Tackling Health Care Corruption and Governance Woes in

Developing Countries

Maureen Lewis

Advisor, HD Vice Presidency

Nonresident Fellow, CGD

Outline of Presentation

Define corruption and poor governance for the health sector

Demonstrate the relative importance of poor governance to health outcomes

Measure corruption and poor governance in health care delivery

What to do about it?

Institutions matter

Health systems are the institutions and will carry the burden In reaching the MDGs In making “cost effective” meaningful In absorbing more funding

Poor governance and corruption undermine the effectiveness of donor and country efforts to achieve better health status

Governance and corruption

Not typically addressed in health Spending often occurs even when there are

indications of poor governance KKM components of importance:

Government effectiveness Control of corruption Voice and accountability

Corruption: “use of public office for private gain”

Percent Perceiving Corruption in the Health Sector

0% 10% 20% 30% 40% 50% 60% 70% 80% 90%

Sri Lanka (2002)

Khazakhstan (2001)

Peru (2001)

Bangladesh (2002)

Kyrgyz (2001)

Bosnia (2000)

Bulgaria (2002)

Senegal (2001)

Romania (2000)

Croatia (2002)

Macedonia (2002)

Slovakia (2000)

Albania (2002)

Bolivia (2001)

Madagascar (2001)

Serbia (2002)

Morroco (2001)

Moldova (2000)

Tajikistan (2001)

Control of Corruption

4060

8010

012

0

-2 -1 0 1 2Government effectiveness (KKM 2005)

4060

8010

012

0

-2 -1 0 1 2Control of corruption (KKM 2005)

R² = 0.293

R² = 0.222

4060

8010

0

-2 -1 0 1Voice and accountability (KKM 2005)

R² = 0.085

Gov’t Effectiveness Voice & Accountability

Relationship Between Corruption Indices and Immunization

Regression results on the determinants of measles immunization coverage

KKM government effectiveness indicator positive, robust and significant

Ethno-linguistic fractionalization consistently negative and significant

Average primary school completion of women important to better coverage

GDP per capita irrelevant

Separating governance from corruption Some are obvious:

“selling” official positions kickbacks, outright theft

Others are less clear Sometimes it is simply mismanagement,

inefficiency, inertia, etc. Incentives are often wrong Tracking performance tends to be a low

priority and hard to do in health

Drugs and Supplies

Drugs often go missing Costa Rica 32 of users are aware of theft Uganda drug leakage in 10 rural clinics

averaged 73% China about 30% of drugs are expired or

counterfeit Ethiopia and Nigeria recorded missing

equipment: in Ethiopia only 21 percent of hospitals have autoclaves

0

5

10

15

20

Saline Solution

Cotton Dextrose Penicillin

Bolivia (1998)

Argentina (1997)

Venezuela (1998)

Colombia (1998)

Comparison of Purchase Price Difference for Selected Medical Supplies Across Public Hospitals in Four Latin

American Countries

Leakage Rates for Health Care, Selected Countries

COUNTRYYEAR LEAKAGE

RATETYPE OF

EXPENDITURE

Ghana 2000 80% Non-salary budget

Peru 2001 71 “Glass of Milk” Program

Tanzania 1999 40 Non-salary budget

Uganda 2000 70 Drugs and supplies

Source: Lindelow, Kushnarova, and Kaiser, 2005

Absence Rates Among Health Workers

Health staff

Health staff

Hospital MDs

Health staff

Health staff

Health staff

Rural clinics

Large rural centers

Health staff

Rural MDs

All MDs

Health staff

Rural MDs

0 10 20 30 40 50 60 70 80 90 100

India (Udaipur) (2004)

Bangladesh(2004)

Mozambique (2003)

Indonesia (2004)

PNG (2000)

Dominican Republic (1989)

Honduras (2001)

India (2003)

Uganda (2004)

Uganda (1997)

Proportion Making Informal Payments Among Users

0 10 20 30 40 50 60 70 80 90 100

Ghana (2000)

Vietnam (1992)Thailand (2000)

Indonesia (2001)Cambodia (2000)

Peru (2001)Paraguay (1999)Colombia (2001)

Bolivia (2002)

Sri Lanka (2001)Pakistan (2002)

Nepal (2002)India (2002)

Bangladesh (2002)

Slovakia (2000)Russia (2002)

Romania (2000)Moldova (2002)

Macedonia (2002)Latvia (1998)

Kyrgyz Republic (2001)Kosovo (2000)

Hungary (2002)Czech Republic (2002)

Croatia (2002)Bulgaria (2001)

Bosnia (2002)Armenia (2001)

Albania (2001)

Informal Payments as % of Half-monthly Income

0 50 100 150 200 250

Thailand (1999)

Tajikistan (1999)

Sri Lanka (2001)

Russia (2002)

Peru (2001)

Pakistan (2002)

Krygyz (2001)

Kazakhstan (2002)**

India (2002)

Ghana (2000)

Cambodia (1999)

Bulgaria (2001)

Bolivia (2001)

Bangladesh (2002)

Armenia (2001)

Albania (2002)*

Albania (2002)

Inpatient

Outpatient

Are patients satisfied?

Corruption is common: Out of 23 countries health ranked in the top 4

most corrupt sectors in 10 countries Evidence from Pakistan, Indonesia, El

Salvador and Turkey show similar views: Low quality of public health care Limited hours and long waits Lack of non-labor inputs

What to do? Improve government effectiveness:

Mixed evidence on the impact of higher salaries, sometimes more corruption

Better incentives for health workers: employment security recruitment and promotion criteria; and capable management more important

Raise accountability (hire & fire staff locally) Improved oversight; sometimes inspectors

improve performance

Improve government effectiveness (cont.) Increase audit by central government and

autonomy of local government to ensure following of financial procedures

Address who pays: raise formal fees and ban informal payments

Contract out services with pay-for-performance

Citizen “report cards” Local oversight can be helpful

Control corruption

National anti-corruption strategy Data base of staff to bolster administration Improve records and oversight of info In Colombia and Argentina cost of supplies

declined with the use of price lists and transparent purchasing

More information to citizens about public health care expectations and performance

Make government accountable to communities/national government/oversight board

Voice: mixed results

Voting and NGO presence have minimal if any effect on corruption in Bolivia, but corruption is lower where local organizing groups are active

In Uganda and Philippines voter turnout and corruption levels are unrelated

Suggests that public service delivery does not affect voting patterns or candidate selection

Voting may be too blunt an instrument

Conclusions

Returns to health investment may be very low with corruption and low effectiveness

Institutions matter: health systems cannot be divorced from efforts to improve governance

Institutional factors need to be strengthened along with spending to improve performance

Need more evidence Health can’t be sidelined in overall corruption

agenda of donors or countries