John Lister looks at three recent studies that prove what many of us believed to be the case.

The Covid pandemic, with its grim death toll and its disproportionate impact on the poorest and most vulnerable, has triggered a fresh round of analysis of health care systems and in particular the impact of privatisation and private payments on access to and effectiveness of health care.

As the author of a substantial book on the topic in 2013 (Global Health versus Private Profit, available online) I was not surprised, but encouraged by the more recent research which has come to similar conclusions

It turns out that all over the world privatisation and private health care are not only inefficient, expensive and exclusive of those most needing health care – they actually result in distorted systems that help spread Covid – and kill people who might have survived if publicly-financed and provided health care had been available.

UNDP puts a figure on increased death toll

Last May, as most countries experienced the first peaks of the virus, the United Nations Development Project and its Human Development Report Office published an important but lowprofile report entitled Privatisation and Pandemic: A cross-country analysis of Covid-19 rates and health care financing structures.

It looked at data from 147 countries and found that:

“Controlling for per capita income, health inequality and several other control variables, we find that a 10% increase in private health expenditure relates to a 4.3% increase in Covid-19 cases and a 4.9% increase in Covid-19 related mortality.”

This not only applies to poorer countries, but also helps explain why the US with its private healthcare system had “nearly double the mortality rate” of Canada with its publicly financed health care.

And while globalisation tends to increase the prevalence of Covid-19, “higher hospital capacity (in beds per 1,000 people) is significant in lowering Covid-19 mortality”.

The study also stresses the links between inequality and higher risk of Covid-19 mortality, noting that (as we have seen in England):

“Poorer people are more likely to suffer from chronic conditions and thus be at higher risk of Covid-19 mortality. Poorer people without medical insurance or the means to pay private health care fees may also disregard social distancing in order to keep working …”

The UNDP researchers conclude:

“This paper adds to a literature that questions the ability of privately-financed healthcare systems to cope with the scope and magnitude of infectious diseases, including COVID-19.”

But they go further, and argue for a fresh evaluation of the impact of neoliberal policies (scaling back public provision and prioritising the private sector) favoured in many wealthier countries – and imposed by them and global bodies such as the World Bank on the poorest:

… “Our findings suggest that, to make health systems sustainable at various levels of development and given the expectation of worsening environmental conditions, there is an urgent need to reconsider the neoliberal impulse to privatize health care systems.

“The short-term benefits from such privatization policies – e.g. reduced costs, shorter waiting times – must be weighed against the long-term damage such policies can do to countries’ ability to cope with a rapidly-spreading infectious disease.”

Private failure in poorer countries

More recent research echoing similar findings has emerged in 2021. Global Public Health last month published a wide ranging study “The failure of private health services: COVID-19 induced crises in low- and middle-income country (LMIC) health systems”. The authors from Leeds and Hong Kong universities note from the beginning that:

“This paper argues that the catastrophe in privately provided personal health services that has unfolded is not an unexpected outcome of the pandemic, but rather a set of predictable events and outcomes that could have been predicted due to existence of underlying market and redistributive failures that had been embedded in mixed public-private health systems over decades.

“While market failures in private health care have long existed and have been well documented, this article explores the ways in which these failures have been thrown into sharp relief by the COVID-19 pandemic.”

The study draws upon a wide search and analysis of 870 newspaper reports around the world, and draws from this data a “triple crisis” of the private care sector during the Covid-10 pandemic:

“(1) a financial and liquidity crisis among private providers; (2) a crisis of service provision and pricing; and (3) an attendant crisis in state-provider relations.”

The authors argue that “systems that were already failing to serve many people and that had not been properly integrated into national health systems were those that were most poised to fail.”

The financial crisis hits in varying ways. The paper notes that especially in low and middle income countries the private health sector tends to be less affordable and available to poorer people, and to offer a relatively narrow range of highly specialised elective services for the minority of higher-income or insured people. In India, South Africa, Turkey and Nigeria a 2-tier system has emerged in which “big multi-site chains” dominate a large share of the private market, while beneath them lie smaller private clinics and hospitals.

In some countries (India, Thailand, Brazil, Mexico, Turkey, Costa Rica, Malaysia, Ecuador) sophisticated private hospitals have developed to cater not for domestic demand but for health tourism: these have been hard hit by covid-linked restrictions on travel.

Meanwhile private hospitals dependent on health insurance have been hit by delays or refusals to pay up in Kenya and Lebanon, and government limits in Nigeria, Iraq and Iran. In the USA “43 million US citizens were thought to have lost private employment-linked insurance coverage,” while “Indian insurers are publicly stating their model is not up to the demands of a pandemic.”

Some private sector providers are “triaging patients on their ability to pay”, jacking up prices throughout India with charges of up to $1,000 per day for beds with ventilators, other hospitals demanding advance payments of up to $6,500, and one Zimbabwe hospital charging $5,000 up front deposit for admission.

