Healthcare for all? How UK aid undermines universal public healthcare - January 2021 - Global Justice Now
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Healthcare for all?
How UK aid undermines universal public healthcare
January 2021
Healthcare for all? How UK aid undermines universal public healthcare Researched and written by Daniel Willis. With thanks to Anna Marriott, Siomha Cunniffe, Mark Beacon and Nick Dearden for their comments and suggestions for improvements. January 2021 About Global Justice Now Global Justice Now campaigns for a world where resources are controlled by the many, not the few. We champion social movements and propose democratic alternatives to corporate power. Our activists and groups in towns and cities around the UK work in solidarity with those at the sharp end of poverty and injustice. Like what we do? We’re a membership organisation, so why not join Global Justice Now? You can call 020 7820 4900 or go to: www.globaljustice.org.uk/join Or you can donate to help produce future reports like these: www.globaljustice.org.uk/donate Global Justice Now 66 Offley Road, London SW9 0LS +44 20 7820 4900 | offleyroad@globaljustice.org.uk @globaljusticeuk | www.globaljustice.org.uk Registered Charity No 1064066 This report is printed on 100% recycled, post-consumer waste, chlorine-free paper using vegetable-based inks. Cover image: Medicare for All rally, Los Angeles, June 2017. Molly Adams CC BY-2.0 Layout: www.revangeldesigns.co.uk 2 I Healthcare for all? How UK aid undermines universal public healthcare
Contents
Executive summary 4
Introduction 7
Why go public? 7
DFIs and the ‘push for private’ 8
Undermining action? 8
‘Mutual prosperity’ and the Global Britain agenda 10
Funding private healthcare in the global south 12
Group 1: Investments in companies, hospitals and healthcare funds where
questions have been raised about labour rights and business practices 14
Group 2: Investments in major private healthcare companies that appear
to predominantly treat middle- to high-income patients 16
Group 3: Investments that have highly questionable development impact 17
Problems with privatisation: at home and abroad 18
An effective use of aid? 18
Exacerbating inequalities and failing to improve access 19
Undermining public services 20
A lack of transparency and accountability 21
There is an alternative – financing public healthcare 22
Recommendations 23
References 24
Healthcare for all? How UK aid undermines universal public healthcare I 3Executive summary
“Privatisation is premised on assumptions The UK government is at the forefront of a trend
to invest large amounts of development funding
fundamentally different from those that
in private healthcare. Over half a billion pounds
underpin respect for human rights, such of UK public funds have been invested in private
as dignity and equality. Profit is the healthcare in the global south in the past decade
overriding objective, and considerations alone. What’s more, this figure is likely to increase
such as equality and non-discrimination in the years to come as the UK seeks to expand
its post-Brexit economic role as a key exporter of
are inevitably sidelined…Rights holders
health services.3
are transformed into clients, and those
The problems with private healthcare are well
who are poor, needy or troubled are
documented. The UK government has touted its
marginalised.” private sector investments as a means of achieving
universal health coverage in the global south,
Philip Alston, former UN Rapporteur on Extreme
thereby furthering the Sustainable Development
Poverty and Human Rights1
Goals (SDGs). The argument runs that their own
public investment will encourage more private
sector investments in private health businesses,
“If the objective is to guarantee expanding services as a whole. It’s part of a trend
universal access to healthcare, it is which enjoys enthusiastic support from public
vital to eliminate barriers that inhibit institutions like the World Bank, despite the fact that
people accessing services and one the austerity policies pushed by these institutions
over four decades are partially responsible for
obvious place to start is to remove
the precarious state of health services in many
financial barriers – services should be countries across the global south.
publicly financed and provided free of
But this ignores the fact that it is extremely difficult
charge. Worldwide it has been shown to build a universal health system based on private
that healthcare user fees dramatically operators. Private business chases profit, which
reduce demand for health services… can’t be achieved by serving the majority of the
Conversely, when countries have population – at least not without large scale public
subsidies. Instead, private healthcare usually caters
removed user fees, such as when the UK
for richer patients, with low-income patients being
launched the National Health Service made even poorer by the fees charged, while
in 1948, they have witnessed huge many others are excluded from services altogether.
increases in demand for services.” Britain’s funding of private healthcare does little
to mitigate these problems. Most of Britain’s
Robert Yates, Director of the Global Health
funding for private healthcare flows through the
Programme at Chatham House2
controversial CDC Group – a development bank
wholly owned by the British government which
4 I Healthcare for all? How UK aid undermines universal public healthcarespends development funds on building private room with a ventilator as approximately £350 a
sector infrastructure. A significant portion of this day (over four times the average monthly wage).8
money is channelled through private equity funds Other UK-backed hospitals face criticism for closing
which specialise in growing investment portfolios departments during the coronavirus pandemic
but not in development. or, in the case of Vikram Hospital in Bengaluru,
India, being forced to close after refusing to treat
Over half a billion pounds of funding has made
government-referred coronavirus patients.9
its way into private healthcare in recent years,
including some deeply problematic investments. •• Investments with no apparent development
Some CDC-backed healthcare companies and impact, including a “premium and budget” fitness
hospitals stand accused of misappropriating funds, club chain in Brazil which runs “one of the most
overcharging or turning down patients altogether expensive fitness centers based in Sao Paulo”.10
during the coronavirus pandemic, or having no CDC has also backed a cosmetic surgery clinic
discernible impact on expanding healthcare in India, which offers “Vaser Liposuction” for
access to low-income groups. Among the worst between £950 to £3,800 and male nose surgery
examples are: for £800 to £1,100, and a hospital in Harare that
“continues to attract the country’s political elite”.11
•• The now defunct Abraaj Growth Markets Health
Fund, the former CEO of which is facing fraud •• Numerous hospitals where there are scant signs
and corruption charges for his involvement in the of positive development impact, such as
“biggest collapse in private-equity history”.4 In Dr Agarwal’s Healthcare Limited where CDC’s
June 2019, the Financial Times reported that Abraaj own website states that this investment will
CEO Arif Naqvi had allegedly “misappropriated primarily treat middle-income patients.12 Other
more than $250 million into accounts under his examples include CARE Hospitals Group which
control or those of family members and personal targets India’s “emerging middle class” and
associates”.5 Liquidators now claim the figure “completely scaled down operations” early in
could be as high as $385 million.6 the pandemic, owing to the loss of revenue.13
•• Serious allegations of systemic overcharging The last point is crucial, because perhaps the most
made against a UK-backed hospital in Kenya. worrying impact of this “push for private” is that it
The Nairobi Women’s Hospital, unaffordable undermines the ability of countries to prepare for
to many Kenyans, has been accused of and respond to pandemics like Covid-19. Health
overcharging patients, with staff claiming the systems overly reliant on the private sector see
hospital “resembled a trading floor” with a resources concentrated in particular hospitals and
“corporate culture of being pushed to meet regions, undermining the public sector and leaving
admission targets” and “a financial reward paid other areas vulnerable.
