Bulletin of the World Health Organization

Private sector contributions and their effect on physician emigration in the developing world

Lawrence C Loh a, Cesar Ugarte-Gil b & Kwame Darko c

a. Dalla Lana School of Public Health, University of Toronto, 155 College Street, Sixth Floor, Toronto, ON, M4S 1A7, Canada.
b. Instituto de Medicina Tropical Alexander Von Humboldt, Universidad Peruana Cayetano Heredia, Lima, Peru.
c. Department of Surgery, Korle-Bu Teaching Hospital, Accra, Ghana.

Correspondence to Lawrence C Loh (e-mail: lloh@jhsph.edu).

(Submitted: 26 July 2012 – Revised version received: 11 December 2012 – Accepted: 13 December 2012 – Published online: 17 January 2013.)

Bulletin of the World Health Organization 2013;91:227-233. doi: 10.2471/BLT.12.110791

Introduction

There has been considerable academic interest in the growth of the private sector in the delivery and financing of health care in developing countries. In a recent editorial, Forsberg et al. drew attention to the “major role in financing and provision” that the private sector plays in low- and middle-income countries, and went on to state that “private health sector research has moved beyond classifying and counting providers and users, to the assessment of mechanisms for harnessing the private sector and identifying conditions for their successful application”.1

In the developing world in particular, research on health care is often hampered by a lack of standard definitions. For example, only clinicians with medical degrees are categorized as physicians in some studies, but traditional healers are also considered physicians in other investigations.2,3 Despite such problems with definitions, a growing body of literature now links private health-care financing and delivery in low- and middle-income countries with quality of care, drug availability, patient access and equity, provider training and provider knowledge, and changes in public-sector health care delivery in the same settings.47 Various interventions may further improve private health care provision in low- and middle-income countries.8

The private sector is making a growing contribution to health care in much of the developing world. In an analysis of data from 26 African countries by the World Bank, nearly half of the sick children from the poorest income quintile were found to have made use of private providers.9 Most (nearly 87%) of India’s health care is now privately funded10 and out-of-pocket payments from patients have been found to represent 40–70% of the gross domestic product spent on medical care in 20 developing countries.11 Various factors, including the traditional counterbalance between supply and demand, heavily influence the growth of private health care in the developing world and whether physicians choose to practise in the private sector, the public sector or both sectors and to stay in their home country or to emigrate.12

Physicians in low- and middle-income countries often emigrate because of the poor incomes and inadequate resources available in their home countries and the better professional prospects and higher standards of living available to them abroad.13,14 There is considerable recruitment of such physicians by high-income countries.15 Of the physicians working in Australia in 1999, Canada in 2002, the United Kingdom of Great Britain and Northern Ireland in 2002 and the United States of America in 2004, 23–28% were immigrants, mostly from Asia, the Caribbean and sub-Saharan Africa; India alone accounted for nearly 60 000 of the physicians.16 The emigration of physicians from numerous low- and middle-income countries drains skilled personnel from already weak health systems and reduces the success of existing primary care and public health activities.17

In an attempt to determine if countries with relatively large private health care sectors have relatively low rates of physician emigration, the relevant data from three countries with emerging economies were collected together and analysed.

Case studies

The three study countries, Ghana, India and Peru, were selected to give a wide range of physician emigration rates and to represent three different World Health Organization (WHO) regions. The data analysed came from the Organisation for Economic Co-operation and Development (OECD),18 which records the numbers and nationalities of immigrant physicians in each OECD country, and from reviews of the relevant published and “grey” literature. The expatriation rates for physicians were taken from a table published by the OECD18 and are estimates for the year 2000. Each rate was calculated, as a percentage, by dividing the number of physicians who were trained in a study country but were practising in any OECD country in 2000 by the sum of that number and the number of physicians practising in the same study country in 2000, and then multiplying the result by 100. The literature reviews were conducted using the PubMed, Google and SciELO search engines and the search facilities available via the web sites of the World Bank and WHO. The PubMed search strategy involved keywords and MeSH terms related to private health care and physician migration, combined with developing world, Ghana, India or Peru. Similar strategies were followed with the other search engines.

