Digital Health Transformation through Private Sector Engagement
Findings from Digital Health Exemplars’ research on enablers for digital transformation in primary healthcare
Issue 22, May 2025
ISSUE Overview
In this month’s Digital Health Research Roundup, guest editors and of the McKinsey Health Institute (MHI) and from the Center for Global Digital Health Innovation (CGDHI) at the Johns ÎÚŃ»´«Ă˝, examine how private sector engagement is a key enabler of digital health transformation. Sharing findings from the Digital Health Exemplars (DHE) multi-country study, they showcase how governments are partnering with private tech sector actors to strengthen primary healthcare (PHC) through digital transformation. Insights shared include engagement models, collaboration incentives, financing mechanisms, and other success factors.
Upcoming Webinar on Private Sector Engagement
Join CGDHI, McKinsey Health Institute (MHI), and other global digital health leaders on June 5, 2025, for the next webinar in our Digital Health Exemplars series on enablers of digital health transformation in primary healthcare. Our discussion with policymakers, researchers, and donors will share how public sector collaboration with private partners operates in different country contexts and what factors may drive success.
Guest Editors’ Remarks:
The digital transformation of healthcare systems has emerged as a public health priority, with many countries harnessing technology to address persistent healthcare challenges. However, the scale and complexity of digital transformation often exceed the capacity and resources of governments acting alone. Through strategic funding and collaboration, the private sector may help bridge this gap.
The private sector can provide different capabilities to the public sector, as well as access to scale and capital in digital health. These capabilities include operational efficiency, innovation, agility, and technical expertise, including software development, market analytics, behavioral science, organizational transformation, and AI implementation.
However, due diligence is needed to mitigate risks. These partnerships require careful consideration to ensure public benefit, including addressing concerns around data privacy, vendor lock-in, data fragmentation, financial sustainability, and regulatory oversight. Moreover, the private sector can help bridge gaps for underserved populations, but it can widen disparities if poorly designed. Stakeholders can push for smarter, more flexible strategies to encourage innovation while safeguarding patients' data privacy and security, and to balance questions of health equity.
Effective Public-Private-Partnerships (PPPs) require strong governance frameworks and public sector technical capacity. These models differ substantially based on a country’s health system, digital health maturity, financial resources, and regulatory climate, and aligning them with national digital health priorities is key to their success. Additionally, outlining clear roles and responsibilities is crucial for mutually beneficial community and health system outcomes.
In this Research Roundup, we share the experiences of multiple countries at various stages of digital health maturity to illustrate how countries harness strategic private sector engagements to effect digital transformation of PHC. The findings derive from two arms of the Digital Health Exemplars (DHE) project: 1) MHI’s study of Canada, Estonia, Mexico, Tanzania, and Togo; and 2) CGDHI’s examination of five countries designated as “exemplars,” Rwanda, Ghana, India, Brazil, and Finland. We also share two recent publications on private sector engagement in digital health that provide additional strategic guidance.
Foundational Publications on Engaging the Private Sector for Digital Transformation
The Health Equity Consortium (HEC) private sector engagement model
1. Arnaout A et al, , Frontiers in Health Services, 2023
This article discusses the Health Equity Consortium (HEC) private sector engagement model, driven by collaboration between community-based organizations (CBOs), public health entities, healthcare providers, and private technology partners. It explores how HEC helped improve healthcare access and outcomes during the COVID-19 pandemic in Washington State and California.
Key Takeaways:
- The HEC model increased COVID-19 vaccination rates among underserved populations by combining trusted community outreach with private sector tools such as digital scheduling, QR-code-based patient flow, and automated data systems. This model shows potential for scaling to other public health areas, including chronic disease and cancer screening.
- The partnership succeeded by building trust through community-based organizations, enabling real-time data sharing across systems, applying AI tools to identify gaps and support equity-focused decisions, and creating value for all partners through financial and operational gains, including improved reporting and quality of care scores.
- The model is promising but requires continued evaluation to sustain post-pandemic.
