AfricaFocus (Washington, DC)

Africa: Accountability for User Fee Damage?

analysis

Editor's Note

"In contrast to the untested economic theories of the World Bank's health economists in the 1980s, it turns out the critics had been correct all along: user fees do not raise substantial revenue for the health sector, nor do they make public health interventions more effective."

Rather, argues Richard Rowden in a 2013 paper, user fees "turned out to be inequitable and sharply limited access to health care for the poor." Those who imposed these policies, he suggests, should be held accountable.

This AfricaFocus Bulletin contains excerpts from Rowden's article, entitled "The ghosts of user fees past: Exploring accountability for victims of a 30-year economic policy mistake." The full article is available in the journal Health and Human Rights at http://www.hhrjournal.org/archives/

Rowden recognizes that his proposal faces formidable obstacles to implementation, but he stresses "an unmistakable shift in international consensus away from health sector privatization and user fees toward public provision of universal health coverage (UHC) with tax-based financing."

Tentative evidence of such a shift came in December 2013 with a new Lancet Commission report on Global Health 2035 (http://globalhealth2035.org/). That report, authored by two of the principal advocates of the World Bank's earlier approach, including former World Bank economist Lawrence Summers, abandons support for user fees.

However, the report resolutely avoids any mention of the right to health or the broader socioeconomic context of health care. A critique of the report by 42 public health professionals appeared in The Lancet of 31 March 2014 (see http://tinyurl.com/kawlzl2).

They argue that the Commission's recommendations "are based on the principle of return on investment, not on health equity, while creating a double standard: one for the rich and another for the rest of us ... The Lancet Commission's recommendations do not represent the global health community and are fundamentally flawed by neglecting the principle of the right to health."

For previous AfricaFocus Bulletins on health issues, visit http://www.africafocus.org/healthexp4.php

The ghosts of user fees past: Exploring accountability for victims of a 30-year economic policy mistake

Rick Rowden

Health and Human Rights, Volume 15, No. 1, June 2013

Rick Rowden is a doctoral candidate in Economic Studies and Planning at Jawaharlal Nehru University (JNU) in New Delhi, India. Please address correspondence to the author at rick.rowden@gmail.com. ]

[Excerpts. To download full text, including footnotes, visit http://www.hhrjournal.org/archives/]

Today, there is an unmistakable shift in international consensus away from health sector privatization and user fees toward public provision of universal health coverage (UHC) with tax-based financing.

As part of broader efforts to privatize health financing in recent decades, the issue of user fees, in which fees are charged to users of health services at the time of delivery, proved especially controversial.

The newly emerging consensus against privatization generally, and against charging user fees in particular, was recently articulated in a September 2012 special issue of The Lancet on universal health coverage.

The shift was also underscored in the December 2012 adoption of a United Nations General Assembly resolution on affordable universal health care, which urged member states to develop health systems that avoid significant direct payments at the point of delivery.

In practice, this shift has been exemplified in recent years, as countries such as China, India, Brazil Mexico, Sri Lanka and others have rejected the privatization approach in favor of moving toward UHC.

This new support for UHC comes nearly 30 years after roughly the same conclusions had been reached at the 1978 World Health Organization (WHO) conference in Alma-Ata, Kazakhstan, at which UN agencies and health representatives of 134 countries and 64 organizations formally recognized access to health care as a human right.

The revolutionary significance of this acknowledgement implied tremendous new obligations on all governments to therefore adopt policies that would make a basic package of publically financed primary health care (PHC) universally accessible, affordable, and more socially responsible.

The Alma-Ata consensus reflected the then-almost universal acknowledgement of the importance of scaled-up investment in public health systems generally.

But the Alma-Ata consensus was reaching its apex of political support just months before the world was dramatically changed by the ascendance of neoliberal economic policies, as represented by the election of Prime Minister Margaret Thatcher in the UK in 1979 and President Ronald Reagan in the US in 1980 ... The Reagan and Thatcher governments led others in dramatically reforming the thrust of economic policy at the World Bank and other bilateral aid agencies, including on health policy.

Ironically, in the late 1970s, the World Bank had been influenced by the prevailing perspectives of the Alma-Ata Declaration, and its annual World Development Report (WDR) 1980 expressed the idea of health care as a universal human right and showed a strong commitment to primary health care.

And like other major international institutions at the time, the World Bank actually warned in the WDR 1980 against introducing user fees for health, education, and water: "The use of prices and markets to allocate health care is generally not desirable."

