1FW2e8F

SECTION 1 2 3
WHAT CAN BE DONE
CASE STUDY
HEALTH PUBLIC-PRIVATE PARTNERSHIP
THREATENS TO BANKRUPT THE LESOTHO
MINISTRY OF HEALTH
The Queen Mamohato Memorial Hospital, in Lesotho’s capital Maseru,
was designed, built, financed and now operates under a public–private
partnership (PPP) that includes delivery of all clinical services. The
PPP was developed under the advice of the International Finance
Corporation, the private sector investment arm of the World Bank
Group. The promise was that the PPP would provide vastly improved,
high-quality healthcare services for the same annual cost as the old
public hospital.
Three years on, the PPP hospital and its three filter clinics:
• Cost $67m per year – at least three times what the old public
hospital would have cost today – and consume 51 percent of the
total government health budget;
• Are diverting urgently needed resources from health services in rural
areas where three-quarters of the population live and mortality rates
are rising;
• Are expecting to generate a 25 percent rate of return on equity
for the shareholders and a total projected cash income 7.6 times
higher than their original investment. Meanwhile, the Government of
Lesotho is locked into an 18-year contract.
The cost escalation has necessitated a projected 64 percent increase
in government health spending over the next three years. Eighty-three
percent of this increase can be accounted for by the budget line that
covers the PPP. This is a dangerous diversion of scarce public funds from
nurses, rural health clinics and other proven ways to get healthcare
to the poorest and reduce inequality.
For more information see: A. Marriott (2014) ‘A Dangerous Diversion: will
the IFC’s flagship health PPP bankrupt Lesotho’s Ministry of Health’,
Oxfam, http://oxf.am/5QA
Rich-country governments and donor agencies – including the World Bank
Group, USAID, the UK Department for International Development, and the
European Union – are also pushing for greater private sector involvement in
service delivery. 430 This can only lead to one thing: greater economic inequality.
In fact, high levels of private-sector participation in the health sector have
been associated with higher overall levels of exclusion of poor people from
treatment and care. In three of the best performing Asian countries that have
met or are close to meeting Universal Health Coverage – Sri Lanka, Malaysia
and Hong Kong – the private sector is of negligible value to the poorest fifth
of the population. 431 Recent and more detailed evidence from India has shown
that among the poorest 60 percent of women, the majority turn to public
sector facilities to give birth, while the private sector serves those in the top
40 percent. 432 Private services benefit the richest most, rather than those most
in need, and have the impact of increasing economic inequality.
93