The Role of the World Bank
Despite the growing criticism leveled against the
Bank for its indifference to the precipitous decline in living standards
and the social conflicts that have resulted from its structural
adjustment programmes, it released Financing Health Services in
Developing Countries: An Agenda for Reform. With this 1987
publication, the World Bank gave notice that it intended to play a
prominent role in global health reform. The thrust of Agenda was
clearly the role of health financing as a conditionality in SAPs. Hence
the promotion of the role of the market to finance and deliver health
care. In 1993, the World Bank’s World Development Report: Investing
in Health outlined its agenda for health reform. This was a
comprehensive policy document on market driven healthcare combining
health sector financing and delivery.
The Report recognises that poverty is a threat
to health but does not address the issue of economic inequality and poor
health. It states that economic growth is a condition for good health,
that is, economic growth will fuel good health and better population
health will result in more secure economic growth, but does not tackle
the health consequences of unbridled economic growth which has led to
greater income disparities and wider health differentials in countries.
In fact, under the guise of promoting cost-effective, decentralised and
country appropriate health systems the Report’s key
recommendations follow from the same line of thinking and solutions in
SAPs that have worsened poverty and lowered levels of health (Werner
& Sanders 1997:104-106).
In this Report, health is evaluated in terms
of the Global Burden of Disease measured in Disability Adjusted Life
Years (DALYs). DALYs incorporate questionable assumptions about the
value of life. The Bank assigns different values to years of life lost
at different ages. The value for each year of life lost rises from zero
at birth to peak at 25 years and then declines with increasing age. Thus
the very young, the elderly and disabled people are less likely to
contribute to society in economic terms hence considered less valuable:
so, fewer DALYs will be saved by health interventions which address
their ills. Therefore public money and support should not be wasted on
interventions for these social groups. Thus resources allocated to the
health sector is determined by interventions which address conditions
with high disease burdens (as measured in DALYs) and priority will be
given to interventions which are cost effective.
Two minimum packages are proposed based on resource
allocation and the leading role for the private sector in health care
delivery. The first deals with clinical services and the second with
public health. The policy recommendations of the Report are
recommended as the basis for a new ‘health conditionality’. Thus
guidelines are provided that SAPs will be implemented in ways that do
not lead to the deterioration in health statistics for which the IFIs
have been criticised in the past (The Lone Pine Statement
1994). The Bank’s three pronged approach for governments is to:
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‘Foster an enabling environment for households to
improve health’. In effect this means that disadvantaged families
are required to cover the costs of their own health. In other words
fee for service and cost recovery through user financing (user fee)
and putting the burden of health costs on the poor.
-
Improve government spending in health. This calls
for trimming of government spending by reducing services from
comprehensive coverage to a narrowly selective, cost-effective
approach or a new brand of selective primary health care.
-
‘Promote diversity and competition in health
services’. This deals with the turning over to private doctors and
businesses most of those government services that used to provide free
or subsidised care to the poor. This implies privatisation of most
medical and health services, thus pricing many medical interventions
beyond the reach of those in greatest need (Khor 1994).
Privatisation and Profits
The Report affirms a wider role to the private
sector and proposes a limited role for government in the financing and
provision of health care. In fact, the State’s role is to facilitate
and strengthen private initiative since government is depicted (in the Report)
as inefficient if not corrupt, and health care is too expensive to be
paid for from State coffers, the private sector is the competent
authority to manage it for profits. Data for South America reveal that
implementation of the WB proposal would release $38 billion for the
private sector (Laurel & Arellano 1996: 14). Health care then
becomes a commodity and the health sector becomes a place to accumulate
wealth.
In many Third World countries, this process has been
accelerating whereby the dismantling of the public health sector has
spurred the corporatisation/privatisation of the health sector and the
growth of private health insurance schemes. Privatisation in these
countries is selective and confined to sectors, which are profitable.
Thus the proposal to assign and essential health package to the public
sector and reserve discretionary services for the private sector.
