assessing governance for eliminating corruption in the health sector in pakistan partnership for...

Assessing governance for eliminating Assessing governance for eliminating Corruption in the health sector in Pakistan Corruption in the health sector in Pakistan

Partnership for Transparency Fund Support to Partnership for Transparency Fund Support to Civil Society Initiatives for GovernanceCivil Society Initiatives for Governance

Objective of the project Objective of the project

….. to carry out an anti-corruption intervention in one health facility setting in NWFP in collaboration with the NWFP Health Reform Unit, drawing on the existing evidence of corruption in the health sector with a view to developing assessment and intervention tools that can later be utilized and institutionalized in other health facilities of the province……

Project Plan of Action:Project Plan of Action:

Phase Activity

Assessment A generic review of existing data and evidence; literature search and key informant interviews and focus group discussions using a validated instrument and development of indicators

Intervention Site specific assessment of corruption Strategizing interventions and the development and application of tools. Development of an Agreed Action Plan for the NWFP Government Department of Health on an anticorruption strategy within their jurisdiction of authority

Dissemination Sharing of results with members of the Health Policy Forum and other broad based groups of public health professional, health-policy makers, media, community groups, international experts, agencies involved in civil services reform such as the National Commission on Government Reform, with which Heartfile has collaborative linkages.

Institutionalization A train the trainer’s workshop

Envisaged outcomesEnvisaged outcomes

• Institutional buy-in into an anti-corruption agenda within the health sector in one province in the country.

• The development of a pilot site, where anti-corruption intervention will enable bringing down the costs of corruption in financial and human terms

• Agreed Action Plan for the NWFP Government Department of Health on an anticorruption strategy within their jurisdiction of authority

• Development and institutionalization of anti-corruption assessment and intervention tools.

The envisaged outcome and actual outcomes The envisaged outcome and actual outcomes at the end of project at the end of project

Envisaged outcomes Status at end of project

Institutional buy-in into an anti-corruption agenda within the health sector in one province in the country.

Achieved: a formal MOU exists with the Government of NWFP with institutional commitment to address this issue.

The development of a pilot site, where anti-corruption intervention will enable bringing down the costs of corruption in financial and human terms.

Has not been achieved: post MOU, discussions with the DoH of NWFP pointed to the need for a corruption mapping as that has not been done in the country. Interventions can only be structured when there is clear indication of what needs to be intervened on. DoH NWFP was also reluctant to have a facility named especially after the political turmoil in Lady Reading Hospital which was named in the MOU

Agreed Action Plan for the NWFP Government Department of Health on an anticorruption strategy within their jurisdiction of authority.

Achieved: action plan has been developed and recommendations have been endorsed by the Government of NWFP.

Development and institutionalization of anti-corruption assessment and intervention tools.

Is on its way to being achieved: Linkages have been developed with the National Accountability Bureau to institutionalize the plan developed. One of the main talks scheduled by NAB on the occasion of the National Anti-corruption day on December 8 in a high level national seminar is based on this work.

Update on what has been achieved in term of Update on what has been achieved in term of the following phases the following phases

1. Assessment

2. Intervention

3. Institutionalization

4. Dissemination

1.Project

Assessment

1.Project

Assessment

Why is corruption central for being addressed as a Why is corruption central for being addressed as a governance issue in health systems governance issue in health systems

• Evidence shows that countries with higher indices of corruption have poorer health outcomes.

– (IMF Working Paper 00/116, Appendix Table 9 p.27 - 71 different countries showed that countries with high incidences of corruption have higher rates of infant Mortality)

• Evidence shows that reducing corruption can improve health outcomes by increasing the effectiveness of public expenditures

– (Omar Azfar, Corruption and the delivery of health and education services, Chapter 12 in Bertram Spector (ed.) Fighting Corruption in Developing Countries. Bloomfield, CT: Kumarian Press, 2005 )

• Corruption stands as the key impediment to the impact of well intentioned spending

– Transparency International

Cross country comparison of three corruption related Cross country comparison of three corruption related indicator relevant to the health systems indicator relevant to the health systems

0

50

100

150

200

250

Alb

ania

Arm

enia

Ban

glad

esh

Bo

livia

Bo

snia

Bu

lgaria

Cro

atia

Gh

ana

Ind

ia

Kazakh

istan

Kyrg

yz

Maced

on

ia

Mo

ldo

va

Pakistan

Peru

Ro

man

ia

Slo

vakia

Srilan

ka

Tajkistan

Th

ialand

% Perceiving corruption in health % who make informal payments

Informal payments as %age of half monthy per capita income

How is corruption ‘measured’ and studied How is corruption ‘measured’ and studied conventionally? conventionally?

