Poor people being bypassed or bankrupted as rich countries pour development billions into private healthcare

Patients living in poverty in the Global South are being bankrupted by private healthcare corporations backed by multi-million-dollar investments from development finance institutions (DFIs) run by the UK, French, German and other rich country governments.

DFIs like the World Bank’s International Finance Corporation (IFC) and the European Investment Bank (EIB) invest public funds via the private sector to help foster economic development in the Global South and tackle poverty.

However, today, Oxfam publishes two investigations on DFI funding into private hospital chains and other for-profit healthcare corporations operating in low- and middle-income countries and finds cases of them:

• Extorting and imprisoning patients including newborn babies, even retaining dead bodies, for the non-payment of bills;
• Profiteering, including during the pandemic, and routinely over-charging patients into bankruptcy and poverty;
• Denying treatment to those who can’t afford it —even in emergencies— and pricing services and medicines wildly out of reach of most people in local communities;
• Being involved in tax tricks, price rigging, and medical negligence leading to deaths;
• Failing to prevent human rights abuses, including organ trafficking by staff and exploitative practices, for example by pressuring patients to have unnecessary and expensive medical procedures.

“For decades, rich countries have been wedded to a theory that public funds can underwrite the private sector in order to help low- and middle-income countries develop their healthcare sectors,” said Oxfam International’s Health Policy Lead Anna Marriott. “This has proved to be an evidence-free, rich country bankers’ guide to global healthcare —a free-for-all of private greed over public good— where the big winners are the super-rich investors and owners of healthcare corporations, and the losers being the masses facing rising poverty, sickness, discrimination and human rights abuses.”

Oxfam investigated investments by European DFIs into the booming private healthcare sectors of India, Kenya, Nigeria, Uganda and other Global South countries. It finds:

• 358 health investments between 2010 and 2022, more than half (56 percent) of which went into private healthcare corporations operating in low- and middle-income countries;
• At least $2.4 billion channeled into health corporations that can be tracked, but Oxfam found at least another 269 health investments for which the value is not disclosed;
• Most of these health investments (81 percent) are being “lost from sight” —sub-invested out via a network of financial intermediaries, 80 percent of them located in tax havens like Mauritius, Jersey and the Cayman Islands;
• Little to no public accountability of these investments and no evidence as to whether they are improving access to healthcare for people living in poverty, especially women and girls;
• Extremes of private hospital chains offering 5-star hotel treatment for politicians, sports stars and celebrities at elite prices, through to people being extorted, exploited or excluded depending on their ability to pay.

“Half the world’s population can’t get essential healthcare. Every second, sixty people are plunged into poverty by medical bills. Donor countries and development banks have long promised that they can drive down healthcare costs for people living in poverty by investing taxpayers’ money into the private sector. Instead, costs are rocketing up and causing harm,” Marriott said.

In India, where the private healthcare sector is now worth $236 billion and rising rapidly, the IFC has directly invested over half a billion dollars into some of the country’s largest corporate hospital chains, with more made indirectly via private equity, owned by some of the richest billionaires in India. Oxfam found:

• The IFC has not published a single evaluation of its health projects in India since these started over 25 years ago;
• Multiple complaints upheld by Indian health regulators including cases of these hospitals overcharging, denying healthcare, rigging prices, evading taxes, and refusing to treat patients living in poverty for free despite this being a condition of receiving government land for free;
• Of 144 hospitals funded, only one is located in a rural area, and only 20 are located in the ten states ranked lowest in India’s Annual Health Index;
• IFC hospital investments focus more on company expansion and “value creation for investees” than on patients’ rights or improving access for those more in need.

The reports cite profit margins of up to 1,737 percent on drugs, consumables and diagnostics in four big hospital complexes in the Delhi-National Capital Region.

The Maputo Private Hospital in Mozambique, backed by the IFC during the pandemic, reportedly charged COVID-19 patients a $6,000 deposit for oxygen and $10,000 for a ventilator. Similarly, in Uganda, the Nakasero Hospital reportedly charged $1,900 per day for a COVID-19 bed in intensive care, while the TMR Hospital charged $116,000 for one patient who died from the virus. Nakasero Hospital is funded by France, the EU and the IFC while TMR Hospital is supported by the UK and France.

The Sírio-Libanês Hospital in Brazil, which has DFI investments from both Germany’s DEG and France’s Proparco, treats primarily a rich elite including Latin American celebrities and presidents. It boasts 500 security cameras, 250 electronic access controllers, 250 proximity sensors, 100 guards, and doctors who are trained to deal with the paparazzi.

While the number of mothers dying in pregnancy and childbirth is rising around the world, Oxfam found that DFI funded hospitals are far out of reach for those most needing life-saving healthcare. The average cost of an uncomplicated childbirth in these private hospitals is more than a year’s income for an average earner in the bottom 40 percent of the population, while the cost of a caesarean birth is more than two years’ income.

In Nigeria, nine in ten of the poorest women give birth with no midwife or skilled birth attendant. Oxfam tracked development funds from the EIB, Germany, France and the IFC to the high-end private Lagoon Hospitals in Lagos, where the most basic maternity package costs more than nine years’ income for the poorest 10 percent of Nigerians.

Spent wisely, aid and other forms of government spending are essential in order to save lives and drive development. Ethiopia successfully used aid to achieve most of the health-related Millenium Development Goals by 2015, including the reduction of maternal deaths by more than 70 percent. In lower-income countries doing the most to stop women dying in childbirth, 90 percent of their healthcare comes from the public sector. COVID-19 has demonstrated how health security is dependent on delivering healthcare for all goals everywhere as soon as possible.

“It is more urgent than ever that governments stop this dangerous diversion of public funds to private healthcare and instead deliver on aid and other public funding promises in order to strengthen public healthcare systems that can deliver for everybody. Global South governments should also step up and be more assertive in directing foreign public investments into better health outcomes for their people,” Marriott said.

Oxfam is calling for a stop to all future direct and indirect DFI funding to private healthcare and an urgent, independent investigation into all current and historical investments.