A typology of private investor-ownership in health service provision and related regulatory frameworks in five countries

Private sector entities can invest in and own the means of healthcare provision, creating opportunities and risks for health systems. While private investment can enhance access to capital, promote competition, and foster innovation, it can also exacerbate incentives for providers to engage in supplier-induced demand, undue price increases, quality compromises, and 'cherry-picking' of the most profitable patients and services. Despite the growing presence of private investors in the healthcare sector, heterogeneity in investor types remains poorly understood. This limits the ability of policymakers to consider whether, and to what extent, regulatory intervention is called for in relation to different forms of investor-ownership. By drawing on principal-agent theory, this article begins to address this gap by presenting a typology of investor-ownership in health services provision. Examining the policy relevance of such a typology, we present a case study analysis of current regulations directed at ownership across five countries, representing different health system models. We find that regulatory frameworks that differentiate between types of for-profit investor-ownership are largely absent in Europe, but more developed in the US. We argue that growing private investments require a combination of entry regulation and behavioural oversight to better align the incentives of investor-owners with public health objectives.