Civil society groups at the recent World Health Assembly criticized the continued focus on insurance schemes in the push for Universal Health Coverage (UHC), which all too often includes significant private sector participation. Evidence to support the claim for private sector involvement of this kind remains extremely thin and a new study by the Municipal Services Project shows it could jeopardize public health in the South.
The study compares health outcomes in Chile and Costa Rica, two countries that have come to epitomize contrasting approaches to ‘Universal Health Coverage’ in Latin America. Chile’s focus has been on insurance-based UHC while Costa Rica has built a single public health system. The research provides strong evidence to show that there are widespread and consistent advantages to promoting UHC through a strong public system that funds and provides all medical and preventive services to citizens rather than through a fragmented public-private mix.
It is important to note that both countries have achieved the lowest infant mortality rates and the highest life expectancies in the region thanks to major advances in primary care. But Chile’s health ‘market’ has led to inefficient use of resources, with higher administrative costs and more irrational medical procedures (e.g. caesareans) resulting from oligopolies and collusion among private providers.
One of the major goals of UHC is financial protection for poor households when they face illness. Yet Chileans systematically need to make higher out-of-pocket payments to get medical care in comparison with Costa Ricans. This situation is produced in part by the fact that Chileans pay for health conditions, services or products that are not covered by their insurance (e.g. prescription drugs).
In contrast, Costa Rica’s public health care system remains relatively affordable and more efficient, with total per capita health expenditure standing at US$811 compared to US$947 in Chile. Importantly, Costa Rica has also consistently prioritized preventive health care. Expenditure on prevention and public health services from 2002-2006 in Costa Rica is more than double that of Chile (6-7% vs 2-3%). This focus on prevention is more cost-effective and can yield greater public health impacts in the long term.
Using comparable data (Latinobarómetro), the Municipal Services Project study shows that twice as many people reported facing access barriers to health care in Chile compared to Costa Rica, citing distance to hospital, time to obtain an appointment, and cost of seeing a doctor as the major reasons. In addition, lack of access to health services as a result of financial barriers in Chile still stands at 4.2% compared to 0.8% in Costa Rica.
Costa Ricans continue to be largely satisfied with the quality of their healthcare services, more so than Chileans. Interestingly, LAPOP 2012 results show that most people in both countries think that government, rather than the private sector, should be responsible for health care (71.1% in Chile and 67.5% in Costa Rica).
According to the notions of “active purchasing” and “managed competition” – frequently used to promote insurance schemes – the existence of different providers competing for resources should have produced higher levels of quality at lower costs in Chile. The evidence presented in this report shows that such assumptions are not always true.
The Chilean health system is an example of how segmentation produced by the coexistence of private and public insurances is detrimental to efficiency and equity. Collusion among private providers and oligopolies are realities that are ignored in the competition argument.
Debates over the best institutional arrangements to organize universal health care are far from over, but this case study demonstrates that insurance schemes as promoted by some proponents of the UHC agenda are neither the only nor the best option.
Luis Ortiz Hernández is Professor in the Health Care Department, Universidad Autónoma Metropolitana Xochimilco, Mexico and visiting professor at Queen’s University, Canada. His most recent publication, “Chile and Costa Rica: Different roads to universal health in Latin America,” is available here.
This great new two minute video captures the motivation and the rationale for the movement against a greater role for the private sector in the health care systems of low- and middle-income countries.
The video highlights the manipulation of the Universal Health Coverage agenda to serve the interests of profit making companies while simultaneously starving already crumbling public health services from badly needed investment.
Giorgi’s shy innocent face stares out of a billboard in Tbilisi. The words ‘I have a right to live’ are printed across the frame. A famous Georgian journalist tenderly holds Giorgi’s hand, urging the country to hear their urgent call to action. 13-year-old Giorgi has just a few critical months to find a bone marrow donor to save his life.
Giorgi is part of a campaign run by leading Georgian journalists, and supported by Oxfam, to ask the Government to urgently invest in the healthcare sector, and save the lives of children affected by leukaemia. For Giorgi, the journalists’ crusade is his last hope. Giorgi’s mother, Jakhia, explains,
“We have no money. We only receive 125 lari (£48) per month from the state, which is barely enough to feed my family. We have nothing to sell, and I don’t know how we’ll cope,” she says wiping away tears.
