Privatization in the Health sector in Africa

By Anna Mariott (Oxfam UK) - Health specialist. Author of “Blind optimism- Challenging the myths about private health care in poor countries”.

1.1 Developing countries are put under pressure to promote the Private sector.

The study presents how Aid impacts on Health in poor countries and the pressure donors put on developing countries to promote the Private sector.

The tools used by rich countries to promote private sectors are:   Aid policies that impose policies and Policy advise to developing countries that are left without defence. This undermines the ability of governments to decide their own path and prevents governments to decide and to be accountable to their own citizens. Another influencing factor is the non-government actors and the proliferation of global health initiatives that reiterate that privatization can better answer the needs. National Policies should not be dictated from outside.

Donors and International Institutions highlight that Public financing and public delivery of services has failed, hence the need to search for alternatives that according to them is the private sector.

The reality is different and the dangers of private sector on health care have to be denounced. In Oxfam’s answer to the World Bank (WB), Oxfam expressed its concerns regarding the impact on Health of Aid conditionalities and trade arguments. The WB and other International institutions say they do not push policies through Aid, but on its way of doing Oxfam sees a blue print that pushes for changes and reforms as much in poor as in rich countries. The ingredients are:  public sector reform, decentralisation, subsidizing private providers, bringing investments and allowing private sector to take ownership of them, while the government has to pay these companies. The growth of private sector has to be analyzed and its impacts monitored.

Arguments used for private provision

Six arguments are used for private provision: being a majority provider in many countries it should therefore be at the heart of scaling-up; can take strain off public health services; is more efficient; is more effective and of better quality; can reach the poorest and finally can improve accountability through competition.

The 1st argument: Because private sector is already significant, it will be key in scaling up.

The WB 2007 report on the privatization on Health care1  says that in Africa half of the health care is private.  But in Sub-Saharan Africa 51% of the poorest has no medical care. The study “The business of Health in Africa2” mentions that ‘A poor woman in Africa today is as likely to take her sick child to a private hospital or clinic as to a public facility.’ In Malawi, 70% of private Health providers for the poor are shop keepers. Result: privatisation means selling drugs in shops. What about those who have no access? In India the private sector provides 82% of outpatient care, but 50% of women have no medical assistance whatsoever during childbirth. The proportion of the private sector says nothing about fulfilment of right to health care.

Argument 2: Private sector is more efficient and can help reduce costs.

There is no cross country analysis, but the evidence available shows just the contrary. In China when private sector was allowed health services fell down. Privatized Lebanon spends twice as much per capita as public Sri Lanka, yet infant mortality is 2.5 times higher and maternal mortality is 3 times higher. On top of that the transaction costs are high when dealing with many providers. In Cambodia these transaction costs amount  to 15% (50%?) of the health budget.

Argument 3: Private sector can improve quality of care and accountability to patients.

The private sectors tries to reduce costs,  at the expense of patients.

Governments who cannot even regulate their own health sector, will not be able to regulate private actors.

Argument 4: The private sector can help reach the poor.

Evidence is missing to make this claim, as there are no analysis and studies to prove it. The existing evidence in China and Vietnam since privatisation, shows a substantial increase in rural people reporting illness but not using health services, and an increase in unattended home deliveries and delay of care, particularly for women and girls. So much that Chinese reforms are now being reversed with massive investment in public financing and investment in public services.

1.1.1 The public alternative

The picture of the Public sector is imbalanced. There are failures in Public services: efficiency, accountability, equity, but there is no analysis of the reasons why they have failed.

Reasons for Public failure. Different domestic factors contribute to poor performance: lack of political will; poor technical capacity; and corruption. The role of donors is also important: in Africa the legacy of the Structural adjustment Programs (SAP); the tiny proportion of aid allocated through budget support; side effects of vertical initiatives. Today only a small proportion of aid goes to health. Health worker migration to well-funded programs and providers is pulling resources away from public services.

Advantages of public provision: Economies of scale that cause the average cost per unit to fall as quantity is increased; easier to regulate quality; redistributive capacity to reach poorest; public ethos of service and at longer-term it builds government legitimacy.

We rarely hear about the Public success stories. Yet they exist. There are the old ones: Kerala, Sri Lanka, Bostwana, Caribbean & Pacific islands, Cuba. And the more recent ones: Uganda, Timor-Leste, Eritrea. There are success stories in each region of the developing world but no studies of progress have been made. The empirical evidence is very clear. No low or middle income country has reached free health services outside public services.
Differences between private and public. A study in Asia shows that where health service is inequitable not reaching the poor, like in Bangladesh, India and Indonesia, the private sector is as inequitable as the public sector. In countries with a better performance like Sri Lanka, Malaysia, and Hong Kong, the public sector reaches many more poor than the private sector.  According to WB data, maternal health care shows that births attended by public providers have the higher performance covering between 40 and 100% for poor women. The achievement of the public sector is much greater than the one of private sector. This means we need to make the public sector work.
As conclusion of the study Oxfam demands to donors to: be honest; stop promoting unproven and risky private sector approaches; learn from countries that have achieved universal and equitable access; and prioritize rapidly expanding and strengthening free government healthcare.



1     The Role of private Sector in the Fight Against HIV/AIDs in Sug-Saharan Africa – December 2007
2     The Business of Health in Africa. Partnering with the Private Sector to Improve People’s Lives – International Finance Corporation – WB Group

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