Indian private hospitals biggest beneficiaries of international aid programmes

Such strategy perpetuates inequality and does not redress issues related to poverty, say experts

By Jyotsna Singh
Published: Friday 17 July 2015

The biggest recipients of investment through aid programmes of rich nations have been the large commercial hospital chains in the emerging economy countries. Limited to a few million dollars till some years ago, the trend has picked up internationally with hundreds of dollars doled out to corporate chains. Indian corporate hospital chains have been the biggest beneficiaries of such aid programmes. Experts have raised concerns about issues of equity and poverty redressal.

Authors of a recent editorial in British Medical Journal Benjamin M Hunter and Susan F Murray of King’s College London, UK, carried out a preliminary analysis of investment commitments to private hospitals and clinics by international development finance institutions. They found that at least US $2.3bn has been committed by them of which $1.9bn had been committed in the last eight years.

Indian companies received $470m, ahead of Turkey ($345m), Brazil ($232m), China ($176m), Russia ($123m), and South Africa ($100m).Five beneficiaries are international chains (Saudi German Hospitals, Apollo Hospitals, Fortis Healthcare, IHH Healthcare Berhad, and Life Healthcare) and four are national chains (Max Healthcare, Acibadem Healthcare Group, Medicina, and Rede D’Or). Three of these are Indian chains, namely Apollo Hospitals, Fortis Healthcare and Max Healthcare.

In Britain, the policy is called beyond aid, which aims to address underlying causes of poverty, and focus on the use of loans and equity investments to support the growth of private companies. As part of this strategy, tens of millions of pounds have been committed by the Department for International Development's investment arm, CDC Group, to private hospitals and clinics in countries like India, Bangladesh and South Africa. The trend became visible in 2012.

The two direct investments by CDC Group were between 2000 and 2012 ($6.1m in Prime Cure Clinics, South Africa, and $5m in Apollo Hospital Dhaka, Bangladesh) have been dwarfed by investments of some $65.5m since (in Rainbow Hospitals and Narayana Health, both India), which are expected to enable these hospital chains to expand to new cities.

The investments are made in the name of job creation and returns on investment. The House of Commons International Development Committee published in February 2015 that beyond aid policies “would be good for the UK in the short run as well as in the long run". 

The authors highlight concerns about impoverishment caused by healthcare costs and suffering caused by unnecessary medical tests in a profit-driven sector. Citing a report by the Department for International Development, they said that far more users of private healthcare are impoverished each year in India than users of the public sector—48 per cent compared with 15 per cent incur catastrophically high out-of-pocket health spending. They said the trend of helping profit-driven hospitals will be detrimental to healthcare in low and middle income countries. 

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