But just as the ambitious nature of the Alma-Ata vision of universal access for primary health care was becoming recognized, the US and UK brought in many new free market economists to the World Bank, which began to adopt the new conservative counternarrative that was emerging in the 1980s.

According to this narrative, public sector efficiency could be improved by privatizing the health sector and by introducing user fees, which in theory would raise the additional revenue necessary to make the health sector financially viable. Critics' warnings that poor people would be unable to afford these fees went unheeded.

... this article focuses on the World Bank, not only because it was a leader at the forefront of promoting user fees and significantly influenced other international agencies that followed its lead, but also because of its particularly coercive approach to making implementation of user fees a binding condition on its loans to many poor and aid-dependent borrowing countries.

Thirty years of user fees at the World Bank: From critic to advocate to critic again

The origins of this logic in favor of user fees first appeared within the World Bank in the 1981 report, "Accelerated Development in Sub-Saharan Africa."

Also known as the Berg Report after its author, the paper is considered an important turning point in World Bank thinking in the 1980s, as the organization moved away from the Keynesian economics which had dominated from the 1940s to the 1970s and towards the market-oriented approaches of neoliberalism.

Instead of finding ways to try to finance PHC, the report called for private insurance schemes, charging user fees at public health clinics, reorganizations and layoffs of staff in public health systems, streamlining administrative procedures, liberalizing the pharmaceutical trade, and "contracting out" to private firms.

... Instead of the Alma-Ata view of health care as a human right - in which government policy is obligated to fulfill - the paper's logic depoliticized and negated the state's obligation to this commitment.

Rather than exploring ways the state could fulfill this obligation, [World Bank economist] de Ferranti inverted the perspective to instead ask only how much health care could be afforded "subject to the resource constraint."

As this new logic took hold throughout the World Bank and other aid donors, the earlier high-profile commitments to the Alma-Ata principles of access to health as a human right, which included support of the public health provision of PHC, were abandoned rapidly.

The idea that individual "health consumers," who rationally base every purchasing decision on how best to optimize their cost efficiency, ought to "purchase" health services only when they have begun to show symptoms - and not before - was more than just a convenient cost-cutting measure.

It was arguably the kind of lethal reasoning that contributed to weakening the initial public health response to the HIV/ AIDS crisis, possibly making the epidemic far worse than it otherwise would have been. ...

The 1985 paper also made a strong push for general privatization of health care, claiming that the role of the private sector is "a key one."

While admitting that the evidence on private provision was so far inconclusive at the time, he [de Ferranti] still proposed a plan to foster the development of private institutions, in which the basic idea is to limit the growth of the public sector until the private sector can take over.

Privatization, along with defunding the public health system, is justified because if one can charge full-cost marginal pricing for patient care, then "for patient related services ... the arguments in favor of a strong public role in the provision of health care are, on close inspection, not very compelling."

...

By 1987, these papers proved influential in establishing new World Bank health sector reform policies, helping to completely invert the Bank's earlier position - as stated in its 1975 Health Sector Policy and 1980 WDR reports - as the use of prices and markets to allocate health went from undesirable to highly desirable.

By the mid-1980s, all of the intellectual pieces needed to justify the allocation of health care via the market with World Bank policy advice and loan conditions were in place; these became a key part of structural adjustment programs, particularly throughout the 1990s.

By 1993, the Bank published its first health-focused WDR, "Investing in health." which laid out the neoliberal agenda of user fees, privatization, and decentralization of government services.

... With structural adjustment programs, the World Bank and IMF offered new loans to heavily indebted developing countries, conditional on compliance with a set of economic policy reforms. ...

These changes greatly transformed the health sectors of dozens of developing countries as deep budget cuts, staff layoffs, and user fees were applied throughout the 1980s and 1990s; this had tragic consequences for millions of people who were too poor to afford the user fees.

[Eventually] under mounting pressure from civil society critics, the US Congress approved legislation in 2000 that prevented the US Treasury from approving any further World Bank loans with user fees included as binding conditions.

This compelled the World Bank to issue a revised user fees policy in 2001, in which it acknowledged that the fees have prevented poor people from accessing health clinics (and primary education), and stating it now "opposes user fees for primary education and basic health services for poor people."

However, it included a caveat that said it would still support user fees in some circumstances. ... despite the revision of user fees policies across UN institutions, the Bank still promotes them in some cases, and user fees remain common in many developing countries.

