ABSTRACT
For decades, governments and development partners promoted neoliberal policies in the health sector in many LMICs, largely motivated by the belief that governments in these countries were too weak to provide all the health services necessary to meet population needs. Private health markets became the governance and policy solution to improve the delivery of health services which allowed embedded forms of market failure to persist in these countries and which were exposed during the COVID-19 pandemic. In this article, we analyse the manifestations of these market failures using data from an assembled database of COVID-19 related news items sourced from the Global Database of Events, Language, and Tone. Specifically, we identify how pre-existing market failure and failures of redistribution have led to the rise of three urgent crises in LMICs: a financial and liquidity crisis among private providers, a crisis of service provision and pricing, and an attendant crisis in state-provider relations. The COVID-19 pandemic has therfore exposed important failures of the public-private models of health systems and provides an opportunity to rethink the future orientation of national health systems and commitments towards Universal Health Coverage.
Introduction
Around the world, the COVID-19 pandemic has challenged health systems to provide necessary care for the surge of infected patients while simultaneously ensuring continued access to essential health services among the general public. However, in many countries with mixed public-private health systems, just when hospital beds and other resources were most needed, the private sector faced an unprecedented set of catastrophic conditions that left many providers on the verge of collapse. Following precipitous drops in the demand for health services, as well as government restrictions on service provision, an important liquidity crunch emerged, especially among providers with business models based on elective procedures, medical tourism, and non-acute forms of care (Hellowell, Citation2020). In response, many of these providers have engaged in unethical business practices that have further limited service provision and have strained already tenuous and widely challenged public-private relationships. While this catastrophe in private health service provision has been global, the phenomenon has been especially severe in low and middle-income countries (LMICs), where rates of use of the private sector tend to be higher than in wealthier countries (Grépin, Citation2016).
This paper argues that the catastrophe in privately provided personal health services that has unfolded is not an unexpected outcome of the pandemic, but rather a set of predictable events and outcomes that could have been predicted due to existence of underlying market and redistributive failures that had been embedded in mixed public-private health systems over decades. While market failures in private health care have long existed and have been well documented, this article explores the ways in which these failures have been thrown into sharp relief by the COVID-19 pandemic. In tandem, we also look at how redistributive failures, which also have been endemic and have left many health systems have been unable to serve the needs of those they intend to serve, have also been exposed and amplified by the pandemi. The latter crisis is about the failure of mixed and private health care systems to fulfil a redistributive function and are as consequential to health outcomes and equity as market failure.
While countries differ with regards to what they believe to be the appropriate role of the state in health systems, it is widely accepted that a key function of government is to correct market failure, and in most places to also address redistributive failures in terms of inequitable access to health services. From a neoclassical economics perspective, private health sectors, and especially private hospital sectors, lack the conditions necessary to generate efficient market outcomes (Arrow, Citation1963; Filmer et al., Citation2002). The private health sector also tends to be less affordable and available to the poor, this being another way in which market fail people. Indeed, more heterodox and political economy driven understandings of market failures stress that they are not just about inefficiencies in the market for specific goods or services, but rather can also be understood as the natural consequence of relying upon markets for health services (Johnson, Citation2017; Krugman & Wells, Citation2006). However, for the purposes of this paper, we see both embedded market and redistributive failures as the roots of current crises in private health markets.
Normally, the solution to the existence of uncertainty and the inability of some to pay for health is the provision of insurance and social risk pooling, including the cross-subsidization of the sick by the healthy and the poor by the rich. However, while publicly provided health insurance schemes are common in most high-income countries (HICs), they are still incomplete or absent in many LMICs (WHO, Citation2019). Where private insurance exists, it may only be available to the wealthiest segments of populations, either due to relatively expensive premiums or because it is only made available through employer-sponsored schemes. In such settings, private providers often cater to the higher-income or insured segments of the population, which may further incentivize them to offer only a narrow and highly specialised range of elective services with high margins, such as diagnostic services and elective surgeries.