to clinical officers for each admission”.7
The problems with the privatisation of healthcare are
•• Hospitals in Bangladesh and Pakistan accused of so significant that we believe that all development
overcharging patients throughout the Covid-19 funds should instead be targeted at supporting
pandemic, including Evercare Dhaka and strong public health systems. There is widespread
Evercare Lahore which lists its price for a hospital evidence that public healthcare, funded through
Healthcare for all? How UK aid undermines universal public healthcare I 5Prime Minister’s Office, Government of India
Indian Prime Minister Narendra Modi attends the opening of the Shri Mata Vaishno Devi Narayana Superspeciality
Hospital in Jammu and Kashmir, April, 2016.
taxation, is the most effective and just way to 3. The UK should exclude public health services
improve access to good quality health services, from all trade and investment deals, not only
whilst also supporting strong labour rights. protecting our own NHS, but also allowing
Moreover, public healthcare is not just about developing countries the policy space to build
achieving the best health outcomes, it also their own public, universal systems.
contributes to reduced inequalities across society.
4. The UK should advocate for a new international
To this end we issue the following recommendations: approach to public health financing based
around:
1. The UK government should commit to ensuring
that all UK aid supports strong public health a. stronger co-ordinated international action on
systems and is not used to invest in private tax avoidance.
healthcare companies or promote Public-Private b. debt cancellation for global south countries,
Partnerships. including bilateral, multilateral and private
2. CDC should stop investing in private healthcare sector debts.
and should review all of its existing private c. developing models for a global wealth
healthcare investments to devise an exit tax to redistribute wealth and ensure that
strategy that protects jobs. Until this happens, governments in the global south have the
CDC should not receive the additional £779 revenues they need to finance strong public
million capital injection it is due to receive from health systems.15
government between April and June 2021.14
6 I Healthcare for all? How UK aid undermines universal public healthcareIntroduction
The Covid-19 pandemic has demonstrated like never Yet this is nothing new; as Global Justice Now has
before that private healthcare is no substitute for argued previously, the past decade has seen UK
strong public health systems. While under-resourced aid increasingly used to support the profits of big
public services across the world have struggled to business and contribute to the privatisation of public
meet the high demand for testing and treatment, services across the global south.21 Development
private hospitals have charged extortionate amounts funds intended to reduce global poverty and
to those unable to access public services or have improve universal access to healthcare have
simply shut their doors in the face of lost revenue. instead contributed to widening inequalities and
Countries with either heavily privatised healthcare the exclusion of marginalised communities.
systems or which have faced periods of sustained
austerity in recent years, such as Peru, Argentina, Why go public?
Chile and indeed the UK, have had some of the
highest per capita death tolls during the pandemic.16 There is widespread evidence that public healthcare,
In contrast to the prevailing orthodoxy of recent funded through taxation, is the most effective and
years – that leveraging private sector investment is just way to improve access to good quality health
the best way to expand access to basic services services, whilst also supporting strong labour rights.
–communities have found that when they needed For example, Oxfam have argued that it was only
these services most, their access was denied. through “committed action by governments in
organising and providing health services” that
As the pandemic has progressed, it has also become “child deaths [were reduced] by between 40 and
clearer how the ability of public and private sectors 70 per cent in just ten years in Botswana, Mauritius,
to respond to the crisis is deeply influenced by the Sri Lanka, South Korea, Malaysia, Barbados, Costa
structures and inequalities of our global economic Rica, Cuba, and the Indian state of Kerala”.22 Public
system. On the one hand, 64 countries were found healthcare, free at the point of use, can increase
to be spending more on servicing their external demand for health services by removing financial
debt than they were on public health in the early barriers to access, but also improves their quality by
weeks of the crisis.17 On the other, the pandemic valuing people and their health over the profit of
has been used to justify a wave of privatisation individual companies.
and outsourcing to big business.18 In the UK, despite
widespread criticism, the management and But public healthcare is not just about achieving
processing of coronavirus tests has been largely the best health outcomes; it also contributes to
outsourced to the private sector and there have reduced inequalities across society. As Public
been no guarantees yet that the large amounts of Services International (PSI) argue, “public funding for
public funding provided for vaccine development public health services, paid from general taxation,
will result in global equitable access rather than provided free at the point of access, is considered
huge profits for big pharma.19 Development funds the most effective in redistributing resources from
have also been diverted to support big business, high- to low-income groups”.23 Public healthcare
with UK aid providing half of a £100 million allows the costs of healthcare to be distributed
partnership project with Unilever in March 2020.20 across society, enabling all citizens to both pay in to
the system and to benefit from it. This universalism
is key to building a strong public health system that
users feel ownership of and are confident in.