All of the search results were reviewed for relevance and the citations in the relevant articles were examined for other articles that might hold useful data. The final analysis included only data from articles that had been published within the previous 20 years in a peer-reviewed journal or by the World Bank or WHO. For this analysis, only individuals with biomedical training were considered to be physicians.

Ghana

Physicians from Ghana appear more likely to migrate abroad than physicians from India or Peru. The physicians who remain in Ghana mostly work for the public sector, although most (64%) of their income comes from out-of-pocket contributions from patients. A Ghanaian is much more likely to have public health insurance than an Indian or Peruvian. Private health insurance remains relatively rare in Ghana, although it has become more common in the last few years.

Levels of physician emigration are relatively high in Ghana. Of the physicians who graduated from the University of Ghana between 1985 and 1994, 50% and 75% had emigrated within 4.5 and 9.5 years of their graduation, respectively.19 Although Ghana’s first private insurance scheme, the Nationwide Mutual Medical Insurance scheme, was launched in 1993, most physicians continued to be paid from the “public purse”. The private insurance scheme was soon struggling with fraudulent claims, inadequate premiums, a generally dissatisfied clientele and a claims backlog.20

In the 1990s, about 47% of the hospitals and 60% of the clinics in Ghana were government-managed. Private health-care facilities then, as today, were most commonly run by nongovernmental organizations on a no-profit basis or by faith organizations that charged patients small, nominal fees; for-profit delivery by the private sector remained rare.21 The quality of the health care delivered by the private sector varied greatly; although some urban facilities were well equipped and well managed, many private clinics in rural areas were run by “petty traders selling drugs, drug peddlers, quacks and injectionists”.22

The Ghanaians’ apparently small appetite for private insurance and private health care delivery led to the insolvency of the Nationwide Mutual Medical Insurance scheme in 1997.20 Physician emigration remained very common; between 1993 and 2001, 68% of Ghanaian medical graduates left Ghana.23

In the year 2000, 1469 physicians trained in Ghana were recorded as living in OECD countries. This represented an expatriation rate of 31.2%.18 In 2009, health care in Ghana was described as a mixture of private traditional systems and public, private for-profit and private not-for-profit non-traditional systems. Recent efforts have been made towards integrating the system based on traditional medicine with the private, not-for-profit, non-traditional system.24 Only 10% of the health-care providers working in Ghana in 2010 worked exclusively in the private sector.20 At this time, private insurance remained rare and was largely confined to unionized workers in the private sector, who had fought for such cover during their collective bargaining with their employers.20 Despite the predominance of the public sector in Ghanaian health-care delivery, 64% of the health-care financing in Ghana comes from the private sector and 80% of the private finances come from out-of-pocket contributions from patients.3 More than half of all Ghanaians are covered by public health insurance via the National Health Insurance scheme.20

India

India trains more physicians than almost any other country, provides the largest number of emigrant physicians, and has the largest private health-care system. About 11% of physicians practising in the United Kingdom and 5% of those practising in the United States of America were trained in India.14,25 India is the country from which the largest number of physicians of any given nationality living in OECD countries have emigrated.18 However, the number of physicians trained in India every year is so enormous that the 55 000 Indian physicians who live abroad make for an expatriation rate of only 8%.18

At the time of India’s independence, in 1947, only 8% of health care delivery was private. Today, however, 80–85% of the licensed physicians, 93% of the hospitals and 80% of the outpatient clinics in India operate, in whole or in part, within the for-profit private sector. Private physicians are remunerated on a fee-for-service basis. Out-of-pocket contributions from patients provide an estimated 87% of health-care finances.10 It has been estimated that only about 1% and 10–14% of the Indian population has public and private health insurance, respectively.26,27

Private physicians in India are categorized as rural medical providers, non-profit physicians or for-profit physicians. Rural medical providers are generally unqualified medical practitioners. Non-profit private physicians, who work for nongovernmental organizations or faith-based organizations, provide only 1.32% of the private consultations in India.10 Most private physicians in India work in the for-profit sector.10