Using data from a review of newspapers around the world, we characterise and analyse the manifestations of this catastrophe during the COVID-19 pandemic into what we call the ‘triple crises’ of the private health sector, including (1) a financial and liquidity crisis among private providers; (2) a crisis of service provision and pricing; and (3) an attendant crisis in state-provider relations. We first review the embedded nature of market failures in the market for private health services and argue that systems that were already failing to serve many people and that had not been properly integrated into national health systems were those that were most poised to fail. We then provide detailed examples of the triple crises and how they are limiting more effective responses to the pandemic in countries around the world. Finally, we conclude by examining what the triple crises of private health signals for future health security and pandemic planning as well as for progress towards Universal Health Coverage (UHC).
Major shifts in the market for private health providers
Governments have an important role to play in both the provision and regulation of health systems. However, a lack of resources or political will often prevent the state from fully carrying out this responsibility, which in the case of many LMICs has led them to develop dependencies upon external actors for financing health goods and services. Following the structural adjustment programmes that began during the 1980s, many donors imposed important constraints on public health systems, which led to a further scaling back of the role of the state in many countries (Sparke, Citation2020). Scaling back of the role of government in health systems also occurred in periods of austerity, which followed national, regional, and global financial crises. To fill the void left by government, multilateral finance institutions and governments encouraged neoliberal policies, such as increased liberalisation, privatisation, and financialization of global health markets (Sparke, Citation2020). Over the past few decades, the International Financial Corporation (IFC), as well some bilateral and multilateral donors further accelerated the financialization of health care services and the expansion of the private sector through targeted investments and seed funding (Hunter & Murray, Citation2019; Sparke, Citation2020).
As a result, at the outset of the pandemic, most LMICs had mixed public-private health systems, both in terms of financing and provision, that while heterogenous, relied heavily upon private providers for a significant portion of health service provision (Grépin, Citation2016; Mackintosh et al., Citation2016). In some countries, such as India and Nigeria, the private sector was the dominant source of care, whereas in other countries the private sector played a more complementary role either competing with the public sector for certain types of services (e.g. diagnostics or outpatient care) or catering to specific portions of the population (e.g. high income or urban populations) (Mackintosh et al., Citation2016; McPake & Hanson, Citation2016). Over the past few decades, the private sector has also become more specialised to provide a range of complementary services to those available in the public sector such as pharmacies, imaging, and diagnostic facilities (Mackintosh et al., Citation2016).
In some LMICs, there exists a two-tier private hospital and health service industry structure in place, with big multi-site chains occupying a large percentage of the market share in counties such as India, South Africa, Turkey, and Nigeria. Beneath these larger private hospital and service chains sits a tier of a smaller tier of private clinics and hospitals (Mossman et al., Citation2019). However, in many places the private sector is poorly regulated and not well integrated into national health systems (Montagu & Goodman, Citation2016). The erosion of publicly provided health and the downgrading of state capacities in health, coupled with the promotion of a parallel private health system that is poorly regulated that is not integrated into national health systems, all led to a situation in which such providers were difficult to assimilate into the national pandemic response due to limited legal and regulatory arrangements. Additionally, information on the composition and capacities of the private sector in national systems is often very poor or completely lacking (AbouZahr & Boerma, Citation2005). These factors all played their part in setting mixed public-private health systems up for the current catastrophe, which we next turn to in the following sections.
