Social services


A poor diagnosis: the World Bank’s health record

29 September 2014

Hospital Metropolitano, Nicaragua's leading private hospital, a recent IFC investment; Credit: Hospital Metropolitano

The World Bank has come under increasing fire over its healthcare financing. In its September evaluation of the Bank’s health support, the Independent Evaluation Group (IEG, the Bank’s arms-length evaluation body) highlighted “a perception that [the Bank] has become less serious about health financing.” It found that because of the Bank’s “shifting area of focus” towards purchasing care from providers and “results-based payment reform [it] is perceived as not properly linking health financing to poverty reduction.”

Citing International Finance Corporation (IFC, the Bank’s private sector arm) investments in Nigeria and Tanzania, the report exposed that IFC investments have failed to target the poorest (see Update 86). Evaluating the IFC’s $3 million loan to a Nigerian private health provider in 2007, the report found “no evidence from the IFC’s Development Outcome Tracking System to suggest the 1.2 million HMO [health maintenance organisation] enrollees in Nigeria and 613,000 patients were poor”. Sidua Hor of the Universal Access to Healthcare Campaign, a Ghanaian NGO network, said: “the IFC health interventions are pro-rich, inequitable, and have very little for poor and vulnerable rural dwellers … Universal health coverage (UHC) is the answer to the health needs of the poor, and the best way to deliver UHC is through public financing”.

The IEG commended the Bank’s “notable successes”, through its health financing functions, including revenue collection, risk pooling, and purchasing: “Bank support has helped increase governments’ health budgets and protect health spending against budget cuts during the economic crisis”.  However it also criticised the Bank’s predominant focus on activity or results based payments: “Little attention was paid to the impact on costs and broader effects on the public sector”. The evaluation concluded that the Bank and the IFC lacked a “joint strategic approach to health financing” and advocated that an “integrated approach” linked to public sector reforms would be more sustainable.

a perception that [the Bank] has become less serious about health financingIEG evaluation

In its management response to the report the Bank “broadly concurs” with the IEG’s conclusions. It commented that the report “could benefit from recognising” that “there is not a ‘one-size-fits-all’ prescription”. Ultimately, the Bank insisted “in many emerging economies, the private sector is now growing at a much faster rate than the public sector, IFC anticipates greater opportunities for the World Bank Group to support private sector development in health financing.”

Oxfam: IFC’s “risky experiments”

A mid-September report from international NGO Oxfam also exposed major flaws in the IFC’s health financing. The report analysed the IFC’s $1 billion Health in Africa (HIA) initiative, aimed at improving healthcare access and health-related financial protection.

Credit: Nairobi Women's Hospital

Credit: Nairobi Women’s Hospital

Launched by the IFC in 2008, HIA aims to generate $1bn via three main investment mechanisms: a $300m equity vehicle; a $500m debt facility and a $200m technical assistance fund. However Oxfam found that contrary to HIA’s self-proclaimed “emphasis on the underserved”, its investments “have, in practice, predominantly been in expensive, high-end, urban hospitals offering tertiary care to African countries’ wealthiest citizens and expatriates”. Investments include a $1.5 million loan to Clinique La Providence in Chad in May 2013 to provide “healthcare services for which Chadians are currently travelling abroad” The HIA also funded a 2010 $2.66 million loan via its Africa Health Fund financial intermediary (FI) to the private Nairobi Women’s Hospital, which charges $463 for the most basic maternity package, the equivalent to three to six months’ wages for the average Kenyan woman. The IEG report also raised concerns about the HIA’s investments. In Tanzania, it highlighted that the IFC “invested in the [country’s] largest private insurance company;” via the Health in Africa Investment Fund, whose clientele “is primarily corporate employees who are mainly higher- and middle-income individuals”.

By often prioritising urban areas, the report claims investments miss the majority of rural poor people, particularly women. Oxfam described HIA as “unaccountable and opaque” because of the IFC’s “failure” to “measure … impacts on people living in poverty” and the use of FIs to make its investments. Oxfam questioned whether the IFC “may actually be working at odds with the Bank’s goal to advance UHC”. Yet in its 2014 annual report published in September, the IFC insisted that “Health and education are … a central element in any strategy to end poverty and reduce inequality. IFC supports clients that deliver high-quality services to low- and middle income people.

Nicolas Mombrial of Oxfam International said: “The IFC cannot demonstrate that this scheme is reaching poor people … [It] must not use Africa as a laboratory in which to run risky experiments.”

Recent IFC investments in the health sector

IFC investment: Details
Colombia: private hospital, approved July A $20 million investment in a “state of the art, high complexity” hospital in a “privileged location” in Cartagena, Colombia.
Turkey : PPP healthcare scheme, approved July A  61 million euro ($79 million) stake in a healthcare public private partnership scheme in Adana, Southern Turkey to build six hospitals as well as “health support facilities, commercial area, technical unit building, one helipad and a cogeneration or trigeneration plant”. Its partners include Rönesans Holding, a conglomerate whose portfolio includes “36 assets in Turkey and Russia and a focus on shopping malls, offices and mixed use projects”. Previously ranked “the world’s third biggest retail contractor”, its 2010 revenue including non-consolidated partnerships totalled $1.42 billion.
Nicaragua: private hospital, approved May A $4.35 million investment in Nicaragua’s leading private hospital, based in Managua – a 51-bed facility to support work including “the construction of an auditorium for seminars and events on various relevant health topics”.
Singapore: pharmaceuticals, approved May A $147.5 million loan to Jubilant Pharma, a Singapore-based subsidiary of drug major Jubilant Life Sciences. According to financial news site Forbes in 2012, 70 per cent of Life Science sales were foreign and include a sizable Chinese market. Jubilant’s other businesses include oil exploration and food – it was the master franchiser for Domino’s Pizza and Dunkin Donuts in India.