Rich countries and World Bank must stop pushing privatized health in poor countries

Published: 12th February 2009

Washington, DC – Rich country donors and the World Bank are wasting money and risking lives by continuing to push unproven and discredited private healthcare programs in poor countries, international agency Oxfam said today.Oxfam’s warning comes in a new report ‘Blind Optimism: Challenging the myths about private health care in poor countries’.The report gives considerable evidence of the poor performance of private sector-led health care initiatives globally. In China, for example, one third of drugs dispensed by private vendors are counterfeit, while in seven sub-Saharan African countries the WHO found that most anti-malarial drugs in private facilities failed quality tests. The World Bank itself has said that the private sector generally performs worse on technical quality than the public sector.Anna Marriott, author of the report, said: “Donors’ romantic views of private sector health providers are completely divorced from the facts. In Malawi 70 per cent of private providers are shops. For the most part, private health care in poor countries is made up of unqualified shopkeepers selling out-of-date medicines. Is that what you would want for your sick baby?”Oxfam has found that the World Bank uses its unmatched policy influence worldwide to promote privatized health despite lack of evidence. At the same time its private sector arm, the International Finance Corporation, recently announced it will mobilise $1 billion to finance the growth of the private sector’s role in health care in Africa. Many other donors and influential organizations have also increased their efforts to encourage and fund more expansion of private-sector lead health care projects. The United States Agency for International Development (USAID), the Department for International Development in the UK (DFID), and the Asian Development Bank have followed the Bank’s example in spending millions of aid dollars funding large-scale programs to contract-out service delivery to the private sector.Meanwhile, aid for primary health-care services in poor countries has almost halved in the last decade. Oxfam warns that cuts in public health services are condemning hundreds of millions of people to early preventable death or needless suffering – and a massive scale up in public health spending is required.After years of disinvestment, and with the allocation of aid for primary health-care services in poor countries dropping by almost half in the last decade, the public sector in many instances is weak and badly run. “After years of donor under-investment in government health care, to claim that government failure is inevitable is like tying a football player’s laces together and blaming him for losing the match,” said Marriott.“If the past few months have taught us anything it is that the market has its limitations and that governments need to take a lead. That is why President Obama is planning to scale up US investment in universal health care, while China has announced a $124 billion investment in public health provision to protect its citizens and stimulate economic growth.”Oxfam’s research shows that scaling up government provided health services has been central to rapidly improving life chances in poor countries. “Thanks to increased state spending on health in  Sri Lanka, for instance, women can now expect to live almost as long as those in Germany, despite an income ten times smaller,” Marriott said.“The Bank and other donors need to put their blind optimism about the market behind them. Universal health care is only achievable with government intervention to provide services. World Bank President Zoellick has rightly called for a fiscal stimulus to assist poor countries. This should be spent in part on a rapid scaling up of government provided health care - it will save lives and get economies going again.”

For the most part, private health care in poor countries is made up of unqualified shopkeepers selling out-of-date medicines. Is that what you would want for your sick baby?
Anna Marriott
Oxfam Health Policy Officer

Notes to editors

  • A recent report by the International Finance Corporation (IFC), the private sector investment arm of the World Bank, claims that over half the health-care provision in Africa comes from the private sector. In fact, Oxfam’s analysis of the data used by the IFC finds that nearly 40 per cent of the ‘private provision’ it identifies is just small shops selling drugs of unknown quality. In some countries such as Malawi, these shops constitute over 70 per cent of private providers.
  • Lebanon has one of the most privatized health systems in the developing world. It spends more than twice as much as Sri Lanka on health care yet its infant and maternal mortality rates are two and a half and three times higher respectively.
  • Chile’s health-care system has wide-scale private sector participation and as a result has one of the world’s highest rates of births by more costly and often unnecessary Caesarean sections.
  • In China immunization coverage dropped by half in the five years following commercialization of health care. Prevalence rates of tuberculosis (TB), measles and polio are now rising and could cost the economy millions in lost productivity and unnecessary treatment.
  • In Lesotho research has found only 37 per cent of sexually transmissible infections were treated correctly by contracted private providers compared with 57 and 96 per cent of cases treated in ‘large’ and ‘small’ public health facilities respectively.
  • No low- or middle-income country in Asia has achieved universal or near-universal access to health care without relying solely or predominantly on tax-funded public delivery. Scaling-up public provision has led to massive progress despite low incomes. A Sri Lankan woman, for example, can expect to live almost as long as a German woman, despite an income ten times smaller. If she gives birth she has a 96 per cent chance of being attended by a skilled health worker.