Philippines: European Development Cooperation Should Not Support Commercialisation of Health Care Exacerbating Inequality

The current privatization policies of the Philippine government do not provide an answer to the enormous health needs. Despite the name of the Philippine "€œUniversal Health Care"€ program that claims to "€œbring equity and access to critical health services to poor Philippinos"€, commercialisation of health services will do exactly the opposite. Unfortunately, the European Commission is supportive of these policies and formerly approved a contribution of  € 33 million in support of the Health Sector Reform Agenda of the Philippine government

Philippines: European Development Cooperation Should Not Support Commercialisation of Health Care Exacerbating Inequality

 by Natalie Van Gijsel*

Campaign and Policy Officer at Medecine Pour le Tiers Monde (M3M)

Today, in the Philippines, 28 women out of 100 do not enjoy skilled attendance during delivery, a situation showing a glaring lack of access to healthcare. While in Belgium each year 8 mothers die of pregnancy-related causes, in the Philippines 8 mothers die every day. Every day 194 children under five years die in the Philippines, compared to one child per day in Belgium. Especially the poorest of the poor die without ever having seen a doctor.

Philippine civil society criticizes Public Private Partnership approach

The Aquino government claims that “public-private partnerships (PPP)”1 are the only alternative to meet the health needs and the continuing population growth in the Philippines. By outsourcing public hospitals to the commercial sector2, as announced by Health Minister Enrique Ona, one wants to save on government spending, while progressing in public health outcomes. All 72 public hospitals in the Philippines would be eligible for privatization.

However, according to local organisations – IBON, Gabriela, Council for Health and Development (CHD) and Advocates for Community Health -€“ the current privatization policies of the Philippine government do not provide an answer to the enormous health needs. Despite the name of the Philippine “€œUniversal Health Care”€ program that claims to “€œbring equity and access to critical health services to poor Philippinos”€, commercialisation of health services will do exactly the opposite and leave the poor behind.

What is the role of the European Union?

The European Commission (EC), being a big donor in Overseas Development Assistance to the Philippines, is supportive of the current health sector reforms in the Philippines and formerly approved a contribution of € 33 million in support of the Health Sector Reform Agenda of the Philippine government. The latest published Philippine-EU Strategy Paper (2007-2013) stated that “€œfurther privatisation is critical and urgent”€ (p.18).

The “€œAgenda For Change€ of the European Union’s Development Cooperation (Directorate General Devco) -in line with the 1993 World Bank Report ‘Investing in Health’– is pushing for more involvement of the private sector. In the document it is written how “€œthe EU should develop new ways of engaging with the private sector, notably with a view to leveraging private sector activity and resources for delivering public goods”€, including health care provision. According to the Agenda For Change, the EU should “€œcatalyse public-private partnerships and private investment”€. References are made to imposing stricter conditionalities on the development aid provided, “€œthrough a range of aid instruments, notably ‘€˜sector reform contracts'”€. In a recent press release Andris Piebalgs, the European Commissioner for Development, confirmed the urge for “€œA Stronger Role of the Private Sector in Achieving Inclusive and Sustainable Growth in Developing Countries”, stating that “€œThe private sector has a crucial role to play in helping people to lift themselves out of poverty (…), ensuring that businesses find an enabling environment to invest more, and more responsibly, in developing countries to help everyone enjoy the economic opportunities which the private sector can bring”€.

Commercialization increases inequalities in access to health care

The most disadvantaged populations in the Philippines live in slums in the cities. People migrate to the city in search for work opportunities and a better life. But what they find is poverty, a life in unsanitary conditions and exposure to pollution. Although slum dwellers are the most vulnerable to diseases, they have the least access to health care.

The commercial sector in the Philippines invests mostly in specialized hospitals in the cities. Rural areas, where the majority of the population lives, and preventive primary health care are being overlooked by the private-for-profit sector. In addition, one has to pay high fees for health care by private for-profit providers, while user fees have been proven to result in low utilisation of and exclusion from health care and further  impoverishment. The rural and urban poor are then pushed to rely on the underfunded public health sector or poorly regulated informal providers.

