Health Care Privatization In Pakistan


Gen. Musharraf’s regime virtually became an ordinance passing factory last year, trying to force through as many laws as possible before the current period of quasi-democracy started in October 2002. Pressure by the International Financial Institutions (IFIs) was often the primary motivation behind these laws, with the Punjab Health Ordinance being no exception.


The Punjab Health Ordinance was passed in great hurry in January 2002 and has led to the formulation of Boards of Governors (BoG) in teaching hospitals in the whole province. Similar ordinances were proposed in all four provinces in Pakistan but the Sind and Baluchistan governments refused to impose them. Given the fundamental changes promised by the Punjab Health Ordinance, the absence of any consultative process in its making has disturbed large sections of the society. Now that some of its implications are being felt on an everyday basis, it has become a key mobilizing issue for the anti-globalization movement.


Ostensibly the ordinance is a response to the demands by medical colleges and doctors for greater autonomy. As will soon become clear, however, the ordinance in fact reinforces and expands the hold of the local and international private interests and government bureaucracy on the health care sector in Pakistan. It is pertinent to note that increasing the hold of both government and private interest are not contradictory in the Pakistani context, since the government is in essence only a facilitating body for large private interests.


The preamble of the ordinance states the following objectives for passing this ordinance, “… to provide quality and affordable health care with special dispensation for the poor and vulnerable sections of the society and for enhancing the quality of education in Health Sciences”.


Let us take the issue of affordability first. The immediate effect of the implementation of the BoG in Punjab teaching hospitals has been the levying of user charges for various investigations e.g. x-rays, blood tests. Tests that used to be free now cost on average Rs.50-60 (approximately $1) each. Registration fees have similarly risen from Rs.2 to Rs.10-20.


Perhaps these charges represent some perverse incentive for people to remain healthy. However, such illusions are soon put to rest when one considers the costs of normal medical procedures such as giving birth. A quick round of the Ganga Ram Hospital maternity ward showed that patients had spent around Rs.2000-2500 (approximately $42) for a normal delivery and approximately Rs.5000 (approximately $84) for a cesarean. This for giving birth, which is not a disease and does not normally require prolonged hospital stay or complex procedures. Ganga Ram Hospital has also imposed Rs.100 charge for the birth certificate without which the mother will not be discharged. Infant and maternal mortality is bound to increase as more people avoid seeking professional medical care for deliveries.


These charges must be put in context. Until the 1980s hospitals provided medication, meals, clinical care, beds and clothing for patients. In fact, at some hospitals poor patients also received fare to go back to their homes. Now, a patient entering any hospital in Pakistan, private or public, has to provide his/her own medication, food etc. Medication of course is the most expensive part. It is useful to remember that it was during the regime of General Zia in the 1980s that the Pakistani policy making came under increasingly influence of the IFIs.


After the changes in the 80s, the only service that the government provided for free to the patients until Jan 2002 was the consultation of the doctors and the investigative procedures for indoor patients in government hospitals. Within six months of the implementation of BoG in these hospitals, investigative procedures now bear a “user fee”. However, nominal this charge may seem in dollar amounts, to the 60% of Pakistani population that is struggling to eat two decent meals a day, along with the charges for medicines, this is tantamount to a complete denial of health care accessibility.


The supporters of the new policy argue that free health facilities are also used by many who can afford to pay, and this puts a strain on the public exchequer. This argument does not hold much water either. First, due to meager funding and inept planning, standards of government hospitals have deteriorated to such an extent that anybody who can barely afford private care, already avoids going to public hospitals. This is despite the fact that the quality of doctors and support staff in lower tier private hospitals is often worse than the government teaching hospitals.