Although the Georgian government provides chemotherapy and medicines to children affected by leukaemia, there are currently no facilities in the country to facilitate bone marrow transplants and no database to find donor matches. Giorgi’s mother may be forced to seek refugee status abroad to pay for her son’s transplant which costs around 100, 000 euros (£85, 000)– an insurmountable amount for the majority of Georgia’s population.
Giorgi’s story is representative of hundreds of people across Georgia who are struggling to access affordable health care. The health system in Georgia requires families to take drastic measures to save their children’s lives.
In Gori, the former home of Stalin, Maya, a young single working mother largely dependent on social benefits, is unable to afford the cost of her post cancer treatment. Rising food prices are also having an impact on her family and pushing health care even further out of reach. Maya looks sadly out of the window of her small dilapidated ex Soviet apartment, which she shares with fourteen other families “Sometimes I go to bed hungry at night so I can pay for medicine for my daughter.”
Elsewhere, people like Elguja, who used to be an actor, have no choice but to buy low quality cheap medicines. Elguja who turned blind at 22, says, “My pension is 125 lari (£48) each month but medicine costs 100 lari (£38). I have to buy cheap medicines but it makes my asthma worse. You can’t imagine what it’s like when you can’t breathe, especially at night.” Elguja often has pain in his eyes but cannot afford the high costs of eye medication. “I miss being able to see people’s eyes on stage,” Elguja wistfully remembers, “The eyes are the window to the soul,” he waves his walking stick like a wand as if he is playing the part of a blind man in a play.
For Giorgi, Maya, and Elguja, the new Government’s pledge for universal free healthcare for Georgia’s population, and the promise to establish a transplant centre for children affected with leukaemia offers hope. Oxfam is working to raise awareness amongst young people about their health rights and have a say in the future health care system. For young Madea, who is taking part in the project, it gives her a chance to have a voice, “Healthcare is the most important thing, especially for children as they are the future of the country. We often have meetings with municipality representatives to have a say in the healthcare system and lobby for changes.”
Meanwhile, Giorgi’s message ‘I have a right to live’ remains on billboards across the capital, a stark reminder of the urgent need for healthcare reform in Georgia. I hope that Oxfam’s campaign gives Giorgi, Maya and Elguja a second chance.
Caroline Berger is the Oxfam Regional Digital Media Coordinator for the CIS
John Lister is well-known as a researcher, writer and campaigner against cutbacks and privatisation in the NHS. But his new book Global Health Versus Private Profit focuses on the changes taking place in global health care systems. It has received glowing endorsements from a number of specialists in the field, and described as “penetrating, highly readable, and extremely well researched”. We caught up with John and asked him to talk about the book.
Can you sum up the book’s main point in two sentences?
Who will be interested in reading the book?
This book is for all those working to achieve universal access to health care, and anyone interested in the evolution of international health and the different ways in which the
I also hope it might be read by some of the people working for the institutions assessed in the book including the WHO, World Bank (and especially IFC), for national health care systems and for NGOs and donor agencies. My analysis is based on research, analysis, literature and evidence, and I would be delighted to see a debate on issues which people find contentious. neoliberal agenda has brought its influence to bear on international health over time.
Global Health versus Private Profit offers a detailed analysis of the main “menu” of market-style reforms to health care systems that have been rolled out in country after country, despite the absence of evidence for their effectiveness, and ignoring the evidence of harm that is being done.
These include the emphasis on competition rather than planning and cooperation, the splitting of health care systems into purchasers and providers, privatisation in various guises – including buying in services from the private sector that were previously delivered by public sector providers – the imposition of user fees, and the focus on health insurance and managed care in place of social provision and universal coverage.
Many of these policies are being implemented in rich countries and poor alike, but they are having the most devastating impact on the poorest. They sap vital resources, dislocate and fragment systems, prevent them from responding to health needs, and obstruct the development of planning.
What evidence does the book bring to light of this conflict between global health and private profit?
Perhaps the most important examples come in the chapter entitled “The Missing Millennium Development Goals” which underlines the massive global gaps in provision of care for the growing elderly population, in mental health care and services for people with physical disabilities.