Materials and methods
To analyse the impact of the COVID-19 pandemic on private providers in LMICs, we searched the Global Database of Events, Language, and Tone (GDELT) database, which is a database of all the events that happened or is happening around the world (Leetaru & Schrodt, Citation2013). Specifically, we use the GDELT Event 1.0, which collects articles from major international news sources, including foreign language news sources with an English online version, including newspapers from both high-income and LMICs and codes them according to the event types. The units of observation in our dataset are events identified by GDELT and for each event, the internationalised domain name (i.e. the URL of the original article in English) of the first article mentioning this event is used as the title of each event (i.e. titles are stored in English). To extract articles about the private sector, we searched the titles of all articles in GDELT from January 1-August 29, 2020. Then we identified articles that had one COVID-19 related terms in its title: ‘epidemic’, ‘covid’, ‘sars’, ‘virus’, ‘mask’, ‘pneumonia’, ‘coronavirus’, ‘quarantine’, ‘confirmed case’, ‘suspected case’, ‘outbreak’, ‘pandemic’, ‘lockdown’, ‘n95’, ‘hand sanitiser’, ‘wuhan’, ‘infect’, ‘health commission’, or ‘cdc’. From the covid-related articles, we then searched for the keyword ‘private’ in the title. From those articles, we then search for any of the following words in the title: ‘health’, ‘provider’, ‘hospital’, ‘insurance’, ‘doctor’, ‘nurse’, ‘pharmacist’, ‘pharmacy’, ‘clinic’, ‘sector’, or ‘research’. This search strategy, which involved using English language terms on domain names, may have still biased us towards English speaking countries, however, we did still identify events from English language media in non-English speaking countries (e.g. China, Mexico, Peru). We then limited our search to articles where the location was in an LMIC (as defined by the World Bank Income Classification Scheme in 2020). Experiences of high-income countries were only discussed when specific examples were known by the authors and used as a comparison. A total of 1527 unique articles were obtained through this process.
We then manually inspected all the articles to ensure that they were relevant to the private health sector. The first step of inspection is to exclude all the irrelevant news by reading the headlines (e.g. excluded articles that focussed on private schools) and then screened the remaining articles for content on aspects of the health sector, which resulted in a final list of 870 news articles that discussed the private health sectors in LMICs. From this final list of articles, we then analysed the common themes of the articles and then based on these themes, organised them into three major categories, one for each crisis. Below we use illustrative examples from our newspaper search to further describe the characteristics of each crisis.
Characteristics of the triple crises in private health
Crisis 1: liquidity and financial crisis
The COVID-19 pandemic has created an acute liquidity and financial crisis among private sector providers resulting both from a sharp decline in revenues as well as an increase in the costs of delivering services. A major challenge that faced all providers was the precipitous decline in the use of general health services that was observed among the general public, especially during the early phases of the pandemic. Due to safety concerns, many elective medical surgeries and procedures were postponed either by the patients, governments, or hospitals, as in South Africa (Ebrahim, Citation2020; Sehloho, Citation2020). Many patients either were forced or elected to defer such services, potentially due to the fear of contracting COVID-19 in such facilities, a common reaction that has been observed during previous infectious disease outbreaks (Wilhelm & Helleringer, Citation2019).
Many private hospitals in countries such as India, Thailand, Brazil, Mexico, Turkey, Costa Rica, Malaysia and Ecuador had made major investments to cater to wealthy foreign patients seeking lower-cost services in internationally accredited high-quality facilities (Hunter & Murray, Citation2019; Silva, Citation2019). Medical tourism is now an internationally competitive market that was worth approximately $38 billion in 2019 (The Business Research Company, Citation2020). As a result, many private providers in those countries, especially private hospitals, are heavily reliant upon medical tourism for revenues. For example, in some of the bigger Indian hospital chains, such as Fortis or Max, medical tourism accounted for approximately 10% of all revenues in 2018–19 (Suri, Citation2020). In South-East Asia, some industry analysts have estimated that up to 30% of revenues for private hospitals and specialist clinics are now coming from medical tourism (TTG Asia, Citation2019). In mid-March, following the growing number of cases in Europe and North America, almost every country in the world implemented some form of cross-border travel measure aimed at reducing the transmission of COVID-19 (Lee et al., Citation2020). As a direct consequence of these travel measures, there has been a sharp decline in the number of medical tourists, for example in Malaysia where it has threatened the immediate financial survival of private hospitals (Khoo, Citation2020).
Private providers also experienced rapid cost escalation due to the increasing needs of infection control measures and personal protective equipment (PPE). The high costs of medicines for the treatment of COVID-19 were also added to the cost of doing business. For example, in India, the local government in Bhubaneswar issued an order to the private health institutions, mandating them to bear the treatment cost for their infected medical staff (Orissa Post, Citation2020c).
