck in a vicious cycle of supply, demand and investments.
As a (semi-) public good, healthcare requires large government intervention. However, many African countries suffer from limited state capabilities and poor institutions. As a result, many people turn to the private sector and, since insurance is not available for most, pay for healthcare out-of-pocket.
Despite its important role, the private sector is often weakly regulated and highly fragmented. Due to the high investment risk it has limited or no access to the capital required for quality improvement and expansion of its services. And low quality in the clinics means low trust among patients. Another reason for few insured patients.
The high proportion of out-of-pocket spending and the lack of trust in healthcare provision leads to low and unpredictable income for healthcare providers. This limits their options for investing in the quality, scope and scale of their services even further.
Healthcare markets, especially at the base of the pyramid, are stuck in this vicious cycle of low and unpredictable demand, low and uncertain quality of supply, and totally inadequate investments. And the absence of health insurance leads to catastrophic health expenses, sending millions into deeper poverty every year. Reversing the vicious cycle into a virtuous one is key to achieving inclusive healthcare.
Read more about our approach.