Sunday, November 9, 2008

Health Sector in Pakistan - 5


The health professionals have an inelastic response to wage rate increase in the urban health facilities. In other words, the professionals will be less enthusiastic in offering their services for employment in the urban health facilities let alone rural even if wages are increased. However, their response to such an increase for service in rural health facilities would be positive. The doctors and nurses in private medical facilitie3s treat more out patients daily, and are paid on average less, than their counterparts in public sector medical facilities. This seems to indicate that public sector medical personnel are underutilized and that the govt. is less efficient in providing health care than the private sector. A majority of doctors and nurses in the private and public sector augment their earnings by doing part-time work in clinics in addition to their regular job. In fact, it appears that for most doctors the motivation for working in hospitals is to develop clientele for their private practise. The earning from part time work is not captured by the survey or by the statistics on the public health sector. It appears that the wages paid to doctors in hospitals is not considerably more than the wage rate of the unskilled or semiskilled worker. It is certainly not more than that of the average graduate who work in the corporate sector as a clerk.

One than has to ask why there is such a high supply of doctors in the market we produce more than our share of doctors. Unfortunately, the 70-80% of them goes abroad as the nation cannot offer them anything. The bright among the remaining Are often without financial aid, and prefer to stay only in the cities. That’s another distorted truth. Even getting a job in a rural area requires getting through tiresome red tape. There is so much unemployment among doctors that they would readily take up a job anywhere. Anyone who say our doctors are unwilling to rough it out in the villages. Give them respectable pay, comfortable living quarters {like you give to BPS-17 Military and Civil Mandarins} and a reasonably equipped BHU, and such doctors are in thousands can be scored up who are jobless and are willing to go anywhere. After all, these are the same doctors who serve the uncultivated and completely uncouth Bedouins in the deserts of the Arab World, because they get proper facilities. In the absence of significant monetary incentives one fails to understand why individual spend a considerable amount of time and energy in medical college?

In other words, we need to know whether the labour market is operating rationally or not. Lack of cost effectiveness and inefficient allocation of resources combined with institutionally fixed wage rates makes the plight of the health system even more arduous in Pakistan where the allocation of public funds for this sector are already one of the lowest in the region as indicated earlier. There doesn’t exist an unlimited inflow of doctors and, especially at the institutionally set low wage rates, many of these health professionals are reluctant to offer their services to the public health system. Forget the remote areas, there are plenty of “Goths” and slums within an hour’s drive time from Karachi alone with population in the range of two to three lakhs, and there is not single doctor in sight. Why can’t the government post doctors and staff in such areas? The government does not have the resources. Our health and education budget together makes for one %of the total. While there is no denying that the govt. has periodically increased the Health Budget, has it benefited the poor? Then some 60% goes into the slot of salaries, and the remaining is siphoned off into the slots of pilferage and corruption. No doubt that the Private sector may be providing about 50% of all health care services in Urban areas, but in rural Pakistan, 70% of health services are still met by the govt. health provider.

The statistics show that there are 600 students per 520 beds per year when ideally there should be 15 beds per doctor per year. The obvious result is that there is absenteeism and people work in a disorganized manner. And while we have so many doctors, in direct proportion, we have an acute scarcity of nurses with one nurse for eight doctors as opposed to the ideal 15 nurses for on doctor. Our Paramedics and technicians are also in short supply. The mandarins in the power corridors do not have any idea about even the “H” of Health Policy. Our health policy is in a mess and is not addressing the real issues.