Healthcare for all? How UK aid undermines universal public healthcare I 7In the UK, these arguments are broadly accepted •• Investments in companies, hospitals and
and attempts to introduce part-privatisation, healthcare funds where questions have been
marketisation and user fees for non-UK citizens have raised about labour rights and business practices.
been opposed (although not, ultimately, stopped) The most striking example of this is the now defunct
on the grounds of supporting the universalism of Abraaj Growth Markets Health Fund, the former
the NHS. When it comes to investing in healthcare CEO of which is facing fraud and corruption
in the global south, however, a new common sense charges for his involvement in the “biggest collapse
has emerged which says that governments in poor in private-equity history”.27 There have also been
countries can’t finance public healthcare and so serious allegations of systemic overcharging
the private sector must step in and be supported. made against CDC-backed hospitals, such as
As Oxfam argued in detail in 2009, these arguments Nairobi Women’s Hospital and Evercare Dhaka,
are based on a series of myths about how private both before and during the Covid-19 pandemic.28
healthcare operates in reality.24 Nonetheless, this Other CDC-backed hospitals have faced
approach to development remains commonplace criticism for closing departments during the
with governments and multilateral institutions. pandemic or, in the case of Vikram Hospital in
That is why, alongside the debate about whether Bengaluru, being forced to close after refusing to
development funds should support public or private treat government-referred coronavirus patients.29
healthcare, we must also consider alternative
•• Investments in major private healthcare
means for financing universal public healthcare (or
companies that appear to predominantly treat
as PSI puts it, how we go about achieving “fiscal
middle- to high-income patients. Many such
justice for funding health”).25
investments made by CDC are for the expansion
of existing hospitals and companies, which
DFIs and the ‘push for private’ tend to treat middle- and high-income groups,
and so do little to expand healthcare access
In part, the precarious state of many public
to marginalised communities. There is often
health systems in the global south is a result of the
also little evidence that such investments could
development strategy pursued by development
not have been made by the private sector
finance institutions (DFIs), multilateral investment
without the assistance of public development
banks (MIBs) and the World Bank. In recent years, the
funds. Many of these investments are in major
Bank’s ‘billions to trillions’ agenda has encouraged
Indian healthcare providers (Narayana, CARE,
governments to look beyond their limited ability to
Healthcare Global) to support expansion into
finance health, education and energy infrastructure
other cities, regions or countries.
with public finances and instead look for new
partnerships with the private sector.26 •• Investments that have highly questionable
development impact, meaning that it is difficult to
In this paper, we examine this approach with a
see how they are contributing towards Universal
specific focus on the healthcare investments
Health Coverage (UHC) and extending access
made by the UK’s DFI, known as CDC Group
to low-income groups. This includes investments
(a development bank wholly owned by the
in a “premium and budget” fitness club chain
UK government with a mandate to invest in
in Brazil, a cosmetic surgery clinic in India and a
infrastructure and support businesses in Africa and
hospital in Harare that “continues to attract the
South Asia). What we have found is a range of
country’s political elite”.30
investments that do little to support public health,
which have highly questionable development
impact, and which in many cases exclude the
most marginalised communities from their services.
We have identified three broad ways in which
these investments can be harmful:
8 I Healthcare for all? How UK aid undermines universal public healthcareThe major problem with this approach is that return for loans. These reform packages generally
investment decisions end up being based on what included deregulation, privatising public services
financiers and private equity funds in the global and cutting taxes on the private sector. More
north view as potentially profitable businesses recently, the World Bank’s ‘billions to trillions’
that will make a good rate of return. Expanding agenda has sought to meet the so-called $2.5 trillion
healthcare access to low-income groups becomes ‘finance gap’ needed to meet the SDGs by using
a secondary concern, even though CDC is entirely public money to leverage greater private sector
funded by UK aid and committed to an impact investment.35 The World Bank argues that their
framework that, in theory, prioritises meeting the SDGs. Maximizing Finance for Development approach
is necessary because “countries’ resource needs
Undermining action? [to meet the SDGs] surpass their own budgets
and available donor funding”.36 But critics have
In the early months of 2020, as Covid-19 spread argued that this approach is unrealistic in terms
rapidly around the globe, reports indicated growing of the amount of finance it expects to raise and
fears about the ability of states with weak public results in money being diverted away from where
health systems to respond. For example, while the it is needed most.37 For example, the Initiative for
UK has 28 doctors per 10,000 people, even relatively Social and Economic Rights argues that the World
rich developing countries have a small fraction of Bank’s Uganda Reproductive Health Voucher
that with nine doctors per 10,000 people in South Project “failed to reach the poorest women” and
Africa and India.31 Reports highlighted a severe lack “incentivised the commercialisation of healthcare”
of ventilators in the Central African Republic (with by requiring participants to pay for vouchers.38
only three machines for a population of 5 million
people), while governments in Angola, Côte d’Ivoire, Each year, the UK government invests a good
Mozambique and South Sudan told the World Health proportion of its aid budget in health programmes
Organisation that they have no ICU capacity for in an attempt to meet SDG 3: Good Health and
patients with severe symptoms.32 And in India, even Wellbeing (in 2018, the UK spent £1.32 billion of its
though some regions such as Kerala have stronger £14.6 billion aid budget on health, approximately
public health systems, the unequal distribution of 14.3% of the total aid budget).39 Using public money
private sector hospitals and resources left some in this way to support the global movement towards
regions and low-income families at risk of being universal healthcare is entirely reasonable and,
unable to access key ICU services.33 These structural given the strong relationship between poor health
weaknesses to public health systems were particularly and extreme poverty, supporting the development
worrying given that low healthcare worker to of strong public health systems is a highly appropriate
population ratios and a lack of preparedness were use of UK aid money which, legally, must contribute
key factors in the rapid spread of the Ebola virus towards the reduction of poverty.40
through Liberia, Guinea and Sierra Leone in 2014-15.34 However, there are contrasting approaches
Part of the reason that public health systems have to making development funds more effective
been so poorly prepared has been an increasing for achieving these goals. The UK has a strong
shift among international institutions towards tendency, which has increased over time, to
supporting private healthcare in recent decades, use the private sector as a delivery mechanism.
