While politicians from both the major parties in England vie with each other to sound the most enthusiastic about using private hospitals to treat NHS-funded patients, campaigners have pointed to the problems both in terms of the diversion of funding and staff away from the NHS, and in the limited scope of private hospitals, lack of regulation and sometimes poor quality of care provided.
But in low and low middle income countries, where public health provision is limited, the consequences of diverting government funds and money from development aid into investment in private for-profit hospitals which levy charges directly on to patients can be far worse.
A report from Oxfam published this summer explains how the British government – through its own agency British International Investment (BII) and through British support for the World Bank’s privatisation wing the International Finance Corporation (IFC) – has been actively making things worse.
Oxfam’s report Sick Development
shows how BII funds have been invested in for-profit hospitals in Africa and India that refuse to treat emergency patients who cannot pay up front, charge sky-high fees unaffordable by the poor, imprison patients who cannot pay the fees (and even refuse to release bodies of patients who died), and in some cases refuse to accept government health insurance cards which should cover costs of treatment.
Sadly the British government is not alone in this: Oxfam notes development finance institutions (DFIs) from France, Germany and the EU have all engaged in similar investments in private hospitals in ways that inflict harm, widen inequalities and worsen the health of the poorest rather than delivering any of the expected benefits.
Oxfam has followed this issue for years, attempting to track and evaluate the impact of British and other investments, and in 2014 they published Investing for the Few, focused on the deplorable record of the IFC.
In 2007 the IFC had published a report commissioned from McKinsey entitled Business of Health in Africa: Partnering with the Private Sector to Improve People’s Lives. It argued that significant profits could be made from health care in sub-Saharan Africa … from the wealthy elite:
“High end clinics that target growing middle and upper-income populations in urban centers can deliver net profits of up to 30 per cent. … An expected increase in the number of patients able to afford these services, as well as increasing acceptance of local treatment among patients, makes prospects for growth impressive.” (p40)
The report was closely followed by huge IFC and media fanfares heralding the launch at the end of 2007 of a “$1 billion health-care strategy for Africa”, including “a new equity investment fund which could ultimately be worth up to $500m”, plus provision to lend another $400m-$500m to help local banks lend to small and medium-sized enterprises in the health care industry.
The logic of this was puzzling at the time: in the lowest income countries, where the majority of the population existed on $2 per day or less, there was clearly little or no prospect for a private medical facility to run at a profit unless either it was able to draw in government subsidies, or it largely ignored the poor and deliberately provided for the wealthiest minority.
Investing for the Few showed, from publicly available information, that Health in Africa’s investments had in fact predominantly been in “expensive, high-end, urban hospitals offering tertiary care to African countries’ wealthiest citizens and expatriates” with an openly stated focus on the elite – including those rich enough to seek healthcare overseas.
Oxfam noted a critical World Bank review, which stated the IFC had made no attempt to answer the question: ‘does strengthening the private health sector improve health outcomes for the poor?’ The review argued that “not only is this a major failing against the IFC’s own stated objectives, but it also throws into question the dedication of considerable World Bank Group resource to an initiative whose critics have long argued will ‘primarily benefit the rich’.”
Despite the IFC’s ambitious claims, the sums of money involved were much, much smaller than the $1bn suggested back in 2007. Two similarly-named, relatively small equity funds, the ‘Investment Fund for Health in Africa’ and the ‘Africa Health Fund’ were established, both run through tax havens, and raised just over $100m between them.
But four years later the only reported new investment in sub-Saharan Africa was $2.6m in the Nairobi Women’s Hospital, a private hospital providing inpatient and outpatient services to children and women.
Despite the IFC’s formal commitment to fight poverty, the NWH’s scale of fees in 2011 was anything but accessible to most Kenyans, with the most basic “shortmat” maternity package costed on the Nairobi Women’s Hospital website at £280 – the equivalent of 6 months wages for a Kenyan woman earning the average wage of £11.30 per week. The cost went up by over £200 if an obstetrician was involved, and by more again for a caesarian section.
Now, 12 years later, Sick Development attempts to “map the money trail between some of the biggest development finance institutions (DFIs) … to for-profit private healthcare providers in the Global South.”
It points out that the same Nairobi Women’s Hospital has continued to attract millions of dollars from “development funds”, despite soaring prices for its treatment – and barbaric methods of compelling patients to pay up. Investing bodies include the UK’s BII ($10m in 2016) as well as Germany’s DEG, France’s Proparco, the IFC, Norway’s DFI Norfund, the African Development Bank, the Southern African Development Bank and the Bill and Melinda Gates Foundation.
All this investment has brought neither a reduction in charges nor any more compassionate behaviour. Indeed Oxfam has found that NWH has frequently imprisoned patients until their bills were paid. Bodies of those who have died have been held for up to two years.
Worse, most of the recent funding for NWH was given after a 2016 media interview in which the then hospital CEO made clear that it was the hospital’s policy to detain patients (and bodies) until bills were paid. The Oxfam report lists evidence of up to 37 alleged or confirmed human rights abuses between 2017 and 2021: some of the most shocking include:
“17 December 2017: A woman who lost one of her twin babies during childbirth reports that her surviving twin has been detained at NWH for over three months because she cannot afford the bill of nearly US$3,000. The mother told reporters of the psychological stress she was suffering due to having to commute daily to breastfeed her son before leaving him in the care of nurses.