If we would keep formulating the Health Policy like the present one we won’t be able to have health care for all even in the next fifty years. We need revolutionary changes, working at the grass roots. The policy makers are working in a world of their own, away from the ground realities. There have to be stringent measures for checks and balances in place, and the govt., if it aims at health for all, has to increase the health budget. We must also attach the hospitals in the periphery as well as those at the Taluka level to the tertiary care hospitals so that the excess of doctors serving in the latter hospitals can bend to the former. We also need to invest in the nursing profession and give it the status it duly deserves. We need to have more quality training institutions for paramedics and technicians. And, lastly, the unpleasant elements need to be weeded out from the medical colleges. Only if the government’s priority shifts from making atomic bombs, beefing up the army, buying submarines and F-16. In England, the budget for health and education from 22% and 26% respectively, and 18% on defense. It is easy to see what we are doing with whatever money we have. The main deficiencies have been identified as the ineffectiveness of the district health office to supervise health services in a district. DHOs generally lack in essential qualifications and management skills. A large number of male and female doctors and paramedics at the primary and secondary health facilities are vacant, as well as specialist positions in district and tehsil hospitals. Mega-hospitals are managed in an adhoc manner.


It is common knowledge that more than half a million quacks are practicing across Pakistan. They pose a major health hazard to society and are responsible for jacking the mortality rate in the country. Over the past more than five decades, health ministers, health secretaries and DGs of health divisions have not had the time to take the stock of the havoc these quacks have wreaked on society. The extent of menace is such that it requires the immediate establishment of a task force to make real impact on the situation. In the city of Karachi alone, there are about 40,000 quacks. The irony is that even if caught, a quack, under the existing laws, is required to pay only Rs. 200 inj fine. This, practically speaking, is just a tool in the hands of the law-enforcers to make a quick buck at the cost of public health even human life in the so-called Islamic Republic of Pakistan.

The situation, needless to say, is quite in contrast to what happens in the developed world. In Edinburgh recently, a doctor was de-registered by Scotland’s medical council for doing an operation despite the fact that he knew that he had Hepatitis B. In Pakistan, on the other hand, the PMDC has always been loath to punitive action against doctors indulging in malpractice, what to talk of quacks. Take, for instance, the case of the victims of psychological illnesses. Among the uneducated and the unsuspecting, the trend is to take patients to one quack or another who treat the problem as one of demonic possession, and subject the patient to often brutal exorcism at the hands of Pirs and other of the ilk. Far too often, the cure is worse than the disease. In many such cases, somebody with a mild problem is pushed over the edge; in others, the incarceration with mental patients drives almost normal people into insanity. The situation is no different when it comes to physical problem. A WHO mission recently compiled a report stating that the main reason for the rising number of Hepatitis-C cases in Nowshehra (NWFP) is the presence of a large number of quack doctors. It was reported to WHO office in Islamabad that there was an outbreak of Hepatitis in Hotikhel Village of Nowshehra district. The Islamabad office had earlier sent a team to the area to ascertain the gravity of the situation and compile a report and later asked the Peshawar office to send a mission to the area and launch an awareness program.

The mission met 32 patients diagnosed as positive for Hepatitis by local physician; 21 of them had Hepatitis-C and the rest were infected with the B type. The main reason was found to be the practice by quacks who administer several injections to the patients with the same syringe. The main road of Hotikhel had a lot of drug shops run by unqualified people who give all types of treatment to the residents of the area. The world health agency now plans that in collaboration with the Department of Health and certain NGOs working in the area, it may embark on a program of he4alth education for prevention of Hepatitis. Contribution to the spread of Hepatitis-B and C is also made by quack dentists and barbers. The use of unsterilized instruments for tooth extraction and other dental procedures by the quack dentists, who operate
their mobile clinics on the roadsides, should be taken note of by the authorities. Similarly the barbers share different people with the same razor and blades, and do not take proper precautionary measures. While the quack dentists need to be removed from the roadsides, the barbers need to be trained through proper and intensive guidance and follow up checks not to play with the lives of their customers. It should be one’s fervent hope that the govt. must undertake a campaign with all seriousness it deserves to eradicate the menace of quackery once and for all.

PUBLIC HEALTH CARE DELIVERY (government & private sector):

The most topical issues in the delivery of health care in the developing countries relate to the efficiency of public health care delivery systems and the role of the private sector. In Pakistan, the services in the health care system range from the preventive care programs operated by the govt. to the curative health facilities operated under both the public and the private sector (the latter ranging from the pure commercial operations provided by the specialists to the free facilities operated by public spirited trust and charities). In the public health services the growth of infrastructure has been much higher in rural areas. Private sector health facilities are largely urban based and curative. Private sector health care facilities cater to about a quarter of the patients treated in hospitals, but the conditions in the smaller hospitals are generally only marginally than in public hospitals.

