Feature

Most markets are a mess

In much of the world a simple public/private division neither applies nor matters. The issue is how to get any health care at all. Mike Rowson looks at what governments can do

Markets in healthcare are a fact of life for developing countries. Over the past 20 to 30 years, a process of commercialisation – whether intended or not – has taken place in health sectors and in the poorest countries the private sector is now the leading supplier of services, to lower as well as higher-income groups.

Increased commercialisation has been driven by a number of factors. First, economic crisis has undermined public services in many places, and a process of passive privatisation has taken place with private sector companies stepping in to fill gaps and state employees (particularly doctors) undertaking more private practice to raise their incomes. War has had similar effects. Second, policy advice to poor countries, by the World Bank and other donors, has sought actively to increase the role of the private sector in healthcare.

The result has been the creation of ‘mixed’ healthcare markets – called ‘messy’ by some – that patients must navigate to receive care. The private sector that participates in these markets is often different from what we imagine the private sector to be in the developed world. Health policy experts Hilary Standing and Gerald Bloom say the term covers ‘a very broad spectrum from professionally certified medical specialists to drug peddlers and traditional providers of health services’.¹

In many countries religious groups and NGOs provide extensive care. Despite a lack of regulation and the fact that these services are of wildly varying price and quality, they are often deemed more accessible and helpful than run-down public services.

Healthcare and poverty

Seeking healthcare can be very stressful for any person, but particularly if you are poor as well as ill. Healthcare systems can mitigate this stress; properly functioning health services can bolster individual autonomy and self-respect.

But in developing countries they regularly have the opposite effect. Financial barriers result in high-levels of self-exclusion and, perversely, seeking care can push people into poverty. In the early 1990s, the World Health Organisation estimated that 21 per cent of previously non-poor people in Bangladesh became impoverished due to spending money on healthcare.

Actually receiving ‘care’ can be a demeaning experience, reinforcing the sense of exclusion that comes from being poor. A WHO and World Bank study looking at poor people’s perception of health services noted how people were badly treated, suffering abuse from health providers – treated ‘worse than dogs’ – and extortion or incomplete treatment.² A lack of regulation affects quality of care across both public and private sectors.

Across health services financial resources often fail to reach the poorest people. User fee exemption schemes are misapplied and better off or more influential groups of people monopolise them. Civil servants and the formal sector can access subsidised government insurance, but the rural poor and informal sector workers cannot.

The donor response

The donor community has noted the crisis in health services in many developing countries for the past two decades. But the solutions they have tried have often made matters worse.

Demand-reducing economic policies have forced cuts in government expenditure, and politically weak ministries such as health have often suffered. Imposing user charges to get around financial constraints and improve quality of care was strongly pushed by the World Bank for much of the 1990s, despite the well-known effects on poor people.

Recommending higher levels of private provision, with governments told to focus their meagre resources on providing a ‘basic package’ of primary healthcare services targeted at the poor, has also been counter-productive. Services for poor people tend to become poor services, as the political influence and money of higher income groups are pushed out of the system.

Broader measures to get health services closer to communities – such as decentralisation and increasing participation – have taken place in parallel with these reforms. But the experience has not always been a happy one, with underfunded and ill-thought through decentralisation sometimes causing chaos in health service provision, and ‘participation’ often meaning little more than the participation of the poor in building clinics and providing money for drugs.

Greater contracting-out of services has been recommended to create value for money and better managed, more appropriate services. However, the market incentives that have been introduced as result – emphasising cost-cutting and competition – can drive out key elements of well-functioning health systems, such as responsiveness to clients (rather than responsiveness to donors), cross-subsidy and redistribution of resources from rich to poor.

To put it starkly, the ideological position behind such reforms is one common to both developing and developed countries: that governments fail. But how far is this really true? All the problems listed above can be seen in public services in the developing world, but they can also been seen in the private sector, both for-profit and not-for-profit. In fact, international evidence makes it quite clear that governments can provide well-functioning health services for their populations, with spectacular results: examples as diverse as Malaysia, Sri Lanka, China, Cuba, Barbados, Botswana and Costa Rica show it can be done.

Even in those countries where health systems are at the point of collapse, there will still be parts of the service that work well for the poor. These experiences should be valued and important lessons drawn, yet donor reforms have too often been prescriptive – starting anew without looking at how to build on successful experiences. The constantly changing ‘fashions and passions’ of reform can be a major problem in themselves.

What are the solutions?

Recent work on healthcare markets in Tanzania by Paula Tibandebage and Maureen Mackintosh has revealed some interesting perspectives on how to increase the grip of poor people on health services in low-income countries.³ It is true that governments are strapped for cash but they do also have substantial legal and political leverage to influence the shape of the system. Tibandebage and Mackintosh have proposed a number of ways in which access to healthcare could be enhanced – and polarisation decreased – through active government control of messy markets.

• Promote voice – there is a need to strengthen collective representation between groups of users and particular institutions. Governments should try to encourage involvement in facility management and collaboration between local people and primary providers to create a strong medical constituency that can represent people’s interests at higher levels of the system. They can also encourage the development of patient advocacy and consumer groups to promote standards. Laying out hard rights in law to a minimum package of care might also help people make claims on the system.
• Negotiate explicit returns for government support – governments in developing countries could support a range of health institutions in and outside the public sector through subsidies or tax breaks. These ‘rewards’ could also produce returns for governments interested in helping to reduce the effects of social exclusion in the health sector. Wealthier institutions could be asked, for example, to allow less well-off institutions access to scarce equipment; to help staff to update skills; or to provide services to patients referred from the government sector free, or at low cost.

Similarly, government-supported mutual health insurance schemes could be asked to ensure that poorer members of the scheme paid less than richer members, or were exempt altogether. There could be much greater use of exemption from healthcare charges generally. Although it is hard to exempt the right people, there are examples of it being achieved at both local and national level.

• Push standards up by benchmarking facilities that act in a socially inclusive fashion and provide a good service for poor people in terms of price and quality of care. Reward them with public recognition as well as further incentives such as membership of recognised ‘high-quality’ associations.
• Create a public discourse around the need to protect the poorest members of society. Highlighting issues of universality and fairness in the way people are treated may help greater acceptance of the development of more inclusive health systems in the long run. Trying to ensure that the middle-classes do not seek care in different institutions from lower-income groups is crucial in exposing wealthier people to the problems facing poor people.

In short, there are a number of measures that governments can take in the search for more equitable health systems, which go beyond focusing public sector resources on primary healthcare for poor people. Will governments and international agencies respond?