Rethinking blended financing for primary healthcare

Part 3 of a three part blog series

Reflections from the symposium “How can the public–private mix advance PHC in a transforming world order?”, convened by the Health Systems & Policy Research Cluster at UCL Global Business School for Health in collaboration with Health Systems Global’s Private Sector & Commercial Determinants of Health Technical Working Group, May 2026.

The paradox in PHC resourcing

Across many low- and middle-income countries, primary healthcare (PHC) service delivery faces a persistent paradox. The greatest unmet need is often in rural, remote, and low-income urban settings, where coverage of essential services remains inadequate. Yet private capital, although available globally and often within countries themselves, tends to flow elsewhere: toward urban markets, higher-income populations, insured groups, and specialised curative services with clearer revenue streams and more predictable returns.

This mismatch raises a central question for health systems: how can private capital be mobilised to strengthen PHC service delivery without deepening the inequities that PHC is meant to address?

This question was at the core of the symposium’s organised session on Unlocking efficient, resilient resources across private and public sectors for primary healthcare delivery. Researchers, governments, investors, philanthropies, development finance institutions, and healthcare providers came together to examine how blended financing and private investment can support PHC service delivery and accelerate progress toward universal health coverage.

Which private sector ownership and structure?

One message from the session was clear: the private sector is not a single entity, and a simplistic “public versus private” framing is reductive. In practice, PHC service delivery involves a wide range of non-state and private financing actors, including non-profits, sole proprietors, public corporations, venture capital, private equity, philanthropy, development finance institutions, and blended finance arrangements. Each of these ownership and financing structures operates with different time horizons, accountability arrangements, and expectations of return.

This distinction is especially important in healthcare, where information asymmetries, incomplete contracting, and misaligned incentives can distort provider behaviour. At the same time, private investment can expand access, advance innovation, and mobilise resources where public financing is constrained. The issue, therefore, is not whether private capital is inherently good or bad, but whether its incentives align with universal health coverage and the public purpose of PHC.

Examples from the field

Several examples illustrated both the promise and limitations of blended and catalytic finance in improving PHC service delivery. These included interventions ranging from scaling specialised services and refurbishing public facilities to backing climate-resilient technologies and leveraging larger multilateral funding flows. Across the examples, private and philanthropic capital was used to de-risk investment, complement public financing, and support innovation in areas where public resources alone may be insufficient.

At the same time, the cases surfaced recurring challenges. Models depended heavily on public infrastructure, referral systems, reimbursement arrangements, and policy stability. They also required careful alignment between investors, governments, implementers, and providers. The lesson was clear: blended finance is not simply about bringing in more money, but about structuring capital, risk, incentives, and accountability so that financing strengthens PHC service delivery rather than creating parallel or fragile systems.

What role can governments play?

PHC services are often fragmented, prevention-oriented, and concentrated in communities where ability to pay is limited. This makes them low-margin and less attractive to conventional private capital. Governments therefore cannot simply wait for investment to flow toward underserved PHC markets. They must actively shape those markets to reward equity and quality.

Strategic purchasing, risk-sharing, first-loss financing, output-based incentives, stronger digital claims systems, and regulation can help governments act as market stewards for equitable PHC service delivery. This stewardship role is especially important where private capital may otherwise concentrate in services and geographies with stronger commercial returns, leaving the most underserved populations behind.

Reconciling private capital with equitable PHC delivery

The future debate is not whether private actors should participate in PHC: they already do. The more important question is which forms of private financing, ownership, and governance are compatible with equitable, resilient, and publicly accountable health systems.

Blended finance may help mobilise additional resources, but its value will depend on whether governments can steer capital toward public health priorities rather than allowing market incentives alone to determine where investment flows. For PHC service delivery, the challenge is not only to unlock private capital, but to ensure that it is aligned with equity, quality, and universal health coverage.

Suma Pathy is a health systems and social impact practitioner with experience in primary healthcare, RMNCH, immunisation, adolescent health, and private sector engagement in India. She has led USAID-funded health systems programmes and works on climate-health, digital health, and innovative financing for equitable service delivery.

Robert Fryatt is an Honorary Associate Professor of Practice at the UCL Global Business School for Health. He has thirty years’ experience working in low-, middle-, and high-income countries and in NGO, government, multilateral and private sector settings.

• Read Part 1 of our three-part blog series, also available: Balancing business and accountability: governing equitable primary healthcare partnerships with the private sector - Health Systems Global (HSG)

• Read Part 2 of our three-part blog series, now available: Digital innovation for primary health care: aligning public–private partnerships for scale, trust and public good - Health Systems Global (HSG)

Image copyright: Africa Public Health Network