Similarly, while it is true that there is an expense attached to providing medication and consultation to the public free of user charges, we should realize that it becomes a strain as a result of distorted priorities. Approximately 38% of Pakistan’s 2002 tax revenue is spent on defense, and another 51% on interest payments. Is it too much to ask for a 2% increase in healthcare spending which stands at a measly 2.8%? Unlike the spending on defense and interest payment for debts that the people of Pakistan had no role in borrowing, the spending on health has direct a contribution towards the development of the society.


Public health care is not a matter of charity or benevolence but of building and maintaining the working capability of the people in an organization or a country. Effective management of human resources for productive uses requires that some basic needs are taken care of and people don’t have to waste energy and time trying to organize them individually. This is why the Pakistani army, for instance, has a well-developed hospital and school infrastructure. Similarly, the developed nations especially in Western Europe, where the level of productivity is very high have realized this. Without a good public healthcare system Pakistan’s industrialization will suffer.



A healthy, vibrant society cannot comprise of beggars. The government claims that deserving patients will get Zakat, the compulsory contribution to charity under Islamic law. First, the amount of Zakat funding for health care is limited. Second, the procedures involved to prove one’s destitution force people to act like beggars. By actively encouraging charity and forcing more and more people to become dependent on it, the government is producing a nation where people have to sacrifice self-esteem on a daily basis.


Even worse, it might be argued that in a way the privatization of health and education produces an incentive system that engenders corruption in a society. If your child is ill and you have to pay Rs.5000 ($84) for her medication, or if the only chance she has of getting a decent education is for you to pay Rs.2000 ($34) a month in fees, then how else do you make your Rs.2200/month salary (based on the official figures for per capita income; approx. $36) stretch to cover these? The increased “burden” on the exchequer of providing user charge free health care is more than offset by the increased productivity and efficiency of a nation.


The ordinance also proclaims that ‘quality’ healthcare will be provided to the masses. This can hardly be possible when all the doctors and nurses, critical to providing it are enormously frustrated with the changes the ordinance is bringing. Their frustration is understandable. On the one hand the formation of BoGs denies completely the achievement of years of hard work by doctors in setting up a service structure for themselves, and on the other the alternative offered is in complete negation of their aspirations and ground realities. Doctors agitated for years to be made part of a government service structure that provides some security of a defined process of promotions and pay scales etc. As the pay offered in public sector is low, the only reason many doctors chose to stay on is because they can see some career path for themselves.


By the authority vested in the BoGs, they can hire or fire as they wish which is a complete negation of the terms of employment stipulated in the service structure for doctors. More importantly, there have been no public service commission exams in Punjab since 1995 and hence all the new doctors working in the public sector are effectively working on contractual basis. The ordinance does not clarify their position at all and the experience of BoGs so far has shown their preference for keeping doctors in this destabilized and dependant position.


The new ordinance further demoralizes doctors by giving the Boards authority to fire without stating cause. The termination of Dr. Mehmood Ali Malik as the chairman of BoG for Ganga Ram Hospital is a case in point. Dr. Malik, a former Professor and Principal of the prestigious Kind Edward Medical College, and one of Pakistan’s most renowned physicians, was appointed chairman of the BoG for Ganga Ram Hospital. In his now famous address, during which the governor of Punjab and Health Secretary were also present, he dared to criticize the faulty formation of the BoGs and their implications for patient welfare and quality of health care and health education. He was promptly removed from his post and to this day has not received any official notification detailing reasons for his removal.


Doctors are being told that their pay will rise ultimately and there will be no need for them to have a private practice. In fact, the ordinance is being promoted as a step that will rid Pakistani society of the menace of private practice. Of course this touches a responsive chord within the public who pay heavy private consultation fees. However, in actual practice the ordinance compounds the problem of privatization of health care rather than solving it.