The health care services require a number of improvements, the most important of which are related to management and institutional changes. A number of management problems originate with general regulations. For instance, the delegation of financial and personnel powers would require either special exemptions or changes in over all govt. regulations. A second area of concern is planning for health care services. Current practice doesn’t use any form of analytical methods either for projections or the analysis of alternatives. Instead, decisions are based on opinion. The third area of concern is the remuneration structure. The quality of services provided by the private sector need also to be monitored and controlled. Inefficiency in the delivery of public health care stems from the need for the govt. to react to demands rather than do what should be done. It has been argued, within the framework of public choice theory that the chief agents in govt. act to maximize individual utility rather than social welfare. Thus, politicians may be seen to maximize their own chances of staying in power, military and civil bureaucracy not only do that they also maximize their budgets and the individuals to use govt. to maximize their real income through exploiting the direct provision of services and transfers. The private sector health care facilities account for the bulk of the services offered, with private spending accounting for nearly 60% of all health expenditure.

The services are largely urban based and curative, are used mainly by the richer segments of society and have a large variation in quality. This latter is the result of the heterogeneity in the sector, ranging from forprofit to non-profit institutions all sizes, and also due to weak regulation. Even though the private spending is large, financial, insurance and other pre-paid health care mechanism are underdeveloped. Although, public sector allocations to health care are exposed to grow, it is expected that these will be at a much lower rate than the growth in demand, thus there is a need for a greater participation by the private sector. It is therefore critical to improve private sector5 health care so that it is able to meet needs more equitably.

A Comparison of govt. and private medical facilities:

WageRate of Wage Rate of Recurring Exp Number of Number of Doctors Nurses Per Bed

Out Patient Out Patient Per Doctor Per Nurse

Per Day Per Day

Private 5,100 1,550 12,700 23.7 25.6

Non-Profit 3,800 - 11,600 25.5 20.8

Government 5,372 1,969 22,000 3.7 5.36


Although it was the public healthcare system that was providing the greatest relief for the poor (if there is at all), it was precisely this sector that each successive government has tried to undermine. Especially under general Zia, the public sector entered a period of decay, when ghost units were being built to siphon funds away from the state to private contractors. Thus the private sector became increasingly active. His government systematically destroyed the public sector, especially in healthcare. This was a deliberate policy. A dilapidated public healthcare system prepared the ground for introducing private healthcare. The idea was that instead of protesting, the public would thank him. Thus we had the emergence of rampant corruption in the public sector, which contributed to a worsening of the service provided. In the meantime a vibrant private healthcare sector flourished like mushrooms. Now a parallel healthcare system exists in Pakistan. It is efficient and equal in standard to anything in the west but as it is run on purely business lines it has no ethical values. It is totally unaffordable for the general public and has become one of the most successful businesses in Pakistan. The policies of all successive governments have been to destroy the public healthcare system and favour the private sector.

Health is a fundamental right and this has been well documented in Alma Ata Declaration of 12th December 1978 and Pakistan is a signatory to it with conviction that health for all by year 2000 is the solemn responsibility of the government. How we take care of our nation’s health is evident from the fact that Seven five year plans and over a dozen recommendations of Health Ministry are rotting on the shelves of Health Ministry better to be disposed to “Garbage Dealer” as they are redundant and obsolete. Ad-hocism is in practice and remained so throughout. At present government is hardly for name sake, offers approx 17 to 25% of the succor to its suffering humanity through its public sectors. Over 80% of the needs of the community mainly in urban areas is undoubtedly provided by private sector. The private hospitals and clinic through their loud voice, resources and rapport and in conspiracy with the bureaucrats have got themselves declared as representing private sector in health care system. Orientated to money incentives far less to service and solace and practically out of bound to all sufferers except the rich and influential in big cities only, they are prosperous and thriving as health providers. Majority of them are an apology to the noble name of hospital and are really “sick places”. But there are some honorable exceptions as well. They are needed as a necessity of life and will flourish because it is human instinct to live, preserve life and desire for freedom from pain and fear of death.

