Can private-public healthcare partnerships help solve a basic need that goes unmet for many base-of-pyramid populations?

The United Nations includes good health and wellbeing as a sustainable development goal. Many regions have limited access to quality healthcare services, especially affordable services. Private-public healthcare partnerships are one way that the gap between health needs and health resources can start to close.

Impact investors, however, are just turning to this space. Only 6 percent of global impact investing dollars went toward healthcare in 2017, according to that year’s Annual Impact Investor Survey conducted by the Global Impact Investing Network (GIIN).

Potential Opportunities and Challenges

The potential market for such partnerships could be huge. In 2014, according to the World Economic Forum, emerging economies represented 23 percent of global health expenditures, more than double their contribution in 1995. These expenditures are expected to increase by $4 trillion a year, accounting for a third of global health expenditures by 2024.

That said, there are also some potential challenges for public-private partnerships in healthcare. In some cases, an inadequate supply of trained medical professionals to provide care can present problems. And there may not be the institutional stability private companies require of government partners.

One deeper concern is that private corporations may not have the same holistic view of these projects that their public partners do. The World Economic Forum found that the biggest challenge for participants in such partnerships had to do with process or bureaucracy (cited by 80 percent of respondents), followed by divergent interests and lack of a shared vision.

Success Stories

Despite these challenges, it’s certainly possible for public-private partnerships in healthcare to successfully serve base-of-pyramid populations. After working with governments, nonprofits, and others in India to deliver healthcare to residents living on less than two US dollars a day, Swiss pharmaceutical company Novartis has since implemented similar programs in Kenya and Vietnam.

In addition to providing necessary drugs, the organization offers healthcare education, diagnosis, and treatment in its “health camps.” The Healthy Family programs, which employ more than 500 workers and contractors, have provided diagnoses and treatments to three million people and has offered health education to 40 million people, according to the company. The program in India, which began in 2007, was profitable by year three.

In another example, Danish pharmaceutical company Novo Nordisk’s Base of the Pyramid program has been working with governments throughout Africa to increase access to diabetes care among the working poor. In Kenya alone, over the last five years the program has provided diabetes screening to more than 19,000 people, trained more than 1,500 healthcare professionals, and established nearly 50 diabetes support groups. The cost of insulin in counties where the program runs has gone down 50 percent.

The Stanford Social Innovation Review has also highlighted successful examples in the United States, including the California FreshWorks Fund, a public-private partnership fund that provides loans to organizations working to improve access to healthy food in underserved neighborhoods. While such an objective might appear outside the healthcare sphere, access to nutritious food and outdoor time for children both result in long-term public health improvement.

Though challenges remain, such examples show that public-private partnerships are one method that investors can use to facilitate the changes necessary to meet the healthcare needs of base-of-pyramid populations.

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