PHM-Exch> PPPs Likely to Undermine Public Health Commitments

Claudio Schuftan cschuftan at
Wed Jan 17 19:24:32 PST 2018

From: Jomo <jomoks at>

PPPs Likely to Undermine Public Health Commitments

Jomo Kwame Sundaram, Anis Chowdhury

SYDNEY and KUALA LUMPUR, Jan 17 (IPS)  - The United Nations Agenda 2030 for
the Sustainable Development Goals (SDGs) is being touted in financial
circles as offering huge investment opportunities requiring trillions of
dollars. In 67 low- and middle-income countries, achieving SDG 3 — healthy
lives and well-being for all, at all ages — is estimated to require new
investments increasing over time, from an initial $134 billion annually to
$371 billion yearly by 2030, according to recent estimates by the World
Health Organization (WHO) reported in The Lancet.

Selling PPPs
Deprived of fiscal and aid resources, none of these governments can finance
such investments alone. The United Nations Intergovernmental Committee of
Experts on Sustainable Development Financing estimated in 2014 that annual
global savings (both public and private sources) were around US$22
trillion, while global financial assets were around US$218 trillion.

The third International Financing for Development Conference in Addis Ababa
in mid-2015 recommended ‘blended finance' as well as other public private
partnerships (PPPs) to pool public and private resources and expertise to
achieve the SDGs. Development finance institutions (DFIs), particularly the
World Bank, are the main cheerleaders for these magic bullets.

Sensing the new opportunity for mega profits, the private sector has
embraced the SDGs. The World Economic Forum now actively promotes PPPs with
DEVEX, a private-sector driven network of development experts. A recent
DEVEX opinion claims that PPPs can unlock billions for health financing. It
invokes some philanthropy driven global partnership success stories -- such
as the Global Alliance for Vaccine Initiatives (GAVI) and the Global Fund
to Fight Aids, TB and Malaria -- to claim that national level PPPs will
have similar results.

A managed equipment services (MES) arrangement with GE Healthcare in Kenya
is also cited as a success story, ignoring criticisms. For example, Dr.
Elly Nyaim, head of the Kenya Medical Association, has pointed out that MES
has not addressed basic problems of Kenya's health system, such as
inappropriate training and non-payment of salaries to frontline health
workers, encouraging emigration of well-trained health professionals to
developed countries, further worsening Kenya's already difficult health

It should be obvious to all that private sector participation in the
development process is hardly novel, having long contributed to
investments, growth and innovation. Not-for-profit civil society
organisations (CSOs), especially faith-based ones, have also been
significant for decades in education and health. Thus, in many developing
countries such as Bangladesh and Indonesia, health and education outcomes
are much better than what public expenditure alone could fund.

False claims
However, PPPs have a long and chequered history, especially in terms of
ensuring access and equity, typically undermining the SDG's overarching
principle of "leaving no one behind", including the SDG and WHO promise of
universal health care. Also, partnerships with for-profit private entities
have rarely yielded better fiscal outcomes, both in terms of finance and
value for money (VfM).

Misleading claims regarding benefits and costs have been invoked to justify
PPPs. Most claimed benefits of health PPPs do not stand up to critical
scrutiny. As a policy tool, they are a typically inferior option to respond
to infrastructure shortfalls in the face of budgetary constraints by moving
expenditures off-budget and transferring costs to future governments as
well as consumers and taxpayers.

Typically driven by political choices rather than real economic
considerations, PPP incurred debt and risk are generally higher than for
government borrowing and procurement. PPPs also appear to have limited
innovation and raised transactions costs. PPP hospital building quality is
not necessarily better, while facilities management services have generally
reduced VfM compared to non-PPP hospitals. Underfunding and higher PPP
costs lead to cuts in service provision to reduce deficits, harming public

Healthcare PPPs in low- and middle-income countries have raised concerns
about: competition with other health programmes for funding, causing
inefficiencies and wasting resources; discrepancies in costs and benefits
between partners typically favouring the private sector; incompatibility
with national health strategies; poor government negotiating positions
vis-à-vis powerful pharmaceutical and other healthcare service companies
from donor countries.

Perverted priorities
Rich and powerful private partners often reshape governmental and
state-owned enterprise priorities and strategies, and redirect national
health policies to better serve commercial interests and considerations.
For example, relying on antiretroviral drugs from PPPs has resulted in
conflicts with national authorities, generic suppliers and consumer
interests, which have undermined health progress. Donor-funded PPPs are
typically unsustainable, eventually harming national health strategies,
policies, capacities and capabilities.

PPPs may divert domestic resources from national priorities, and thus
undermine public health due to financial constraints they cause. Such
redirection of investment exacerbates health disparities, adversely
affecting vulnerable groups. Health workers often prefer to work for better
funded foreign programmes, undermining the public sector.

PPPs can thus lead governments to abdicate their responsibilities for
promoting and protecting citizens' health. Partnership arrangements with
the private sector are not subject to public oversight. Therefore,
selecting private partners, setting targets and formulating operating
guidelines are not transparent, they only aid in creating more scope for

PPPs are certainly not magic bullets to achieve the SDGs. While PPPs can
mobilize private finance, this can also be achieved at lower cost through
government borrowing. Instead of uncritically promoting blended finance and
PPPs, the international community should provide capacity building support
to developing countries to safeguard the public interest, especially
equity, access and public health, to ensure that no one is left behind.


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