Global spending on healthcare totals US$ 7 trillion and could double by the next decade. A big market for health services, the base of the pyramid (BOP), represents about two-thirds of the global population.
Demographic changes and global economic shifts are turning the business world’s attention to emerging markets, where most of the BOP lives. Companies focused on responsible, inclusive, and long-term growth are also changing the way the private sector defines value and where and how it looks to find new revenue.
How sustainable is the traditional model of providing healthcare to the BOP through grants, subsidies, donations and taxes? Consider these factors:
Many donor initiatives are not multiyear
Above all, grants are often employed for short run health priorities and initiatives, and may be less effective in contributing to long-term growth and development of healthcare infrastructures.
Meeting the needs of the BOP through affordable microinsurance: Can health insurers offer adequate coverage at low prices and still make a profit? Schemes like microinsurance – offering tailored coverage specifically to populations that cannot afford conventional insurance – hold promise.
Selling affordable products to the BOP market: Businesses have had success adopting an approach called frugal innovation, or designing a functional, low-cost product for emerging economies.
Leveraging technology to optimize available resources: Technology will be the key to bringing scale and capacity to healthcare for the BOP.
Develop complimentary, cross-sector partnerships: With so much of the health system in countries with large BOP populations reliant on both the public and private sectors, partnerships between the two are a necessity.