with pressure on national governments to follow suit. UK bilateral aid that was spent through private
In many countries the weakness of public services sector contractors (not including NGOs and civil
is a legacy of debt crisis in the 1980s, after which society organisations) increased from 12% to 22%
the International Monetary Fund (IMF) enforced between 2010-11 and 2015-16 when approximately
structural adjustment policies on governments in £1.4 billion was given to private contractors.41
Healthcare for all? How UK aid undermines universal public healthcare I 9Meanwhile, in 2018 only £15 million (approximately growth might benefit ‘those at the top’ initially,
0.1%) of UK aid was provided as direct budget but by creating jobs and business, that growth
support to governments (compared to nearly 20% will eventually reduce poverty across the whole
fifteen years ago).42 As the use of budget support of society.45 The current government has gone
as a development tool has declined, significant one step further, with UK aid policy now driven
amounts of aid have been directed towards private by a belief in ‘mutual prosperity’ – the idea that
healthcare in Asian and African countries by CDC. development funds should not just be spent to
At present, CDC holds a portfolio of direct private reduce poverty in recipient countries (despite
health investments worth approximately £420 million. this being the actual legal definition of Official
Development Assistance [ODA] as defined in the
Critics argue that this is problematic because
2002 Development Act) but that it should also
private healthcare automatically excludes those
“generate economic and commercial benefits
unable to pay to access services, reduces public
both for recipient countries and for the UK”.46
accountability and undermines public health
systems, particularly by creating a two-tier health In health, this has led to development funds being
system in which those who can afford private used to contribute to privatisation reforms in the
healthcare, prioritise it. But this approach has been global south. CDC’s strategy of investing in private
a lucrative business for local private hospital chains healthcare was supplemented by support from the
and for multinational healthcare companies and former Department for International Development
consultancies that administer, deliver and advise (DfID) for health privatisation through its investments
on the contracts. Furthermore, this ‘market knows in the Harnessing Non-State Actors for Better Health
best’ approach to development has accelerated for the Poor (HANSHEP) initiative.47 HANSHEP was
with the development of the ‘mutual prosperity’ designed to promote health markets, Public-Private
agenda, which has seen development funding Partnerships (PPPs) and the privatisation of public
spent increasingly in sectors and countries where health systems (including child and maternal health
UK businesses are favourably placed to win services) in low-income countries.48 HANSHEP was
contracts and develop trading relationships. just one element of DfID’s wider approach in the
past two decades which has been described as
‘Mutual prosperity’ and the a “healthcare industrial strategy that includes an
attempt to export PPPs…[and] influence developing
Global Britain agenda country governments towards adopting the [PPP]
The past decade has seen the UK government’s model, in order to lay the basis for the winning of
international development strategy steadily consultancy, construction and other contracts
repurposed under a private sector, ‘market knows by British firms”.49 This suggests that UK aid health
best’ approach. Global Justice Now has previously spending has not in fact been targeted towards
shown how development funds have increasingly developing better health outcomes but has instead
been used to extend private healthcare and been spent in the pursuit of British economic interests.
private education systems across Africa and Asia,
ODA has also been used to fund the cross-government
while Unison have demonstrated that similar
Global Better Health Programme which will invest
privatisation has been promoted in the water,
£79 million in the private sector to improve health
sanitation and energy sectors.43 This approach has
systems in middle-income countries.50 But this
been incredibly profitable for some aid-funded
programme is also designed to develop healthcare
businesses, particularly British companies and
systems where UK companies (including Healthcare
consultancies with expertise in certain sectors
UK – the export arm of the NHS) are best placed
(especially infrastructure, financial services and
to sell their services and increase the market share
project management).44
of UK exports.51 Whilst there is a development
This drive towards supporting private profit logic towards improving access to healthcare in
resembles the failed theories of trickle-down middle-income countries as well as low-income
economics – the idea that encouraging economic countries, the programme partners were selected
10 I Healthcare for all? How UK aid undermines universal public healthcareon the basis that they “have the potential to benefit increase the amount of money CDC can receive
from UK expertise, and have indicated a strong from government from £1.5 billion to £6 billion, with
willingness to collaborate with the UK…[and] also the option of a further increase to £12 billion over
have growing health sector markets”.52 This raises time.59 Since then, the proportion of UK aid being
the question of whether achieving UHC really is disbursed by the former Department for International
the main goal of the Better Health Programme or Development (DfID) fell significantly and control of
whether, again, it is more focused on increasing UK development policy moved gradually away from
health exports. The programme also acts as part of DfID’s control whilst other government departments
the UK’s broader strategy to increase health exports and CDC played a greater role. In 2020, this trend
around the world post-Brexit: was accelerated with the ‘merger’ of DfID into the
“The NHS will be ready to target up to £7 billion of new FCDO, effectively making all aid spending
opportunities a year over the next decade with its subservient to the UK’s foreign policy objectives.