While pay raises for new doctors have been announced in some hospitals they have not yet materialized. In the spirit of market-oriented policies, we are told that the top tier of the hospital management must be paid corporate rates to attract talent. If we try to calculate the cost of the top four executives, the Principal Executive Officer (PEO), Deputy Dean, Medical Superintendent (MS) and Finance Director we see that just covering that cost is beyond the means of these hospitals and drains their resources to the extent that no other investment is possible. Average PEO pay and perks include around Rs.2,50,000 pay+car+residence+share in hospital income in some cases. That amounts to around Rs.400,000 to 500,000/month ($8,333). The Deputy Dean costs around Rs.200,000, ($3,333) Medical superintendent around Rs.100,000 ($1,667)and Finance Director around Rs.50,000 ($833) . All in all, just these four posts cost around Rs.8-900,000 ($15,000) per month.


Before the introduction of this pay scale for the top four, teaching hospitals spent around 80% of their budget on establishment i.e. salaries, building maintenance etc. and 20% on the day to day care of patients. With pays like these just for the top four posts we can rest assured that more than 100% of the hospital budget will be spent on establishment.


In hospitals where various service charges have been levied already, the big question being asked is, where is this money and why have we not seen an improvement in facilities for patients? Why are doctors in these hospitals still forced to get basic medical supplies like syringes for the destitute through their private contributions out of their meager paychecks, let alone a pay raise?


Hence, to expect these doctors to stay and work in Pakistan should they get the slightest chance to work anywhere else in the world is unrealistic. This means the most well trained doctors in our hospitals today are ready to leave. These are the people who could have taught the next generation, in addition to providing experienced care to the patients. Obviously this does not bode well for the quality of health care or health education, in the short or long term.


Effectively the three objectives highlighted in the preamble of the ordinance are nothing but fantasy. The cost of care to patients has actually gone up, quality of healthcare and health education is bound to suffer as experienced doctors leave the public sector and new doctors have no incentive to remain in Pakistan. Experience in other countries and other sectors has shown that the stage is being set for a rapid deterioration in the standards of these hospitals to the level that privatization may seem like the only option. In fact, the ordinance states that the BoG “may pass on any functions of hospitals to any person or persons it deems fit”. This is a clear indication of the real intent, which is privatization.


It would be naïve to assume that this ordinance is a well meaning but misguided attempt at reforming the health care sector in Pakistan. There has been considerable criticism of the ordinance focusing on implementation issues and perhaps not so much on the spirit of it. The implementation oriented criticism has focused on issues like the way the BoGs have been hand picked by the government, and the way rules laid down in the ordinance regarding selection of PEOs/members of board have been ignored to select either the most pliable doctors or the most influential industrialists.


In the final analysis, these details should be looked at against the backdrop of the wider picture. The fact of the matter is that government of Pakistan, like many other developing countries, is under pressure to declare to the WTO in March 2003, whether its health and education sectors are open to foreign investment or not. The haste with which both the Health Ordinance and the Model University Act (see Znet article: Anti-Globalization Protests in Pakistan by Iqtidar) have been passed, the connivance of World Bank in forming these policies and the imprint of International Financial Institution’s free market ideology on these so called reforms, points only to the fact that the health and education sectors are being prepared for further privatization. Thus while claiming to stamp out private practices, the government is actually paving the way for making the whole health sector private.


The ‘solutions’ imposed by the ‘saviors’ of Pakistan’s economy, the IFIs, are bound to create more divisions in the society, deprive Pakistan of its talent pool and make one of the key sectors in the country subservient to foreign investment interest. The doctors agitating against the BoGs are gaining public support and appreciation for taking a principled stand. The historic coalition between doctors, teachers and lawyers currently agitating all over Pakistan is a unique development. The middle and lower middle classes have come together in Pakistan to resist the snatching away of the meager gains that they were able to make in the 60s and 70s.


While many in this movement may not think of themselves as part of the larger anti-globalization movement, the leadership is increasingly making this link clear. There is a clear understanding of the role that the IFIs have played in the deterioration of public services in Pakistan. This understanding forms the basis of a resistance movement that goes beyond the limited scope of the party politics currently practiced in Pakistan.

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