• Corruption measurement is one of the most challenging areas in governance diagnostics because of definitional ambiguities, complexities in categorization, overlap of forms and its linkage with the cultural and social milieu within which activities can be perceived as being corruptive.

• In corruption assessments, scientific insights that are within the purview of health systems and policy research are usually not sufficient and often there is a need to incorporate lessons from political science and sociology and the public policy process in general.

How should corruption ideally be measured? How should corruption ideally be measured? Corruption at the governance

level Forensic investigations Economically modeled estimates based on existing commission ratesPublic expenditure tracking surveys Price information comparisons Standardized assessment of quality and performance of key elements of

governanceFocus groups

Service delivery

Informal payments Exit interviews Focus groups

Staff absenteeism and ghost workers

Data from staff and wage paymentsExit interviews Focus groups

Quackery Health census Focus groups

Theft Data from electronic supply inventories

Marketing

Spurious drugs Market surveys Focus groups

Unscrupulous marketing Employee records and business registers Focus groups

Nishtar S. Corruption in the health systems. 2007 - In press

Constraints for the project (assessment phase) and what Constraints for the project (assessment phase) and what appeared to be achievable?appeared to be achievable?

Corruption at the governance level

Forensic investigations (corruption does not leave a paper trail)Economically modeled estimates based on existing commission ratesPublic expenditure tracking surveys (Need electronic tracking systems)Price information comparisons Standardized assessment of quality and performance of key elements of

governance (indicators for quality and performance not available) Focus groups (performed in this study)

Service delivery

Informal payments Exit interviews (performed in this study) Focus groups (performed in this study)

Staff absenteeism and ghost workers

Data from staff and wage payments (Need electronic tracking systems)Exit interviews (performed in this study) Focus groups (performed in this study)

Quackery Health census (Cost, time and labor intensive)Focus groups (performed in this study)

Theft Data from electronic supply inventories

Marketing

Spurious drugs Market surveys (Cost, time and labor intensive & some already available from which inferences were extrapolated)

Focus groups (performed in this study)

Unscrupulous marketing Employee records and business registers (time intensive but data available) Focus groups (performed in this study)


Therefore in the project proposal it was outlined that focus group discussions and informant interviews would be used as a tool for assessment

Definitions of corruption considered for the Definitions of corruption considered for the project project

• ….use of public office for private gain• ….the sale by government officials of government

property for private gain• ….pattern which is seen to exist when a power holder,

responsible functionary or office holder is by monetary or other rewards not legally provided for induced to take actions which favor whoever provides the rewards and thereby does damage to the public and its interests

Drawbacks of the definitions Drawbacks of the definitions

• …use of public office for private gain• …the sale by government officials of government

property for private gain• Both of them do not include corruption in the

private sector• …pattern which is seen to exist when a power holder,

responsible functionary or office holder is by monetary or other rewards not legally provided for induced to take actions which favor whoever provides the rewards and thereby does damage to the public and its interests

• fails to appropriately allude to the ethical, moral and intellectual aspects of corruption

Broader definition of corruption in health Broader definition of corruption in health systems employed for this study systems employed for this study

• ………actions of stakeholders within the health system mandated with governance and regulatory roles, or those that have a stake 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…………

Assessment phase of the project - design Assessment phase of the project - design

• Descriptive, qualitative study using focus group discussions and informant interviews as evaluation tools

• Ethnographic methods inclusive of in-depth interviews with key informants, document review, and participant observation

• Many of the conclusions reached in the report were triangulated

Key findings: what are the modes of corruption in Key findings: what are the modes of corruption in health and their outcomes in a developing country health and their outcomes in a developing country settingsetting

Outcomes1. Leakage of funds from the state system through kickbacks, illegal profits, bribes, theft, embezzlement or inflated public procurement prices2. Costs in accessing care3. Compromised quality of services


•Strategic vision and directions and state capture•Decision making

•of relevance to health related human resource•in procurements and contracting

•Regulation•Regulation of publicly financed and provided services

•Publicly financed systems where oversight of field operations is critical:•Publicly financed systems where services are delivered out of facilities

•Regulation to correct market failure•Regulation of service delivery in the private sector•Regulation of health related human resource•Regulation of medicines and pharmaceuticals

Excerpts from the report in each area………state Excerpts from the report in each area………state capture capture

• …………..State capture is a broader phenomenon in policy and decision making. It has been frequently cited that the tendency to invest in civil works, physical infrastructure and equipment purchases is motivated by vested interest; however this may not always be the case. However on the other hand, instances have been well reported where regulations have been changed to favor commercial entities without regard to access and affordability implications………..

