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Health privatisation

Photo: Chris Sant Fournier

Photo: Chris Sant Fournier

Malta’s state-supported, tax-payer-funded healthcare is among the best in the world. Malta’s long medical tradition dates back to the time when the Sacra Infermeria, run by the Knights of Malta, offered state-of-the-art treatment.

Standards of healthcare improved throughout the British colonial period and have expanded with each succeeding generation since independence. To date, our state health service has offered a consistently high standard of patient-centred care with access to treatment for everyone regardless of their means or circumstances. This standard has been maintained despite continuing pressures on funding and an acute shortage of beds.

At the other end of the scale, countries where healthcare facilities are operated by the private sector  (such as the United States) have performed badly, with many people finding themselves unable to afford treatment or, indeed, who avoid even seeking medical help because of the exorbitant costs entailed.

Tax-supported public health systems face huge financial problems as populations grow, life-spans get longer and medical treatment becomes more sophisticated.

This has meant that, year on year, state healthcare financing is subject to greater strain, especially in the hospital sector.  To this has now been added the pressure from a large number of immigrants in Malta – EU and third country nationals – and their families, which inevitably has increased demand on the health service.

But there is a new threat to Malta’s precious medical tradition: the privatisation of large parts of the Maltese health service. Three hospitals have been leased to a private healthcare company with much of our state patient care handed over or outsourced to Vitals Global Healthcare.

The public needs to be made transparently aware that privatisation of health could come at a cost and that it will erode the key principle upon which state health services in Malta were founded

The most worrying aspect of this transfer is that Vitals Global Healthcare has never managed any form of health service anywhere in the world. To exacerbate matters, details of the contract entered into by the government with the company have not been revealed. Whether the contract and choice of provider were primarily aimed at achieving the best possible standards of care for the Maltese is thrown into doubt by the government’s failure to expose the terms of the contract to proper scrutiny.

Privatisation of national health services has become a source of concern in those countries which have opted to entrust state-funded health services to commercial companies. Their experience suggests that privatisation of health provision serves neither the best interests of patients, nor the state’s finances.

Privatisation has led to lower priority being allocated to patient care because of the profit-driven nature of such an arrangement. There has been a severe loss of accountability with scrutiny of public spending being obscured by complex contracts. It has not been unknown for private health companies to reduce staff to a minimum and overcharge the state for outsourced services once they have won the contract.

Whether privatisation is the pragmatic answer to help fix the financial challenge faced by state health services is a hotly debated issue with some calling privatisation “a radical experiment that can go catastrophically wrong”.

On the other hand, Malta has a reasonably well-established insurance-based private healthcare system.

This form of healthcare is quite separate from state health provision and one way to alleviate the pressure on the public health service, therefore, would be through provision of incentives for people to take out private health insurance. This would encourage the development of separate self-financing care. It would be non-intrusive and relieve some of the strain from the state-funded health service.

The negative consequences of privatisation of state health services experienced elsewhere were recently reviewed in an article in this newspaper, ‘The spectre of commercialised medicine’ (December 31). Coincidentally, the next day the London Sunday Times carried a front-page report about the creeping privatisation of UK Health Trust hospital units, ostensibly in the drive to “deliver efficiency through increasing staff and modernising buildings, equipment and services”.

The trend toward privatisation in the UK is raising concerns about separating a ‘private model’ from the National Health Service – a situation resulting in a two-tier health service with a proportion of NHS patients becoming private (paying) contractors. It is also feared that skilled staff will be diverted to the private sector and that training of junior doctors will be in danger owing to increased demands placed on them.

Privatisation has also impaired quality of treatment by putting profit margins before patient welfare. Equity between welfare of the needy and (the more ‘profitable’) well-off private patients gets lost.

Private clinics tend to cherry-pick lucrative patients who can then be overcharged, over-treated or kept on longer in hospital to increase profit.

At the same time health carers are exposed to possible exploitation with scrimping on staff to maximise profits.

All these factors could conspire to make healthcare more costly in the long run to government than increased direct funding of the health service.

This was the case in Hamburg in Germany, where the profit motive in privatised healthcare even intruded into the clinical setting with clinicians’ meetings more concerned with ‘strategic plans’ and  marketing campaigns aimed at wealthy people,  rather than prime patient welfare and real medical needs.

Difficult questions must be addressed. Will privatisation of Malta’s healthcare to a commercial company lead to a lower standard of care and, ultimately, cost the state more than direct funding? Experience in some countries suggests that the latter is often the case.

The report in the UK Sunday Times concluded with the following warning: “Ministers need urgently to reassure us that hospitals built up through decades of investment are not in danger of becoming private profit-making institutions.” These words are particularly relevant to Malta’s impending privatisation of health which will involve more than the usual pattern of outsourcing of contracts to the private sector. The government is handing over (or leasing) national assets – three hospitals, no less.

There is little general awareness of the implications – and potential perils – of health privatisation.  In spite of the escalation of demand on health services and limited funding, Malta’s health service has always been first class and provided care for all. We now risk exposing this model to commercial interests where only the privileged will be eligible for first-class treatment. Moreover, the government may end up the loser by paying inflated fees for outsourced treatment.

The Maltese public needs to be made transparently aware that privatisation of health could come at a cost and that it will erode the key principle upon which state health services in Malta and elsewhere were founded, namely that of free health services to every citizen at the point of delivery.

Privatisation appears to be driven solely by financial considerations. But the options and implications must be better scrutinised and understood. There is very little evidence that government has looked seriously at the experience of other countries or taken steps to ensure that quality of care and equity for those who need healthcare is being fully safeguarded.  There has been little discussion with the stakeholders.

It is time for a proper public debate on the issue and for members of Parliament to scrutinise the actions of the executive more closely. The hitherto toothless Parliamentary Committee on Health should show its fangs and examine forensically whether Malta is staggering blindly towards a privatised health service by the backdoor.

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