Health Financialization and Palliative Care

By guest contributors Sherin Paul and Katherine Pettus

What is health financialization?

Health financialization is a process whereby privately held corporations, often multinationals, convert health into globally saleable commodities in the form of bonds, shares, equity, and asset value. This process of financialization subordinates public health and social welfare, traditionally government responsibilities, to private financial interests that prioritize short-term shareholder profits over long-term patient and community wellbeing. Since investments that tackle structural drivers of poor health show no return on investment, they remain unaddressed when financialization becomes the rule.

A few well-resourced entities, by definition, contaminate diverse healthily competitive ecosystems. Large corporate entities get the upper hand on pricing decisions depriving smaller players of market access and driving up the cost of care. These higher costs are transferred to the patient as copays, out of pocket expenditure and limited coverage. Poor people, unwilling to incur catastrophic out of pocket expenditure, are reluctant to seek health care, thereby further widening the inequity.

In short, governments that commodify or financialize their health systems, trade market efficiency for equitable access, essentially side stepping their legal commitment to protect, respect, and fulfill the right to health. As the data from India shows, economically and socially vulnerable groups are often the most adversely affected, either by outright health system abandonment or increased intensity of catastrophic health expenditure.

Kerala as the best practice example?

International commentators often cite Kerala, the first author’s home state in the south of India, as a best practice case of ‘good health at a low cost’. Its health system is fueled by a mix of public and private sectors, pillared on an empowered society that considers healthcare a ‘right’. This is one of the reasons Kerala is performing well on health status indicators such as maternal and infant mortality rates (MMR and IMR), life expectancy at birth etc. Both from provider – patient and public health perspectives, these are the factors any health system should try and achieve. A model that achieves this without imposing high-cost burdens on households among all sections of the society, is definitely revolutionary.

Yet how are these public/private systems actually financed? We note two tectonic shifts in Kerala’s health care delivery in recent years: first, government financing for public health care facilities through the Kerala Infrastructure Investment Fund Board (KIIFB), which underwrites large government infrastructure projects and is financed through capital markets and mechanisms like the International Finance Cooperation (IFC). Second, global giants like Blackstone and KKR financing private hospitals. One can justify this by saying that private hospitals are free to find capital for functioning and expansion. So, what’s the problem with these two major changes?

In their own words, ‘The International Finance Corporation (IFC) improves the lives of people in developing countries by investing in private sector growth. We connect economic development with humanitarian needs to create real progress for the people and places that need it most’. Though the public hospital infrastructure improved significantly with KIIFB funds, especially after the devastating floods that inundated the state in 2018, will this be akin to playing with fire? If KIIFB uses a user fee model of revenue generation essentially the general public will be stuck with the public debt of repaying the IFC.

Can global investors, including IFC, be satisfied with well performing health status indicators with their investments or do they want their profit margins to improve as well? Could the latter goal undermine the former? The evidence elsewhere has shown that these actors reorient the field, away from public health improvement to private profit.  Since the shift is only recent, it will take some time for its effects to manifest in Kerala. We can’t help but wonder though, if the incidences of medicine shortages in government hospitals, increased out of pocket expenditure and closure of smaller hospitals (street corner clinics) in Kerala are unrelated events, or indications of the adverse effects of health financialization.

Palliative care and financialization

How does palliative care fit into the picture? Kerala is one of India’s ageing states. Social development progress marked by high life expectancy and falling fertility rates, meaning that nearly one sixth (16.5%) of the population is aged 60 years and above. The United Nations Population Fund (UNFPA) projects the 60+ cohort as 22.8% of the state’s total population by 2036. Since ageing populations are associated with significant health and social burdens to households and economies, public authorities must create viable strategies to meet the increased palliative and end of life care needs.

Palliative care focuses on reducing health related suffering caused by illness or injury of any kind through special interventions, including physical, psychosocial, and spiritual. The community palliative care model that evolved in Kerala – The Neighbourhood Network in Palliative Care (NNPC) –  endorsed by World Health Organisation, is a prime example of how communities can empower themselves to manage basic palliative care needs in their midst.

But can the NNPC model address the rising palliative care needs of the state given changing demographics, including out migration of younger population? Will institutionalized hospice care facilities, already on the rise, capture the community space? It will be easy prey for the global capital investors that have already entered the core health care space. Would financializing palliative care, a practice intent on reducing suffering, transform it into a new source of suffering?

The US Hospice Industry

The US hospice industry is a cautionary tale: the profit based logic of financialization has shown itself in severe tension with the person centered logic of care that constitutes palliative and end of life care. Financialization compromises nurse and physician autonomy as the focus shifts to income generation from individuals and patient units.

The privatization of medical education and unregulated growth of private medical colleges in India have raised the cost of medical education in India. Many young doctors face the double whammy of repaying education loans coupled with the pressure of maintaining a reasonable standard of living for their families. Workplace pressures could conceivably lead doctors to prioritize profit over other considerations—they are, after all, only human.

Prioritizing profit fosters over-treatment and futile treatments, further increasing patient suffering toward the end of life. This results in practices such as treatment denial, withholding discharge (holding patients’ hostage in hospitals) until the bills are paid etc, all of which violate stipulated human rights. This undermines progress towards Universal Health Coverage, primarily affecting the poorest of the poor whose voice is politically the weakest. In this context, global investors and their financial intermediaries pressure institutions to increase health care costs to a level that exceeds the spending capacity of low resource settings. These costs are reflected in catastrophic and impoverishing household expenditure, especially in regions where health insurance coverage is traditionally low. Besides, most services provided at home in palliative care are excluded from benefit packages in insurance-funded systems. How do governments address these complex issues?

Conclusion

Kerala is just one case that illustrates how the growing global trend of health financialization is in tension with basic principles of equitable palliative care, which is characterized by high need and insufficient supply. It is important to translate the practical implications of health financialization into real world context and get the conversation going. The point is not to blame anyone or show any institution in a poor light. Fresh and informed conversations in contrast, can lead to feasible, inclusive solutions that benefit all parties.

Wemos suggests that “Universal and equitable public healthcare systems require public financing. And public resources for health should be used wisely, avoiding diversion into commercial solutions that do more harm than good”. However many countries, especially those classified as low-income and low-middle-income, governments might not be able to do all the fiscal heavy lifting. In such situations, they need to have a well-thought out plan on how to welcome private parties to provide health care, with containment of  health care costs.

Governments should be able to take informed decisions, free of pressure or lobbying from financial giants and their intermediaries, about how their populations can be protected from catastrophic and impoverishing health expenditure. To achieve this, they can empower communities to understand healthcare as a fundamental right. Such education will generate popular demand for an equitable, participatory and accountable healthcare system that includes preventive, promotive, curative, rehabilitative and palliative care services, from their respective governments. We are working for a world where good quality palliative care is accessible to all who need it.

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