The process of building a partnership between the public and private sector is rendered difficult by the general climate of mistrust that prevails between the two parties. On the one hand, the govt. sees the private sector as being motivated primarily7 by profit maximization considerations, fundamentally in conflict with the objective of increasing the outreach of health services to essentially poor unserved populations at lowcost. On the other hand, the private sector sees the government as being restricted by bureaucratic redtape, which tends to slow down decisions and retard innovation. Perhaps, even more importantly, government functionaries are seen as being notoriously prone to corruption in their dealings with the private sector. There are number of promising areas for public-private partnerships in the health sector of Pakistan. One such model would involve the leasing out of a government hospit6al at the district / tehsil level to the private sector, with the proviso that investment would be made to upgrade the facility, strengthen the medical staff and collect reasonable user charges.


The govt. should consider innovative mechanism of inducting the private sector and the local govt. into expanding their role. For the latter, however, the question of resource generation is of paramount importance. There two ways in which this can be achieved. The first is by increasing yield from existing sources through improvements in tax administration. The second is by broadening the tax base. Since, higher levels of govt. already take away [Defense Budget] the more buoyant and elastic sources which may be tapped, provincial and local govts are left with a very narrow tax base. This, in most instances is the levy of a special; surcharge for health, such as contributions by employers in the urban areas to social security. A similar charge should also be levied in the rural areas, where the land owning families should be made to pay for the welfare of their employees. This would to a large extent introduce some equity to the financing of health services. This however needs to be examined in depth.

The private sector is making considerable inroads into the delivery of health services to households in the lower end of the income range; govt. should encourage this in a number of ways. The first could be a Tax Holiday for investment in new facilities or by providing access to land at full market rates coupled to a loan for construction and purchase of equipment at a subsidized lending rate. This should however be restricted to only registered NGOs, Trusts and Foundation with a sound record of public service and a track record of operating at least four or more health facilities. The second could be by broadening the scope of support through the health foundations. The third could be by encouraging the private sector into taking over the existing public health care facilities, while retaining title, thus relieving the govt. of a considerable recurring expenditure liability which would be used more productively in improving primary health care.

This should be the prime responsibility of govt. Thus there could be a clear demarcation of responsibilities, the public sector responsible for primary health care and the private sector responsible for curative health care. Thus this could be a policy of withdrawal from the latter stages of health care leaving this entirely in the hands of the private sector. This could however be supplemented by a system of grants for the poorer segments of society.


To get greater control over the future of the students, the government thought up of a stunt. They created the University of Health Sciences and all the medical colleges in the Punjab were asked to affiliate to it. Interestingly the elite colleges such as the King Edward and the Fatima Jinnah medical colleges were exempted from doing so. This "university" is not recognized internationally and it can destroy the careers of medical students whose degrees will not be accepted abroad. The sole purpose of this operation was to centralize the results and examination system so that if any students were to rebel against privatization they could easily be victimized directly from the central "parent school" in Lahore.

The inadequate private medical colleges that do not fulfill the requirements of other universities could easily get recognition through this dummy "university" which actually lacks any facilities of its own! Part of the government’s maneuvering has also involved an attempt to increase ethnic tension between the southern and northern Punjab so as to divert the attention of the people away from these problems and thus confuse them and stop them from adopting any progressive thinking.

The general Zia regime and all subsequent regimes have attempted to stifle any kind of political activity in the colleges. It was in fact totally banned. Student unions are still banned to this day and after the experiences of the past the people, and especially the students had developed apathy and hatred towards "politics". But when the government started to actually implement the above-mentioned steps, such as the increase in fees and the setting up of the "University of Health Sciences", the student spontaneously protested. Student strikes took place in some colleges for the first time in twenty years!