All of this is health need, but countless millions of people can’t pay a market price for care, and so they are the “customers the private sector doesn’t want”. The longer health care is shaped by the quest for private profit the larger these gaps will become.
So are we just looking at wrong-headed ideas, or is there more to it than that?
My book argues that these so called “reforms” are driven not by evidence, but by ideology – but that behind the ideology is a massive material factor: the insatiable pressure from the private sector which is desperate to recapture a much larger share of the massive $5 trillion-plus global health care industry, much of which only exists because of public funding.
That’s why rather than relying on hopes of expanding on the basis of private insurance, the private sector has been eager to get a larger slice from public sector budgets.
Why do you draw specific attention to the UK’s NHS in your book?
The costly experiments with competition, and slicing up publicly provided services to encourage private providers, have gone furthest in England, but that’s partly because compared with other countries there was a more integrated and publicly-provided service to dismantle.
But sadly England is not unique. Similar “reforms” from the same discredited menu are being adapted in different ways to different systems across much of Europe, and are even being driven in to the poorest developing countries where they are even less appropriate and more disastrous in their consequences.
For example, one growing problem is the international spread of “Public Private Partnerships,” to finance new hospitals, many of them drawing on the trail-blazing Private Finance Initiative (PFI) in the UK, which is proving itself to be a major liability, bankrupting hospitals in a cash-strapped NHS.
Despite many costly flaws, failures, and false starts, more PPPs (P3s in Canada) are now under way in OECD countries, but also in Latin America, Asia, South Africa and even Lesotho – in a costly $120m scheme I have written about for Global Health Check.
Where do you get the information for your critique?
I have made a point of using the most up to date material available from the World Bank (and its privatisation wing, the International Finance Corporation) and the IMF, as well as official figures from governments and the rich countries’ club, the OECD. It’s important to use data that cannot be refuted – and in many case, let’s be honest, these are the only figures available.
Does the book raise any new issues?
I am not claiming to have invented many of the ideas in the book, but I hope I have helped to update, popularise and develop the argument for them.
And my concluding chapter “It doesn’t have to be this way” brings together a lot of different ideas, emphasising that the policies we are opposing are not inevitable products or even a rational response to the current situation, but choices that have been deliberately made by politicians working to a neoliberal agenda. They can be rejected and defeated by mass political action.
How do you hope the book will be used?
As I say in the preface, good ideas must be turned into political action to change the world. Bad ideas must be fought through political action too.
Sometimes good arguments can begin to prevail, such as the success that has been achieved by Oxfam and other campaigners challenging the logic of imposing user fees on health care.
So I hope my book will not sit gathering dust on library shelves, but be brandished — even used as a weapon — by those fighting for change.
A reinforced hardback edition may yet be needed to ensure we win!
Health Policy Reform: Global Health versus Private Profit, by John Lister is available from www.libripublishing.co.uk
(use voucher code HPR13 when purchasing to get discounted price of £20).
As world leaders prepare to gather for the 66th World Health Assembly on May 20, social movements are questioning the market-friendly version of universal health coverage (UHC) it is promoting.
One organization, Jan Swasthya Abhiyan (JSA), is denouncing India’s emulation of this UHC strategy, as contained in the country’s 12th Five Year Plan, which uncritically endorses the private medical sector and focuses on health insurance schemes. In a recent paper – JSA proposes an alternative UHC model.
Public financing for whom?
In the past five years there has been an impressive roll out of government-funded insurance schemes in India that are supposed to improve the country’s public health system. In theory, treatment covered under these schemes can be provided by any accredited facility. But in practice the majority of providers are found in the largely unregulated private sector which already accounts for 80% of outpatient and 60% of in-patient care according to the National Sample Survey Organisation (NSSO), making India one of the most privatized systems in the world. India’s healthcare system is increasingly dominated by big hospitals chains (e.g. Apollo Hospitals) with an infamous track record of expensive services and unethical practices. As it is, health insurance schemes mostly channel public monies for private profit. For example, from 2007 to 2013 the state of Andhra Pradesh allocated a total Rs.47.23 billion to facilities accredited under the Arogyasri scheme, of which Rs.36.52 billion went to private facilities.
