Despite the presence of government-provided healthcare services in the majority of low-and-middle income countries, many patients turn toward private sector providers, who are often perceived as providing higher quality, more convenient services. These private small-scale providers include non-profit and for-profit health clinics, local pharmacies, high-end hospitals and traditional healers. This proliferation of small-scale providers does help respond to patient needs and demands, but also contributes to confusion and fragmentation in mixed market health systems. When public and private health entities operate separately, the added administrative burden of coordinating contracts, purchasing supplies and services, and organizing patient care between the two sectors results in an ineffective system with hidden costs.
Yet research by Results for Development’s Center for Health Market Innovations (CHMI) reveals an increasing recognition that “intermediary” models that enable government engagement with small, fragmented private sector players while helping to improve quality are important in managing and improving mixed health systems.
In the brief, intermediaries are defined as organizations that form networks between small-scale providers to interact with governments, patients and vendors. These organizations can perform key health systems functions which are typically more challenging for individual private providers to do on their own.
More importantly, intermediary organizations supported by policymakers, donors and other health systems actors are able to help bridge the divide between sprawling public sectors and a wide array of small-scale private providers. R4D’s research has revealed that intermediary models hold the potential to address the four major challenges of fragmentation inherent in mixed market health systems.
While the majority of the research studied intermediary organizations operating in Nigeria and documented in the CHMI database, the brief generalizes the findings in a way that is applicable for existing intermediaries, policymakers, donors and other organizations interested in better understanding how to develop stronger intermediaries that effectively address the key challenges of fragmentation in health systems. The documentation of “promising practices” and successful models can help health leaders test the ideas of this brief in their own contexts to encourage the creation and development of intermediary models.