It has to be said that initially the students clearly lacked any political motivation. Years of political inactivity and repression had imbued them with not such a progressive. But this was now about to change. This protest was the first step towards breaking the code of silence and fear. Students are now clearly moving towards some form of political orientation. This movement is in its early stages and reveals all the weaknesses of lack of experience and leadership. sometimes the students even use reactionary and passive forms of resistance to try and win some concessions. But as they do not understand the real motives that lie behind these measures and do not apply the correct tactics they fail.

However all experiences teach, and as time passes the movement will clearly take a progressive turn. We have carried out some political work among the students and have achieved some great results. This shows that this movement could be the first step towards a more general politicisation of Pakistani workers and youth. The students have learnt one thing: for the first time they have seen how important resistance is. Although minor, they were able to win some concessions by standing up to the authorities. Soon they will understand the limits of their methods adopted so far and will move to the left. We are constantly working toward this goal!!!

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 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. Echoes of the world wide discontent with globalization are currently being heard in Pakistan. A widespread movement sparked by the so-called reforms that the government of Pakistan has introduced in the health and education sectors ostensibly to improve the quality of both sectors, is increasing in momentum, and disrupting governmental plans to quietly privatize both. Very simply, and without any reference to the ‘p’ word (privatization), the government has decreed the setting up of a board of governors (BOG) in each hospital and educational institution (universities, colleges and schools) that would comprise of approximately 20 members drawn predominantly from the private sector. This BOG would have complete control over sale and management of all assets including property, hiring, firing and salaries of all staff, setting of fees for students and patients, in addition to any other acts that the BOG may feel is suitable for its purvey. There is no recourse to appeal to the decisions of the BOG. Each BOG would be headed by a chairperson who would have CEO type authority in making these decisions and implementing them.

In the case of education, a Model University Ordinance has been promulgated that encapsulates reforms suggested by a Commission that was headed by Mr. Lakha, the chairman of the private Agha Khan University. The commission which has now been given a permanent position as the Higher Education Commission, vigorously denies that the reforms will lead to privatization and points to the fact that this word is not mentioned once in its report. It is claimed that BOGS will make the system more efficient. This is undeniable. BOGS will certainly be an efficient instrument to enforce the draconian reforms while perpetuating the power of those behind them. That it will completely kill the ‘effectiveness’ or the raison d ‘etre of the education system is of course besides the point. Efficiency and profits are the holy grail of the new world order and BOGS will probably do its job admirably in order to increase both for the private sector. BOGS’ efficiency will be guaranteed since it won’t be responsible to anybody in the ultimate analysis and there have been no guidelines set to evaluate the performance of BOGS.

Old government schools, universities, colleges and hospitals occupy acres of prime property. The Punjab University, for instance, has approximately 2800 acres of prime property. Some in the education bureaucracy who have publicly supported the ordinance are no doubt looking forward to having access to these resources to generate funds for the institutions i.e. themselves as members of the BOGs. Nothing in the history of various boards in Pakistan and the careers of these people leads us to believe anything other than this is possible. Indeed, according to Prof. Nazim Hussein, Chairperson of the Joint Action Committee leading the protests, one of the old government schools in Raja Bazaar in Rawalpindi recently placed under this system has now been ‘efficiently’ replaced by shops that were allegedly sold for Rs. 1 crore each.

Although the school is no longer, the BOG for that school still stands and of course the members need their pay. While media reports focus on numerous countries grappling with the outbreak of SARS, it by no means represents the principal threat for healthcare in the third world. For all its menace, SARS pales in comparison with the much more dangerous threat that is posed by the increasing subjugation of our healthcare systems to the greed of the international pharmaceutical and health management industry. The rapid privatisation of healthcare being undertaken by IMF’s clients is threatening to leave large numbers of people around the world vulnerable to various diseases as proper health care moves out of their reach. Medical journals boast of unprecedented advances in scientific knowledge of the human body, but millions of people around the world are dying of entirely treatable ailments such as tuberculosis and malaria. While the world’s attention was focused on Iraq and the discrediting of one international body, namely the UN, the wilful undermining of another international body by the US has gone all but unremarked.

