Integrity and Corruption in the Health Sector by Dr Musa Ajlouni


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Integrity and Corruption in the Health Sector by Dr Musa Ajlouni

  1. 1. Integrity and Corruption in the Health Sector: General Introduction Dr Musa Ajlouni
  2. 2. What is Integrity ?
  3. 3. What is corruption? “Abuse of entrusted authority for private gain.” (USAID Anticorruption Strategy 2005) Logo from a Moldovan NGO working on anti-corruption
  4. 4. Corruption in the health sector “Actions of stakeholders within the health system mandated with governance and regulatory roles, or those that have a role in the delivery of services and/or providing inputs to the system, which are not legally provided for and which do or have the potential to do damage to the public or its interests.” Source:Nishtar S. Corruption in the health sector in Pakistan. Heartfile and transparency International; 2007.
  5. 5. Corruption in the health sector Corruption in the health sector is a concern in all countries, but it is an especially critical problem in developing and transitional economies where public resources are already scarce”
  6. 6. Corruption in the health sector Health system corruption is less likely in societies where there is broad adherence to the rule of law, transparency and trust, and where the public sector is ruled by effective civil service codes and strong accountability mechanisms. Source: William D. Savedoff and Karen Hussmann(2005).The causes of Corruption in the Health Sector.
  7. 7. High corruption vulnerability in the health sector • High degree of imbalances of information • Inelastic demand for services • Providers choose services for patients (Supply induced demand ) • Health professionals have assumed a cultural role as trusted healers who are above suspicion
  8. 8. • Services are highly individualized making it difficult to standardize and monitor service provision( clinical freedom) • The uncertainty of the health market • The complexity of health system High corruption vulnerability in the health sector
  9. 9. Impact of Corruption in the health sector • Reduces the resources available for health • Lowers the quality, equity and effectiveness of health care services • Decreases the volume of services • Increases the cost of provided services
  10. 10. Source: Five key actors in the health system Source: Savedoff and Hussmann, Chapter 1, The causes of corruption in the health sector, in Transparency International (ed.), Global Corruption Report 2006. Five key actors in the health system
  11. 11. How are corruption and fraud manifested in the health sector?
  12. 12. § Pharmaceutical companies can skew research studies, influence review boards or simply bribe regulators to approve or speed up the processing of their applications. § Health care providers and facilities may be tempted to pay a regulator to overlook lapses in licensing requirements. Regulators (ministries of health, parliaments, supervisory commissions)
  13. 13. Payers/Financers (Public and Private) § Decisions may be made to favour regions governed by political allies, rather than following criteria of equity and efficiency. § The public insurer can also allocate resources for political gain and at the expense of patients or taxpayers. § Private insurers: fraudulent billing. May bribe insurance regulators to ignore illegal practices.
  14. 14. Health care providers (hospitals, doctors, nurses, pharmacists) Providers may act in ways that are not in their patients’ best interests, whether motivated by direct financial gain, increased prestige, greater power or improved working conditions.
  15. 15. Health care providers § When providers are paid ‘fee-for-service’ it is in their financial interest to provide more services, and more costly services. § When paid on a ‘capitated’ basis they may provide fewer services . § When paid a fixed salary there is a tendency to be less productive and provide less care.
  16. 16. Health care providers § Publicly employed health providers may: • Abuse job by referring patients to their parallel private practice (or use public facilities and supplies to serve their private patients) • Absenting themselves to provide private consultations elsewhere. • Steal drugs and medical supplies • Take bribes from patients for services that are supposed to be free.
  17. 17. Health care providers § They may create ‘phantom’ patients to claim additional payments. § They can order tests to be conducted at private laboratories in which they have a financial stake. § They may prescribe expensive drugs in exchange for kickbacks or bribes from pharmaceutical companies. § Non-qualified health care providers who pass themselves as qualified and provide services that they are not qualified to provide (Quackery).
  18. 18. Health care providers § Health facility officials may accept kickbacks to influence the procurement of drugs and supplies, infrastructure investments and medical equipment. In so doing, they may pay higher prices or overlook shoddy work.
  19. 19. Patients § Patients may try to get free or subsidized care by underreporting their personal or family income. § Patients may misrepresent their enrolment in an insurance plan by using the insurance cards of friends or family members. § A patient may bribe a doctor to obtain benefits for non-health issues, such as a health certificate to obtain a driver’s license, to avoid military service or to obtain disability payments.
  20. 20. Suppliers § A range of practices are commonly used by pharmaceutical companies as incentives to encourage the use of their product such as distributing free samples, gifts, sponsored trips or training courses.