In South Africa, where the big three private hospital chains cover just 27% of the population but control 80% of hospital beds and 90% of admissions, the government last June agreed to pay up to $950 per day per patient. In impoverished Peru the government agreed to pay $15,000 per Covid patient.

Meanwhile in Bangladesh, Oman, Iran, Brazil, Philippines, Egypt, South Africa and Pakistan private hospitals are simply refusing to admit or treat Covid-19 patients. In Nigeria private hospitals have not been permitted to treat Covid-19 patients because they lack adequate infection control.

The paper presents a consistent picture of a grasping, unethical and dishonest private sector gouging profits and gaming the system at the point of greatest need for health care – with no regard for the health of the poorest. Its concluding section notes what should happen:

“If the private sector emerges intact financially from the pandemic, it should expect to encounter much more opposition from civil society and health workforces to its role in healthcare, with regulatory push back from governments and far tighter controls on market entry and competition. …

“Given the data we presented above, the role of the private sector in the delivery of health services should be reconsidered, and the regulation of this sector should be further strengthened.”

However it warns of the political and economic forces limiting the extent to which the system can be corrected, not least because it’s likely the World Bank and the IMF “will continue to favour the private sector and market-based delivery of health.”

European privatisation

Closer to home, another weighty institution that has embraced neoliberal policies (largely at the behest of previous British governments since Thatcher) has been the European Union.

Another new report, When the Market Becomes Deadly from the Corporate Europe Observatory, paints what might be a rather more familiar picture of the impact of four decades of policy since Thatcher and Reagan helped impose neoliberalism as the predominant ideology in the developed world.

However the underlying message in Europe is the same as in the lower income countries: privatisation kills: “analysis shows healthcare privatisation has reduced countries’ long-term preparedness for dealing with pandemics.”

Throughout Europe, as we have recently seen exposed in Britain, the private hospital sector is utterly dependent on a sufficient flow of public funds:

“As part of this marketisation, private for-profit providers seek what they call a level-playing field with public providers; in other words, a slice of public funds.

“This is partly because for the private healthcare model to be profitable (beyond just the wealthiest minority of paying clients), it still requires public funding – since often, those most in need of healthcare are least able to pay the ‘market price’ for it.”

The study highlights the role of the European Union of Private Hospitals (UEHP), a lobby group active in Brussels, which argues that the private sector has played an “integral role” in combating Covid-19, and that “private hospitals in Europe do not create inequality” – but rather “inequality is created ‘by the financing system”.

“According to UEHP, inequality only arises if the public sector refuses to pay private hospitals for patients’ care, leaving patients to face high out of-pocket payments. And that, it insists, is the fault of public sector gatekeepers, not the private hospitals!

“Thus UEHP argues that it is ‘essential that the system treat the private and the public hospitals on an equal basis’.” This will be familiar to Lowdown readers who have followed the saga of NHS England’ deals with private hospitals.

However while the general lines of the argument – noting the damage done to pandemic preparedness by neoliberal cuts in public spending and hospital bed numbers – and the attack on the evidence-free myths of private medicine are sound, some sections of the study suffer rather badly from pretty use of ancient statistics This is especially true of the section on Public Private Partnerships (PFI in Britain) which has few facts post 2016.

Fortunately this limitation does not apply to a number of useful case studies of Italy and Spain and a full-page box on the pernicious role of McKinsey in “confidential Covid-19 work for the [EU] Commission”.

The section on long-term care, with a case study from Sweden, and examples from various countries, will also be grimly familiar to campaigners up against the chaotically privatised social care system in England, and the death toll since the pandemic struck.

The pamphlet concludes with a simple summary: “To strengthen health systems in Europe, the EU should terminate neoliberal policies that have resulted in damaging budget cuts and created pressures to privatise and commercialise healthcare and elderly care systems, thereby weakening Europe’s pandemic preparedness.”

Specifically the demands are that the EU should:

“End austerity, starting with a commitment not to return to pre- COVID-19 austerity rules, including the Fiscal Compact. …

“Remove the pressures towards liberalisation, commercialisation, and privatisation that undermine public healthcare systems and the welfare state more generally. …

“Ensure that COVID-19 recovery funds are used to strengthen public hospitals and healthcare provision, rather than for-profit, private hospitals.

“Protect public services from being further prised open by the EU’s trade and investment agenda.

April 7 Day of Action

On 7 April  (World Health Day), British campaigners can help challenge this logic by joining the Day of Action for #Health4All, coordinated by the European Network Against the Commercialisation and Privatisation of Health and Social Protection.

The 7 April day of action will focus on the four demands of the European Citizens Initiative and the demand to invest more in healthcare and health workers. There will be decentralised actions throughout Europe.

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John Lister
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