The Long-term Effects of Private Health-care

The middle class’ demands are important in influencing politics, and it is when they stand together with the poor that universality can emerge

Oxford Department of International Development

St Antony’s College – University of Oxford

On 29 January, I argued in Mauritius Times that health-care in Mauritius is not universal: those who can afford to pay for health-care are always able to choose the better and more quickly accessible health-care, which is often found in the private sector. I also argued that if the Mauritian population believes that all Mauritians, irrespective of their means, should be able to enjoy health-care of the same high quality, the situation in Mauritian health-care today is unsatisfactory.

However, the greatest challenges to universality in health-care – a situation where everyone has equal access to health-care of the same high quality – are found in the longer term. Whilst the private health-care sector has always been accepted in Mauritius, it has grown more substantially in importance in the 1980s and early 1990s, and even more so, since the beginning of the 21st century.

Whilst both periods have witnessed liberalisations of the economy and of the health-care sector, this new century has also seen a reduced commitment to universality among politicians, especially during the governments of Navin Ramgoolam from 2005 to 2014.

 The Titmuss Report

Going back in time, after the publication of the Titmuss Report in 1961, the key aim in health-care was to build the public sector. Therefore, the number of private clinics and their share of health-care remained low in the 1970s, with private health-care being accessible only by the few. Whilst the importance of the private sector increased in the 1980s and early 1990s, its role remained limited.

It is the period from around 2005 onwards that has been the most important period for the growth of the private sector. For example, from the beginning of 2004 to the end of 2014, the private sector’s share of childbirths almost doubled. In the years of 2005-2008, moreover, out-of-pocket spending on health-care by Mauritians increased by almost 70 per cent. Furthermore, in 2010 and 2011 – around the time when Apollo Bramwell Hospital opened and Fortis acquired Clinique Darné – the number of attendances in the private sector increased by a total of 86 per cent. The two latter figures have remained stable since then.

The role of private health-care has, moreover, been strengthened in several different ways since the beginning of the new millennium. The aims to make Mauritius into a ‘medical hub’ and to attract foreign patients through medical tourism – which gained speed with the takeover of Clinique Darné and the opening of Apollo Bramwell Hospital – necessitates a growth in the size of the private health-care sector.

In fact, the Ramgoolam government saw the promotion of medical tourism as a means of attracting more private resources to Mauritian health-care. Therefore, as a result of this plan to diversify the economy, the promotion of private clinics – which are unaffordable for most Mauritians – has been necessary.

These developments have also led to multinational health groups and big conglomerates becoming involved in health-care: the most important examples of this are the Apollo Group of Hospitals, Fortis Healthcare, British American Investment (BAI) and the Ciel Group. Significantly, both BAI and Ciel have been important to Mauritius, and especially BAI had significant influence on Ramgoolam’s government. With these actors’ importance comes influence, which they can use to affect policy decisions in favour of private health-care.

Admittedly, the collapse of BAI and the takeover of Apollo Bramwell Hospital have affected the dynamics in health-care in the short term. However, in the long term, this is unlikely to mean much for the overall picture: private actors will remain involved in health-care, and they will be able to use their influence to champion their own interests.

A final set of important changes are the incentives that have been created for Mauritians to buy private health insurance. From 2012 onwards, individuals can use their employers’ National Savings Fund contributions to buy private health insurance. As a result, in 2012, there was an almost threefold increase in the number of accident and insurance policies in Mauritius. However, at the end of that year, still merely 73,000 people had health insurance. Whilst the reform means that more Mauritians are able to buy health insurance, most can only buy (very) basic coverage. Moreover, those who do not earn much or who work in the informal sector do not benefit from the reform.

Yet another incentive was created when, in 2013, individuals and employers became entitled to tax relief for medical and health insurance premiums. This meant that relatively substantial medical insurance coverage became more available for many of Mauritius’ more well-off individuals – and for the few who are fortunate to work for an employer that pays for their insurance.

These reforms, therefore, together make it easier for a small group of Mauritians to access private health-care. For the vast majority, however, it becomes no easier to obtain insurance beyond perhaps the most basic policies. Moreover, the tax reliefs are resulting in reduced tax income for the government, and could therefore potentially imply reduced funding for public health-care.

These developments are likely to negatively affect public health-care, which is the only alternative realistically accessible for most Mauritians. Apart from the reduced commitment to public health-care that became evident during Ramgoolam’s period in power, there are several reasons why these developments are likely to constitute a problem for universality in health-care in Mauritius.

Firstly, because the private sector has been strengthened, the government has given up some of its control over the health-care system. Thereby, it has reduced its ability to ensure that the overall health-care system has universality at its core, and, with it, the principle that everyone should be able to receive health-care of the same high quality within a reasonable amount of time. Evidently, the private sector does not aim to provide high quality health-care to everyone. Instead, its commitment is to those who pay for their care. Only the government can have a commitment to health-care for all.

Secondly, the developments favouring private health-care mean that certain actors have been able to increase their influence in health-care and that new actors have gained influence. These two types of actors include clinics, the owners of clinics, and insurance companies. With this new-won influence, they are likely to champion further policies favouring the private health-care sector.

Thirdly, and most importantly, as they opt for private health-care, an increasing number of middle class Mauritians will lose their interest in funding public health-care and in demanding higher quality and shorter waiting time in the public sector. Research from across the world demonstrate that when the middle class abandons public health-care, they become less willing to take part in funding it through taxation and are also placing less pressure on governments to keep quality high.

The middle class’ demands are important in influencing politics, and it is when they stand together with the poor that universality can emerge. Therefore, when more people opt for private health-care, there will be less support for government spending on public health-care, especially when the most basic levels of care is concerned.

In other words, if the poor and the middle class do not have the same wishes for health-care – and do not stand side by side in demanding more spending and higher quality in the public sector – universality is less likely to be possible.

Such a development would, moreover, worsen an already existing trend: of the budgets of Ramgoolam’s government from 2005 to 2014, only the two budgets before the election in 2010 had real term increases in government expenditure on health. Without such increases, the improvement of public health-care becomes difficult.

Unintended consequences

These issues mean that health-care will become less universal, as they are likely to lead to a weakening of public health-care, which is the only alternative available for those who cannot afford to access the private sector. There is, therefore, a significant risk that there will be a large divide among the people, where some can opt for higher quality care at the same time as most must opt for health-care of lower – and falling – quality. The issues discussed here, taken together, mean that the promotion of private health-care today can lead to unintended consequences tomorrow in terms of the speeding up developments unfavourable to universality.

If the Mauritian people wants to promote a universal system, the government should spend its resources on strengthening the public sector, rather than on creating incentives for the privileged to seek private health-care. Not only would a prioritisation of the public sector make the reduction of inequality possible, but it could also reduce the demand for private health-care, if the public alternative was of a similar standard.

The promotion of a strong, universal public health-care sector – which has been the aim of numerous Mauritian politicians for decades – would result in a health-care system where everyone can access health-care of the same high quality, irrespective of their means. In the long run, this is likely to be better for everyone.

As part of his postgraduate studies at the University of Oxford, Erik Eriksen researched the Mauritian health-care sector with a view to looking into the ways in which the private sector affected universal health-care. This included several months of research and interviews in Mauritius.

* Published in print edition on 26 February 2016

Tags:Apollo Bramwell, BAI, Erik Eriksen, Hospital, National Savings Fund, Private Health-Care, Titmuss Report