In Malaysia, where the public healthcare system is
under threat, there has been an explosion of private healthcare services
in the last two decades or more. In 1996 the Health Ministry privatised
the five hospital support services at the University Hospital, namely
cleaning, laundry, clinical wastes, maintenance of biomedical equipment
and emergency power supply. Since then, costs have increased by 250
percent (Malaysian Medical Association: April 2000). Skimming was
very much the order of the day. In one instance the Health Ministry
awarded a RM100 million contract to a company which subsequently
subcontracted it for RM 65 million to a second company. The first
company earned RM35 million in profit for doing nothing. In another
example, the Health Ministry tendered a separate contract to the same
company mentioned above for RM60 million, which again subcontracted it
to the same second company for RM 40 million. The second company in turn
subcontracted it to a third company for RM20 million. Profits were made
by all the companies through the subcontracting mechanism at the
taxpayers expense (Ibid).
With the corporatisation of the University Hospital,
the latter in March 2000, further increased charges by over 100 percent
for many essential lifesaving procedures like the electrocardiogram
(ECG) which saw a price hike from RM20 to RM40; exercise ECG from RM120
to RM240; angiogram from RM600 to RM1300; and emergency heart pacing
which was free in the past, has been slapped with a fee of RM700 (Ibid).
Patients who cannot afford these fees are refused these essential
procedures and referred to the welfare section. Poor patients cannot
afford these fees and many feel humiliated going through the process of
being refused and told to depend on kith and kin to foot the bill.
Increasingly, public health services are being subsidised to cater for
the middle class and the rich (Ibid).
The World Bank Report’s proposal for
increased health insurance coverage (for middle income countries) where
consumers are given a choice between public and private insurance, in
effect ensures the collection of funds (through compulsory savings) to
the private sector. It provides a criterion (with the amount paid in
premiums) which can be used to separate those who are profitable from
those who are not. This will serve to redistribute funds from the public
to the private sector. This means funds are not distributed according to
need, as in the case of collective State funds but according to
individual premiums, thus separating out the higher payers for the
private sector. Complementing this is the growth of hospital
corporations.
In South America, serious cutbacks in State health
expenditure in the context of SAPs necessitates the use of private
health funds, as public funds are insufficient to cover the cost of
private services. Thus the growth of private insurance is crucial to the
consolidation of a private health system provision and insurance,
parallel to the State public system. Through this mechanism private
health care gets access to a major portion of health resources covering
the needs of a minority of the population, thus reducing the resources
of the State system which is responsible for the majority. In Chile, the
private system covers 20 percent of the population and concentrates over
40 percent of all resources used (Laurell & Arellano 1996:16).
Under this free market model, health is no longer
considered an absolute human need: it is a private good, rather than an
inalienable right. Health is subjected to the forces of the free market
where free choice and competition is the golden rule. This means the
dismantling of the state welfare system. The model acknowledges the laws
of the market to determine whose health is profitable for investment and
who should live or die. This approach can only lead to a growing health
gap between private affluence for the rich minority and public scarcity
for the majority. This exclusionary principle abolishes the concept of
health for all (as enshrined in the Alma-Ata) and equity and social
justice.
Because of its financial clout and political
influence, the Bank Report has had an influential impact on
Northern donors shaping their thinking about health. It is now
subscribed to by aid agencies, other international organisations and
Northern donors. Thus countries who are willing to implement these
health policies can receive aid to finance the costs of these structural
changes in the health sector.
Because of its financial leverage, the Bank can make
Third World countries accept this blueprint for health as it has done
with SAPs. In the words of a Bank economist ‘Policy lending is where
the bank really has power - I mean brute force. When countries really
have their backs against the wall, they can be pushed into reforming
things at a broad policy level normally, in the context of projects,
they can’t. The health sector can be caught up in this issue of
conditionality’ (Kamran, A. 1999).
The World Bank has taken over the role of
international health policy formulation leaving the WHO on the
sidelines. The Bank Report dealt the final blow to the Alma Ata
Declaration.
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