Due to COVID-19 disruptions, there were also reports in some countries that private providers faced increased delays in receiving payment as both private and state-funded insurance schemes settled payments with longer than normal schedules, further compounding the liquidity crises among private providers. In Lebanon and Kenya, the state-based insurance schemes delayed payments to private providers (Amos & Al-Arian, Citation2020; Mohiddin & Temmerman, Citation2020). General revenues have dried up in many natural resource and oil-driven economies, leaving less fiscal space for governments to transfer revenues to the private sector. This is a real and present crisis of state-private health sector financing models in countries such as Nigeria, Iraq, and Iran (Akinwotu, Citation2020; George & Akwagyiram, Citation2020; Loveluck & Salim, Citation2020). Moreover, reports from many countries also suggest that private insurance companies were delaying payments and settlement due to the financial impacts of COVID-19 on insurers. Some 43 million US citizens were thought to have lost or would lose private employment-linked insurance coverage as unemployment soared (Glenza, Citation2020). Indian insurers are publicly stating that their model is not up to the demands of a pandemic and are in many instances refusing to cover long stays in ICU or additional costs associated with PPE or medical oxygen (Dhara, Citation2020). Private insurers are also in trouble in some countries arising from the cancellation of coverage (by employers and individuals), higher claims, and are deferring or delaying settlement with private sector providers just when cash flow is most necessary.
Crisis 2: service provision and pricing
Private sector providers are responding to their challenging financial positions by refusing to provide services as well as triaging patients based on their ability-to-pay and where possible gouging patients on price. These coping strategies have in many country examples exacerbated the limited resource capacities available to national systems to both respond effectively against the pandemic and to ensure continuity of services to the general public (Payne, Citation2020; Ryan, Citation2020). This has played out in many different ways across LMICs. Our research has revealed the withdrawal of services and refusal to admit COVID-19 patients; the filtering of patients based on the ability to pay; gouging on price, and brinksmanship on price per patient to be paid by governments dependent on access to private hospital beds. Evasion of emergency pandemic regulations by firms and gaming new requirements on pricing and bed availability also transpired, with this requiring government authorities to intervene and sequestrate beds, threaten providers with legal sanction, or cap prices being charged (see below). Yet the fact that all such interventions are being widely required in many LMICs testifies to the difficulties of suddenly integrating private providers into national systems and planning to meet the pandemic, especially in instances where private providers have only been loosely regulated to date.
There have been many examples where private hospitals and facilities have refused to admit and treat COVID-19 patients (Amani, Citation2020). Many of the articles describing this practice came from India, either because India has been particularly plagued by private hospitals refusing treatment or because of the higher tendency to cover these issues by the Indian press. There have been numerous reports in the Indian media of patients dying, sometimes outside hospital doors, after failing to gain admission to private hospitals in Delhi, Bengal, Karnataka, Punjab, and many other locations throughout India (Ahuja, Citation2020; ANI, Citation2020; India Today, Citation2020; Mirror Now Digital, Citation2020; News18, Citation2020; Orissa Post, Citation2020b; Press Trust of India, Citation2020b; Roy & Kalra, Citation2020; The Indian Express, Citation2020; Yamunan, Citation2020). The refusal to admit patients has led to legal action and threats of suspension of hospital licenses in many Indian states (Chatterjee, Citation2020). These legal sanctions, however, have been ignored in some instances, with the refusal to admit and treat COVID patients still very much being reported across India to the date of writing (Thiagarajan, Citation2020).
India is not alone in experiencing this distasteful and unethical practice of private providers refusing admission and treatment, although the weak and fragmented regulatory landscape of Indian private health has meant it seems to be more systemic and systematic a private sector response in that country. Reports of the practice were commonplace across a range of LMICs, for example, we have identified report Bangladesh, Oman, Iran, Brazil, the Philippines, Egypt, South Africa, and Pakistan (Ang, Citation2020; Ara, Citation2020; Latifi & Heydari, Citation2020; Limpot, Citation2020; MEMO, Citation2020; Ngema, Citation2020; SABC, Citation2020; Ying, Citation2020). In other settings, high admission standards have also been imposed as another means of refusing COVID-19 patients, leave empty hospital beds and important resource capacity unused, and leading to those needing treatment to die at home (Hua, Citation2020).