The WTO has, in the current unilateralist view of the Bush administration, outlived its usefulness, and the pharmaceutical industry’s lobby provided the impetus to make this break. Admittedly, both the UN and the WTO are largely tools of US policy. They serve the useful purpose of legitimising decisions made in corporate headquarters in New York or in Washington as the will of all the countries involved. However, by the very fact of having a membership wider than the World’s Sole Superpower, both the UN and the WTO are sometimes forced to reflect the tide of world opinion that is rising against wars and unfettered corporate globalisation respectively. This is the sin for which they have been sidelined by the impatient Bush administration. In the case of the WTO, pressure building up since Seattle 1998, had forced the WTO to ratify an agreement in Doha 2001 whereby poor countries could import generic drugs if there was a major public health concern like AIDS in Africa. There are 29.4m mostly very poor people currently afflicted with AIDS in sub-Saharan Africa. Many lives can be saved if they have recourse to generic drugs that are often a hundred times cheaper than what the big pharmaceutical companies charge.

After initially agreeing to the Doha Declaration, which was the result of desperate pleas from afflicted countries as well as sustained activism by grass roots organizations, the US decided to unilaterally withdraw from it in Feb, 2003. The $60 million donated by the pharmaceutical industry to Republican electoral victory has not been in vain. The influence of corporate interests in the White House is immense. Pfizer, the US based largest pharmaceutical company in the world, was one of the companies lobbying energetically against concessions over Doha. The VP Corporate Affairs for Pfizer, who used to work in the office of the US Trade Representative, declared that Pfizer is “comfortable with the position that the US government has taken…” What is at stake here? The pharmaceutical industry is one of the most profitable in the world, with profit margins at 18.5%. Pfizer, for instance, is not just the leader of the pharmaceutical industry, but one of the biggest companies in the world. With a stock market value of $180bn, Pfizer ranks fifth among the world’s biggest companies.

The pharmaceutical industry owes its wealth to extremely high barriers to entry, including high expenditures and the patent system. Ostensibly patents are granted to pharmaceutical companies to allow them to recoup the resources invested into R&D. For decades, pharmaceutical companies have justified the exorbitant prices of drugs by citing the tremendous resources that are required to finance their development. However, it has been established over several years now that their R&D figures are bloated, and that they spend more on marketing than on R&D. Analysis of the industry’s tax information shows that in 2002 Merck used 13% of its profits on marketing and only 5% on R&D, Pfizer spent 35% on marketing and only 15% on R&D, and the industry overall spent 27% on marketing and 11% on R&D. In fact, during the 80s-90s management fad of focusing on core competencies, many pharmaceutical companies identified marketing and branding as their core competence rather than R&D or manufacturing.

They were happy to outsource some R&D to subcontractors. In addition, R&D is often subsidized by research done in universities or through government grants to the industry, which the industry includes in the total cost. For instance, the group Medicines Sans Frontiere (Doctors without Borders), an organization of volunteer doctors who work in the poorest countries, has suggested that while the pharmaceutical industry claims that it costs $800 m to develop a new drug, research by the Global TB Alliance, puts it at around a maximum of $240m and average of $40m. Thus, when consumers around the world, but especially in developing countries like Pakistan pay the exorbitant prices for patent protected medicine they are paying largely for the marketing that the pharmaceutical companies have done to promote those brands rather than for the research. This falsifies the fundamental justification for patent protection. The Doha round allowed some, not all, poor countries to bypass paying for patent protection. Looking at it from the pharmaceutical company perspective one realizes that there is a real danger in this. In the short term this would have saved a few million lives in the third world. But in the long term it could have strengthened the demand for generic medicines and changes to patent protection, the source of these corporate giants’ wealth. The maths just did not add up for the pharmaceutical companies and so they pulled the plug on the Doha agreement. The mo e by this industry to protect their 18.5% profit margins, at the cost of millions of lives in the developing world is made only more grotesque when one looks at what the top executives are paid for formulating such policies.

