World Bank moves towards including the private sector in healthcare
There are clear signs that the World Bank increasingly favours working with the private sector in healthcare services. But there is a way to go yet and British NGOs remain intransigent.
Last autumn World Bank president Jim Yong Kim, a South Korean-American physician and anthropologist, talked about how to maximize financing for development (mffd). Insiders say this is code for leveraging the private sector. This is particularly true for the World Bank’s human capital index which was launched a few years ago but will be re-emphasised in 2018. We are told that this basically means measuring education and healthcare assets in each country.
We hear Kim is arguing forcibly for the inclusion of the private sector in both sectors. ‘It is generally known, given current national debt levels, that the private sector has to be involved in education and healthcare,” said one source.
Despite this, there remains considerable internal and external resistance to the move. ‘There remains a loads of people in the World Bank who want nothing to do with the private sector,” said one source, echoing a comment we first heard several years ago.
Many international NGOs are also forcefully opposed to the private sector. We hear that this is very much a British preoccupation. “The British see healthcare services through the eyes of the NHS and are constitutionally opposed to private sector involvement,” we were told. ‘That is all very well, but you can’t build NHS organisations in Africa in this decade.”
Our Analysis: Given that the private sector, warts and all, makes up over half of all provision in many emerging markets, excluding it from development plans seems odd. We hadn’t realised the extent to which British NGOs led by outfits such as Oxfam are the main opponents of private involvement.
A problem for many development banks is finding private operators who do not merely serve the wealthy or the new middle classes. A few years ago, ex-IFCers told us that the IFC, the investment arm of the World Bank had become much more stringent about this investment criteria. Gone were the days when the IFC could uncritically invest in a lavish hospital chain aimed at the rich.
More recently this appears to have relaxed again. Note that in 2017 the IFC lent $15m to Acibadem City Clinics, the Bulgarian offshoot of Acibadem, the big Turkish hospital chain, which in turn is part of IHH, a bling-laden Pan-Asian hospital chain that mainly meets the needs of the rich.
Such a move may reflect the fact that there just aren’t many large vehicles in which development banks can usefully invest. You can also deploy the argument that a provider for the rich will gradually lead to a trickle down effect to the poor. Although we would argue that the opposite is more likely to apply. If the rich are cocooned in their own excellent private healthcare system, they are much less likely to want help pay for healthcare for the poor. A better argument perhaps is that private hospital groups will be gradually forced to address the mass market as provision for the very rich gets saturated.
In truth, it is really hard to say who does what and for whom. Across the world large private and not-for-profit providers give some poor people some services in exchange for tax breaks (Brazil) or land (India). One’s suspicion is that they will do the very least they can get away with.
We would welcome your thoughts on this story. Email your views to Max Hotopf or call 0207 183 3779.