Challenging the World Bank’s privatization model for health systems
6/12/2023
- Blog
During the World Bank-International Monetary Fund (IMF) Annual Meetings in Marrakesh, in the midst of discussions on the World Bank’s reform and the appointment of the new World Bank president, we created a moment of critical thinking about the model of health system development that the World Bank should pursue. Together with Akina Mama wa Afrika, Action Aid, Global Initiative for Economic, Social and Cultural Rights(GI-ESCR), Institute for Social and Economic Research(ISER) and Oxfam International, we organized a panel discussion on using development finance for for- profit healthcare. We looked at its implications for universal health coverage (UHC), human rights and gender equality.
Discussing the threats of healthcare commercialization to health equity
While the World Bank continues to focus on private investments and private capital mobilization, also in healthcare, civil society is very weary of the consequences of this approach to equitable access to health services for all people. Our session ‘Development Finance to for-profit Private Healthcare: What Implications for UHC, Human Rights and Gender Equality?’, addressed these concerns. The event was part of the Civil Society Policy Forum, a major event fostering dialogue between civil society organizations, World Bank and IMF staff, and other stakeholders.
Anna Marriott (Oxfam International) kicked off by introducing Oxfam’s recent report ‘Sick Development‘. In her presentation, she detailed how the International Financing Corporation (IFC), the private arm of the World Bank, along with other development institutions, finances private hospitals in African countries and India that have been involved in several human rights violations. These violations include overcharging patients, denying emergency care, detention of patients and patients’ corpses and overprescription of treatments, all aimed to overcharge patients and their families.
“Eva said that she felt cheated and exploited by CARE Hospital. The bill for her mother’s treatment and care came to an astonishing INR 30 lakh (over US$36,000) – nearly four times the maximum charge promised by one of the hospital’s senior consultants, and the equivalent of more than seven years of Eva’s and her father’s total combined income. Eva said that the hospital had refused the family’s government health insurance card, insisting she could afford to pay. She also said that the private health insurance the same consultant had convinced her to buy and had promised would cover the bill had refused to reimburse her.
Oxfam (2023), Sick Development: How rich-country government and World Bank funding to for-profit private hospitals causes harm, and why it should be stopped
After Marriott’s presentation, civil society representatives and activists provided their insights on the report’s findings and the risks associated with favoring private for-profit healthcare over public provision.
Olabukunola Williams (Akina Mama wa Afrika) explained that investing in African health systems would not only increase access to sexual and reproductive health services but could also lead to fair wages for women in the health workforce.
Rossella de Falco (GI-ESCR) talked about how profit incentives often push private healthcare providers to reinforce health inequalities by offering services that are not affordable for everyone. Thus making private healthcare less compatible with the aim of realizing universal health coverage. This is why human rights principles emphasize the role of governments in fulfilling this right.
Wangari Kinoti (Action Aid) clarified how the drive to privatize healthcare services in low- and middle-income countries perpetuates inequality and reproduces colonial relationships, with private investors extracting profit from essential health services in these countries.
Allana Kembabazi (ISER) referred to the African manifesto on public services , an important statement signed by African civil society organizations calling for quality, equitable, accessible, and gender responsive public services that are publicly funded, delivered and governed.
Both participants in the room and online joined the conversation. Many of their interventions echoed experiences of human rights violations and inequitable access to care that a heavily commercialized healthcare system had created in their own countries.
Response by the International Financing Corporation
Charles William Dalton, Senior Health Specialist at the IFC, responded to the interventions on behalf of the institution. He condemned the misconduct of the private actors mentioned in the Oxfam report and proposed fostering better communication between civil society and development institutions to understand what is and what is not effective in healthcare systems.
He acknowledged that the IFC needs more safeguards for investments in the private sector, including more robust selection criteria within their health portfolio, better monitoring of the outcomes of private sector’s investments, and adherence to ethical standards for healthcare actors.
Although he expressed openness and interest in dialogue, civil society representatives pointed out that the IFC has fostered underinvestment in Africa’s health system, because it continues to promote fiscal austerity policies and push for privatization as a remedy for the lack of public budget.
There is a consensus, among civil society, that the World Bank and global actors should look for solutions that strengthen public health systems instead of resorting to privatization.
Concerns about the future of the World Bank: focus on private capital mobilization
The session was a crucial counterpoint to the strategy that the World Bank shared during the Annual Meetings. The discussion around the World Bank’s reform underscored a new emphasis on the role of private investment and private capital mobilization to achieve the Sustainable Development Goals. The newly appointed president of the World Bank Group is Ajay Banga. He is the former CEO of Mastercard and has no prior experience in development finance. He made it clear that the World Bank will maintain its focus on private capital mobilization, and that he does not necessarily regard healthcare as a public service:
I agree that it’s easier to think of healthcare as a public and socially delivered need. But the reality is, in most countries around the world, that doesn’t work very well. (…) There is not enough money in government budgets or in other budgets to provide for universal health care. (…) There are no governments in the world that are capable of doing that today.
Given this renewed emphasis on private investments, the Civil Society Policy Forum session proved even more pertinent. With real life stories, it demonstrated that investments in the private sector may fail to translate into equal or better access to health services. It is important to create a convincing counter narrative that centers around the urgent health needs of people who are currently left out. And to oppose to the idea that commercialization of health services is the best available alternative for limited funds. As civil society, we must therefore continue to advocate for development institutions to prioritize and encourage governments to invest in strengthening public health systems.
Watch the full recording of the session. Access the link below and look for “Day 2 (Oct 11)”, fourth video.