GlaxoSmithKline, the second largest company in the world after Pfizer, is proposing to pay its CEO £22million in severance pay. He was the highest paid executive in Britain in 2002. In order to deflect some criticism, in highly publicized moves, the pharmaceutical companies have recently donated some medicines to a few countries. Such moves do not make any difference whatsoever to the systematic manner in which big pharmaceutical companies turn misery into dollars. According to Medecins sans Frontieres. "We're talking about systematic long-term medicines provision for about 90% of the world's population. You can't possibly deal with that on a donations basis. It is not realistic. The solutions need to be found in the trade area." And it is in the trade arena, the only arena with long-term implications, that these companies resist any changes that would allow greater access to the third world.

These mega pharmaceutical companies are aided in their project by other stalwarts of international healthcare who are eager to make similar profits at the expense of desperate patients. As the manufacturing sector’s potential for growth diminishes, it is in the service sectors, like health and education, around the globe that international capital is looking for openings. A first step towards complete privatization has been taken in Britain for instance, in the form of Public Finance Initiatives (PFI), which legitimize the investment of private capital into the public sector. Although these initiatives have largely failed, the British government is strangely persisting against popular opinion.

In 2002, George Monbiot, a British journalist, pointed out that this seemingly irrational behaviour might be because PFIs are fast becoming a big export market for UK. They need to be kept alive in some form in UK in order to be sold overseas. He documents how since 1996, the British government has been sending delegations to convince the South African government that the private finance initiative was "maximizing efficiency" in hospitals etc. One of the key selling features to other countries is the fact that "the full spectrum of techniques" has been "tried and tested in the UK". Soon after coming into office Tony Blair’s government sent the biggest UK health care trade mission ever to South Africa to clinch the deal. In 2000 South Africa signed the first contract for PFI hospital schemes. Of course, companies that had “tried and tested” the model in Britain gained lucrative contracts.

And while it continues to support privatization of health care in developing countries, the UK government, under pressure due to the failures of PFIs at home, continues to explore other options. In 2000 the UK government dispatched a team to study the health care sector in Cuba. Cuba has a social welfare system where health care is free to all and the overall quality of its system is among the best in the world. It is extremely cost effective and patient centric, precisely the results the UK NHS is looking for. Healthcare costs £750 a head annually in UK compared to £7 in Cuba. There is one family doctor per 500-700 people in Cuba, compared to one for 1,800-2,000 in UK. The much smaller Cuba has 21 medical schools, whereas Britain has 12.

Mainstream corporate media will not let us compare the relative merits or demerits of the Cuban health care system, while presenting privatization as the solution for problems that have more to do with adequate funding by the government than the inherent weakness of a public welfare system. As we in Pakistan, allocate a meager 2.8% of our budget to health sector while a whopping 40% goes to defense we need to reassess these priorities. The government imposed Boards of Governors in teaching hospitals in Punjab, which marked the beginning of widespread and continuing agitation. The BOGs have huge discretionary powers especially relating to hiring/firing of staff and doctors, sale of all property and assets, and significantly the hiring of any other body to perform any of the functions of a BOG. The protestors claim that these BOGs are the first step in the privatization of public hospitals brought upon by the WTO deadline to Pakistan and other countries to declare whether our health care sector is available for international investment. In response to these protests the Punjab government set up a commission under Justice Mujadid Mirza, which submitted its report to Punjab Chief Minister Chaudhry Pervaiz Elahi on Jan 31. It is widely believed that the commission recommended abolition of BOGs. The Punjab government has predictably repressed the publication of this report so far. If the formulation of BOGs in teaching hospitals in Pakistan is not motivated by international and local pressures to open up the health sector to private investment, the government has nothing to lose by publishing the commission report. If it believes that there is a viable case for privatisation of hospitals, it should open the field for discussion on that issue.



Dr. Afaq Ahmad Qureshi. said...

Wow. Such in depth study. Excellent narrative. Really enjoyed reading the analysis and facts. Thanks for sharing.

Dr. Afaq Qureshi.

Dr. Afaq Ahmad Qureshi. said...

Excellent analysis and representation of facts. Thanks for sharing.

Dr. Afaq Qureshi.