To further complicate the matter, some governments had actually imposed rules to prohibit private hospitals from offering treatment to COVID-19 patients. For instance, both in Nigeria, private hospitals were not permitted to treat COVID-19 patients, and in India, some providers with limited or inadequate capacities have not been licensed to provide treatment (Obinna, Citation2020; TNN, Citation2020). The Nigerian Medical Association advised against the use of private hospitals in treating COVID-19 due to concerns over limited capacities for infection control (News Agency of Nigeria, Citation2020; Vanguard, Citation2020). And despite these restrictions, there have nonetheless been examples of hospitals and clinics providing COVID-19 treatment while unlicensed to do so, or not following government-imposed protocols and treatment guidelines (Fagbemi, Citation2020; Press Trust of India, Citation2020a).
Another financial coping strategy by private sector providers has been to create additional revenues through gouging of COVID-19 infected patients, which is the practice of charging well above market rates for a good or service, which can happen in settings when there are very high levels of demand relative to supply and for goods for which demand is usually highly inelastic, such as hospital beds. The pandemic has precipitated all of these conditions, setting up a scenario where it is relatively easy for private providers to engage in this behaviour.
India has also been in the spotlight for gouging. In the early stages of the pandemic, there were news reports of hospitals charging extremely high fees for COVID-19 treatment, particularly in the larger hospitals and multi-site chains. The pricing schedule at Max hospitals made headlines in June, which listed daily charges for treatment of Rs 53,050 a day without a ventilator and Rs 72,550 (or US$1,000) a day with such assistance (Shukla, Citation2020). Prices of this level are clearly beyond the capacity of the majority of the Indian population to pay and were even too high for many Indian insurers who pushed back against gouging and extended stays in ICU that had been imposed by hospitals (Bhuyan, Citation2020). By May 2020 the situation in Delhi was spiralling out of control with the government refusing to act on prices being charged as infections ratcheted up (Express Web Desk, Citation2020). Pressure from the public and private insurers, and public and government hostility, finally produced change and state government intervention in June, following other states that had already capped prices for treatment. Despite such price capping and threat of legal action, the practice of price gouging was still being witnessed in the private provision of medical services (Mathew, Citation2020).
India was not alone in documented examples of gouging and many different strategies have been observed in other countries. For example, many hospitals in Asia and Arica were charging patients extremely high prices for PPE, oxygen, medicines, and plasma, or for in-patient testing for the virus (Mirror Online, Citation2020; Paliwal, Citation2020). Private hospitals have also been transferring the high costs of hospital infection control and the purchase of PPE for hospital staff onto patients at very high charges (Hisamudin, Citation2020; Nazari, Citation2020).
Another common strategy is the imposition of up-front deposits for those seeking admission for COVID-19 treatment. This practice of triaging patients based on their ability-to-pay was visible across many Indian states. There were reports in the Indian media of patients being forced to pay Rs 100,000-200,000 (USD$1300–2600) or even Rs 500,000 (USD$6,500) in advance of their admission to hospital (Jaiswal, Citation2020; Ravi & Babu, Citation2020). The practice has also been found in Zimbabwe with hospitals asking for $5,000 in USD for admission (Muchetu, Citation2020).
Human resource challenges have also plagued private providers during the COVID-19 pandemic, further threatening their ability to provide services. Health workers were understandably concerned about contracting the virus given their high risk of exposure. However, shortages of personal protective equipment (PPE), especially early in the pandemic, left them vulnerable to infection. There were many reports of medical staff getting infected, for examples such instances were well documented in India, South Africa, and Nigeria (Barnagarwala, Citation2020; EWN, Citation2020; Sahara Reporters, Citation2020). Perhaps unsurprisingly, this has also led to reports of health workers going on strike, walking off the job, or simply being absent from work. Such reports have been seen in countries like India and the Philippines (ABS-CBN News, Citation2020b; PTI, Citation2020a).
Crisis 3: state-firm relations and governance
A long-standing mistrust between public and private sector actors, coupled with the practices of private sector actors during the pandemic, have combined to create tensions with regards to state-firm relations and governance of the health sector and has led to brinksmanship by private providers to allow COVID-19 patients to access private hospital beds and capacities.
