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Public private partnerships and universal health care in Latin America - at what cost?

Added 10 Oct 2019
Current trends in development finance place private finance centre stage to close the so-called financing gap needed to achieve the Sustainable Development Goals (SDGs). But the provision of universal, quality public services, critical to protecting human rights and meeting the SDGs, is put at risk by this policy approach. In turn, the normalisation of austerity worldwide is eroding the policy space available to states to meet development ambitions, at a time when fiscal space is being constrained by rising debt vulnerabilities. These trends are interacting to pose serious risks to states’ finances and their peoples. This is the first report in a series of Eurodad analyses to shed light on the human impact of market-based solutions, policy guidelines, debt crises, and austerity policies. 

Today’s briefing ‘Public Private Partnerships and universal health care in Latin America – at what cost?’ takes a critical look at the rise of PPPs in the health sector in Latin America as a tool to achieve UHC, by drawing on the global evidence on PPPs in the health sector. 

At the heart of the Sustainable Development Goals is an international commitment to Universal Health Coverage (UHC). This responds to the urgent need to address a crucial problem: at least half of the world’s population still lacks access to essential health services, and affordability remains a key reason for that.

Public private partnerships (PPPs) are increasingly being promoted as a way to tackle these issues by financing the health sector, both at the global level and across Latin America. This is happening against a backdrop of health systems that were reformed as a result of neoliberal policies and the influence of international financial institutions including the World Bank.

We find that there is weak evidence that health PPPs are able to address the challenges that most Latin American countries face to deliver on UHC, including fragmentation and inequalities within the health system. In fact, the reliance on heath PPPs risks undermining progress on UHC altogether. 

On the basis of the global evidence on PPPs in the health sector, this briefing raises three issues to be considered before promoting health PPPs further in Latin America:
  1. Health PPPs can be an expensive and risky business.
  2. There is no empirical evidence to claim that health PPPs deliver positive development outcomes.
  3. Health PPPs can have negative impacts on the wider health system and on democratic governance.
We call on international financial institutions and their member governments to stop the ideologically driven promotion of PPPs in the health sector, in Latin America and globally. If they genuinely want to improve access to healthcare and its quality, the focus should be placed on national health systems, as they can be a tool for addressing social inequality and exclusion. An increasing role of the private sector in the provision of healthcare risks undermining social goals in favour of private profits.

As Latin America is one of the regions in the world with the highest levels of inequality, the ability of health PPPs to reduce inequalities needs to be carefully considered. Latin American governments should learn lessons from the international experience with health PPPs and avoid ‘buying a model’ that is questionable in its ability to deliver in the public interest. It is critical to identify alternatives to health PPPs: increasing public finance for health is key to making progress on UHC