World Bank Funded Health Care: Reality or Deception

"It vindicates our stand that since beginning of this project that PHSC was created by domestic rulers to engulf the funds taken as loan from World Bank. In my meeting with World Bank official in 1998 in Washington DC, I had pointed out that the setup and system including the officials to manage the PHSC remain the same as the previous state health sector which was projected as failure necessitating formation of PHSC, clearly indicating that the target of neither World Bank nor the State Government was to improve health care system. Now when the loan installments are almost over and corrupt officials and rulers have pocketed the money, the PHSC is recommended for winding up. People have ended up with more debt and worsened health services. Insaaf International will soon launch a campaign for accountability of the failure of the project and fixing of responsibility at state and World Bank level."

Insaaf International time and again highlighted the malfunctioning and adverse effects of PHSC on health care services but the visiting World Bank Team always showed its ‘satisfaction’, covered in the media. Recently the World Bank extended the loan as result of its ‘happiness’ over progress of PHSC. Insaaf International in coordination with World Bank Bond Boycott (Center For Economic Justice, Washington DC) had released a report World bank Funded Health Care- A Death Certificate for Poor in September 2001 exposing the functioning of PHSC. -- Editor

Kamla, 32-year-old and severely anemic, is in the waiting room of the corporation hospital in Bhatinda (Punjab, India). She desperately needs a blood transfusion. Her eight-year-old son stands besides her, carrying his two-year-old sister. Her children look starved and equally anemic. The hospital staff tells Kamla that she must pay to get her treatment. Kamla has no money.

The hospital will not admit her without money or a “yellow card” which would be needed to exempt her from fees. So Kamla leaves the hospital and lies down on the road outside with her husband and two children helplessly watching her suffer. She seems resigned to die right there. Luckily, a local aid worker spots her and gets Kamla admitted to the hospital with his own funds. But few of the thousands of people like Kamla get so lucky.

One of the most controversial and harmful policies promoted by the World Bank is user fee in health care. User fees are charges that people are required to pay upfront in order to get treatment. In many cases, services for which the Bank recommends user fees were previously provided for free. World Bank and several regional development banks recommend the institution of user fees as a means to finance expansion of health services and as a way for better-off clients to subsidize the care of those impoverished enough to qualify for exemptions. As the account above suggests, exemption systems rarely work as intended. User fees prevent many for receiving care and discourage others from seeking it because they must choose between health expenditures and food or other essential needs.

This report shows that in the state of Punjab in India, World Bank’s recommendations of partial privatization and user fees in the health sector have clearly pushed health care out of the reach of the poor. As a result of the Bank’s policy recommendations, which include increased user fees, the state’s responsibility for providing health care to its citizens has been undermined. In Punjab, health care has become a commodity available only to those who can afford to pay.

In Punjab the World Bank became involved in health care sector through a project called India-State Health Systems Development Project II, in which US$106.1 million was lent to India for health sector reforms. As a condition of this loan, Punjab Health Systems Corporation (PHSC), a para-statal health organization, was created to replace the existing public health system.

The World Bank’s stated goal for PHSC project was to improve the performance of health care system through increased quality and effectiveness. The ultimate goal of this project was to improve health status of the people, especially women and the poor. What it has done is exactly the opposite, mainly because of changes required by the World Bank in the structure of “user fees” charged for health services.

Before the formation of World Bank-funded PHSC, there were three levels of user charges for patients, which varied based upon an individual’s monthly income. Full user fees were charged for people with incomes of about 2,000 rupees/month (roughly $45/month); half charges were required for those earning between 1,000-2,000 rupees; and those making less than 1,000 Rupees/month were always exempted from fees. The previous arrangement, though far from ideal, at least put primary, secondary and tertiary level health care within reach of the poor.