The predominance of the private sector in health care in India is largely a consequence of the Indian government’s failure to keep pace with the growing health-care needs of the world’s second largest population. The government’s economic policies, the rapid influx of technology and the increasing number of Indians who have moderate (rather than poor) incomes have also encouraged expansion of the private sector.27 Although the growth of private-sector health care has generally increased access to health-care providers, there are concerns that private care is too expensive, poorly regulated and associated with inadequate training and a general lack of practice standards, particularly in the for-profit sector. The Indian government is making efforts to address these concerns by increasing public-insurance coverage28 and improving the regulation of the private sector.29

Why India has such a low rate of physician emigration, even though it has the largest absolute number of physicians migrating abroad, is unclear. It is possible that Indian physicians who have received poor training choose to remain in India, perhaps encouraged by work in the for-profit private sector that can provide reasonable incomes and little regulatory restriction. The recent growth in medical tourism to India, which has provided a fresh source of income for the for-profit sector, may well have improved physician retention. If the growing calls for increases in the public financing and delivery of health care in India30 are successful, levels of physician emigration from the country may increase.

Peru

Peruvian physicians only really began to emigrate following the civil unrest in the 1980s, but the trend continued into the 1990s in the midst of an economic recession. Over this period, health care was predominantly delivered by the public sector and public investments in health were seen as critical to national development.

In 1984, the public sector held 78% of the hospital beds and 93% of the primary health-care facilities in Peru. However, the cuts made in the government’s health budget at about this time drove an expansion of private health care delivery. Throughout the 1980s and 1990s, physicians who were publicly employed in Peru fought for permission to develop and maintain private practices to mitigate the consequences of the budget cuts on their incomes.31 Although concerns were raised about how such “dual-sector practices” would affect patient access and various other aspects of health care delivery, the number of Peruvian physicians who work for both the private and public sectors continues to grow. So far, no relevant official policy or regulation has been developed and the general consensus seems to be that physicians should be allowed to supplement low public wages in this way.32

The General Health Law of 1997 required the Peruvian government to promote conditions that should, in principle, guarantee adequate and universal health service coverage throughout Peru.33 The result was a relaxation of the public monopoly on the delivery of medical services. Once this law was passed, beneficiaries of the public insurance provider – Peru’s Social Security Institute, formerly called the Instituto Peruano de Seguridad Social (IPSS) and now called the Seguro Social de Salud (EsSalud) – could receive care from private companies, which would then bill the insurance provider. In another attempt to promote adequate coverage, the government created the Seguro Integral de Salud (SIS) in 2001 to cover indigent rural and periurban populations, especially the impoverished women and children in such populations who had no other access to social assistance.

Of the health care received by patients treated by physicians in Peru in 1998, 55.1% was provided through publicly financed institutions, 20.8% (delivered either publicly or privately) was financed by the Seguro Social de Salud, 10.9% was provided through public non-specialized health-care services (e.g. armed forces, police and welfare institutions) and only 18.9% was provided by private providers supported by out-of-pocket contributions from patients.34 By the time the 2003 Second Infrastructure and Human Resources Census was conducted, however, these percentages had changed to 39.1%, 18.1%, 7.1% and 32.4%, respectively.31 Thus, between 1998 and 2003 the amount of health care provided by private providers supported by out-of-pocket contributions nearly doubled, partly as a consequence of the large number of physicians (nearly 50% of all of those in Peru) who were working in both the public and private sectors by 2003.31

Since the passage of the General Health Law in 1997, private insurance coverage and out-of-pocket payments have become significant financing mechanisms for health care in Peru. Today, 42% of Peruvians receive some form of public insurance: 20%, mostly urban workers, are covered by the Seguro Social de Salud, 18% are covered by the Seguro Integral de Salud, and 4% are covered directly by the government because they are politicians, members of the armed services or educators.35 Since only 2% of Peruvians have private health insurance, more than half (56%) of all Peruvians have to pay out of pocket for their health care.36 The uninsured Peruvians are mostly the working poor, who are ineligible for support from the Seguro Social de Salud because they have work and who earn too much to receive support from the Seguro Integral de Salud and too little to pay for private insurance.37 The decision to allow some richer Peruvians who are covered by public health insurance to contribute towards their own health care at expensive private facilities has been seen as a waste of the insurance, especially by the uninsured working poor.32 By 2008, 15% of Peruvians were receiving primary health care through private providers located in urban areas.38,39

