Corruption and Health in Developing and Transition

Economies

Maureen LewisChief Economist for Human DevelopmentWorld Bank

Major Sources of Corruption in the Health Sector

Contracting and procurement Petty theft Selling accreditation or positions Public funds disappearing Staff nonattendance Informal payments

Measuring Corruption Perceptions of leaders, providers

and the public; Contracting: audit and supervision; Petty theft: difficult, track supplies; Selling accreditation: anecdotal; Public funds use: PETS; Staff attendance: surveys, records; Informal payments: surveys/studies.

Perceptions Out of 22 countries, 10, or almost

half, consider health in the top 4 most corrupt sectors;

In 60% of 22 countries canvassed, over half of interviewees perceived corruption in health, and in over 85% of the sample corruption was apparent to 60% of the public.

Contracting/Selling Accreditation and Positions Part of broader corruption problem; Hard to single out one sector unless

it is a pilot; Tend to correlate with other forms of

corruption or bad public practices; In Buenos Aires procurement data

showed 15% drop in prices during corruption crackdown.

Misuse of Public Funds Public Expenditure Tracking Studies

(PETS) trace the flow of funds from the budget to expenditure at the front line – in clinics and hospitals;

Quantifies the bureaucratic capture, leakage and problems with deployment of human and other inputs.

Misuse of Public Funds: Education Tracing flow of funds in primary

school showed that in the base year: 87 percent of funds in Uganda never

reached the schools; 60 percent of funds in Zambia never

reached the schools.

Staff Nonattendance Time and motion studies and full costing

and expenditure review of hospital. In D.R. 12% of contracted physician time available at hospital. Training of interns by MDs nonexistent;

Quantitative/Qualitative surveys of users and providers includes: qualitative assessment of incentives; interviews with providers; exit/follow up patient interviews (Armenia,Poland, Georgia).

Staff Nonattendance (cont.) Quantitative Service Delivery

Surveys (QSDS) based on unannounced spot checks of clinics (Bangladesh, Honduras, India, Peru, Uganda);

Apply questionnaires for: local health administration; health facility records; exit interviews (Uganda).

0

5

10

15

20

25

30

35

40

45

Perc

ent

Bangladesh Honduras* India Peru Uganda

Absence Rates among Health Care Workers, 2002

Informal Payments Household surveys Corruption surveys Reviewing patient records Qualitative studies

• Focus groups of providers/ patients/community• Provider/administration interviews• Exit surveys/follow up patients• (Poland, Georgia)

0

10

20

30

40

50

60

East Asia LAC South Asia ECA Africa (Ghana)

Average Frequency of Bribes/ Informal Payments

Frequency of Informal Payments: Hospital vs. Total/ Outpatient

0

10

20

30

40

50

60

70

Albania Armenia Khazakhstan Kosovo Kyrgyz Romania Ghana

Total/Outpatient

Hospital

0

20

40

60

80

100

120

140

160

180

200

Armenia Bulgaria Kyrgyz India Pakistan Ghana Cambodia Thailand Peru

Average Informal Payment Per Visit, Constant PPP$

Outpatient/Total

Hospital

0%

20%

40%

60%

80%

100%

120%

140%

Armenia Bulgaria Kyrgyz India Pakistan Ghana Cambodia Thailand Peru

Average Informal Payment as Percentage of 1/2 Mean Monthly Income, PPP$

Outpatient/Total

Hospital

Average Outpatient Expenditure (% of monthy mean income, PPP$)

0 10 20 30 40 50 60 70

Armenia

Bulgaria

Kyrgyz

Albania

Georgia

Post-2000

Pre-2000

Average Inpatient Expenditure (% of monthly per capita income, PPP$)

0 50 100 150 200 250 300

Armenia

Bulgaria

Kyrgyz

Albania

Georgia

Post-2000

Pre-2000

Underlying Causes of Corruption Lack of clear standards of performance

for providers Organizational and management deficiencies

Lack of effective auditing and supervision Collusion in contracting Lax fiscal controls in flow of public funds

Limited enforcement of rules/no sanctions Abuse is unchecked Good performance unnoticed

Underlying Causes of Corruption (cont.) Lack of accountability and oversight

Nonattendance of staff Poor quality of care Informal payments

Lack of citizen involvement and of local oversight and authority

Absence of monitoring and evaluation

Remedies Government-wide anti-corruption

stance; Culture of public service; Procurement and contracting rules,

and enforcement of rules; Public standards of conduct and

oversight; Effective enforcement of rules and

rewards/punishment for behavior;

Remedies (cont.) Improvement in civil service rules, pay

and review; raise quality of public management of

health services; Reform of provider units (TQM) – health

providers input to raise productivity and performance;

Charge official fees and compensate providers accordingly for efforts;

Promote private sector alternatives;

Remedies (cont.) Allow accountability at health service

delivery unit to stem petty theft and improve management potential

Improve fiscal oversight with consequences for unlawful practices Local accountability Local advertising of expected funds

receipt

Challenges Cultural change is difficult; Physicians hard to influence; Oversight is costly and complex; Some level of corruption emerges in

most health systems; Without controlling corruption health

system is compromised in eyes of the public.

Total Hospital Outpatient Albania 53 Armenia 49 57 40 Bosnia 23 Bulgaria 18 Croatia 11 Latvia 15 Khazakhstan 26 9 Kosovo 15 3 Kyrgyz 26 5 Macedonia 24 Romania 35 66 Slovakia 16 58 Tajikistan 66 Bangladesh 58 India 25 Nepal 18 Pakistan 96 Sri Lanka 92 Bolivia 38 Peru 3 Paraguay 9 Thailand 2 Indonesia 42 Cambodia 57 Ghana 26 30

Frequency of Bribes or Informal Payments