Wrong economic policies prove deadly

...

The 2008 World Health Report summed up the overall experience with user fees, documenting how many countries introduced them in the 1980s and 1990s in an effort to infuse new resources into struggling services, often in a context of disengagement of the state and dwindling public resources for health.

WHO noted in the report: "Most undertook these measures without anticipating the extent of the damage they would do." In many settings, "dramatic declines in service use ensued, particularly among vulnerable groups, while the frequency of catastrophic expenditure increased."

The WHO report also noted, "Where some countries have reconsidered their position and started phasing out user fees, this has resulted in substantial increases in the use of services, especially by the poor."

The 2010 World Health Report documented widespread "financial catastrophe (for households) associated with direct payments for health services" and states that "even when relatively low, any kind of charge imposed directly on households may discourage using health care services or push people close to poverty under the poverty line."

The 2010 WHO report found that when people have no choice but to use services, they may incur high - sometimes catastrophic - costs from which they never recover.

Taken together, WHO estimated that around 150 million people suffer financial catastrophe annually, while 100 million are pushed below the poverty line. WHO Director Margaret Chan has said that user fees represent "by far the greatest obstacle to progress" toward achieving universal coverage.

...

In contrast to the untested economic theories of the World Bank's health economists in the 1980s, it turns out the critics had been correct all along: user fees do not raise substantial revenue for the health sector, nor do they make public health interventions more effective.

Rather, they turned out to be inequitable and sharply limited access to health care for the poor. The surges in demand whenever the fees are abolished suggests that the neoliberal premises upon which user fees were based do not hold true.

... Coming full circle back to the earlier consensus arrived at in Alma-Ata, today's emerging consensus supports removing user fees as a way to increase health care utilization and improve health outcomes for the poor.

The quest for accountability

When considering the full circle journey from the Alma-Ata consensus in support of tax-financed, public PHC in 1978 to today's reemerging support for tax-financed, public UHC, it is worth asking how and why the international health community took this nearly three decade detour and how such a misguided alternative policy could have dominated during the intervening period.

More importantly, there are related questions of accountability and liability, and determining who is responsible for the tragedy. Trying to quantify the exact degree of criminally negligent homicide resulting from such economic policies is difficult to ascertain.

For example, James et al. projects that 153,000 child deaths could be avoided if user fees were abolished in 20 African countries. However, Yates looked back in time and raised perhaps even more important questions, estimating that 3 million child deaths could have been averted had user fees not been charged.

It is important to ask if the surviving victims of the negligent policies will get any recompense, or if there will be any accountability for the purveyors of the policies, such as the World Bank and/or its economists.

While precise quantification of the death and injury resulting from the implementation of user fees may not be possible, the degree of pain and suffering as a consequence of the policy is undeniable and considerable in magnitude; someone holds responsibility for the unnecessary nature of these injuries.

In criminal law, criminal negligence is defined as an act that is careless, inattentive, neglectful, willfully blind, or in the case of gross negligence, what would have been reckless in any other defendant.

Arguably, the World Bank exhibited such negligence because the implementation of user fees was like a grand ideological experiment on millions of unwilling subjects, whereas a proper approach to analyzing the effect of user fees would have been to first observe the outcome in small controlled studies, with subjects who have given their prior and informed consent.

But this was never done before the World Bank mandated user fees as binding loan conditions across dozens of poor and aid-dependent countries in a blanket manner.

Over time, legal advocates have expanded the frontiers of liability for injustices, with many countries adopting far-reaching legal codes for criminal malpractice lawsuits, particularly for legal and medical malpractice cases.

Increasingly, victims can seek redress from negligent doctors and lawyers, who can be faced with serious civil and criminal liabilities.

Pharmaceutical companies, too, are increasingly held liable and threatened with litigation in cases of gross negligence when they have marketed medicines that turn out to be unsafe.

It is noteworthy that while the legal and medical professions can decertify and disbar doctors and lawyers for malpractice, the economics profession has never established a process for sanctions against economists who get it wrong.

...

Legal advocates have been pushing the frontiers of legal liability in other arenas, however. Interesting steps forward have been achieved with the establishment of the International Criminal Court (ICC) to hold individuals accountable for human rights abuses and crimes against humanity across international boundaries.