The outsourcing of healthcare to commercial investors goes at the expense of the public sector; it is diverting resources away from the public sector. First of all, the private-for-profit sector entices health workers away from the public sector by offering better working conditions and higher salaries3.The Philippines also train health workers en masse for export. So there is a net surplus of health workers, but through the “brain drain” the poor in urban and rural areas are left behind with a shortage of doctors and nurses. Secondly, increasing commercial sector involvement replaces Philippine public expenditure for health care. For reasons of diversion of resources away from the public sector, public health care provision is often of poor quality. A two-tier health system with commercial facilities for the better off and underfunded public services for the poor raises concerns of equity and social justice in health care access. Considering that the health system, being an important social determinant of health equity, can increase or reduce  inequities in health outcomes.

Does the private-for-profit sector provide better quality health care? 

If assumed that “quality care” is understood as “offering the best treatment according to the diagnosis, based on evidence and international treatment guidelines”, then this is not necessarily the case. Indeed, research in developing countries shows that, more often than their public counterparts, doctors in the private-for-profit sector do not respect international treatment guidelines.

In Peru and Chile higher rates of potentially unnecessary procedures, particularly ceasarian sections, were reported in private-for-profit settings after privatization of  obstetric services. Studies in Mexico suggested that fee-for-service payment structures (which are more heavily present in private than in public care delivery settings) incentivized increased C-sections, while ceasarian sections should only be performed on medical indication because they entail more health risks for the mother.

Recent studies also suggest that in several developing countries, private-for-profit practitioners had a significantly worse knowledge of correct diagnosis and treatment. In Sub-Saharan Africa doctors serving in the for-profit sector have shown to be more likely to prescribe unnecessary antibiotics to children with diarrhea, instead of the recommended oral rehydration salts. Irrational prescribing practices could lead to antibiotic resistance, which poses the world population at risk.

Is the private sector more efficient than the public sector?

We understand “€œefficiency”€ as “€œproducing the best possible results with the available budget”€. According to the 2009 Oxfam report “€œBlind optimism“€, commercialization of health care increases public spending, while health outcomes deteriorate. Lebanon has one of the most privatized health systems in the developing world. The country spends two times more on health care than Sri Lanka, a country far lower on the development index of the United Nations. Despite the high public spending, the infant and maternal mortality rates are 2.5 and 3 times higher, respectively. Outsourcing healthcare to the commercial sector in China- still remembered for its former “€œbarefoot doctors”€- has led to a decline of less-profitable preventative health care; immunisation coverage dropped by half in the following five years. Likewise, following extensive privatization reforms in Colombia in 1993, population vaccine coverage declined and more cases of tuberculosis occurred.

EU should refrain from promoting privatization policies

Economic development is seen as the panacea in creating health and wealth. However, opening up the health sector for increased private-for-profit investments is creating inequalities in access to health care and thus inequities in health outcomes, which raises serious concerns of sociale justice. Therefore, the European Union should refrain from development policies that support or push privatization efforts in the health sector.


1-IBON Facts and Figures. PPP in Health. Vol. 34. N° 7 & 8, 15 & 30 April 2011

2- IBON Facts and Figures. Aquino’s Universal Health Care. Vol 34, N° 17, 15 september, 2012

3-Haddad, S., Baris, E., & Narayana, D. (2008). Safeguarding the health sector in times of macroeconomic instability: policy lessons for low- and middle-income countries. Ottawa: Africa World Press: International development research centre


*Natalie Van Gijsel is Campaign and Policy Officer at Medecine pour le Tiers Monde in Belgium. Being a midwife she worked in Belgium and for some years in Sierra Leone. She is a master-student in Global Health Policy at the London School Of Hygiene and Tropical Medicine