Maseru hospital endangers Lesotho’s health budget, says Oxfam

by Developed Africa 10. September 2014 09:00

Oxfam has warned that the Queen Mamohato Memorial Hospital, run by a private consortium led by South-African healthcare provider, Netcare, threatens to bankrupt the country’s health budget and is jeopardising the care of the poorest people of the country. Oxfam’s health policy adviser, Anna Marriott, has dubbed the public/private partnership (PPC) a “flawed and dangerous plan”, despite the model being recommended by the International Finance Corporation (IFC), the private sector arm of the World Bank.

Lesotho is a country facing enormous health challenges, with the third highest HIV and AIDs prevalence in the world, and with infant and maternal mortality rates on the increase. The new hospital, which was opened in Maseru in 2011, promised to vastly improve the healthcare services on offer for the same annual cost as the old public hospital that it replaced. According to Oxfam this promise has not been fulfilled.

While death rates appear to have dropped by 41%, alongside other dramatic decreases such as that of infant deaths by pneumonia (65%) and stillbirths (22%), Oxfam has highlighted the high cost that has come alongside this. Oxfam has calculated the current cost of running the hospital and associated clinics is more than three times that of the one that it replaced, at $67 million a year, 51% of the country’s entire health budget. This has been attributed to inflation at 7% on repayments, and higher demands for treatment than anticipated. Netcare has stated that the demand has exceeded the contracted volumes of 20,000 inpatients and 310,000 outpatients per year, with additional outpatients costing a further $4.72 each, and inpatients attracting fees of $786 each.

The report claims that the IFC has acted irresponsibly through its role as advisor to the government of Lesotho, and its recommendations of PPP as a successful model for Lesotho and several other African countries, leading to similar projects being proposed in Nigeria and Benin. The PPP model has a history of causing unsustainable financial burdens on governments even in wealthier countries, with public finance initiatives leading to debts that have, in the UK, caused a hospital trust to go into administration and 22 others to claim their clinical and financial futures in danger due to the demands of repayments. Similar concerns have been voiced in Australia. The report from Oxfam states:

The high cost, high risk nature of health PPPs was already clear from international evidence in rich countries and raises serious questions about why the model was pursued by the IFC in such a low-income, low-capacity context. “

With only 24% of the country’s population living in urban areas, and only half of this living in the Maseru area, Oxfam has voiced concerns about the unequal distribution of resources disadvantaging those in rural areas, where most people live. Netcare has disputed the report, claiming that the hospital cost is only 35% of the total budget, and calculating the total catchment of the hospital as around 26% of the total population. It has described the Queen Elizabeth II hospital, which the Queen Mamohato Memorial Hospital replaced, as “decrepit, dirty and unhygienic”, and has highlighted the importance of newly-introduced facilities such as intensive-care and neurosurgery. It has also emphasised the fact that the contract lasts for 18 years, after which point the hospital and clinics will belong entirely to Lesotho.

Geoffrey Keele of the IFC has said in a statement that:

The World Bank group shares Oxfam's concern that the health network in Lesotho is being overburdened as it attempts to fulfil greater-than-anticipated public demand for basic health services. The World Bank group is working with the government of Lesotho to strengthen the country's health system so that everyone in Lesotho, especially the poorest, can access the essential health services they need.”



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