Contradictory to its objective of poverty reduction, the International Finance Corporation’s (IFC) investment in hospitals in India have failed to fulfil their obligation of providing free healthcare to economically disadvantaged patients.
The private hospitals that get the rich investment from the IFC are alleged of overcharging, denying healthcare, rigging prices, evading taxes, and refusing to treat patients living in poverty for free, according to Oxfam’s investigations into IFC funding of private hospital chains.
Investing in private healthcare facilities in a context where a significant portion (37%) of Indians face substantial financial burdens due to healthcare expenses in private hospitals appears to be at odds with poverty alleviation efforts. These investments do not contribute to the development of robust healthcare infrastructure or address the pressing healthcare needs that remain unmet in the country.
INVESTING IN HIGH-END URBAN HOSPITALS AND CLINICS
- Poor rural populations suffer the greatest access gaps to healthcare but as is common for most private hospitals
- IFC investees are concentrated in highly populated urban areas because this is where more income and therefore profit can be generated
- 77.8% of the IFC direct investee chain hospitals are in Million Plus population cities. 60.4% of hospitals are in Tier 1 cities, 35.4% are in Tier 2 cities and only 4.2% are in smaller habitations.
- Of the 144 hospitals listed on the corporate websites of these chains, only one was described itself as being in a rural area.
- Only 13.9% of the hospitals are in the 10 states ranked lowest in terms of the overall performance of the health system based on the Annual Health Index 2021; not a single hospital operates in four of these 10 states.
HEALTHCARE SECTOR
- 14 advisory projects (10 completed and four active) worth USD 7,624,377– for most, the IFC acts as transaction advisor for the establishment of hospital public-private partnerships (PPPs). Two additional advisory projects have been identified via IFC press releases.
- 18 direct investments of which eleven are in the hospitals and clinics sector. The historic hospital and clinic investments totalled USD 523 million of which equity financing is USD 331 million (63 %), and loan financing is USD 192 million (37%). These are dominated by some of India’s biggest corporate hospital chains- Apollo, Fortis, and Max Groups. The Apollo group is the IFC’s most prolific investee with four direct investments in India, an indirect investment via IHH Healthcare, and one direct investment in its Sri Lanka operations.
- 23 investments through financial intermediaries with specific healthcare sector investments in hospitals, clinics, and diagnostics. The IFC has made recent improvements in the transparency of its investments through financial intermediaries, however its lack of consistent and transparent reporting of its intermediated investments in health makes a comprehensive and accurate mapping of such projects was impossible. Of those IFC-financed financial intermediaries that invest in healthcare, 15 (68%) are domiciled in places that are considered tax havens by the Tax Justice Network including Mauritius, Singapore and the Cayman Islands.
- 67 million USD in private capital through Asset Management Companies (AMCs) from commercial banks to support private entities for Apollo Health and Lifestyle Limited.
WIDE RANGE OF DEEPLY CONCERNING COMPLAINTS
The report highlights a multitude of issues that have surfaced in the private healthcare sector, including instances of overcharging, denial of healthcare services, price manipulation, financial conflicts of interest, medical negligence, and the failure to provide free healthcare to impoverished patients, despite the conditions under which free or subsidized land was allocated to these hospitals.
Regulatory bodies have documented cases of medical negligence that are deeply concerning. Examples include a patient being dropped on the floor, resulting in multiple fractures and death. A patient left unattended in an ambulance, leading to their demise. Instances where surgical materials, such as cotton wool, left inside a patient’s brain after surgery, resulting in fatal consequences. The report also points to cases where incorrect surgeries performed, such as operating on the wrong leg; and incidents where children were left permanently disabled due to medical errors. In one heart-breaking occurrence, a baby was declared dead by doctors, only to be discovered as still breathing during the last rites.
INVESTING IN HOSPITALS PRICED OUT OF REACH FOR THE MAJORITY
The report reveals that a two-day stay for a C-section procedure in some hospitals in Delhi would equate to three to four months of the average wage in Delhi. Even healthcare packages marketed as “affordable” primarily cater to affluent clients, further exacerbating the inequality in access to healthcare.
The expansion of private healthcare provision fuelled by private investment carries the risk of eroding healthcare systems as social institutions and poses significant implications for health equity. Therefore, it is crucial for the IFC to carefully consider and address the long-term impacts of its investments on the public health system in the country, ensuring that its actions do not undermine the overall well-being of the population.
