Egypt’s health sector in the shadow of devaluation: All roads lead to ruin
Doctors Syndicate Secretary General Mona Mina argues that it is illogical to have to choose between poor resource management and privatization as pathways for Egypt's health sector
 
 
 
Photograph: Basma Fathy
 

“After the Egyptian pound was floated, we had to make a choice: either increase the price of medicine or no longer provide it. We always face terrible choices,” says Mona Mina, the secretary general of the Doctors Syndicate.

Sitting in her office at the Doctors Syndicate’s headquarters next to a desk scattered with documents that trace her many commitments and the scope of the syndicate’s work, Mina reflects on the government’s decision to raise the price of 2,010 pharmaceutical products after the November decision to liberalize the foreign exchange rate. Of the drugs included in the adjustment, 619 are used to treat chronic diseases. Parliamentary sources indicated at the beginning of March that the government’s legislation to introduce universal healthcare will not be referred to the House of Representatives before June.

In addition to her position at the head of the syndicate, Mina is one of the most prominent figures in Egypt’s health sector as a founding member of the independent group Doctors Without Rights and having championed movements to secure citizens’ access to healthcare and guarantee doctors’ formal rights. In December, the public prosecutor summoned her for investigation on accusations that she had spread false news that could disturb public peace by announcing that doctors had been given directives to reuse syringes in public hospitals in order to ration limited medical supplies.

The current crisis in provision of medicine is rooted in a history that extends back 20 years, according to Mina. “In the 60s, public drug companies covered 60 to 70 percent of the needs of the Egyptian pharmaceutical market. These companies exported to Africa and to the Arab world. Now, however, public companies cover only 4 percent of the needs of the Egyptian market, while international companies and giant pharmaceutical monopolies cover 60 percent of the market’s needs and private Egyptian companies cover 36 percent. If our companies had covered 60 percent of the Egyptian market needs, the increase in dollar prices wouldn’t have caused such a dramatic change.”

She cites intravenous fluids as one example of the absurdities wrought by these market shifts, and which have become increasingly apparent in price determinations and scarcity since the November devaluation. “What does it mean for intravenous fluids to be unavailable? It is simply sterilized water and added salt. How is it possible that a fluctuation in the dollar affects its availability? It’s the simplest thing in medication technology!”

Photograph: Basma Fathy

The price adjustment introduced by Prime Minister Sherif Ismail and Health Minister Ahmed Rady structured the market according to three categories for locally produced goods: The price of pharmaceuticals that cost less than LE50 was increased by 50 percent of the dollar’s appreciation against the pound; the price of those that cost between LE50 and LE100 were increased by 40 percent of the dollar’s jump; those over LE100 rose by 30 percent.

The price of imported medicines was also affected, with those under LE50 increasing by 50 percent of the dollar’s post-flotation value, and those above LE50 by 40 percent.

These policies induce “chaos,” according to Mina, as they force small local companies to continue to cede their market share to larger multinational companies.

If a multinational company sells its pharmaceutical products for LE200, she explains, a 30 percent increase in line with the dollar’s appreciation in value means that the price would rise to LE360, despite the fact that the company already was making substantial profits before the adjustment. In contrast, an Egyptian company that was selling a local substitute for LE20 would only see a price adjustment to LE30, preventing it from securing a reasonable profit margin after the cost of importing active ingredients and the cost of manufacturing is deducted from its returns.

However, for Mina, an increase in the price adjustment rate for locally produced goods must be accompanied by heightened control over drug manufacturing to ensure compliance with quality and sustainability standards.

“We have a body called the National Organization for Drug Control and Research that has been in operation since the 60s, but its hands are tied,” she says, arguing that, by reactivating this body, the Doctors Syndicate could play a role in advertising locally produced products and expanding the local pharmaceutical industry.

Hospital privatization and the resource management crisis

According to Article 18 of the 2014 Constitution, the state should allocate no less than 3 percent of the gross national product to the health sector. However, the government neglected this constitutional allocation in the most recent budget.

Mina argues that the recent scarcity in medical supplies and pharmaceuticals cannot be imagined as an issue separate from this crisis in resource management and use. “The Ismailia General Hospital was established 15 years ago with a budget of LE120 million” she says. “In contrast, the hospital’s development plan garnered 400 million pounds — a three-fold increase compared to the cost of setting up the entire hospital. The development plan includes changing the gas network, painting and laying groundwork. How could this happen at a time when the hospital suffers from a significant lack of medication and medical supplies?”

Parliament released the budget for the current fiscal year last June without reviewing the government’s commitment to constitutional allocations for the health budget. The government had “reclassified” some of the allocation categories in order to tailor them, in appearance, to the Constitution’s budgetary requirements in accordance with recommendations that originated in Parliament’s budget and planning committee.

Read Mada Masr’s wider coverage of the Doctors Syndicates‘ internal and external conflicts.

The parliamentary committee’s recommendations proposed to reclassify a wide range of expenditures to meet the minimum budgetary allocation: government expenditure for the Health Ministry, its affiliated hospitals and governorate health departments, that earmarked for the General Authority for Health Insurance and medical institutions, and expenditures for the Interior Ministry and Armed Forces-affiliated hospitals as well as pharmaceutical manufacturing and distribution public sector and public works companies.

In the budget and planning committee’s draft budget, there would be LE101.3 billion allocated to the health sector, a figure representing 3.65 percent of GNP in contrast to the LE 49.8 billion outlined in the original version of the general budget.

