29.01.2015 Views

1FW2e8F

1FW2e8F

1FW2e8F

SHOW MORE
SHOW LESS

You also want an ePaper? Increase the reach of your titles

YUMPU automatically turns print PDFs into web optimized ePapers that Google loves.

SECTION 1 2 3<br />

WHAT CAN BE DONE<br />

CASE STUDY<br />

HEALTH PUBLIC-PRIVATE PARTNERSHIP<br />

THREATENS TO BANKRUPT THE LESOTHO<br />

MINISTRY OF HEALTH<br />

The Queen Mamohato Memorial Hospital, in Lesotho’s capital Maseru,<br />

was designed, built, financed and now operates under a public–private<br />

partnership (PPP) that includes delivery of all clinical services. The<br />

PPP was developed under the advice of the International Finance<br />

Corporation, the private sector investment arm of the World Bank<br />

Group. The promise was that the PPP would provide vastly improved,<br />

high-quality healthcare services for the same annual cost as the old<br />

public hospital.<br />

Three years on, the PPP hospital and its three filter clinics:<br />

• Cost $67m per year – at least three times what the old public<br />

hospital would have cost today – and consume 51 percent of the<br />

total government health budget;<br />

• Are diverting urgently needed resources from health services in rural<br />

areas where three-quarters of the population live and mortality rates<br />

are rising;<br />

• Are expecting to generate a 25 percent rate of return on equity<br />

for the shareholders and a total projected cash income 7.6 times<br />

higher than their original investment. Meanwhile, the Government of<br />

Lesotho is locked into an 18-year contract.<br />

The cost escalation has necessitated a projected 64 percent increase<br />

in government health spending over the next three years. Eighty-three<br />

percent of this increase can be accounted for by the budget line that<br />

covers the PPP. This is a dangerous diversion of scarce public funds from<br />

nurses, rural health clinics and other proven ways to get healthcare<br />

to the poorest and reduce inequality.<br />

For more information see: A. Marriott (2014) ‘A Dangerous Diversion: will<br />

the IFC’s flagship health PPP bankrupt Lesotho’s Ministry of Health’,<br />

Oxfam, http://oxf.am/5QA<br />

Rich-country governments and donor agencies – including the World Bank<br />

Group, USAID, the UK Department for International Development, and the<br />

European Union – are also pushing for greater private sector involvement in<br />

service delivery. 430 This can only lead to one thing: greater economic inequality.<br />

In fact, high levels of private-sector participation in the health sector have<br />

been associated with higher overall levels of exclusion of poor people from<br />

treatment and care. In three of the best performing Asian countries that have<br />

met or are close to meeting Universal Health Coverage – Sri Lanka, Malaysia<br />

and Hong Kong – the private sector is of negligible value to the poorest fifth<br />

of the population. 431 Recent and more detailed evidence from India has shown<br />

that among the poorest 60 percent of women, the majority turn to public<br />

sector facilities to give birth, while the private sector serves those in the top<br />

40 percent. 432 Private services benefit the richest most, rather than those most<br />

in need, and have the impact of increasing economic inequality.<br />

93

Hooray! Your file is uploaded and ready to be published.

Saved successfully!

Ooh no, something went wrong!