Healthcare privatisation linked with worse outcomes, higher profits: Lancet Study

Higher levels of hospital privatisation were linked to higher rates of avoidable deaths, the authors found in some studies they reviewed.


Published May 17, 2024 | 4:48 PMUpdatedMay 17, 2024 | 4:48 PM

Healthcare privatisation linked with worse outcomes, higher profits: Lancet Study

Privatisation of healthcare was found to almost never have a positive effect on the quality of care, and was associated with higher profits, research that reviewed previous studies of high-income countries (HICs) such as the US, Germany, Canada, and South Korea has claimed.

Researchers said the findings, published in The Lancet Public Health journal, challenged the theory that privatisation can improve the quality of healthcare through increased market competition, and by enabling a more flexible and patient-centred approach.

In their analysis, the researchers, led by those at the University of Oxford, UK, included long-term studies looking at an increase in private providers and measuring quality of care, eventually affecting health outcomes.

The researchers also found that the higher profits at hospitals, converting from publicly owned to privately owned, mainly came from reducing staff and lowering the number of patients having limited health insurance coverage.

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Higher rates of avoidable deaths

Higher levels of hospital privatisation were linked to higher rates of avoidable deaths, the authors found in some of the studies they reviewed.

As governments around the world consider their response to the continuing consequences of the Covid-19 pandemic on health-care systems, the authors found evidence suggesting a risk that governments seek short-term reductions at the expense of long-term outcomes.

“There is a risk, however, that seeking short-term reductions can come at the expense of long-term outcomes, since outsourcing services to the private sector does not seem to deliver both better care and cheaper care,” said study co-author Aaron Reeves, from the Department of Social Policy and Intervention, University of Oxford.

Outsourcing of services is a popular form of privatisation in which a publicly-funded service maintains the decision-making powers, but contracts a private organisation for fulfilling agreed services. The researchers found evidence suggesting that outsourcing tends to worsen health outcomes.

Despite looking at HICs, the study is “very much relevant” to India, a low- and middle-income country, according to a health policy and systems researcher Vikash R Keshri.

“As the HICs with their robust regulation and governance could not optimise the private sector for equitable healthcare, the LMICs with not-so-strong regulation and institutional framework are expected to struggle,” Keshri told PTI.

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The issue of imbalanced representation

Keshri is the corresponding author of a study that looked at actors driving national health policy. The team analysed the composition of key national health committees of India, appointed between 1943 and 2020, for diversity and representation of leadership and members.

“We found that the majority of members in the national health committees were from government departments or institutions. This, we believe, is restrictive as it prevents wider consultations and diversity of opinion,” said Keshri.

He added that such an imbalanced representation can also “greatly affect” healthcare ownership at the implementation level, as healthcare planners and managers at states, districts, and below feel that their voice and wisdom is not included in the national policies.

The research, published in the journal Dialogues in Health, also found an increased “centralisation” of the health policy process in India.

“Lately, there has been overt centralisation of the health policy process dominated by actors based in Delhi. They command disproportionate authority in policymaking,” said Keshri.

On the aspect of which ownership of healthcare was desirable, the health policy researcher said that the COVID-19 pandemic reiterated the significance of strong public health systems.

“In an emergency or time of crisis, people can bank on public health systems as they are accountable to people. When the market collapses, economic logic takes a back seat and so does the private sector.

“However, stronger regulation must be in place to ensure effective utilisation and responsiveness of the private sector in such times of crisis,” said Keshri.

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