Getting it right
Health is a right, and priorities should be based on citizens’ needs. What the majority of Indians lack is comprehensive primary care, but current health insurance “packages” only insure beneficiaries for ailments that require hospitalization. They cover a very small portion of the burden of disease, excluding out-patient treatments for tuberculosis, diabetes, hypertension, heart conditions, and cancer among others. Evidence from the first such scheme in India – Arogyasri – suggests that it consumed 25% of the state’s health budget but addressed only 2% of the burden of disease.
Who inverted the pyramid?
This situation ends up distorting the very structure of the health system by starving primary care facilities to the benefit of more profitable secondary and tertiary care. In 2009-2010, direct national government expenditure on tertiary care was slightly over 20% of total health expenditure, but if one adds spending on the insurance schemes the total would be closer to 37%. In Andhra Pradesh, following the implementation of Arogyasri, the proportion of funds allocated for primary care fell by 14%.
A good health system is like a pyramid: the largest numbers should be treated at the primary level where people live and work. We need to flip the inverted pyramid that has been created and offer a new roadmap predicated on public funding and provisioning of a public system that reprioritizes primary health care, and is comprehensive, integrated and accessible to all.
The health insurance schemes in place fail to address another key issue: access to medicines. Paradoxically, India is the largest producer of drugs in the developing world and at the same time the country where the WHO estimates the greatest number can’t afford the medicines they need. Since the Patent Act was amended in 2005, domestic pharmaceutical companies can’t produce cheaper versions of new drugs, which are now sold by multinationals at prices well beyond the reach of most patients. Poor regulations also means more than 50% of the average family spending on medicines is on irrational or unnecessary drugs and diagnostic tests according to the NSSO. Clearly, the pharmaceutical sector must be reigned in, and all essential drugs should be made available, free of cost, at all public facilities.
Addressing public health gaps
The task of achieving health for all in India will not be easy. Current public health services are marked by poor access, low quality and limited choice. Besides rampant corruption, poor management results in mismatches between demand and supply of services: facilities aren’t distributed optimally; equipment and funds fall short of requirements and don’t flow efficiently. Labour shortages can be partly explained by disinvestment in medical education and flawed deployment mechanisms. Although programs such as the National Rural Health Mission have made some inroads to improve services, much remains to be done. The problem is largely one of unresponsiveness to citizens coupled with unreliable technical estimates of costs and disease burden, leading to ill-informed prioritization.
It is necessary to recast the UHC debate and propose alternatives to strengthen the public health systemto address these problems and to build integrated, comprehensive services with strong mechanisms of accountability. Key to these changes are the following:
Over the short term, we also need to explore alternate ways of harnessing private resources for public health goals. Given the sheer size of the private sector, it is not possible to entirely ignore it while planning for equitable access to public services. It’s not a monolithic entity either; some segments such as charitable, faith-based and other not-for-profit healthcare facilities that work in less developed parts of the country can fill certain critical gaps in the public system. Under clear terms and conditions, other private providers such as general practitioners or small and medium-sized hospitals could be in-sourced to complement available public health services. Importantly, there should be no transfer of assets and resources into private hands and kickback statutes should be put in place to ensure there are no referrals with conflict of interests.
All the possible mechanisms for harnessing the private sector should be seen as supplementary (and often interim) measures, and not as a substitute for very significant scaling up and strengthening of the public system both in terms of quality and accessibility.
There is a need to reclaim public systems, to strengthen and expand them. Moving toward health for all requires major transformations in health care, but also in a wide range of social determinants of health – food security and nutrition, water supply, sanitation, working conditions, housing, environment, education and more. We need to build broad-based alliances for social change to redefine the relationship between people and their public systems.
Amit Sengupta is a Research Associate with the Municipal Services Project and Associate Global Co-ordinator with the People’s Health Movement, a global network of 18 national chapters that includes India’s Jan Swasthya Abhiyanfor which he acts as National Co-convenor.
Madeleine Bélanger Dumontier is Communications Manager for the Municipal Services Project, a global research initiative that explores alternatives to the privatization and commercialization of service provision in the electricity, health, water and sanitation sectors.
Photo: Rajeev Chaudhury