The experience of 25 digital health startups scaling up within Canada's publicly-funded health system
2. Kelley LT et al, , JMIR Public Health and Surveillance, 2020
This qualitative case study examined 25 digital health startups attempting to scale within Canada's publicly funded health system. Based on advisory consultations with these startups, the study highlights the differences between private sector innovation and public system incentives.
Key Takeaways:
- Fewer than half of startups could conduct external evaluations to generate evidence of safety, effectiveness, or cost impact. This may have limited the uptake of the digital tools by public sector payers.
- Digital tools faced resistance in acceptance by hospital systems and physicians due to payment models that only reward in-person care and service delivery, not system efficiency.
- Non-standard Electronic Medical Record systems require costly custom integrations that reduce product scalability and interoperability across healthcare institutions.
- Digital health startups were advised to partner with clinical end users early in solutions design and focus on small-scale real-world evaluations that demonstrate value across outcomes, experience, and cost.
- Startups seeking wider adoption must build solutions that offer clear financial incentives to clinicians to encourage meaningful behavior change.
McKinsey Health Institute’s Preliminary Cross-Country Insights from Canada, Estonia, Mexico, Tanzania, and Togo
The private sector may play a role in bridging the digital health gap. Private sector engagement in digital health varies by country, shaped mainly by digital health maturity, financing availability, and regulations. MHI’s research examines more than 20 use cases across five focus countries—Canada, Estonia, Mexico, Tanzania, and Togo—representing diverse income levels, geographies, and digital health maturity. As the use cases are still being validated, preliminary findings on engagement models, design considerations, and lessons learned are presented below.
Private Sector Engagement Models
Several engagement models have emerged in the research to guide public-private collaboration in digital health, tailored to varying country contexts and ecosystem maturity. This list is not exhaustive and depends on the national and sub-national governance and financing.
Direct Procurement
This model describes when governments, at the national or subnational level, directly purchase digital health solutions from private sector developers and vendors.
Private Sector-Driven Partnerships
These collaborations occur when non-government actors (e.g., private companies, NGOs) initiate partnerships with governments, a model frequently observed in countries with a robust private sector ecosystem.
Multistakeholder Partnerships
This model features a primary private actor coordinating with a consortium of cross-sectoral stakeholders, which often might be employed in emerging ecosystems to tackle complex, large-scale initiatives.
Jointly-funded Innovation Hubs
In these partnerships designed to encourage innovation, publicly-funded organizations provide grants and other resources to private sector developers of digital health solutions.
Emerging Design Considerations for Private Sector Engagement in Digital Health
McKinsey Health Institute’s preliminary findings from its research identified the following potential design considerations that countries may use when working with the private sector on digital health transformation:
Why do countries collaborate with the private sector?
Capabilities are a chief reason for collaboration, as well as the ability to scale and finance solutions. Emerging markets may often supplement funding from the private sector.
Who do countries collaborate with?
Financially-constrained countries may often partner with mission-driven non-profits, prioritizing social impact. In comparison, countries with more available funding might engage local for-profits for innovation and global for-profits for large-scale solutions.
What types of digital solutions are deployed?
Countries engaged the private sector across various solution types. More than half of these solutions were auxiliary tools; Electronic Health Records (EHRs) were the second most common, and telehealth and Health Information Exchanges constituted the rest. Partnerships were predominantly focused on building and implementing solutions, while long-term private sector operation was only seen in a few cases.
How is the partnership structured?
Across the focus countries, direct procurement may be commonly used for specific public sector needs, consortium contracts may be used in emerging ecosystems to coordinate stakeholders via donor-trusted non-profits, and MoUs may serve as flexible agreements for collaboration, supporting long-term partnerships
How are the partnerships managed?
Smaller-scale solutions often involve sole oversight, while large-scale implementations typically require joint oversight. In half of the use cases, governments favored sole public ownership for solutions integrated into public infrastructure. Private sector involvement through funding or equity often leads to shared or private ownership.
