A Poisonous Mix: Health and the Private Sector
A Poisonous Mix: Health and the Private Sector
Billions in development finance is being invested in for-profit expensive hospitals in the Global South that block patients from getting care, or bankrupt and exploit them, with some even imprisoning
Last week, President Macron’s New Financial Pact Summit ended with what has become an all too familiar rallying cry – ever more private finance is the key solve all development and climate change challenges.
At the same event, Peter Sands, ex-banker and now chief of the Global Fund for HIV, TB and Malaria voiced more caution. He warned that innovative financial instruments and private sector mobilization are of limited use when it comes to helping the world’s poorest people, have become a ‘proxy’ for actual giving, and that the best way the private sector can contribute is to pay their taxes so the public sector can do its job for the common good.
This rare voice of dissent is welcome, especially from someone who understands the world of private finance. Oxfam goes further. We are clear that some sectors just need to be off limits altogether for this crude, badly evidenced, private financing first approach. Healthcare is one of them.
This week two new reports from Oxfam, based on years of painstaking investigative work expose how this obsession with the benefits of private finance for development is playing out in health. It’s grim reading.
Risky private healthcare investment in numbers – and shocking stories
Billions in development finance is being invested in for-profit expensive hospitals in the Global South that block patients from getting care, or bankrupt and exploit them, with some even imprisoning patients who cannot afford their bills. All in the name of advancing universal health coverage, fighting poverty and achieving inclusive growth.
One of the reports – First Do No harm – investigates the damaging role of the World Bank Group’s International Finance Corporation in bankrolling powerful corporate healthcare in India. The other – Sick Development – profiles the expensive and exploitative hospitals funded across low- and middle-income countries by the UK, French and German government-owned development finance institutions together with the European Investment Bank and also the IFC. At least $2.4 billion were channelled into private health corporations that could be tracked.
Imprisoning babies until bills are paid
The stories uncovered in these investigations would shock even hardened observers of the failures of the private sector- these included:
Regularly extorting and imprisoning patients including newborn babies, even retaining dead bodies, for the non-payment of bills;
‘I feel very sad seeing her… It is not easy for me because her body has changed… It does not look like a body anymore; it’s more like a stone… We plead with the hospital to give us the body. We will never be able to pay the money no matter how long they keep it.’ – Franciska Wanjiru, whose mother’s body was detained for non-payment of a bill at Nairobi Women’s Hospital, Kenya.
Profiteering, including during the pandemic, and routinely over-charging patients into bankruptcy and poverty;
Denying treatment to those who can’t afford it —even in emergencies— and pricing services and medicines wildly out of reach of most people in local communities;
Being involved in tax tricks, price rigging, and medical negligence leading to deaths;
Failing to prevent human rights abuses, including organ trafficking by staff and exploitative practices, for example by pressuring patients to have unnecessary and expensive medical procedures.
Daylight Robbery: A 2000% profit margin on medicines
Instead of reaching people in poverty, four corporate hospitals funded by the World Bank’s International Finance Corporation in Delhi engaged in price collusion, charging nearly 2000% profit margins on medicines, tests and products. DFI-supported hospitals in Uganda were charging up to $2300 per day for treatment and care. In India, some hospitals lost their license for over-charging and one director was arrested for black market sales of a COVID-19 treatment up to 29 times the price cap set by the government.
One woman’s body was locked in the hospital morgue for two years despite the desperate pleas of her family to release the body for burial because there was no way they would ever be able to pay.
The report looking at IFC investments in private hospitals in India found that focus more on company expansion and “value creation for investees” than on patients’ rights or improving access for those more in need.
Transparent as mud
What is particularly alarming is the opacity of the operations. In India, the IFC has not published a single evaluation of its health projects in India since these started over 25 years ago. Across the European DFIs, no disclosed assessment of impact on low income patients or women and girls. At the same time, 81% of investments are being “lost from sight” —sub-invested via a network of financial intermediaries, 80 percent located in tax havens like Mauritius, Jersey and the Cayman Islands.
A bucket of rotten apples
This story is more than a few bad apples. At a time when half the world’s population can’t get essential healthcare, and when every second, 60 people are plunged into poverty by medical bills, it makes no sense to support private fee-charging hospitals. The reports provide a damning account of a fundamentally flawed theory that tackling health poverty can be achieved by funding expensive and under-regulated corporate hospitals and crowding in private finance to do the same.
What Cyril Ramaphosa, South Africa’s President said about vaccine availability at the close of the Macron Summit, could as well have been said for the healthcare sector as a whole “And we kept saying, what is more important- life or profits by your big pharmaceutical companies?”
Some Hope
Also at the Macron summit- Brazilian president Lula showed us that he is as passionate about fighting inequality as he always has been, and that he is not afraid to challenge other leaders:
Somethings to listen, watch and read
