Basic guide to corruption and anti-corruption efforts in the health sector

The health sector is vulnerable to corruption due to information asymmetry (PDF) between health care providers and patients, combined with massive amounts of money involved in the global health sector.

A 2015 report on the cost of health care fraud (PDF) states that annual global health expenditure is about US$ 7.35 trillion. Of this, about US$ 300 billion (6%) is lost to mistakes or corruption.

Corruption in the health sector occurs in both rich and poor countries. In poor countries especially, it can be a matter of life and death. There are many examples of its devastating effects. Globally, counterfeit malaria medicines lead to over 450,000 preventable deaths every year, prompting one academic to describe drug counterfeiting as a crime against humanity.

Corruption presents a substantial global health security threat. It played a role in the West African Ebola virus epidemic in 2014. In 2017, 30 children lost their lives in 48 hours at a hospital in Uttar Pradesh, India, because of corruption in the procurement of oxygen cylinders. Corruption is also central to the ongoing Covid-19 pandemic and since March 2020 there have been a wave of corruption-related incidents, and decreasing transparency and accountability.

Corruption is one of the biggest threats to universal health coverage, which is one of the targets of the Sustainable Development Goals (under SDG 3). It affects health outcomes by reducing government funding for health services. It has a negative effect on access and quality of patient care. If user fees or insurance contributions disappear through embezzlement and procurement fraud, less money is left for salaries, medicines and equipment. Poorly paid health workers can feel demoralised, leading to low-quality care and less readiness to preform services.

The good news is that reducing corruption can improve health outcomes by making public spending more effective.

Corruption in the health sector takes different forms in different countries, depending on the structure, organisation and sources of funding for healthcare. See for example U4 helpdesk answers on health sector corruption in Southeast Asia and Moldova. However, there are commonalities across countries that help understand typical health sector corruption categories and typologies. Moreover, some forms of health-related corruption, such as counterfeit medicines, are cross-country or global issues, requiring a concerted international effort to address them.

Find out more about the health sector’s susceptibility to corruption in the U4 Issue Health sector corruption. The main reasons the health sector is vulnerable include:

  • Large amounts of resources
  • Uncertainty
  • Information asymmetry
  • The large number of actors involved
  • National health systems’ complexity and fragmentation
  • The globalised nature of the drug and medical devices supply chain

Corruption in the pharmaceuticals sub-sector hinders access to medicines and leads to negative health outcomes. It includes drug counterfeiting as well as the manufacture and sale of substandard, falsified and unregistered drugs.

Corruption in medicine procurement can inflate prices. Even when the government is the purchaser, the poor bear the brunt when government over-spending in one sub-sector leads to spending cuts in another sub-sector. Theft and diversion of medicines from health units to the private market is another problem that adversely affects the poorest and most vulnerable in society. This is especially a problem in quickly evolving epidemic or pandemic situations – as can be seen during the COVID-19 pandemic.

Conflicts of interest can arise when health staff prescribe and dispense drugs and medical supplies based on recommendations from the manufacturers. This issue is in the spotlight in the opioid crisis in the USA, where many doctors get favours from pharmaceutical companies to prescribe strong painkillers that patients become addicted to.

A less talked about form of corruption in health system governance is collusion, politicking and influence peddling. This may for example lead to unnecessary inclusion of non-essential drugs in a country’s essential medicines-list – generating profits for producers and importers.

Corruption mitigation strategies for the health sector

The health sector at the national level is often one of the biggest basic service delivery sectors. It has thousands of units employing hundreds of thousands of health workers and treating millions of patients. In most countries, both public and private entities provide health services. This poses several challenges for mainstreaming anti-corruption in the sector, because the various corruption problems cannot be dealt with at once. It is therefore important to conduct a corruption risk and vulnerability assessment in the sector, and identify which problems are the most urgent or most feasible to deal with. Once risks and vulnerabilities, power relations and social context are mapped, the tools and strategies to reduce corruption and improve service delivery can be selected and implemented.

The World Health Organization’s framework of six ‘building blocks’ for health systems is a useful guide for analysing corruption risks in a country’s health sector. The building blocks can help identify where corrupt practices are likely to occur across the sector in service delivery, health workforce, information, medicines, financing, and governance. In identifying corruption risks in a country or programme, it is important to remember that disease prevention and treatment is not apolitical. Who holds political and bureaucratic power and influence in the health sector and how they exercise it, is at the heart of how corruption manifests.

Information sources on corruption in the health sector include:

The Global Fund Office of the Inspector General Audit and Investigation reports can point to weaknesses and vulnerabilities in the health systems of global fund recipient countries. Once risks and vulnerabilities, power relations and social context are mapped, it is time to choose the tools and strategies to reduce corruption and improve service delivery.