While private-sector involvement in health-care financing and delivery has being growing in Peru, rates of physician emigration and expatriation have been declining. Only about 24% of the physicians who graduated in Peru between 1995 and 2005 chose to stay in Peru.40 However, in more recent studies in two Peruvian medical institutions, only 30%41 or 51%42 of recent graduates were found to have left Peru, to pursue medical residencies abroad.

Of the three study countries, Peru has the lowest level of physician expatriation and the highest per-capita expenditure on private health care (Fig. 1).

Fig. 1. Relationship between expenditure on private health care in Ghana, India and Peru and physician expatriation from the same countries
Fig. 1. Relationship between expenditure on private health care in Ghana, India and Peru and physician expatriation from the same countries
US$, United States dollar.Note: The expenditures shown are the per capita values in United States dollars for 2008. The expatriation rates shown are estimates for 2000.

Overview

The main results from the data review are summarized in Table 1. In each of the three study countries, private expenditure on health per capita was calculated from data collected by WHO43 by multiplying the proportion of total health expenditure spent on private health care by the total health expenditure per capita. When the per capita private expenditures on health in Ghana, India and Peru were plotted against the most recent estimates of the rates of physician emigration from the three countries, the two variables appeared to be inversely related (Fig. 1).

Discussion

For the health systems of Ghana, India and Peru, data on the private sector were rarer and harder to obtain than the corresponding information on the public sector; there is clearly a need for better monitoring and evaluation of private health-care financing and delivery in the three countries. Despite this limitation, it is clear that, over the last few decades, Ghana, India and Peru have seen growth in private-sector financing and delivery of health care, in parallel with economic growth, increasing population demand and changing policy environments.

Of the three countries investigated, Ghana had the lowest per capita expenditure on private health care and the highest level of physician expatriation. Peru, on the other hand, had the highest per capita expenditure on private health care and the lowest level of physician expatriation.

Our primary hypothesis was that physicians working in systems structured towards private delivery and financing may be less inclined to migrate than other physicians. This may well be the case if physicians can offer their services at private rates that exceed the corresponding public-sector remuneration. Peru’s growth in dual-sector practices has not only led to growth in the private-sector delivery of health care, but has also, according to the data available on physician expatriation, improved physician retention. Although the data discussed here indicate a negative correlation between per-capita expenditure on health care and physician emigration, they give only three points on a graph (Fig. 1). This relationship needs to be explored much further, with more extensive models that consider many more countries while controlling for factors (other than the level of private-sector involvement) that may persuade physicians to emigrate or to remain in the country where they were trained.

If it can be proven that growth in private sector participation does improve physician retention, then we need to know if the benefits of retaining physicians in the private sector outweigh the problems of patient access associated with the private sector, particularly in the developing world. Many emerging economies have populations that not only have little health insurance but are also frequently too poor to make the out-of-pocket contributions demanded by the private health-care sector.

In future research, all of the “push” and “pull” factors related to private sector and public sector health care delivery and financing that could drive physician emigration need to be investigated. In India, for example, the poor training of some physicians may prevent their employment in other countries.

Conclusion

Rapid economic development, limitations on public spending and health service regulation continue to drive the growth of private health care in the developing world. As the contribution made to health-care delivery and financing by the private sector increases, physicians in the developing world may become less inclined to emigrate. Much more research on this topic needs to be conducted. In the present analysis it proved impossible to distinguish physicians who worked in both the public and private sectors from those who worked only in the private sector. Better data need to be collected from many low- and middle-income countries, particularly on the private sector. The possibly adverse effects of private-sector growth on attempts to achieve universal health-care coverage also need to be investigated. Careful consideration should therefore be given to any policies designed to regulate private sector growth or physician emigration.


Acknowledgements

We gratefully acknowledge the comments and feedback provided by WHO’s Human Resources for Health team.

Competing interests:

None declared.

References

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