Decision making of relevance to health related Decision making of relevance to health related human resourcehuman resource

• ………. a number of malpractices are frequently reported; these range from preferential treatment to well connected individuals, unfair hiring practices and nepotism in recruitments to staff placements in key roles critical in enabling corrupt practices to prevail; another form of corruption in the human resource arena is deliberate lack of oversight and inattention to mechanisms that compel accountability by senior public officials. This is most pronounced in the case of managerial reluctance to confront physicians in public hospitals and in the case of human resource misconduct in the delivery of publicly financed services, particularly those that involve a field oversight component. ……..

Contracting and procurementsContracting and procurements

• Corruption is most institutionalized in the health sector in the domain of contracting and procurements; patterns in pharmaceuticals sector

• Kickbacks from suppliers and contractors to influence the selection process • Bribes to public officials monitoring the winning contractor’s performance. • Invoicing, overpayments by government agencies so that the margin can be

shared back. • Corrupt procurement officers can also purchase sub-standard drugs in place

of quality medicines and pocket the difference in price.• Over invoicing, padding bills, clever book keeping

– prevalent rates of commissions are 10-20% based on which the funds pilfered can be easily calculated

– a parallel and institutionalized mafia operates the commission related accounts– funds usually channeled into a ‘fund’ which is managed and disbursed according to

unwritten but clearly stipulated rules and procedures – sometimes these are referred to as ‘Kitty funds’

Procurement embezzlement Procurement embezzlement

• In hospitals with minimal levels of oversight blatant forms of procurement frauds have been documented.

• Similar frauds have been reported in other settings even where the level of oversight was much better but where procurement officials find a way around them.

• The time established forms of corruption involving collusion in the contracting process and the sharing of kickbacks amongst those involved in the process continue to prevail;

• In high budget equipment procurements doctors ask for items with narrow specifications; it perceived that sometimes these are preconceived in concert with the commercial sector with prearranged incentives

Corruption in procurement of equipmentCorruption in procurement of equipment – case study – case study from a developing country from a developing country

• In a facility where the level of oversight was minimal, an enquiry commission found gross discrepancies with respect to specifications on comparative statements vis-à-vis physical verification of radiological equipment which additionally was of severely compromised quality. For example, a ‘Cardiac Color Doppler’, which was purchased at three times the price of the state of the art Cardiac Color Doppler machine available in the market, had no color mode and had been fixed with an abdominal probe. In the same hospital, the ‘echo machine’ bought for a hefty price consisted of an out dated computer monitor whereas a water de-ionizer purchased far above the market price consisted of 10 kg water canisters.

Regulation of publicly financed and provided services Regulation of publicly financed and provided services where filed oversight is necessary where filed oversight is necessary

• In the area of a sophisticated systems of regulatory corruption exists; this on the one hand, enables the regulator and inspector to falsify records to show visits and procurements and embezzle discretionary funds sharing them all the way up in the hierarchy. On the other hand, as a result of the consequent deliberate inattention to oversight as part of the inspectors, health providers are absent

from duty and steal supplies to foster businesses on the side.

…….. a case from the Family Planning Program of .. a case from the Family Planning Program of Pakistan Pakistan

Sell free contraceptives for a cost in facilities

Siphon free contraceptives for commercial use in private clinics

Family Welfare Clinic Staff (FWC)

Staff

Do not run satellite clinics

Waste contraceptives to show consumption to meet targets

Deliberate inattention to oversight by DPO at the level of FWCs

FWC staff enable falsification of documentation to show monitoring visits

Sell contraceptives in the market and pre-marked consignments to wholesalers

Staff are absent from FWCs

False TADA’s False POL records

Percentage of funds goes to higher authorities who then deliberately do not hold DPOs accountable for misconduct

Commercial sector are party to such practices

District Population

officer (DPO)

Regulator

Pilferage through discretionary use of funds


Pri

vate

Secto

r

Health professional absent from duty, shave off hours, ghost workers

Care provided in the unregulated private market Quacks

Flourishing Diagnostic facilities in private sector

Illegal gains Access costsQuality compromised

Diagnostic equipment undermined

Public procurements and contracting (bribes, kickbacks and commissions)

State capture

Pu

blic S

ecto

rP

rivate

Secto

r

Determinants of corruption in service delivery - the Determinants of corruption in service delivery - the public private nexus public private nexus


Corruption at the Service Delivery Level (excerpt from the Corruption at the Service Delivery Level (excerpt from the report) report)

• …………….Corruption in service delivery has its root in the existence of an active private sector in health and the imbalance it creates in terms of the differences in remuneration and incentives – public vis-à-vis the private sector. Low salaries manifest themselves in the form of informal payments, absenteeism, theft and other individual coping strategies and a range of unethical health provider behaviors which are exacerbated by no regulatory control and absence of quality assurance mechanisms in the country. These are also symptomatic of bad management and are a reflection of absence of accountability…………….