Under World Bank orders to “rationalize” the existing user charges, free or discounted charges were eliminated for the poorest and middle-income groups (those making under 1,000 rupees/month and 2,000 rupees/month, respectively). User charges for the highest income group (income of more than 2,000 rupees/month) were made applicable for all. One effect of this is that, in a PHSC hospital today, a woman has to spend an average of 1,186 rupees plus secondary charges on delivering a baby, whereas previously she did not have to pay any charges.

The World Bank claims that poor are exempted from user fees it promotes in its lending. But as documentation has shown in numerous other countries where user fees have been imposed,¹ in Punjab, the poor either don’t know about these exemptions, or the government does not issue them. In the case of Punjab, exemptions are theoretically available for the poor if they get a “yellow card.” The person presently in charge of making yellow cards says that he has not issued a single new card since he began work in 1998. Only 44 cards had been renewed so far, meaning that, with the expiration of old cards, at present, in a city of about 270,000 there are only 44 ‘valid poor’ for availing exemption in user fee in health services.

The process of applying for a “yellow card” to be exempted from user fees is extremely difficult, and involves filling out forms, making repeated trips to several government offices, paying additional fees, and having a home address. Even if one is able to get a yellow card, validity of the yellow card depends upon the whims and fancy of government officials. From time to time the government issues orders as and when to renew these cards and for how much time. There are no means available for illiterate or poor people to know when these Government orders will be issued.

The process of applying for a “yellow card” to be exempted from user fees is extremely difficult, and involves filling out forms, making repeated trips to several government offices, paying additional fees, and having a home address. Even if one is able to get a yellow card, the validity of the yellow card depends upon the whims and fancy of the government officials. From time to time the government issues orders as and when to renew the cards and for how much time. There are no means available for illiterate or poor people to know when these Government orders will be issued.

In Shahid Bhai Mani Singh Hospital, which imparts referral services to Bhatinda District, which has a population of 1,181,000, not even a single yellow card holder (poor) was granted exemption from user fees from July through December 2000. Moreover, most poor people do not know about the need for a yellow card, or how to get one. The author conducted random interviews with 52 poor women in the city and district catered by this hospital. None of them had heard of these yellow cards. The author interviewed 150 women in one of the slums of this city. Out of 150, only one had heard of the yellow card from her husband, though she did not know what it was. She said, “Bade Sahib logon ke pass hota hai. Hamare pass kesse hoga.” (Influential people have it. How would we have it.)

This report concludes that poor and women are being hit hardest by the current World Bank mandated health sector ‘reforms’ like the hike in user fees and scrapping of subsidized fee structure in Punjab. In India, these reforms are a death certificate for the poor.

Unable to afford private medical care and access to state health services, the poor are being pushed towards quacks and superstitious methods of treating their medical problems. This is adding to morbidity, mortality, spread of communicable diseases like AIDS, Hepatitis-B, and increased drug resistance etc. People are dying because they can’t afford treatment for even the most basic conditions.

The project has been in place for about 5 years. Since the factors ailing previous state health system were not addressed at all, instead of improvement, there is deterioration in health services. Moreover, corruption goes on unchecked. In state run services patients had to pay a bribe under the previous system; now they must pay a user fee along with the bribe. The privatization of state-owned companies and even entire sectors in India, is increasing rapidly. This redistribution of resources, transferring irreplaceable legacies into private hands, has user fees as just one side effect.

¹A number of studies, including some by the Bank itself, have documented the failure of exemption schemes to protect the poor from user fees. An October 1998 World Bank Operations Evaluation Department report and associated case studies, "Protecting the Poor from the Impact of Increased User Charges in Government Health Facilities", shows the failure of exemption mechanism in Mali and Zimbabwe. World Bank’s 2000 World Development Report on poverty found that exemption mechanisms failed in Ghana. A January 2000 UNICEF paper, "Absorbing Social Shocks, Protecting Children, and Reducing Poverty" found that data was rarely collected on the effectiveness of exemption systems in Africa, but that which was available found exemption schemes to be “rare” and ad hoc.