The WBG’s investments in private healthcare provision: What implications for the right to health?

12 April 2022

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Notes from civil society policy forum on 12 April on the WBG’s investments in private healthcare provision: What implications for the right to health?

Summary: While an important part of the WBG strategy to respond to Covid-19 consists in mobilizing private investment, private healthcare services pose challenges for equitable access. The session will present case studies showing how private sector engagement in healthcare might have negative impacts on the enjoyment of the right to health.

• Moderator: James Cole, Senior Advocacy Advisor, STOPAIDS

• Panelist 1: Marco Angelo, Global Health Advocate, Wemos

• Panelist 2: Rossella De Falco, Programme Officer on the Right to Health, GI-ESCR

• Panelist 3: Allana Kembabazi, Program Manager, Global Health Program, ISER

• World Bank speaker: Andreas Seiter, Global Lead for Private Sector in the World Bank’s Health, Nutrition and Population Global Practice

James Cole

This panel presents three case studies of unintended consequences of private healthcare, examining how the World Bank Group has been promoting private provision and asking how private provision of healthcare can be made to work.

STOPAIDS’ general principles of private healthcare provision:

Private healthcare provision must not undermine public healthcare.

There is evidence that the countries that made progress towards universal health care (UHC) have generally used public funding, and that private funding for healthcare undermines UHC by taking up scarce resources.
Private healthcare provision has been linked to poor COVID response.

Further, patient-centred needs and social accountability must drive UHC, not profit and commercial interests.

Resources must be dedicated to building public goods and access.

Private sector engagement must have strong transparency and accountability mechanisms, in line with the principles of aid effectiveness.

It must support human rights, workers’ rights, the rights of women, girls and all marginalised groups.

Clear consultation and complaints processes must be established.

Private sector investment in health must not be promoted where there is no effective regulation of the private sector.

Marco Angelo

There are serious concerns over privatisation in the health sector, as privatisation generally leads to worse health inequality.
The IFC has a 2 billion USD portfolio in health care companies in emerging markets, but it is hard to have an overview of what it does in health, and it is unclear if this changed under COVID.
Wemos looked at the IFC database and selected health related investments, and found that investment increased in 2020 in both absolute and relative terms.

Wemos identified several main areas of investment:

Largest: Manufacturing and supply of healthcare products – 60%+ of funding.
Second largest: Private healthcare providers… clinics, hospitals, etc.
Then intermediary funds, that is funds that invest in the health sector, including public-private partnerships (PPPs).

During COVID, investment in manufacturing and supply increased the most, there was also some increase in investment in financial intermediaries. Investment in advisory projects also increased; this was technical support for PPPs, 12 were funded in last five years, to set up contracts in tendering processes.

Expected impacts of IFC projects:

The impact of manufacturing is clear – to make more medicines and medical equipment.
Investments in private healthcare providers were to improve quality, not access.

Investments in insurers and financial intermediaries were to further economic development.

Only one healthcare-related project mentioned improved access.

Manufacturing capacity is badly needed; local manufacturing capacity gives a national healthcare system more resilience, eg: during the pandemic.

The World Health Organisation (WHO) makes evidence-based recommendations that say private healthcare can be an obstacle to UHC, and should not be promoted.

In investing in private healthcare, the IFC sets an example to other investors.

It is estimated that half of investments in healthcare providers cater for upper or upper middle income populations, and this poses problems for health equity.
The IFC continues to support PPPs in the health sector through its advisory services.
Investment in financial intermediates affects transparency for all IFC projects; their investments not disclosed to the public or not immediately available;

Rossella De Falco

GI-ESCR has produced two reports, on COVID response in Nigeria and Kenya.
Patients or customers? Impact of commercialisation of healthcare on the right to health during the Covid 19 pandemic in Kenya and Nigeria.
The right to health framework on private actors in healthcare was developed to assess impact.
States have to protect the right to health even when a third party like a private company is involved; private healthcare should not undermine the right to health or the accessibility of healthcare.

Nigeria:

First case of COVID-19 was in Feb 2020. Though the right to health is legally well protected in Nigeria, the country has struggled to cope with the pandemic.
Many factors contributed to this failure, but among them was the large role of the private sector in delivery and governance.
Until the 1980s, healthcare was mostly provided by the public sector; then user fees were introduced, and then a series of health policies that encouraged private sector involvement in healthcare in the country. The National Health Insurance scheme is a de facto PPP and is skewed in favour or private providers.
The result is that Nigeria, one of most developed countries in Africa in terms of income per capita; but it is one of most commercialised in terms of healthcare. 76% of all heath expenditure from individual out of pocket payments in 2018.

Outcomes: the report’s findings:

The focus on developing the private healthcare sector has led to disinvestment in quality healthcare for all; there is a notable lack of specialised staff and equipment.
Nigeria is far below what the WHO recommends in terms of healthcare capacity, and has encouraged the growth of commercial healthcare at the expense of the public system. There is a two-tier system to the advantage of those who pay and have access to information and other assorted socioeconomic advantages. They get access to first class services, but the poor and rural population is left with poor resources and poor-quality facilities. The best healthcare facilities are located in the richer south; northern populations mostly rely on public services. There is a similar geographical trend in education. The rich look for treatment at private facilities, the poor at public facilities; this is a double standard. There is de facto discrimination on access to the right to health based on wealth.

