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. The examples of its devastating effects are many. Globally, counterfeit malaria medicines lead to over 450,000 preventable deaths every year. This prompted one academic to describe drug counterfeiting as a crime against humanity.

Corruption played a role in the West African Ebola virus epidemic in 2014, and so, presents a substantial global health security threat. 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 one of the biggest threats to universal health coverage, which is one of the targets under Sustainable Development Goal 3. It affects health outcomes by reducing government funding available 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 Bangladesh and Zimbabwe. 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 have a cross-country or global character. These require a concerted international effort to address them.

Find out more on how corruption manifests itself at a national level in the U4 Issue Corruption in the health sector. This includes:

  • Embezzlement of health budgets.
  • Theft.
  • Diversion of medicines from the public sector for sale on the market.
  • Informal payments to health workers.
  • Procurement-related corruption such as bid-rigging and kickbacks.
  • Nepotism and favouritism in health workforce management.
  • Bribery in recruitment and promotion of health workers.
  • Ghost workers and health units.
  • Bribery and extortion in the enforcement of regulatory standards for private health practitioners.

Corruption in pharmaceuticals

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 where 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.

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 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.

The World Health Organization’s framework of six ‘building blocks’ for health systems is a useful structure for analysing corruption risks in any country’s health sector. The blocks are:

  1. Service delivery
  2. Health workforce
  3. Information
  4. Medicines
  5. Financing
  6. Governance

Looking at decision points or the links in the supply chain for each building block can help identify where corrupt practices are most likely to occur.

In identifying corruption risks in a country or programme, it is important to remember that disease prevention and treatment is not apolitical. It is not simply a technocratic endeavour, but a political one. 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 itself. A U4 Brief on the Ugandan drug supply chain illustrates this.

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.

Building coalitions

A number of global, regional and national level initiatives to address health sector corruption have shown that it is possible to make a positive change. This takes political will, a committed bureaucracy, socially responsible private actors, dedicated civil society, and willing philanthropists such as bilateral donors and private foundations. Working together can help to improve trust and galvanise necessary political determination to tackle the challenges.

Collective action initiatives – such as the WHO Good Governance for Medicines and Medicines Transparency Alliance – has achieved some progress in mitigating corruption in the pharmaceutical sub-sector. These initiatives unite actors from the government, civil society and the private sector on a common platform for dialogues to agree on anti-corruption interventions.

The Global Fund designed to accelerate the end of AIDS, tuberculosis and malaria relies on whistleblowing and audit checks to reduce corruption risks and secure its finances. A U4 Issue on good governance for medicines initiatives explores lessons from these initiatives. GAVI, the vaccine alliance, succeeded in curbing corruption in country vaccine systems by mainstreaming transparency and accountability in its structures. The alliance and the Government of Cameroon’s response to mis-spending in a vaccine programme includes useful lessons for other initiatives. The Uruguay open health data initiative was a collaboration between the government of Uruguay and a civic tech organisation. These various initiatives show that anti-corruption success is more likely when several actors join forces to effect change.

Whistleblowing

Whistleblowing is vital to uncovering fraud and corruption. It has had significant success in so-called Qui Tam suits under the US False Claims Act. These allow persons and entities with evidence of fraud against federal programmes or contracts to sue the wrongdoer on behalf of the US Government to recover the money lost. The Government has the right to intervene and join the action. The whistleblower is entitled to a share of the money recovered. If the government declines to pursue the matter, the private person may proceed with legal action on his or her own. Billions of dollars lost to health care fraud have been recovered to-date – 3.7 billion in 2017.

Although Qui Tam has been an important feature of the US legal system for a while, there are few examples of successful whistleblowing initiatives in developing countries. In Whistleblower protection: Is Africa ready? William de Maria calls for caution in promoting whistleblowing in some developing country contexts because the social and economic conditions can expose whistleblowers to harmful reprisals. Anonymous whistleblowing, online platforms or phone hotlines may be one way forward. According to international health NGO Aidspan, The Global Fund’s I Speak Out Now! initiative helped address theft and diversion of medicines in Malawi.

Information and communication technologies

Using new information and communication technologies (ICTs) can help reduce corruption in the health sector. Opening up health data can improve transparency and accountability. Pilots in Mexico, Peru and Uruguay show that publishing information about health providers and medicine prices can improve access to quality health services. Since 2015, Ukraine has saved US$ 37 million on buying medicines with an online program – ProZorro – that compares the government’s purchases to the prices listed by other suppliers, which are often lower.

Open contracting aims to reduce corruption in procurement. Budeshi is an open contracting platform in several African countries. It shows promising preliminary results on the role of open procurement platforms in improving procurement of health equipment and drugs, with corresponding benefits for health service delivery. The Global Fund also runs an open procurement platform: wambo.org.

SMS complaints mechanisms have reduced corruption and improved health service delivery. Examples include a citizen feedback monitoring programme in Pakistan, UNICEF U-Report and Serbia on the Move. A U4 Brief on Complaints mechanisms in health organisations explains how a paper-based complaints system in India operated. It states that political and judicial systems must reinforce such mechanisms through investigation and prosecution. Otherwise, they will fail in the long term.

Other technological developments include Minilab – a portable device from Global Pharma Health Fund that detects counterfeit medicines. Anyone can use Minilab anywhere, at low cost. It fits into your suitcase. It is widely used, but the size of the counterfeit drugs problem means we need more labs and trained users.

As described in a scoping review of digital technology for health sector governance, donors should keep in mind the complex political and sociotechnical dynamics that can influence designing and implementing ICTs for good governance in health. For example, limitations of ICTs in developing countries include limited internet access – especially for women and vulnerable groups. Lack of political will to digitise and publish data, and to act on resulting complaints is another potential hurdle.

Reducing informal payments

Informal payments can be difficult to eliminate because they result from complex factors in the health system, the economy, politics and culture. Moldova is an interesting example of using social health insurance to reduce out-of-pocket payments (PDF). A World Health Organization policy paper presents the Moldova framework in detail (PDF). You can read other useful examples in Strategies for reducing informal payments (PDF).