Governments are responding to the practices of private providers during the pandemic in several ways. One common approach is to impose limits on how much private providers can charge for COVID-19 services. For example, Thailand introduced legislation in April 2020 to prevent private providers from charging COVID-19 patient user fees (Boonbandit, Citation2020). Malaysia, the Philippines, and Indonesia all set prices for COVID-19 treatment and fixed the government subsidised rates (Antara, Citation2020; Loo, Citation2020; Tiglao, Citation2020). However, private sector providers in some countries are using their market power to resist such actions by government. One common strategy is for providers with sizeable market power to threaten to close health facilities unless they receive subsidies or are allowed to impose higher charges per patient. For example, in South Africa, the large providers negotiated with the government to secure higher per patient prices for critical COVID-19 care services (Winning, Citation2020).
In other LMICs, private providers with an important share of total national hospital capacities have also been using their market position to negotiate on price. Added to this, there is suspicion in countries such as South Africa, the UK, India and Peru (Aquino, Citation2020; Lintern, Citation2020; Winning, Citation2020), that there is complicity in preserving the private model and political and ideological influences at play in the price agreements being settled. Some of the deals that have been cut are staggering, particularly when compared to the limited financial resources at the disposal of LMICs. In South Africa, the Big 3 firms dominate the private hospital market: Netcare, Mediclinic, and Life accounted for more than 80% of the hospital beds and 90% of all the admissions, despite serving just 27% of the South African population (Nkonki, Citation2019). After more than 2 months of negotiations with the Big 3 providers, the government agreed on a price per patient of Rand 16,000 (US $950) per day in mid-June. Similar examples of big firms leveraging their positions were also present in Peru, where a hard-fought deal made in June led to private providers getting US $15,000 per COVID patient, an astronomical figure given that country’s resources and normal health budget (Aquino, Citation2020).
Governments have also introduced emergency legislation and funding to ‘bailout’ private providers. Examples of financial support from government to ailing private providers were found in not only LMICs, for instances, Philippines, Jordan and Morocco but also high-income countries like the United Kingdom (ABS-CBN News, Citation2020a; Husseini, Citation2020; Inman, Citation2020; The North Africa Post, Citation2020). At the even more extreme end of the spectrum, some countries have effectively moved to sequestrate or nationalise their private providers. In Egypt, for example, emergency powers were passed on April 22nd to effectively sequestrate private hospitals (which was the case in Ireland) for the pandemic response (Reuters, Citation2020). Nationalisation has also been discussed in many other countries, although it failed to materialise, for example in Nepal and Mexico (Payne, Citation2020; RSS, Citation2020; Ryan, Citation2020; Yucatan Times, Citation2020). Moreover, in South Africa, Pakistan and India there were examples of equipment purchased by private actors directly taken over by the governments (IOL, Citation2020; Junaidi, Citation2020; PTI, Citation2020b).
In India, fragmented governance responses have emerged at the state-level, where state governments - such as in Maharashtra and Delhi, the initial epicentres of India’s epidemic - first reacted slowly to emerging evidence of the private sector withdrawing services or charging exorbitant prices early that countries epidemic in April and May, with a rise of legal and other interventions directed at price capping and surge capacity access (Ahuja, Citation2020; Orissa Post, Citation2020a). Even when commitments to preserve a proportions of private hospital bed capacity have been secured, firms have gamed the system, and have done so even in the presence of state or judicial insistence that they should not do so (Calleja, Citation2020; Latifi & Heydari, Citation2020; MEMO, Citation2020). Several Indian hospitals have now been seised by state governments for continued breaches. India is boiling with press and civil society demands that the neglect of the public system and unfettered ‘regulation’ of the private sector cease, with new investment in public health demanded from numerous quarters (Mathew, Citation2020).