  21. 21. Suppliers § Suppliers may bribe procurement officers to authorize low quality equipment or repackaged expired medications. They can persuade providers to use their products at inflated prices, even when cheaper, equally effective alternatives are available.
  22. 22. Suppliers § Suppliers can bribe public health authorities in any of their normal procurement processes, including kickbacks from companies that want to win profitable hospital construction tenders Source: Global Corruption Report 2005
  23. 23. Suppliers § Suppliers can bribe regulatory agencies to develop policies in their favor. For example, pharmaceutical companies may influence governments to prevent generic drug manufacturers from competition, or equipment producers may try to change regulations so that licensed facilities will be required to purchase their products.
  24. 24. Corruption Categories § Practices which involve measures that usually lead to monetary gains. § Non-monetary, which involve unethical behaviors that are not primarily geared to monetary benefit in the short term but in due course would lead to some form of benefit.
  25. 25. Monetary Corruption 1.Financial leakages 2.Siphoning of public funds for private gains 3.Illegal profits 4.Benefits 6.Incentives 7.Pilferage 8.Illegal fees 9.Kickbacks Source: Nishtar S. Corruption in the health sector in Pakistan. Heartfile and transparency International; 2007.
  26. 26. 10.Informal payments 11.Petty corruption – over out allowances 12.Procurement frauds/irregularities 13.Theft of supplies and equipment 14.Over-invoicing and over payments 15.Clever book keeping 16.Overpayment for supplies 17. Graft and padding of bills 18. Selling public positions and bribes Monetary Corruption Source: Nishtar S. Corruption in the health sector in Pakistan. Heartfile and transparency International; 2007.
  27. 27. Non-monetary Corruption 1. Failure to base decisions on evidence 2. Deliberate lack of oversight by public officials 3. Deliberate inattention to mechanisms that compel accountability 4. Preferential treatment to well connected individuals 5. Unfair hiring practices and nepotism 6. Collusion/favoring amongst bidders in the contracting process Source: Nishtar S. Corruption in the health sector in Pakistan. Heartfile and transparency International; 2007.
  28. 28. Non-monetary Corruption 7. Inattention to staff accountably for misconduct 8. Use of public leverage/power for the benefit of private practice 9. Illegal and unethical marketing practices 10. Managerial reluctance to confront physicians 11. Staff Absenteeism 12. Ghost workers 13. Shaving off duty hours Source: Nishtar S. Corruption in the health sector in Pakistan. Heartfile and transparency International; 2007.
  29. 29. Underlying Causes of Corruption • Lack of clear standards of performance for providers • Lack of effective auditing and supervision • Limited enforcement of rules/no sanctions • Lack of accountability and oversight • Lack of citizen involvement and of local oversight and authority • Absence of monitoring and evaluation
  30. 30. Remedies • Government-wide anti-corruption stance; • Culture of public service; • Procurement and contracting rules, and enforcement of rules; • Public standards of conduct and oversight; • Effective enforcement of rules and rewards/punishment for behavior;
  31. 31. Remedies (cont.) • Improvement in civil service rules, pay and review; • raise quality of public management of health services; • Reform of provider units (TQM) – health providers input to raise productivity and performance;
  32. 32. Remedies (cont.) • Allow accountability at health service delivery unit to stem petty theft and improve management potential • Improve fiscal oversight with consequences for unlawful practices
  33. 33. Two basic strategies to address corruption • "Discipline-based approach" (top-down) – Laws, policies and procedures against corruption with adequate punitive consequence for violation – Attempts to prevent corrupt practices through fear of punishment • "Values-based approach" (bottom-up) – Promotes institutional integrity through promotion moral values and ethical principles – Attempts to motivate ethical conduct of public servant Department of Medicines Policy and Standards September 2007 – Good Governance for Medicines 33,WHO
  34. 34. Challenges • Cultural change is difficult; • Physicians hard to influence; • Oversight is costly and complex; • Some level of corruption emerges in most health systems; • Without controlling corruption health system is compromised in eyes of the public.
  35. 35. Corruption: a Global Issue
  36. 36. World Wide: Some Examples An average of 5.59 percent of annual global health spending is lost to fraud. Based on WHO estimates that global health care expenditure is about US$4.7 trillion, this translates into about US$260 billion lost globally to fraud and error. UNDP (2011).fighting Corruption In The Health Sector Methods, Tools And Good Practices.
  37. 37. Germany § In the mid-1990s, Germany investigated 450 hospitals and more than 2,700 doctors on suspicion of taking bribes from manufacturers of heart valves, life support equipment, cardiac pacemakers and hip joints. Source: Savedoff and Hussmann, Chapter 1, The causes of corruption in the health sector, in Transparency International (ed.), Global Corruption Report 2006.
