Privatising health

The Punjab Medical Teaching Institutions (Reforms) Ordinance 2019 has been promulgated by the current Punjab government. Despite opposition and protests from young doctors, paramedics etc, the Punjab government has started implementation of the MTI ordinance. Fully empowered Boards of Governors (BoG) will be established to run government teaching hospitals.

The BoG will consist of members from the private sector. The BoGs have been empowered to hire and fire doctors, nurses and other hospital staff; take all decisions to provide medical facilities to the general public free, subsidised or on full charges depending on the budget.

Through this ordinance, the Punjab government has effectively handed over control of the largest public-sector hospitals in the province to the private sector. It seems one step further towards privatisation and outsourcing of public health services in Punjab.

According to the MTI ordinance, the BoGs shall also have the power to appoint officials on key slots as well as senior faculty members. The post of principal shall be converted into that of ‘dean’, who shall be appointed by the BoG for a period of five years.

There shall be a management committee for each hospital, consisting of a hospital director, medical director, nursing and finance directors and two members nominated by the BoG. Headed by the dean, the management committee shall have powers to terminate any and all employees of the institution in accordance with the rules and regulations framed under the ordinance.

The civil servant status of all the government employees shall stand abolished and there will be no role of the health department in state-run medical teaching institutions. Employees will be given a choice to either continue working for the institution in a private capacity under the MTI Ordinance or be sent to the disposal of the health department for further posting in any other state-run institution.

Initially, the ordinance is supposed to be enforced on 23 hospitals attached to the five government medical universities – King Edward Medical University, Fatima Jinnah Medical University, Faisalabad Medical University, Nishtar Medical University and Rawalpindi Medical University.

The government is claiming that the MTI ordinance will improve health services in the teaching hospitals. But deregulation, restructuring and disguised privatisation is not going to serve the purpose. Resources are necessary to improve the quality of health services.

With a stroke of a pen, the Punjab government has changed the conditions of employment of thousands of doctors, nurses and other hospital staff. Government employees, with pension rights and other legal protections, turned into private employees overnight. After making such a drastic change, the government is now wondering why the young doctors and health workers are opposing this ordinance.

The health minister and other officials of health department are denying that any hospital is being privatised. But they accept that in public-sector hospitals, some services like parking, security and canteen etc have already been outsourced for the last many years.

If one look at the process and history of the privatisation of public-sector enterprises, industries, utilities and services we see that every privatisation action started with outsourcing. From banks to telecom, transport to industries – it all begun with the outsourcing of some services. If the Young Doctors Association (YDA) and Allied Health Staff (AHS) are terming this ordinance as a privatisation measure, then they are not unjustified.

Just imagine government teaching hospitals run by all powerful private BoGs, medical facilities provided by private contractual doctors, nurses and paramedics maintained by the private contractors with mostly outsourced privately-run services.

The government officials and spokesman are trying to confuse the issue by saying that because the government hasn’t sold the assets to private investors this does not count as privatisation. But the fact is that this outsourcing is disguised privatisation. The state still owns the assets but the private sector controls and runs the facilities.

Outsourcing makes these services expensive for the general public. The people pay a heavy price for such so-called efficient and well-managed services. The fact is that the Punjab government has already increased the fees and charges of different tests and services in state-run hospitals. And it has already outsourced CT scan machines in 16 DHQ hospitals and increased CT scan charges from Rs1000 to Rs2500 – an increase of 150 percent.

John B Goodman and Gary W Loveman describe the major forms of privatisation in their article ‘ Does privatisation serve the public interest?’ in the Harvard Business Review. ‘Privatisation means the shift of some or all of the responsibility for a function from government to the private sector. The term has most commonly been used when state handover by sale or long-term lease, of a state-owned enterprise to private investors.

‘But another major form of privatisation is the granting of a long-term franchise or concession under which the private sector finances, builds, and operates a major infrastructure project. A third type of privatization involves government selecting a private entity to deliver a public service that had previously been produced in-house by public employees. This form of privatization is increasingly called outsourcing. (Other forms of privatization, not discussed here, include service shedding, vouchers, and joint ventures).’

Outsourcing is a form of privatisation that serves the interests of private investors rather than the interests of the general public. It puts profits before people. Privatisation is not a solution to the problems faced by public-sector health services.

The writer is a freelance journalist.