world-leading healthcare expertise, thanks to a Although the government has announced plans
new government support service. The Healthcare to cut the UK aid budget from 0.7% to 0.5% of
UK Export Catalyst is set to help the NHS – the Gross National Income in 2021 (an effective cut of
world’s largest integrated health system – to approximately £5 billion) and for an indefinite period
access global healthcare export opportunities”.53 afterwards, it is yet to be seen whether these cuts
will impact CDC. However, with the government
The development watchdog, the Independent planning to transfer a further £779 million to CDC
Commission for Aid Impact (ICAI), has highlighted between April and June 2021, it seems likely that
risks with the use of aid to develop so-called the UK’s DFI will play an even more prominent role
‘mutual prosperity’, arguing that it risks diluting in UK aid in the years ahead.60
development funding and undermining its focus on
poverty reduction.54 ICAI also argued that a mutual This raises important questions about the
prosperity approach risks “a return to past practices accountability and transparency of investment
of tying aid (providing aid on the condition that it decisions. Campaigners have argued that other
be used to procure goods or services from the UK)” government departments have far weaker processes
with increased pressure to “spend aid in developing for ensuring aid transparency and effectiveness
countries that are most likely to be important than DfID had, while also raising concerns about
trading partners”.55 the role of private equity funds in CDC’s strategy.61
In our recent report on CDC, Global Justice Now
This agenda has been accelerated across found that the amount that CDC invested through
government since the 2016 referendum on EU funds had slightly increased between 2011 and
membership.56 Government ministers have argued 2018, despite reforms that were meant to reduce
that a post-Brexit ‘Global Britain’ will redefine its role the amount being invested through financial
in the international order by forming new trading intermediaries.62 Since then, intermediated
relationships and expanding its economic and investments have fallen slightly as a proportion of
diplomatic ‘soft power’.57 Under this agenda, CDC’s commitments, now representing 41% of their
development funds have been spent explicitly with portfolio.63 Nevertheless, decisions about many
the intention of setting up future trading relationships of CDC’s investments are therefore not made
which favour British businesses and promote the by development experts with a strong focus on
City of London as a “development finance hub”.58 poverty reduction, but by financiers and investment
CDC has an important role to play in this strategy. gurus looking to make a good rate of return. The
As the UK’s development finance institution, now degrees of separation between those investing
wholly owned by the Foreign, Commonwealth and the UK taxpayer also makes it difficult to hold
and Development Office (FCDO), CDC receives government to account for these decisions, or
development funds in order to invest in private indeed to obtain coherent information about the
companies and private equity funds in the global investments at all.
south. In 2017, the government passed legislation to
Healthcare for all? How UK aid undermines universal public healthcare I 11Funding private healthcare
in the global south
CDC’s website states that healthcare investments CDC has recently introduced a new ‘Healthcare
represent nearly 6% (£273 million) of its total £4.7 Impact Framework’ (designed by Imperial College
billion portfolio and about 3% (£58.30 million) of its London) which highlights how it expects its direct
2019 commitments.64 However, this figure does not investments to contribute towards the SDGs.
include CDC’s £147 million ($200 million) investment This framework, with which all CDC healthcare
in its own subsidiary MedAccess. CDC therefore investments have been aligned since 2017, is
holds a healthcare portfolio worth approximately designed to assess the accessibility, affordability
£420 million (just under 9% of its total portfolio). and quality of services provided by any potential
Of this, just under £360 million ($488.96) was invested CDC investees, as well as how investment will
directly in healthcare companies (see Table 1). contribute to the local healthcare ecosystem
As of October 2020, CDC’s website also lists a and workforce. Specific reference is made to
further 80 intermediated investments made via SDG target 3 (Supporting provision of healthcare)
forty-seven private equity funds, representing a and SDG target 8.5 (Supporting economic
further £60 million of investment in total.65 opportunities by creating jobs).
In 2019, CDC made six healthcare investments However, for the two healthcare investments for
including the $48.15 million joint purchase of STS which this information has been published online
Holdings with the Evercare Fund, a $30.26 million (Dr Agarwal’s Healthcare Limited and STS Holdings),
investment in Dr Agarwal’s Healthcare Limited, CDC expects patients to mostly come from
and four intermediate investments for which no middle-income groups, with low-income patients
investment value is provided. However, we do only reached “in some geographies [via] pilot
have more information on CDC’s total portfolio of primary care centres” (Dr. Agarwal’s) or via
healthcare investments. These investments have outpatient care (STS Holdings). A previous CDC
been described in more detail below and have investment in CARE Hospitals Group in India was
been grouped together to highlight why they are also expected to help the company target India’s
an inappropriate use of development funds. “emerging middle class”.67 In these cases, the
primary benefit expected to low-income groups is
Broadly, CDC’s health investments cover: both
not, in fact, from the expansion of healthcare at all,
‘affordable’ and ‘elite’ private healthcare providers,
but from job creation. It is therefore questionable
specialist healthcare services, medical researchers,
to what extent these can be considered to be
pharmaceuticals manufacturers, pharmaceutical
contributing to SDG 3.
distribution companies and medical equipment
manufacturers.66 The extent to which any of the
hospitals CDC invests in are truly affordable,
however, is highly questionable.
12 I Healthcare for all? How UK aid undermines universal public healthcareTable 1: CDC’s direct investments in private healthcare
Company Facilities Location(s) Domicile Investment Date
Asian Institute of
Hospital in Faridabad India India $21.32 million December 2017
Medical Sciences
14 hospitals in six cities
CARE India Mauritius $30 million February 2016
across five states of India
Dr Agarwal’s 95 ophthalmology
11 countries India $30.26 million November 2019
Healthcare Limited centres
Healthcare Cancer Care Kenya
Kenya Mauritius $5.25 million June 2017
Global Africa centre in Nairobi
Operates hospitals, India with
education institutions, planned
Manipal and medical research expansion into Mauritius $58.90 million October 2013
facilities in India, Nepal, Africa and
UAE and Malaysia South Asia
United
MedAccess n/a n/a $200 million December 2017
Kingdom
Twenty-three hospitals, India and
Narayana
plus numerous other Cayman India $49.49 million December 2014
Hospitals
care facilities Islands
Rainbow Hospitals Hospital in Hyderabad India India $48.85 million August 2013
STS Holdings Hospital in Dhaka Bangladesh Bangladesh $45.18 million December 2019
Healthcare for all? How UK aid undermines universal public healthcare I 13Group 1: Investments in companies, hospitals and healthcare funds
where questions have been raised about labour rights and business
practices
1. Abraaj Health Markets Growth Fund / After Abraaj’s collapse, the fund’s assets were
Evercare Health Fund bought out by American private equity firm TPG
($75 million, March 2016) Capital and became the Evercare Health Fund.75
The CDC website lists ten active investments
In 2015, private equity firm The Abraaj Group managed by the fund:
launched the Abraaj Growth Markets Health Fund
•• Abraaj Admiralty Hospital Limited, Perregrin
to invest in private healthcare companies in Africa
Properties (both Lagos, Nigeria)
and Asia. CDC invested $50 million in the fund at
•• Avicenna Healthcare 1 Pak (Private) Limited,
its launch, which later grew to $75 million.68 Abraaj,
Gate Healthcare 1 Pak (both Lahore, Pakistan)
which was legally based in the Cayman Islands
(ranked third in Tax Justice Network’s list of top 10 •• Evercare Dhaka (Bangladesh – more on this below)
countries that have done the most to proliferate •• Islamabad Diagnostic Centre (Islamabad, Pakistan)
corporate tax avoidance), said that the aim of the •• Healthlink Management Limited, Metropolitan
health fund was to acquire and build hospitals.69 Hospital Holdings Limited, The Avenue Group (all
However, of Abraaj’s nine healthcare investments: Nairobi, Kenya)
five are in pre-existing private hospitals, three are
•• CARE Hospitals Group (headquartered in
in supposedly new build private hospitals, and in
Hyderabad, India).