“3 October 2018: A court rules that a patient was held illegally at NWH for non-payment of a US$10,900 bill. Judge Lady Justice Wilfrida Okwany declared that even though this was a private facility, continued detention of the client was arbitrary, unlawful and in breach of the 2010 Constitution of Kenya.
“19 May 2019: A special report by the Ministry of Health reveals that 12 patients who should have been discharged are being detained at NWH over outstanding bills, with 15 bodies held for the same reason.”
It would have been bad enough if NWH was the only example of aid budgets being invested via private equity funds in for-profit private hospitals which are completely unaffordable, or if NWH had been the only development-aided private hospital guilty of imprisoning poor patients unable to pay their excessive charges.
But the Oxfam report lists other issues at NWH – and other DFI-funded hospitals in Kenya, including over-charging, over-testing and over-treating patients. It also notes that detention of patients until bills are paid, including bills for low-income patients admitted as emergencies, is “widespread in many countries in which DFIs are investing, including India, Uganda and Nigeria.”
Oxfam campaigns for the abolition of all charges for health care, since even the smallest charge will inevitably act as a deterrent to the very poorest. But the problems paying the bills at NWH and other DFI-funded hospitals are increased because of the high and rising charges for even basic health care.
The report’s author Anna Marriott told the Commons International Development Committee in January:
“We have looked at all of BII’s health investments, both direct and indirect, and found a huge body of evidence that shows not only that a large proportion of the private hospitals funded by BII are unaffordable and inaccessible, but that when people do access them they risk bankruptcy and impoverishment.”
Despite the “long-stated priority for the UK Government to tackle maternal mortality, … we find fees are unaffordable, often astronomical.”
“If I can give a couple of examples, prices in BII-funded hospitals in some of the poorest countries—such as Burkina Faso and Uganda—for a normal uncomplicated childbirth start at around £500. In Zimbabwe it is £1,000. This is with multiple exclusions, often excluding medication and doctors’ fees.
“We know that Nigeria has one of the worst maternal mortality rates in the world. Nine in 10 of the poorest women go without any skilled birth attendants, yet the delivery prices at one hospital in Nigeria, funded by BII via the Evercare Health Fund, start at the equivalent of 12 years’ total income for the poorest 20% of Nigerians. In another hospital in Uganda, fees for childbirth have increased by an incredible 60% since BII invested in that hospital four years ago.”
The report cites other examples of unacceptable profit-driven behaviour, through which private hospitals exclude or impoverish the poorest people the various development funds are supposed to assist. A chapter also lists examples of unethical behaviour and brazen profiteering by private hospitals during the Covid pandemic.
Oxfam has found that over 90% of BII’s investments in health are made indirectly via financial intermediaries, many of them private equity funds, whose ruthless pressure to maximise profits has made matters even worse. And over 80% of the financial intermediaries are based in known tax havens, ensuring that the profits they do extract from private hospitals partly funded by development aid are subject to minimal if any taxation.
Anna Marriott told the Committee that the British government is failing to monitor what is done with development funds, and failing to take action where unacceptable policies are in place:
“One of the things that troubles me most is that if I have been able to find these 32 cases of patient detentions, how is it that this multibillion pound Government-owned institution, with responsibility for due diligence, upholding human rights and doing no harm, has either failed to identify these very well-reported crimes or has ignored them?”
The Committee clearly took some of this on board: the summary of its Report, published in mid September notes:
“the Foreign, Commonwealth and Development Office (FCDO)’s ‘hands-off’ approach to overseeing BII’s investment activity has resulted in BII making some questionable investments. Some investments do not appear to have a clear poverty focus, some may have harmed society and the environment, while others conflict with the UK Government’s policies.
[…]“BII’s use of financial intermediaries to make investments on its behalf has been found to dilute the control BII has over its money and its ability to divest from businesses that do not share the UK Government’s core development values. Examples included an intermediated investment that had initially been made to a healthcare provider that subsequently merged with a cosmetics clinic in India …”
Some of the report’s recommendations also reflect the strong testimony from Oxfam and from Global Justice Now, not least in calling on the Foreign Office to “hold BII accountable for its due diligence and ongoing monitoring of its direct and indirect investments,” and for BII to “ensure that its entire portfolio is aligned with the UK Government’s development agenda,” and “actively manage its portfolio.”
The Committee also recommends BII “must divest from those investments that do not have a clear development objective and do not align with the International Development Strategy.”
The Oxfam report, with its copious references to back up each and every allegation, is a must-read for anyone wanting to grasp the full barbarism of neoliberal policies unleashed when “development” and “aid” funds are invested in private rather than public provision of health care.
No matter how flowery the rhetoric from governments and from the World Bank and IFC about seeking to address inequalities and target the poor, the reality of health care delivered for profit is a system accessible and affordable only by the most affluent in the wealthiest areas, and increased misery for the urban and rural poor.
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