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Sickness of healthcare across the whole world

This article is over 16 years, 11 months old
John Lister, author of a new book on global health ‘reform’, writes on the human cost of the free market
Issue 1960
An immunisation team tackles polio — heroic work against great odds which is ignored by the private sector (Pic: WHO)
An immunisation team tackles polio — heroic work against great odds which is ignored by the private sector (Pic: WHO)

Healthcare has become a huge global industry with an annual turnover in excess of $3 trillion and a workforce upwards of 35 million worldwide, plus millions more in linked services and occupations.

This gives health policy a substantial economic, social and political significance.

But healthcare spending is almost inversely proportional to the global burden of disease. In 2000 the World Health Organisation pointed out that 84 percent of the world’s population shared just 11 percent of global health spending — but suffered 93 percent of the world’s burden of disease.

Japan, with almost the same size population as Nigeria, spends 270 times more on healthcare. Of those African countries with data available, 23 out of 49 saw life expectancy fall between 1990 and 1999.

In developing countries in 1995, over nine million children under five died avoidable deaths — more than the entire population of Sweden.

These are just a few of the more glaring inequalities and contradictions from healthcare systems operating within a capitalist system.

This system places the priority on profit rather than human health, perpetuates extremes of inequality between and within countries, and gives preference to the operation of market forces rather than planning and redistribution of wealth.

But as I have tried to show in my new book Health Policy Reform: Driving the Wrong Way? the main lines of policy that have emerged as the mainstream “reform” agenda do little or nothing to address these issues.

They are driven more by ideology than health needs — and the ideology is that of neo-liberalism, the brutal face of capitalism that predates the post-war welfare states.

The World Bank formula for health reform in the poorest countries is to insist that governments should finance only the most minimal “essential package” of primary care, immunisation and health education — at a cost per head of just $12 per year.

Any more advanced treatment, and all hospital care, should be delivered by the private sector and subject to user fees — thus excluding the poor.

Across the world, the private sector has consistently demonstrated its refusal to build facilities or offer services to the most deprived and unhealthy sections of the population.

Instead, like a heat-seeking missile, private clinics and hospitals home in on those more affluent areas of big cities that offer most profit, leaving the slums and the countryside to the public sector.

Poverty and pressure from global bodies hold back development of healthcare in the poorest countries. But once extensive and accessible healthcare systems are established, it becomes politically impossible to turn back the clock completely.

Even in General Pinochet’s dictatorship in Chile the most extreme proponents of “neo-liberal” policies could not eliminate or privatise the public sector hospitals, although they cultivated a range of private sector provision for the wealthy.

Steps to change healthcare systems therefore take the form of “reforms”, which increasingly seek to remodel health services along market lines and treat healthcare, like any other service or goods under capitalism, as a commodity.

No country has been subjected to a more relentless “reform” programme than Britain over the last 15 to 20 years.

First Margaret Thatcher and now Tony Blair have signed up to neo-liberal reforms aiming to transform the NHS from an integrated, planned system into one in which market forces and competition apply, and in which public funding can be used to sponsor the creation of a new, enlarged private sector.

The reforms are not driven by pressures to cut costs, constrain demand for services, improve efficiency or hold down public spending.

Indeed far from offering economies or efficiencies, many of the new market-style reforms serve to increase costs both to government and to individual service users, and have a questionable impact on overall efficiency of healthcare systems.

Among the most common of these measures are:

  • Decentralisation and privatisation.
  • The separation of purchaser from provider.
  • The use of contracts to allocate resources and monitor service provision.
  • Increased provider autonomy (for example, the creation of foundation trusts) and the cultivation of an “entrepreneurial” approach.
  • The purchase of publicly funded services from private sector providers.
  • New systems for the payment of healthcare providers.
  • The creation of competition between providers.
  • The use of private sector capital (for example, through the Private Finance Initiative or Public Private Partnerships).
  • A focus on “patient choice” and consumerism in place of planning and accountability.

All of these policies are being put in place in Britain, and many are also being applied in other advanced economies.

Studies of over 40 countries show that some of these policies are also being imposed on the poorest countries of Africa and Latin America.

At the same time the poorest in China and Vietnam face misery after their successful centralised systems have been largely privatised.

Nowhere is there any evidence that market-style ­reforms can improve efficiency, cut costs, or do anything but compound existing inequalities in access to healthcare.

However, the dominance of neo-liberal ideology and the plentiful supply of servile academics means that these baseless policies have become the mainstream agenda of the “health policy reform industry”.

My conclusion is that health policy reformers are “driving the wrong way”, asking the wrong questions, and getting the wrong answers.

An alternative is possible — one which begins with the progressive concepts of cooperation, solidarity and planning, and aims to build inclusive, comprehensive and accountable systems based on the collective sharing of risk.

This is the good old socialist principle: “From each according to their ability — to each according to their needs.”

Case 1: The US & Canada

In the late 1960s Canada broke from a US-style health system based on private insurance, establishing a tax-funded system.

It developed this further in 1984 with the establishment of its Medicare system. This offers universal coverage for medically necessary services delivered by a physician or in hospital.

In 1960 Canada spent almost the same per head as the US on health. Now the US spends more than twice the Canadian level.

Even this higher spending in the US still leaves 42 million people (more than Canada’s whole population) completely without health insurance.

Medicare also holds down administrative and transaction costs to around a third of those prevailing in the US.

Treatment costs for Canadian cancer patients and cataract patients sent to private US hospitals are six times as high as the costs of the same treatment in Canada.

Case 2: Kenya

In the period immediately after independence in 1963, the economy of Kenya in east Africa grew rapidly. The government began to develop a healthcare system moving towards free basic treatment and introducing free outpatient care.

It achieved reductions of almost 50 percent in mortality among under fives in the years to 1993. Life expectancy rose from 40 to 60 years.

The 1980s brought the end of economic growth, and pressure from the IMF and World Bank to implement “structural adjustment”.

Government health spending fell sharply in the 1990s, from $10 per head in 1990 to just $2.90 in 2000.

Infant and child mortality rates rose by around 50 percent from 1992 to 1998.

In outpatient centres the introduction of a user fee of $0.33 a visit brought a drop in attendance averaging 37 percent. But when the fees were suspended visits rose again by 41 percent.

A 1998 survey showed that 9 percent of the population had chosen not to visit a government health facility because they could not afford the fees. But 76 percent said they could not afford to visit a private medical facility.

As in many African countries, the fees also did not generate the expected contribution towards the health budget, yielding just 2.1 percent of ministry of health spending by 1993.

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