Reported ethically corrupt practices in health care Reported ethically corrupt practices in health care provider’s behaviors (excerpts from the report)provider’s behaviors (excerpts from the report)

• Public job leverage to boost illegal practices and private facilities. • Refusing to see patients in hospitals and referring them to private

clinics as a conventional norm. Clinic prescription is the ticket to accessing of public sector bed – a phenomena resident staff is familiar with

• Commission based incentives generated from prearranged diagnostic facilities enables private providers to supplement their income but have heavy implications for cost of care most of which is borne by out of pocket payments by patients.

• Theft and pilferage of supplies is institutionalized at all levels of public sector care. Pre-marked and packaged drugs are sold back to the wholesaler

• Quackery is rampant not only in the rural but also in the urban slum and peri-urban areas

• Hospitality based incentive intense marketing by the commercial (pharmaceutical sector) is the conventional norm

Peer regulationPeer regulation

• The report also alludes to the unethical practices of the private sector and the regulatory maladies in the purview of self regulation of human resource which are prey to regulatory capture, using the Pakistan Medical and Dental Council as a case in point. In addition it maps the corrupt practices in the regulation of medicines chain, which can involve registration, price setting, production, wholesaling, and retailing, licensing pharmacies, marketing and procurements – to which both the public and the private sector are a party.

2.Intervention

2.Intervention

In view of the major constraints it was decided to In view of the major constraints it was decided to change the course of the project - what were these change the course of the project - what were these constraints…………..constraints…………..

• Post MOU, discussions with the DoH of NWFP pointed to the need for a corruption mapping as a first step, as that has not been done in the country.

• There was a wide agreement that interventions can only be structured when there is clear indication of what needs to be intervened on.

• DoH NWFP was also reluctant to have a facility named especially after the political turmoil in Lady Reading Hospital which was named in the initial MOU

• DOH NWFP wanted to structure the anti-corruption work for the health sector and not a hospital in isolation, after a careful review

• It was mutually decided to conduct an assessment and propose a way forward

• The nature of the anti-corruption efforts required were outside of the scope and scale of the present intervention

3.Institutionalization

3.Institutionalization

1. MOU with the department of Health of NWFP1. MOU with the department of Health of NWFP

2. Agreement on the Action Plan – key elements 2. Agreement on the Action Plan – key elements

• Further analytical work: put a precise number value on the level of funds misused through economically modeled estimates based on existing commission rate

• Action Plan – summary points • The country has a legal framework - both in substantive and institutional

terms to address corruption - what is required is strengthening of the institutional framework as well as the implementation and application of the existing laws and procedures.

• In addition it stresses on the following points as key recommendations: – Firstly, developing effective and transparent systems for public service

with a focus on institutionalizing integrity in public service and ethical and administrative codes of conduct taking due account of the existing relevant international standards.

– Secondly, the development of management tools that safeguard accountability of public service; these include transparent auditing and procurement procedures and systems that promote fiscal transparency and information availability.

…….elements of the Action Plan .elements of the Action Plan

• Thirdly, the use of technology for promoting transparency in management and tracking;

• in the fourth place, strengthening of local regulations in line with the international code of marketing practices;

• In the fifth place, mainstreaming alternative modes of service delivery and financing bringing efficient management that is given true administrative and fiscal controls, albeit while paying due attention to equity considerations in the delivery of services.

• And finally, capitalizing the public private nexus to make governance more inclusive and participatory as well as independent and transparent at several levels within the health system.

4.Dissemination

4.Dissemination

……. At a national level . At a national level

• Study findings will be presented at the National Meeting organized by the National Accountability Bureau on December 8, 2007– NAB is a statutory national institutional entity of high visibility

which is mandated with anti-corruption work in Pakistan; it was created in 1999 through the promulgation of the Ehtesab (accountability Ordinance) 1999

– To date, NAB has recovered billions of Rupees and prosecuted many corrupt officials in the past including many renowned politicians and high ranking officials

– NAB is yet to begin anti-corruption work in the health sector and the possibility of building further on the work of this project is very strong

In NWFP ….In NWFP ….

• Department of Health of NWFP will release the action plan once the new elected government is in place to garner their commitment subsequent to which some key anticorruption interventions in the electronic systems domain will be developed and institutionalized as a priority

• The Health Policy Forum will oversee this process and provide technical support to it over a long term basis; Health Policy forum of Heartfile, advises DoH NWFP on several matters and is currently also drafting the provincial health policy

• This study will form the opening chapter of Gateway Paper 111 on health reform – a [powerful technical and political tool to place anti-corruption work high on the agenda

assessing governance for eliminating corruption in the health sector in pakistan partnership for...

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