How are the partnerships funded?
Funding sources vary by ecosystem maturity, with maturing digital health ecosystems often relying on public funding while nascent ecosystems supplement public funds with donor or private financing.
Additional Preliminary Lessons Learned from MHI's Research
McKinsey Health Institute also identified the following preliminary findings on how countries engage private sector partners on the digital transformation of primary healthcare:
Effective private sector engagement practices
Partnering with trusted actors (such as established foundations in focus countries) may improve solution quality. Establishing transparent procurement processes and implementing centralized platforms could streamline processes.
Incentives to foster local ecosystems
Tools such as tax breaks and grants, as well as innovation hubs, could boost ecosystem capabilities and global competitiveness.
Standards compliance
Establishing digital health roadmaps may align stakeholders and contribute to the seamless integration of private sector solutions into existing digital health infrastructure.
Data privacy guardrails
Enforcement of regulations on data privacy and security may build trust in handling sensitive personal health data.
Sustainability of digital health solutions
Deferred financing and including public equity stakes could potentially ensure long-term viability of digital health technology, while using non-proprietary source code may promote scalability. Phased ownership transitions and real-world clinical testing may enhance public sector capabilities.
CGDHI’s Preliminary Cross-Country Insights from 5 DHE countries: Rwanda, Ghana, India, Brazil, and Finland
CGDHI identified five initial key learnings from its study of public-private, cross-sectoral partnerships across Ghana, Rwanda, India, Brazil, and Finland, the five countries designated as "exemplars" in the Digital Health Exemplars project.
1. Private sector engagement reflects national health ecosystem dynamics.
The extent of private technology involvement in national digital health initiatives depends on each country's healthcare ecosystem structure as well as the opportunities and incentives available for private tech providers. This engagement spectrum is shaped by factors such as the proportion of private healthcare delivery, digital innovation markets, and government policies toward public-private collaboration.
- Rwanda and Ghana: Countries where a large proportion of citizens utilize public healthcare systems procure at-scale tech solutions with donor support. Public health system utilization in Rwanda and Ghana is 90% and 50%, respectively. While local tech innovation is rapidly emerging, regulation and opportunities for nationwide scale remain limited.
- Brazil: In Brazil’s decentralized health system, the federal government serves 100% of the population through universal healthcare, though some citizens opt to access private care (~25% of the population). Similarly, Brazil’s system prioritizes using freely-provided, government-driven health technology solutions. While there is a rich health tech start-up ecosystem (with 500+ digital health start-ups), private sector tech engagement is largely seen at the subnational level, where there is autonomy to procure private solutions.
- India and Finland: Nations with substantial private healthcare delivery (70% in India) or robust tech ecosystems (400+ health startups in Finland) demonstrate greater private sector integration supported by deliberate policy frameworks, financing, and innovation programs.
2. Balancing regulatory oversight with flexibility for innovation maximizes private sector value.
Countries demonstrate varied positions along the regulatory spectrum (Figure 1). However, successful digital health ecosystems require a thoughtful equilibrium between regulatory oversight and flexibility that fosters technology advancement. This balance creates environments where security and innovation coexist, with regulatory approaches that protect citizens and pathways for modern technology to align with national digital health priorities.
- Limited, clear regulatory approach (Rwanda, Ghana): Without clear directions on engagement and compliance, innovators are often left navigating multiple regulatory policies that might stall innovation.
- Innovation-first approach (India): Voluntary compliance and integration with the national health information exchange layer accelerate innovation but might raise security concerns, user mistrust, and data fragmentation.
- Nationally regulated, state-led innovation approach (Brazil): National agencies regulate the safety of digital health technologies; in some contexts, they also mandate data sharing to the national ehealth information exchange platform. These regulations inform technology specifications and standards that states, municipalities, and private health services must adhere to in order to procure private sector technologies.