Finally, the lack of integration of health information systems between the public and private health was another key challenge in public-private interactions during the pandemic (O’Hanlon & Hellowell, Citation2020). Although most countries notionally have a national health information system, in many cases, private sector actors are either not mandated or do not comply with mandates to regularly report into these national systems. As such, data fragmentation meant that it was difficult for the public sector to assess the resources available in the private sector and to effectively engage with the private sector during the pandemic. In India, there were reports of governments having to force private hospitals to report data no COVID-19 patients to the government (Roy, Citation2020; The Hindu, Citation2020). Worse, in another instance, a private hospital was accused of withholding key information on a COVID-19 case from government official, leading to a localised outbreak at the hospital (Ara, Citation2020).
Discussion and conclusion
The existence of embedded market failures at the onset of the COVID-19 pandemic, which were allowed to persist in these markets due largely to government and development partner policies to promote private ownership in the health sector, has predictably led to a triple crisis in private health. These crises have harmed patients, providers, and have strained the relationship between public and private actors in health systems around the world. This catastrophe has also led to further fragmentation and tension, which has limited LMIC government ability to mount effective national responses to COVID-19 at these critical and challenging times.
Although most LMICs have seen progress in terms of steps to achieve Universal Health Coverage (UHC) over the past decade, important ‘blind spots’ remain, including the ability to build health systems that can prepare and respond to infectious disease threats (Soucat, Citation2019). While recent attention has focussed on the so-called ‘common goods for health’ – health system functions that are largely population-based and include many goods and services that have public good characteristics or externalities – (Yazbeck & Soucat, Citation2019), our analysis shows that this attention has overlooked other forms of market and redistributive failures which persist in the market for personal, privately provided health services. What is also clear is that despite these challenges, LMIC governments, especially those with mixed health systems need the private sector to continue to function and stay afloat both during the pandemic and even in its medium-term aftermath. However, as we describe in our examples above, in some national contexts the private sector has engaged in practices and behaviours that promote its agenda often with little regard for the greater need to engage in a coordinated national response.
If the private sector emerges intact financially from the pandemic, it should expect to encounter much more opposition from civil society and health workforces to its role in healthcare, with regulatory push back from governments and far tighter controls on market entry and competition. As countries move to UHC, it is recommended that countries should increase the proportion of financing coming from public sources. Given the data we presented above, the role of the private sector in the delivery of health services should be reconsidered, and the regulation of this sector should be further strengthened.
Governance at the national level has failed as much as private markets for health, and many are already considering new paths towards UHC, both radical and by means of go-to reform discourses of new financial instruments and better regulatory measures. COVID-19 has opened up a window of opportunity to rethink the role of the private health sector in national health systems and to promote much-needed reform and strengthening of regulatory systems. However, such changes will all require new forms of political backing, legitimacy and stabilisation. Indeed, the present triple crisis may be the basis of radically new arrangements with providers and the business model that has developed in recent decades.
The role of the private sector in progress to UHC, as well policy momentum and measures toward health financing and population access, are all very much at a juncture where the legitimacy of the private sector is in serious question. Concerns regarding its service model orientations, fragility to pandemic shock, and the need to recoup revenues irrespective of national health crisis response needs all raise serious questions as to private sector resilience and reliability in terms of national and global health security. And as has been argued following recent major international infectious disease outbreak events, genuine health security and UHC are very closely aligned; in terms of system capacities, coverage and access, and the ability to mobilise effective services to those in need and not just able to pay.
However, reform of health systems takes substantial time and financial and political resources. Opposition to more publicly grounded means of providing health are also likely to meet resistance at the multilateral level and by increasing number of transnational private providers, all of whom have a considerable influence and with LMIC governments. The COVID-19 pandemic’s attendant economic crisis is also giving substantial power to the key global financial institutions, while also shrinking the policy and fiscal space for governments. There are signs that the present lending and financing of the two international financial organisations toward COVID-19 recovery will continue to favour the private sector and market-based delivery of health (Kentikelenis et al., Citation2020), and we are already seeing the continued promotion of the public-private partnership model for health systems development and the beginning of further rolling back of state-provided systems through conditionalities (Engel et al., Citation2020). Much is presently in the balance for firms and markets in global health and national health systems.
Disclosure statement
No potential conflict of interest was reported by the author(s).
Data availability statement
The data are available on request from the authors.
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References
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