Investing in the health sector in India: an unhealthy development

Indian health care continues to be privatized. Development loans granted by DEG, a subsidiary of KfW, threaten to reinforce inequalities.

In India, health is increasingly about money: Sopore district hospital Photo: Nasir Kachroo/Imago

BOMBAI taz | The German public development bank Kreditanstalt für Wiederaufbau has made 300 million euros available to India during the coronavirus pandemic. The money was intended to help purchase medical supplies and provide food to those in need. Loans were also provided to private companies in the health sector through the KfW subsidiary Deutsche Investitions- und Entwicklunggesellschaft (DEG). For many companies, these financiers represent one of the few opportunities to obtain capital, which other banks offer to a lesser extent due to risks in developing countries.

Above all, these loans would have hardly benefited the general population, dependent on state and municipal institutions. This is what two current studies suggest. They were submitted by West India civil society organization SATHI and international development organization Oxfam.

India has excellent private healthcare and has long been a popular destination for medical tourism. However, both benefit almost exclusively wealthy clients.

In contrast, public health care is massively underfunded. This has led to immense dependence on private hospitals, for which there are no regulations such as fee scales. In theory, more than a third of the population can also benefit from private benefits of up to 5,600 euros per family thanks to the public health insurance for low incomes introduced in 2018 – called “PM-JAY”. However, studies show that medical institutions routinely exploit loopholes to charge patients for expensive treatments – or to deny them services.

Inflated bills

This specifically shows SATHI study “Support patients or profits? Examples where private hospitals are responsible for overcharging, medical negligence, violation of treatment protocols. These are hospitals that have benefited from DEG loans and are also expected to treat patients under PM-JAY insurance.

According to experts, the background is that DEG bases its investments mainly on public-private partnerships – for example with private equity funds such as Quadra Capital, a leader in the Asian healthcare sector. Quadra Capital is based in Singapore, considered a tax haven. The data situation is therefore opaque. SATHI also criticizes “reliance on opaque commercial institutions” that “evade public accountability.”

The SATHI authors also criticize the PM-JAY program itself because it reinforces the focus on private hospitals. Experts familiar with the study point out that DEG apparently has neither reliable financing models nor review mechanisms for its projects under public-private partnerships. Patients’ rights would be indirectly violated by loans financed by German taxpayers’ money.

Misappropriated development funds

The organization Oxfam also criticizes the misuse of development funds in the health sector globally. In the “Sick Development” study presented Monday she comes to the conclusion that the distribution of funds is poorly controlled. As a result, low-income people would have little or no access to health services. There are business practices that violate human rights in health programs in Nigeria and India.

“Instead of promoting universally accessible health services, European and international development banks are investing in elitist projects with questionable business practices,” Oxfam said.

The study authors warn that healthcare is a lucrative business. In 2021, global investments in the sector by international, bilateral and multilateral development finance institutions amounted to $84 billion, almost half of global official development assistance.

Oxfam is calling for an end to this type of financing by European development banks. SATHI is committed to improvements: greater transparency on development financing and its beneficiaries, a global strategy for the health sector and models that take into account the structural deficiencies of local care systems.

Rosemary Rowse

"Unable to type with boxing gloves on. Web maven. Infuriatingly humble creator. Typical tv specialist. Music aficionado. Proud explorer."

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