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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

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