  38. 38. Demands to punish corrupt doctors (Germany) § Germany's state-backed insurers are demanding prison sentences of up to three years for doctors who accept bribes or other gratuities: (Cooperation with pharmacies and pharmaceuticals ) Source:
  39. 39. Pakistan § A cross-country survey showed that 95% of the population perceives that the health sector is corrupt. § Another survey showed that the frequency of informal payments to public health care providers amongst the users of services is 96% . § Staff absenteeism and dual job holding is amongst the most serious issues at a health systems level in Pakistan. Source: Nishtar S. Corruption in the health sector in Pakistan. Heartfile and transparency International; 2007.
  40. 40. China In China and many former communist countries of Eastern Europe and Central Asia, the apparent existence of illegal payments has led observers to conclude that the health care system has been ‘privatized’, that it functions like a private health care market and is only nominally public. Source: Transparency International’s Global Corruption Report 2006 :Corruption and paying for health care.
  41. 41. USA The US Department of Health and Human Services has given estimates that government programs lose 10 per cent of their funds through fraud each year, an annual sum close to US $50 billion. Source: Transparency International’s Global Corruption Report 2006 :Corruption and paying for health care.
  42. 42. Albania § Informal payments to doctors and nurses are the single type of corruption that most Albanians are familiar with and have engaged in. News stories and word of mouth in Albania report numerous stories of poor patients being admitted to hospital but largely ignored by the medical staff because of their inability to pay informally. Maranaj Marku. Albanian Health System Financing And Corruption .Council of Europe Expert July 2010
  43. 43. § It is a frequent practice for doctors to intentionally avoid using public facilities and equipment for patient examinations, instead referring patients to private providers of the same services, with which the doctor has links. Albania Maranaj Marku. Albanian Health System Financing And Corruption .Council of Europe Expert July 2010
  44. 44. Integrity Score and Rank for Jordan,2012 Score: 48 Rank : 58/176 Source: Transparency International's 2012 Corruption Perceptions Index
  45. 45. Corruption Perception Index in the Arab Region,2012 818174Somalia37988Morocco 1317173Sudan41875Tunisia 1816169Iraq44666Saudi A 2115160Libya44666Kuwait 2314156Yemen47561Oman 1313144Syria48458Jordan 3012128Lebanon51353Bahrain 3211118Egypt68127UAE 3410105Algeria68127Qatar Score Arab Region Rank World Rank CountryScore Arab Region Rank World Rank Country
  46. 46. Corruption Perception in Jordan(2006 Survey). Public Sector Private Sector
  47. 47. Estimated Annual cost of health Corruption In Jordan • Total health expenditure in 2009 was estimated at 1610 million JD / third on pharmaceuticals. • Estimated spending that is lost to fraud (WHO 6 %):96 million JD is lost annually as result of fraud in Jordan(32 millions on pharmaceuticals)
  48. 48. In Jordan “..physicians/prescribers overall are quite susceptible to promotion by pharmaceutical manufacturers and there is a culture of prescribing branded new medicines, even where older medicines with cheaper generic equivalents exist and are scientifically proven to be as effective and safe.” Source:Samia Saad, MeTA Jordan Int.(2010). A model Standard Treatment Guideline (STG) for Essential Hypertension and Improving Rational Use of Medicines in Jordan.
  49. 49. Prescribing and dispensing behavior in Jordan § “The prescribing behavior of physicians [and dispensing behavior of pharmacists] are the primary reason for the high level of drug consumption in Jordan, changing the prescribing behavior [and dispensing practices] of providers is a necessary condition for achieving overall cost containment objectives”. (p.12 of NHA 2007)
  50. 50. Purchasing of Medications There are some specific aspects of the procurement process that are at higher risk of inefficiency and potential corruption, such as the local purchases of medications and medical supplies especially amount below the JD200 limit and as well the purchases of medications paid through reimbursement by the Health Insurance Administration. Source: UNDP Study about Integrity Assessment in the Health Sector: Public procurement in Jordan,Dec.2011
  51. 51. A study on Assessment of Current Situation of Home Health Care Services in Jordan Revealed: Prevalence of some unethical practices that included: hiring of unqualified workers, commission and “split fees”, enticing and luring clients, providing unnecessary services, etc. Musa Ajlouni And Hania Dewani (2012).Assessment of Current Situation of Home Health Care Services in Jordan, Scientific Research Support Fund
  52. 52. THANK YOU