The United Nations Working Group on the issue of human rights and transnational corporations and other business enterprises, and civil society advocates, such as Earthrights International, have been pursuing the boundaries of accountability for enabling local populations to seek redress for environmental or other human rights abuses committed by multinational companies in their overseas operations. However, attempts to sue international organizations such as the World Bank have proven difficult.

As a specialized agency of the United Nations, the World Bank has signed a relationship agreement with the United Nations which states that, while it should consult with and be respectful of the United Nations, it is not bound to comply with any UN instructions, with the exception of Article VII resolutions of the Security Council.

It has been argued that the United Nations Declaration of Human Rights (UNDHR), while not a binding treaty, is beginning to take on the characteristics of "customary international law" to which the World Bank is subject under the Vienna Convention.

This suggests that the UNDHR would impose on the World Bank an obligation to respect, protect, and fulfill human rights. However, holding the World Bank accountable under international law is difficult.

...

International lawyers have yet to fully explore or rigorously analyze this "accountability gap"; the rights, responsibilities, powers, and obligations of the Bank are not settled and need greater elaboration.

The Tilburg Guiding Principles on World Bank, IMF and Human Rights, drafted by experts at Tilburg University in 2001 and 2002, attempted to link legal obligations in the field of human rights to the organizations' obligations and discussed the possible redress of adverse human rights impacts of their activities.

The sixth Tilburg Guiding Principle notes that despite the fact that their relationship agreements with the UN allow the IMF and World Bank to function as independent international organizations, these only provide an organizational independence from the UN - not from international law.

Although the World Bank eventually changed its policy on user fees, it has not yet assumed any responsibility for reparations. One way to resolve the "accountability gap" is to strengthen and clarify the applicability of international law rules to the World Bank as a subject of international law with an attempted lawsuit on behalf of those harmed by Bank actions. Such a step would necessarily help clarify the responsibilities of the World Bank and other IFIs under international law.

Despite the independence from the UN provided for in its relationship agreement, the Bank remains part of the UN system and the degree of independence does not, as Tilburg Guiding Principles note, discharge the Bank from its obligations under international law as contained in the United Nations Charter.

For example, as a specialized agency, the World Bank is still obligated to further the objectives of the UN Charter and not to take actions that undermine those objectives. ...

The question of gross negligence arises because it is arguable that the World Bank knew or should have known that its user fees policy was violating the right to health.

By not intervening and continuing its financial and technical support and loan conditions for the implementation of user fees until at least 2004, the World Bank, along with its member states, is complicit in those human rights violations that occurred during this time, and violated the legal obligations enshrined in, inter alia, the UN Charter to promote universal respect for, and observance of, human rights.

Despite the fact that the World Bank is so obligated, its Articles of Agreement are filled with immunity clauses which attempt to make legal efforts holding the Bank accountable for its actions a virtual land-mine of procedural obstacles ...

Additionally, another avenue of argumentation notes that the member states that make up the World Bank all have human rights obligations.

These states cannot ignore, or indeed violate, these obligations simply by organizing themselves into the World Bank or by using the bank as an agent to carry out policies that violate their respective international human rights obligations. ...

This approach to the liability of individual member states of the World Bank is also relevant because most members are among the 160 countries which have made concrete obligations to ensure the realization of economic, social and cultural rights, with such obligations enshrined in the Universal Declaration of Human Rights and in a number of other human rights treaties, such as the International Covenant on Economic, Social and Cultural Rights (ICESCR).

[Note: the United States is one of the few countries that has not ratified the ICESCR - see http://tinyurl.com/qxqfpj5] ... States' actions taken at the World Bank to promote private financing including user fees have led to outcomes that would constitute violations of the obligations to pursue progressive realization of the human right to health and avoid retrogression in the realization of this right.

...

Despite the violations of the human right to health by the World Bank and its member states, the fact that survivors of such violations cannot yet avail themselves of remedies, such as those provided by international and regional human rights fora or the various United Nations treaty-monitoring bodies, suggests a degree of impunity for international agencies dispensing with health policy advice that should be noted with concern by the international health community.

As a lending agency, the World Bank has a duty to ensure that its projects, loan conditions, and policy advice are implemented in such a way that does not result in the violation of human rights, such as the right to heath.

Nevertheless, the Bank breached this duty by ignoring the human rights violations which occurred in the context of the implementation of user fees and therefore could be liable.

This liability should be explored further by civil society advocates and foundations by bringing together survivors of user fees with international lawyers to consider avenues for bringing a class action lawsuit against the World Bank.

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