Regulation-first, innovation-enabled approach (Finland): A combination of mandatory integration requirements and stringent data governance, in conjunction with support systems such as innovation test-beds, can generate high public trust and maintain a vibrant, private health technology sector.
3. Engagement models evolve as the digital health ecosystem matures.
Private sector participation in health technology becomes more sophisticated as digital health ecosystems mature, progressing from simple procurement agreements to complex, multi-stakeholder partnerships (Figure 2). This evolution reflects increasing integration of digital solutions, growing technical capacity, and more nuanced policy frameworks that support various engagement and financing approaches.
- Seeding private engagement (Rwanda, Ghana): Countries in early-to-transitioning stages of digital health maturity primarily rely on donor-supported procurement of infrastructure or technology solutions. Centralized health systems further limit local private sector engagement, increasing the risk of external dependency and vendor lock-in.
- Growing private engagement (India, Brazil): Transitioning and advanced countries feature structured models that combine healthcare services and digitization. For example, Brazil offers tax immunity for private hospitals if they spend their non-taxed monies on the universal health system, including telehealth. In India, private hospitals can obtain monetary benefits by utilizing electronic health records, as well as adequately digitizing other facility processes.
Flourishing private engagement (Finland): Digital health leaders implement sophisticated hybrid financing approaches where government investment in private sector innovation creates a collaborative and sustainable digital health market.
4. Public sector investment in Digital Public Infrastructure promotes private sector innovation.
Governments use Digital Public Infrastructure (DPI), a foundational digital service, such as digital resident ID numbers, to deliver services. Investments in DPI and resulting standardized platforms help stimulate private sector engagement through easier integration and innovation. High-quality DPI applications, both health-specific and general, facilitate market entry and create clear pathways for private solutions to connect with each other and to national health information systems.
Integration sandboxes (India)
The ABDM Sandbox leverages existing digital identifiers such as Aadhaar, India’s national unique ID program, alongside health-specific infrastructure components, streamlining private sector participation through simplified technical integration processes.
Interoperability platforms (Brazil, Finland)
National health information exchange layers establish secure data-sharing frameworks.
Innovation testbeds (Finland)
These provide real-world testing environments, where startups and healthcare providers co-create and trial innovations in authentic clinical environments, accelerating private sector solution development and validation. Oulu Labs, comprising four testbed facilities covering specialized medical care, medical imaging, primary care, social care, and education, is one example of these testing environments for digital health startups and innovations.
5. In decentralized health systems, the private tech sector is incentivized to offer healthcare providers competitive, standards-compliant software choices.
Software vendors are motivated to adhere to national digital health standards through direct incentives and market advantages. This standards-based approach creates competitive and differentiated marketplaces, giving healthcare providers (private, national, and sub-national) several different options of interoperable solutions to choose from.
Market incentive (India, Brazil)
The private EHR companies are indirectly incentivized to align with government-issued software requirements, as aligning with national digital health priorities makes them more attractive for procurement at the subnational level. Further, aligning with these standards gives them a “government-certified” legitimacy (India).
Policy incentive (India, Finland)
Countries employ structured approaches such as monetary rewards to encourage software integration with the national digital architecture; they also mandate compliance through legislation.
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Meet Our Guest Editors:
is a Partner at McKinsey & Company and Affiliated Leader at McKinsey Health Institute (MHI). She leads MHI’s partnership with the Digital Health Exemplars Consortium and supports other MHI efforts on Women’s Health and Healthcare Workforce.
is an Associate Partner in McKinsey's Nairobi office and the Co-Director of Health Worker Capacity for the McKinsey Health Institute. With more than fifteen years of combined experience in management consulting, healthcare, and youth empowerment, she spearheads projects to strengthen health systems and close the gap between education and employment in Africa.
, MD, MPH, is a research faculty member at the Center for Global Digital Health Innovation, Johns Hopkins University. She uses mixed-methods research to advance the quality of primary care in lower-middle-income-countries. With expertise in community medicine, she examines health policies and evaluates digital health interventions to understand the role of technology in strengthening health systems.