Adam Smith Institute

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A health care system diagnosis that doesn't really work

We are told that some patients in hospitals in poor countries are held hostage after their treatment. They are held until their medical bills are paid. Distressing no doubt, even something that something must be done about. But the diagnosis of the underlying point is in error:

“This is a systemic problem, and the number of rights abuses is quite profound: people are being detained without trial, they’re being locked up with security guards, and women are giving birth to babies who are entering the world, in effect, as prisoners,” said Robert Yates, project director at the Centre on Global Health Security, who co-authored the paper.

“Healthcare user fees are at the root of the problem, and this just shows how bad a privately financed health system can get. We need to do more research on this and the global health community needs to start taking this seriously.”

There is a doubling down on this same point:

“Healthcare really needs to be free of charge to the patient, because this is the consequence of making patients pay, and it is the worst situation in a whole range of very difficult situations: they may get the medical care they need but then they, or their belongings or their ID papers, are kept hostage,” said Dr Mit Philips, health policy advisor at Médecins sans Frontières.

“Unfortunately, because many of these health facilities don’t receive sufficient funding to provide adequate care even when patients can afford to pay, this is the kind of economic logic that results. If we’re serious about universal health coverage, then abolishing user fees would be a good place to start.”

As we say, this diagnosis is wrong. For it is our own National Health Service which is the outlier here, one of the very few systems that has no user fees, indeed appears to have no system nor ability to make sure that those who really should be paying them do so. Most, somewhere between the majority and near all, rich world health care systems do have some requirement for such users fees. Yet said rich world systems do not keep patients locked in hospital until those bills are paid.

It is therefore not the system of user fees which leads to the practice, is it? 

What is the reason is one of those things we can discuss. Possibly the absence of a legal and efficient debt collection system. Could be the general poverty in these places meaning that routine health care is hugely costly as compared to average incomes. Might be the manner in which all too much of a nation's government spending gets creamed off by the WaBenzi. We can indeed think of a number of reasons why this is happening.

But given that the majority of rich world systems have some form of user fee, that said majority doesn't keep patients hostage until bills are paid, then it's not user fees being the underlying cause of the problem, is it? 

Therefore the abolition of them isn't the solution.