one there is no clear information available as to
what the investment has been in.70 Even aside from There is very little information available publicly about
the developments around Abraaj detailed below, these investments, but it appears that five of these
it is difficult to see how most of these investments relate to the purchase of pre-existing companies
contribute towards improved access to healthcare and in only three cases will the investments lead to
for the poorest. the construction of new hospitals.76 It is questionable
therefore whether these investments are really
But the story gets worse. In September 2017, a
having the impact that CDC claims they are. In the
meeting of the Abraaj Growth Markets Health Fund
case of CARE Hospitals, CDC also made a $30 million
with investors revealed that $200 million, one-fifth
direct equity investment in 2016 (as discussed below).
of the fund, had not been invested.71 In June 2019,
the Financial Times reported that Abraaj CEO More worrying, however, is CDC’s investment in
Arif Naqvi had allegedly “misappropriated more Healthlink Management Limited, the owner of
than $250 million into accounts under his control or Nairobi Women’s Hospital. Oxfam research has
those of family members and personal associates” previously revealed that the hospital’s care is
(liquidators now claim the figure could be as high as completely unaffordable to many Kenyans:
$385 million).72 Naqvi was arrested in the UK in April “At the Health in Africa-supported private Nairobi
2019 and was placed under house arrest pending Women’s Hospital, even the most basic maternity
potential extradition to the US. He has also been package would cost an average Kenyan woman
sentenced in absentia to three years’ imprisonment three to six months’ wages, at $463.”77
in a separate fraud case in the United Arab Emirates,
and Naqvi and Abraaj are both under investigation Furthermore, in February 2020 journalists reported on
in the US for alleged bribery in Pakistan.73 In both a cache of leaked WhatsApp conversations from
cases Naqvi denies any wrongdoing. The case has staff at Nairobi Women’s Hospital that showed a
been described by the Economist as the “biggest deliberate practice of overcharging patients.78
collapse in private-equity history”.74 The reports state that the WhatsApp group
14 I Healthcare for all? How UK aid undermines universal public healthcare“resembled a trading floor” with senior doctors 3. Vikram Hospitals (undisclosed
“pushing employees to work harder to increase intermediate investment, June 2013)
admissions”. Whistleblowers also described a
“corporate culture of being pushed to meet Vikram Hospital is a 225 bed facility in Bengaluru,
admission targets” and “a financial reward paid India that offers “specialised services including
to clinical officers for each admission”.79 CDC told Cardiac Sciences, Neuro Sciences, Bariatric and
us that they engaged both the company and the Metabolic Surgery” (capitalisation from original).85
fund manager when these allegations emerged. CDC’s website suggests that it has made two
intermediated investments in the hospital via the
Other Evercare Hospitals have been accused of Dynamic India Fund VII and the Multiples Private
overcharging patients throughout the Covid-19 Equity Fund I, both of which are domiciled in
pandemic including Evercare Dhaka (more Mauritius. CDC invested $30 million in the Multiples
information below) and Evercare Lahore, which Private Equity Fund in 2010 and $75 million in the
lists its price for a hospital room with a ventilator Dynamic India Fund VII in 2006.
as approximately £353 a day (over four times the
average monthly wage).80 In July 2020, Vikram Hospital came under criticism
after being “forced to shut their outpatient
2. STS Holdings / Evercare Dhaka department” for “not treating Covid-19 patients
($45.18 million direct investment, referred by [local government]”.86 A local medical
officer stated that Vikram Hospital was one of
December 2019)
several private hospitals in Bengaluru that was
As well as its indirect investment in Evercare Dhaka “telling [patients] that they don’t have beds and
through the Evercare Health Fund, in February 2020 refusing to treat them” despite treating numerous
CDC invested a further $45.18 million in STS Holdings. Covid-19 patients who were “paying cash or
STS is the operating company for Evercare Dhaka, other insurance patients”.87 It was then reported
a “425-bed multi-disciplinary hospital in Dhaka with in September that regulators had “initiated
healthcare providers across 29 specialties”, and criminal proceedings against four private hospitals
is currently developing a new, 350-bed facility in [including Vikram Hospital] for not following
Chittagong.81 The STS website describes its Dhaka government orders on allocation of beds for Covid
hospital as a “private sector for-profit corporate patients”.88 This was just over a week after the
hospital” and argues that “uneven demand and same regulator had threatened to suspend the
perceptions of poor quality [in Bangladesh’s public registration of 36 private hospitals in Bengaluru for
health sector] are driving patients to the private “allegedly failing to comply with the directions of
healthcare sector”.82 the Karnataka government to notify and reserve
50 percent of its beds for COVID-19 patients”.89
The investment is expected to help grow the hospital’s
nursing college, contribute to the creation of 950 This case highlights the potential for private hospitals
jobs and help reduce mortality rates by treating an to prioritise fee-paying patients over government
additional 380,000 patients by 2025. However, CDC referrals, a severely exclusionary practice, not least
appears to expect hospital inpatients to come from in the midst of a global pandemic. But this kind
middle-income groups with low-income groups of approach is inherent in the business model of
only treated through outpatient care.83 private healthcare.
