Sick Development: How funding to for-profit healthcare by Development Finance Institutions is causing harm and should be stopped

When they learn that we are from the slum the hospital staff make us leave…we don’t take people there now… It is not for us. It is not for the poor families. It is for the rich people.

Quote from Oxfam’s Sick Development, p 24.

When imagining what a robust, accessible and sustainable public healthcare system looks like, do you picture expensive hospitals that only cater to the wealthy elite; that refuse to deliver emergency treatment; or even that imprison patients unable to pay?

No, nor us. Yet the above words are from a woman living in an informal settlement in Odisha, India, describing a local corporate hospital that is being funded by European Governments and the World Bank in the name of ‘development’ and universal health coverage (UHC). Billions of dollars in development financing – that is claimed will help millions access healthcare – is being pumped into expensive, out of reach for-profit hospitals via government-owned Development Finance Institutions (DFIs).

Oxfam’s New Report – Sick Development – tracks over 350 health investments in private health companies made by DFIs owned by the UK, France, and Germany, as well as the World Bank Group’s International Finance Corporation (IFC) and the European Investment Bank (EIB) between 2010 and 2022.

More than half (56%) of these investments went into for-profit healthcare providers, mainly hospitals, including in India, Kenya, Uganda, Nigeria, Bangladesh, Brazil and Mozambique, among many other countries in the Global South. Oxfam’s research identified multiple alleged and confirmed patient rights abuses perpetrated by these healthcare providers.

In India, such cases include the denial of emergency treatment including for a child badly injured and left unconscious by a traffic accident, a stab victim and a woman crushed in her home when bulldozers demolished the informal settlement where she lived.

In the same Indian hospitals, patients interviewed by Oxfam said they were blocked from using their government health insurance cards entitling them to free care and were instead pushed into poverty by fees they shouldn’t have been charged.

In some of the worst cases identified by Oxfam, dozens of patients including even a newborn baby and a secondary school boy were detained in the DFI funded Nairobi Women’s Hospital in Kenya for months when bills could not be paid.

The body of Francisca Wanjiru’s mother was locked in the morgue of the same hospital for two years. When the hospital refused to release the body for burial, Francisca launched an appeal, telling journalists: “I feel very sad seeing her… It is not easy for me because her body has changed… It does not look like a body anymore; it’s more like a stone… We plead with the hospital to give us the body. We will never be able to pay the money no matter how long they keep it.”

Public healthcare vs. private profits

Delivering promises on UHC requires people to be able to access quality, affordable health services without financial hardship, but DFI-funded private hospitals are blocking patients from getting care without upfront payment and are charging extortionate fees for medicines and procedures, including maternity services.

Oxfam calculated that the average charges for childbirth across all identified DFI-funded hospitals would cost the equivalent of a year’s total income for someone in the poorest 40%. The cost of childbirth in one Ugandan hospital rose by an extraordinary 60% following DFI investment.

The fees charged by both CARE Hospitals and Narayana Health in India to the people Oxfam interviewed range from about US$730 to US$36,000 – the equivalent of between three-and-a-half months to 14 years of wages for an average earner in India.

Even during one of the worst health crises in living memory, reports suggest that DFI-funded hospitals sought to exploit the pandemic, and people’s desperation, by charging eyewatering prices for beds and care. DFI-backed Maputo Private Hospital in Mozambique is just one example. It reportedly charged COVID-19 patients an upfront deposit of over $6,000 if they needed oxygen, and over $10,000 if they needed a ventilator. Despite these extraordinary fees, IFC made a new investment of $28m in the hospital’s parent company in early 2023.

A fundamentally flawed idea

Many DFIs, when confronted with this evidence, try to pass these cases off as a few bad apples in an otherwise effective development financing model. But Sick Development uncovers a systemic issue of DFIs funding expensive and out-of-reach hospitals in countries where millions of women, men and children living on low incomes face urgent unmet healthcare needs.

DFIs are also choosing to make these investments, and make returns from them, in countries with dangerously under-regulated private healthcare and without adequate safeguards to prevent harm. Worse still, 81% of these health investments are virtually out-of-sight, sub-invested via a network of financial intermediaries. Four of five of these intermediaries, mostly private equity funds, are in tax havens like Mauritius and Cayman Islands.

Finding the data for this report was unacceptably difficult and exposed an alarming transparency and accountability gap. Some of the DFIs initially even disputed some of the investments we identified, only to confirm later that they did have a stake (after Oxfam laid out the complex money trail from the private hospital back to their door). Oxfam could not find one disclosed evaluation for any of the DFIs that credibly measured impact on low-income patients or on women and girls.

DFIs have become a prominent feature of the development sector with the World Bank’s IFC in particular championing the use of public funds to maximise the role of private finance and commercial providers. No sector, including those responsible for delivering fundamental human rights like health and education, has been spared from this blunt, dangerous and unevidenced approach. It is time for that to change.

Oxfam is calling on governments to stop all future DFI funding to for-profit healthcare providers and for an urgent independent investigation into current and historic investments. Where harm is identified it must be remedied. It is imperative that governments focus their efforts on scaling up and strengthening public healthcare systems that are equitable, gender-transformative, universally accessible, and free at the point of use. Patient rights and access for all cannot play second fiddle to profit motive if the world is to achieve UHC.