Sri Lankan Govt. hospital

An article in the business pages of this newspaper caught my eye last week.  It suggested that the Central Bank, in its Annual Report for 2008, had expressed doubts about the ability of the Government to sustain the free healthcare system for much longer.  Budgetary constraints and, rather more curiously, the inflationary effect, would soon compel a rethink of policy, the Central Bank was quoted as saying.

I had been convinced of the benefits of universal health coverage long before watching Michael Moore’s documentary film Sicko about the failures of the American system.  However, the sight of a man sewing up a gash in his knee in his living room with a needle and thread that looked rather more appropriate for darning socks was enough to prove to my complete satisfaction the link between a free healthcare system and civilisation itself.

Michael Moore says that 18,000 people die in the United States every year because they aren’t insured.  They are judged too short, tall, fat, thin, old or sick for cover, or they simply can’t afford it.  Treatment is denied.

He also shows how even Americans who have insurance can end up bankrupted by the deductibles, as happened to one couple he found living in their daughter’s basement, despite years of hard work.  Heart problems and a bout of cancer did for their savings.

Insurance companies, with all the wrong incentives, do everything possible not to pay for treatment when their clients get sick.  So a girl knocked unconscious in a car accident was told later that the cost of the ambulance that transported her to the hospital would not be reimbursed, because she had not called to get their approval first.  Meanwhile, a woman whose husband needed a lifesaving bone marrow transplant explained how they were informed that such treatment wasn’t included in their policy.  He didn’t live to tell Michael Moore the tale.

Anybody who makes it through to the end of Sicko, and still thinks it’d be alright if we left people to fend for themselves in some kind of a health marketplace is subhuman, I tend to assume.  It can’t be right for somebody to have to choose, after an unfortunate run in with a circular saw, between getting the end of their ring finger put back on for $12,000 or reattaching the middle one for $60,000.  Michael Moore explains that the only reason politicians don’t intervene to change things is that they are receiving millions of dollars for their re-election campaigns from the big corporations of the sector.

Sri Lanka, thankfully, isn’t like the United States.  It prides itself on its social indicators, which are on a par with many economically powerful countries.  While there are serious problems with malnutrition, infant and maternal deaths are very low, immunisation coverage is excellent and life expectancy is high.  Indeed, within a few years, Sri Lankans could reasonably expect to live for as long as Americans do today, albeit on a fraction of the income.  A person’s health is properly valued here.

I was disturbed by what I read.  The idea that the Government wanted to undo all this good work, for whatever reason, seemed quite mysterious.  If the lack of universal health coverage could result in such terrible problems in a rich country like America, I thought, the impact on Sri Lankans would be appalling.

It also seemed to me ironic, given that I had just been reading a paper authored by Oxfam International that singled out Sri Lankan public healthcare for rather enthusiastic praise.  NGOs are rarely positive about this country, as is only too clear at the moment, with all the opprobrium being heaped on the Government for its approach to the conflict with the LTTE.  It had been ages since I’d heard commendatory remarks being made by such an organisation, and the comments stuck in my head.  Sri Lanka may be described by a lot of NGOs as an awful place where the Government drops bombs on people without the slightest justification, but at least it is given credit for sending good doctors to take care of the wounded.

The main purpose of the report was to criticise the World Bank for insisting on the expansion of private services in developing countries, at the expense of state systems, which is another point that struck me on reading the comments attributed to the Central Bank.  Maybe these doubts about universal health coverage are entirely home grown, but the World Bank has been funding a Health Sector Development Project in Sri Lanka for the last five years or so.  They don’t tell the public what their projects involve, other than generally speaking, but there is always plenty of advice.  Given that the $60 million agreement was negotiated in Ranil Wickremasinghe’s time, there is a good chance that it is sympathetic to the expansion of private services.

Oxfam International says that public healthcare is the best way of saving lives.  Alternatives are risky and costly, it seems.  Lebanon, which has one of the most privatised systems amongst developing countries, spends more than twice as much on healthcare as Sri Lanka, yet infant and maternal mortality rates are some three times higher.  In South Africa, where incentives have been given to encourage investment in private services, these have generally cost the Government more per capita than it would have spent on expanding the state system to cope.

Meanwhile, the publication quotes experiences in Chile, where widespread private involvement in the health sector has led to the country having one of the world’s highest rates of births by more costly and often unnecessary caesarean sections.  It also mentions China, where increasing commercialisation of the system has resulted in a decline in preventative healthcare, which is less profitable, with immunisation coverage dropping by half in the five years after reforms took place, and the prevalence of tuberculosis, measles and polio on the rise, at great cost to the economy.

The World Bank itself notes that private services are generally of lower technical quality than public healthcare, it says, quoting an example from Lesotho.  It also confirms that there is no evidence that the private sector is less corrupt, with developed country governments finding it difficult to regulate properly too, given that fraud in the American system amounts to between $12 and 23 billion per year.

Sri Lanka, Oxfam International claims, is an example of how scaling up public healthcare has led to massive progress for all.  It is an excellent recommendation.

You can’t believe what you read in the newspapers, of course, so I had a look at the Central Bank document.  Actually, I’d advise readers to flip through it if they haven’t already.  People can only hold the Government to account if they know what it’s up to and, although one can’t expect to find much of the bad stuff in an official document, it’s a start.

The authors are excellent bureaucrats, because they manage to include two rather contradictory assertions on the same page.  The section on health begins with confirmation of the Government’s commitment to the preservation of the free healthcare system, which is a relief.  But a few paragraphs later, we read that the sustainability of this policy is threatened by a lack of resources.  Revenue from duties on international trade is dropping, while expenses in other sectors are rising, so alternative means of financing the health sector will have to be explored. Basic facilities obviously need to be maintained, the report says, but the seriously ill must be encouraged to use quality private services.

If the Central Bank were sure that the Government was committed to the principle, it would argue for greater priority to health in the budgeting process, or focused expenditure in specific areas.  After all, it’s not that the country is bankrupt.  Sri Lanka has enough money to build a second international airport and fund a budget airline.  It borrows to construct motorways.  New bridges and flyovers are being put up all the time, like so many other projects that require a politician to come and lay a foundation stone.  The sky is not even the limit.  It was recently announced that the Government would be launching a satellite into orbit in the near future.

Economists undoubtedly see these as investments, and perhaps they will bring returns in time.  However, ensuring that the workforce is capable of getting to the field, factory or office is a pretty good way of investing money too.

I find it bizarre that these arguments are being revisited. However, if there really is movement in the Government away from the idea of universal health coverage, which the Central Bank seems to acknowledge, this surely requires a proper debate. A few lines in the Annual Report simply won’t do.