There is a general lack of quality and accountability in the healthcare sector, and it is not always true that private healthcare always better than public. In the private sector, there is less compliance with medical standards and ethics and informed choice in comparison to the public sector. The private sector not effectively monitored, and many private clinics are unsafe and unregulated, especially in urban clinics.

Obtaining a COVID test was hard for poor people, private labs were the only option for many, but they were expensive – and some private clinics used expired reagents for tests, gave fake tests.

The study conducted interviews in urban sectors of Lagos.

The 1999 constitution guarantees the right to adequate healthcare.

The 2001 Abjua Declaration, AU states committed to spending 15% of their budgets on healthcare. [Note: Nigeria’s current expenditure is far lower]

Support for private provision of healthcare in Nigeria should be reversed. Concrete steps to ensure access to public healthcare or a viable alternative should be taken, as many face serious barriers in accessing healthcare in Nigeria.

Kenya:

The second report on Kenya, highlighted a different context, but there are similar human rights concerns. The healthcare sector in Kenya is short of resources like ventilators, beds, etc…
The government backed support for commercial healthcare providers, which has gone from 32% to 43% of the sector in less than ten years (2013 -2021). The growing privatisation trend in Kenya is very concerning.
Not all private sector health provision is a concern; the most serious concerns are with the for-profit providers, and market models, because health is a right not a commodity.

The report found the same four trends the other report found in Nigeria.

Inequalities and barriers to access.
Lack of public services.
Insufficient monitoring of private sector.
Private providers providing inadequate healthcare, especially in poor urban areas.

There are insufficient resources in the public sector, so many have had to rely on private healthcare provision, which is of good quality but expensive, or affordable but poor quality.

This leads to socioeconomic barriers to healthcare and lower population health outcomes, and less ability to respond to challenges like COVID-19.

Allana Kembabazi

Privatisation and marketisation has had a noticeable effect on healthcare in many areas. Public health systems have been starved of resources and this has forced many to rely on the private sector. But there are problems with poor standards, weak regulation, and some private hospitals with poor standards took IFC funds. The hospitals say they have to make a profit, and this is the danger of the WBG investing in for-profit models for healthcare. PPP in its many forms has been pushed, for example for medical credit funds.
Money could be put into public health systems instead of private. The dichotomy between private and public is false, the notion of commercialising healthcare to forward development vs public healthcare for all.
The pandemic showed that public health systems are needed for all, not just for poor and vulnerable, while investments in private care are skewed to upper middle income and up, people who can already afford healthcare. This highlights the need to get back to basics and fund public health systems. The evidence is clear form a range of countries — public healthcare is important for all, and private provision hurts the poor.

Andreas Seiter

Andreas has been with the Bank for 18 years, but originally came from private sector pharmaceuticals industry, so he has experience with private sector healthcare.
He sees the critical problem in the healthcare sector in many countries as a problem of governance; in poorest countries both public and private sectors suffer from poor governance.
Government should govern public and private health sectors. The IBRD and IFC are working to strengthen the health sector, and the majority of the work the WB does is with the public sector, but a lot of money wasted because of bad government, poor incentives and a lack of transparency.
In poor countries, the public sector may be starved of resources and the poor still have to pay for the services provided, so in some countries there may be little difference between public for pay and private facilities, and in many countries doctors work in both private and public sectors.
In many wealthy countries, the private sector provides a lot of services and delivers good care but it is carefully regulated. The way the private sector is regulated is critical: look at the difference between private healthcare in the US and Germany, for example. In some countries they have pooled funding that pays on behalf of patients. When patients pay out of their pockets there is inequality.
There is a market for private healthcare services because public services are not there. Unregulated providers will step in if there is not an adequate supply of healthcare in the market, and the question is how do you try to regulate these providers? Do you try to improve them or suppress them?
He says that the conclusions of case studies are strong, unregulated or ineffectively regulated private providers can produce very poor results, but the public sector needs to be well regulated too, not just the private sector.

Discussion:

Patti Rundall – International Baby Food Action Network

International companies are a major problem, the multi stakeholder passion of the UN to involve the private sector has almost side-lined civil society groups, and excluded them from discussion about PPPs. There is also a lack of detail on conflicts of interest. Governments are pressured into accepting PPPs right at the core of the provision of their services.

Allana Kembabazi, Program Manager, Global Health Program, ISER

The assumption that the private sector provides quality healthcare is wrong, and we saw that with COVID-19. The same assumption is made about education, that private should be better.
Often the private sector focuses on the most profitable operations, and leaves the difficult cases for the public.
The poorly-regulated public sector in the US is a warning about private healthcare. Issues of supervision and governance should be addressed before any investment in private healthcare.

Andreas Seiter, Global Lead for Private Sector in the World Bank’s Health, Nutrition and Population Global Practice

We shouldn’t give up on public health systems, but we should note that in some rich countries public and private care are integrated, and in many countries there is no evidence that private is better than public.
Sometimes private healthcare doesn’t deal with complicated cases as they can’t make a profit on them.
The way forward is to go through health financing systems what make a level playing field for all providers irrespective of public or private status.
There is also the issue of where does the public sector end and the private begin in some developed countries, which integrate private care into the public sector very effectively.
There is no assumption on his or his colleagues part that private is better than public.

Topics: IFI governance Spring/Annual meetings
Institutions: World Bank Group

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The WBG’s investments in private healthcare provision: What implications for the right to health?

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