Furthermore, in June 2020, Evercare Dhaka was
one of several hospitals in Bangladesh accused of
“exploiting the ongoing coronavirus health crisis”.
In particular, private hospitals in Bangladesh were
criticised for the high cost of Covid-19 testing (which
has been provided for free in the public sector).84
Healthcare for all? How UK aid undermines universal public healthcare I 15Group 2: Investments in major private healthcare companies that
appear to predominantly treat middle- to high-income patients
1. Asian Institute of Medical Sciences 2. CARE Hospitals Group
($21.32 million direct investment, ($30 million direct investment,
November 2017) February 2016)
The Asian Institute of Medical Sciences (AIMS) is CARE is India’s fifth largest private hospital provider
a private healthcare company in northern India, by number of beds, with 2,345 beds across central,
operating three tertiary care and two secondary west and south-east India which target India’s
care hospitals with a total of 775 beds.90 Its facility “emerging middle class”.92 CDC’s investment
in Faridabad is described as a “super speciality” enabled a consortium, including medical equipment
hospital and AIMS markets itself to a wide range supplier Medtronic and the Evercare Health Fund,
of international patients.91 CDC’s investment was to buy out CARE group via its subsidiary in Mauritius.93
designed to help AIMS’ expansion by adding up In April 2020, CARE’s COO Dr Riyaz Khan stated that
to 1,000 beds in its existing facilities in Moradabad CARE had “completely scaled down operations”
and Dhanbad, as well as in new facilities in Haryana, owing to the loss of revenue during the coronavirus
Bihar and Jharkhand (CDC argues that these lockdown, but reports from early May suggest that
are underserved cities with a high demand for most facilities have now reopened.94
healthcare and low supply).
3. Dr Agarwal’s Healthcare Limited
($30.26 million direct investment,
Adbh266 CC BY-SA-3.0
November 2019)
Dr Agarwal’s Healthcare Limited is India’s largest
ophthalmology chain which also operates across
ten countries in Africa. CDC’s $30.26 million
investment, made in November 2019, is designed
to assist the company’s expansion by providing
capital for the acquisition of smaller hospitals and
chains, supporting the treatment of patients in India,
Nigeria, Ghana, Kenya, Tanzania, Uganda, Zambia,
Rwanda, Madagascar, Mozambique and Mauritius.
CDC’s own website states that this investment will
primarily treat middle-income patients and that the
benefits to low-income groups will come from job
creation and the piloting of some centres for low-
income groups.95 It therefore seems that even CDC
has doubts about the ability of private healthcare
services to reach patients across all income groups.
A Care hospital in Banjara Hills, one of the most affluent
neighbourhoods of Hyderabad
16 I Healthcare for all? How UK aid undermines universal public healthcareGroup 3: Investments that have highly questionable development
impact
1. BioRitmo, Brazil (undisclosed for Nu Cosmetic Clinic, India, highlights a wide
intermediated investment, 2010) range of cosmetic surgery procedures provided by
the company at a substantial price.99 For example,
CDC invested $30 million in the Patria – Brazilian Nu Cosmetic Clinic advertises “Vaser Liposuction”
Private Equity Fund III (domiciled in the Cayman for between Rs. 85,000 and Rs. 350,000 (£950 to
Islands) in 2007. The Patria fund has made two £3,800). Male nose surgery is Rs. 75,000 to Rs. 100,000
healthcare investments in Brazil; one in an online (£800 to £1,100).100 The company highlights that
diagnostics service, and the other in BioRitmo, financing options are available for each treatment.
described as “the largest fitness club operator
in Latin America…that develops and manages In 2012, CDC invested a further $30 million in APF-II
health clubs for the premium and budget market”.96 alongside the International Finance Corporation
However, in a 2015 report on the growing fitness (IFC) and German DFI, DEG. This fund has made
industry in Brazil, BioRitmo is described as “one of the one investment in health on CDC’s behalf as well
most expensive fitness centers based in Sao Paulo”.97 as investments in a performing arts event company
In 2018, BioRitmo’s parent company SmartFit was and a business communications enterprise.101 The
reported to own 509 different fitness centres – the health investment is in Vidal Healthcare Services,
third highest of any gym chain globally.98 described as a “third party administration service
for health insurers” that “designs and administers
BioRitmo’s website shows that it offers a fairly various health management products including
typical programme of fitness classes from Zumba corporate wellbeing programmes, health savings
and Pilates to boxing, jiu jitsu and spinning. While accounts and consumer health plans”.102
personal fitness is, of course, important to individual
health, this investment appears to be primarily 3. The Avenues Clinic, Zimbabwe
aimed at improving healthcare outcomes for (undisclosed intermediated
middle- and high-income groups. Given the quote
investment, 2014)
above about pricing, it also seems unlikely that
BioRitmo is expanding access to fitness clubs to CDC invested $22.5 million in the Takura II
low-income groups. investment fund between 2013 and 2016. Takura
is domiciled in South Africa. Of its 14 investments,
2. Nu Cosmetic Clinic, India 11 are in Zimbabwe, one in Mozambique and no
(undisclosed intermediated information is provided for the other two. Seven
investment, 2016) of its investments are in food processors and
distributors, but the one health investment Takura
Through the APF-I fund based in Mauritius, CDC has has made is in Medical Investments Limited.
money invested in the Nu Cosmetic Clinic in India.
CDC invested $20 million in the APF fund in 2008, Medical Investments Limited is the parent company
but their investment in Nu was not made until 2016. for The Avenues Clinic Hospital in Harare, as well as
Nu is part of the Beam Hospital company, but is also two smaller clinics in the city.103 The Avenues Clinic
linked to Nu Cosmetic Clinic of the UK which has 20 has been described as an “upmarket hospital”
cosmetic surgery clinics across the UK. Nu has the which “continues to attract the country’s political
strapline “The World Awaits A Nu You”. The website elite and foreigners”.104
Healthcare for all? How UK aid undermines universal public healthcare I 17The problems with privatisation:
at home and abroad
The past 10-15 years have seen international An effective use of aid?
finance institutions turning to the private sector as
a means of improving healthcare access to some First, we can see from the investments summarised
of the world’s most marginalised communities. above that many of the companies that CDC
Since 2015, this approach has been touted as supports are major hospital chains operating
the only viable route to meeting SDG 3: Good predominantly in India and/or internationally. These
Health and Wellbeing for all. Both ‘affordable’ and hospitals (including CARE Hospitals, Dr. Agarwal’s
‘elite’ private healthcare businesses in the global and Evercare Dhaka) appear to predominantly
south have received large amounts of funding serve middle-income patients through their
from international donors and PPPs for providing inpatients service, as CDC’s own Impact Framework
healthcare have proliferated. The key problems admits. In most cases these investments are to
with this approach are summarised below. expand existing operations, increase capacity in
existing hospitals, or in some cases to expand a
It’s worth mentioning that, in this same period, company’s operations to new cities and countries.
healthcare in the UK has become increasingly The logic behind these investments does not
marketised, and that the support for private appear to be the targeting of groups of highest
healthcare in the global south is part of a global need, but to help already well-financed providers
pushback against public provision. In fact, the UK grow and reach new markets.
was one of the first countries to experiment with the
Private Finance Initiatives (PFIs) that have become The problem with this is that private hospitals are
the modus operandi for building new hospitals, very likely to be exclusionary, rather than designed
while an internal market has been established to meet universal need. But CDC does not appear
within the NHS. These approaches have created to mitigate this exclusionary drive in the decisions
significant problems, including several high profile they make, allowing investment to be driven by
disasters”, to the extent that the PFI model was what is good for business, not how to respond to
dropped by the Conservative government in 2018.105 the community’s health needs. These facilities are
fundamentally unsuitable vehicles for achieving
However, public opinion in the UK also appears to universal healthcare.
still firmly back the principles of a “national health
system that is tax funded, free at the point of use In some cases, CDC investees have performed
and provides comprehensive care for all citizens”, incredibly well (in financial terms) after the
whilst opposing (to some extent) threats to the NHS investment was made. For example, when
from stealth privatisation and a US-UK free trade Narayana Health went public in 2015, its initial
deal.106 If private healthcare doesn’t work for the UK public offering (IPO) was oversubscribed eight
public, then why should it work for the world’s most times and its share price rose 35% on listing day,
marginalised communities? suggesting that it had faced few problems
raising capital.107 CDC also claims that Rainbow
Healthcare, a private provider of paediatric and
maternity hospital services, has grown at over 30%
18 I Healthcare for all? How UK aid undermines universal public healthcareper year since their investment.108 While this may International finance institutions argue that private
demonstrate that they were sensible investments healthcare is the only way of broadening access to
from a purely financial perspective, it calls into healthcare in remote and isolated areas. Yet many
question how additional CDC’s capital has been PPPs and private initiatives fail on this measure
and whether the companies would have genuinely as investments are attracted towards more
struggled to find alternative investment had public profitable markets in already well-serviced areas
money not been used to reduce risk for the private (as evidenced by CDC’s investments in India which
sector. If CDC’s capital is not additional, then it are heavily concentrated in major cities). A 2014
is hard to view it as an effective use of aid as the report by Oxfam International, which examined
same healthcare services would likely exist with or investments in private healthcare in Africa, found
without CDC’s investment. that by tending to invest in large, well-established
companies and hospitals in urban areas, the Health
There are also numerous healthcare investments in
in Africa programme (funded by the International
CDC’s portfolio (e.g. Nu Cosmetic Clinic, BioRitmo)
Finance Corporation – part of the World Bank
which aren’t even targeted at expanding
group) failed to reach out to underserved
healthcare, and appear to have almost no
communities and supported the expansion of
development impact, being entirely divorced from
unaffordable services.110
the poverty reduction mandate of UK aid. At the
very least, CDC should review all of its healthcare Furthermore, numerous CDC-backed hospitals have
investments, divest from those for which it cannot been criticised for charging exorbitant prices and
identify a genuine development impact, and stop excluding patients during the Covid-19 pandemic.
investing via private equity funds. As mentioned above, Evercare Lahore’s Covid-19
charges are incredibly high, Evercare Dhaka has
Exacerbating inequalities and been accused of overcharging for Covid-19 testing,
and Vikram Hospital in Bengaluru faces legal
failing to improve access proceedings for failing to reserve beds for, and
There are hospitals and insurance schemes refusing to treat, coronavirus patients referred by
promoted by CDC-backed companies which the government.
do explicitly seek to extend health coverage to
low-income groups and underserved populations. “Privatisation is premised on assumptions
These may be well-intentioned projects and could fundamentally different from those that
be partially effective in extending affordable underpin respect for human rights, such as
healthcare to a wider group. But even so-called dignity and equality. Profit is the overriding
‘affordable’ services exclude patients, undermining
objective, and considerations such as
movements towards UHC and breaching the
equality and non-discrimination are
economic and social rights of citizens.109 There will
always be some who are unable to pay the fees; inevitably sidelined… Rights holders are
and these are always the groups that need free transformed into clients, and those who are
health coverage the most. poor, needy or troubled are marginalised.”
Philip Alston, former UN Rapporteur on Extreme
Poverty and Human Rights111
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