However, when Mina tried to suggest that some of the LE 400 million earmarked for development be used to alleviate the Ismailia General Hospital’s debt crisis by appealing to the government’s seeming willingness to shift financial allocations, she was rebuffed: “This is a different item in the budget,” she says she was told. “It is, in fact, a different item. However, the minister has the right to shift money around between the different items with the approval of the finance minister and the prime minister. It is illogical, however, that the hospital will stop working because of its debts while we insist on paint and tiles!”

As such, Mina says she proceeds with general caution amid calls to increase financial allocations to the health sector. “We are cautious when talking about increasing money without addressing regulation and preventing that money from being wasted, because we are seeing large sums squandered. None of us will be happy to see this waste increase.”

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One can understand the Doctors Syndicate secretary general’s position on the privatization of Health Ministry-affiliated Takamol hospitals in a similar manner.

Last December, President Abdel Fattah al-Sisi directed the government to conduct a study into the feasibility of offering contracts to civil society and the private sector to take on Takamol hospital services either by taking on administrative tasks or ownership. It is a move that a statement by the presidency spokesperson claimed would expand the provision of health services and work to find effective mechanisms to assist underprivileged citizens.

Takamol hospitals are large clinics in densely populated rural areas that act as an intermediate service provider between health care units and local hospitals. There is not a precise estimate for the number of Takamol hospitals in operation in Egypt, but most published figures suggest there are more than 500. Each hospital consists of a health clinic and a room furnished with equipment for simple surgeries, with the aim being that such services would decrease the burden on local and public hospitals.

Mina believes that Takamol hospitals could play an important role, if a serious plan for comprehensive social and health insurance was introduced to ensure that health services reach patients across Egypt. Amending the way in which the government manages resources could lead to a substantial improvement in the role these hospitals perform.

However, there have been suggestions that the logic of privatization could drift from the Takamol hospitals to touch district hospitals, a development that worries Mina. “I believe that the private sector has a role to play in providing patients treatment, but the private sector also has a right to seek profit.” She poses that, if the private sector were to intervene in the ownership or administration of Takamol hospitals, which primarily service the poor, there may be an increase in the cost of services to ensure desired profit margins. Importing this type of market logic into the realm of healthcare would have different ramifications from the way it operates in normal commodity markets. “A citizen might be able to stop purchasing certain commodities if prices were to increase, but a citizen wouldn’t be able to stop seeking health services,” Mina says. It is illogical to have to choose between poor resource management or privatization.

According to World Bank data, the public sector healthcare expenditure declined as a percentage of Egypt’s general healthcare expenditure from 46.5 percent in 1995 to 38.2 percent in 2014.

Photograph: Basma Fathy

The Crisis of Physiotherapy

The Doctors Syndicate is currently locked in a confrontation with the Physiotherapists Syndicate on two fronts. In the first, there is disagreement over a proposal to integrate the Physiotherapists Syndicate into the Union of Medical Professions — made up of the doctors, dentists, pharmacists and veterinarian syndicates — while the second concerns the rejection of bill to regulate physiotherapy.

The Union of Medical Professions held a General Assembly meeting on January 20 to discuss Prime Minister Sherif Ismail’s decision to incorporate the Physiotherapists Syndicate into its ranks. The meeting ended in a decision to reject Parliament’s proposal to amend Law 13 of 1983 and a declaration of the union’s readiness to implement an escalation campaign to secure it aims.

Mina says that the conflict centers on the distinction between the umbrella union and the syndicates it houses. The Union of Medical Professions is “a container for pensions and subsidies” rather than a trade syndicate.  “The law regulating the Doctors Syndicate is concerned with the situation of doctors and the situation of health, as well as the relationship between different countries when it comes to the health sector. Its control over pharmaceutical regulation and the role of the syndicate have been established in hundreds of cases. The law regulating the union, however, concerns the percentage of a stamp duty due to the union, which is equivalent to 60 percent of membership dues.”

Professional syndicates in Egypt largely depend on stamp duties to fund their activities, according to Mina.

“The Stamp duty on litigation accrues to the Lawyers Syndicate. The Stamp duty on engineering works accrues to the Engineers Syndicate. And the Journalists Syndicate collects a stamp duty on advertisements,” she says.

“This is private money that belongs to the four syndicate members in the union and it is unacceptable that new members are added without our consent.”

However, it is a different issue altogether when it comes to the stamp duty on pharmaceuticals, as Mina explains that the stamp duty revenues are divided among a number of syndicates: Doctors prescribe medication that is supplied by pharmacists; each have a right to a portion of the revenue.

The Union of Medical Professions collects the stamp duty in addition to a percentage of the syndicate’s member dues to establish pension funds for its 650,000 members, 60,000 of whom are currently receiving pension payouts. Mina estimates that there is approximately LE2.6 billion in pension funds tied up in investments and bank accounts, in addition to LE5 billion in assets.

“This is private money that belongs to the four syndicate members in the union and it is unacceptable that new members are added without our consent,” she says, referring to articles 76 and 77 in the Constitution, which ensure the independence of syndicates and require their approval in their related affairs.

Photograph: Basma Fathy

Mina attributes origin of the dispute to the Physiotherapists Syndicate’s choice to approach Ismail to request a decision to include them in the union after the union had already rejected the idea. “After we rejected the prime minister’s decision — because the union is established in accordance with a law, and the decision is inadmissible if the law itself was not amended — we were surprised to find out that the prime minister had introduced a bill to amend the law to Parliament.”

Mina is not fundamentally opposed to the inclusion of a new syndicate in the wider union. But she contends that this must be contingent on whether or not new sources of funding would be available. “We are not against working with them. We are against their forced entry into the union,” she says.

Mina believes that the reason for the expansion in physiotherapy colleges in comparison to medical schools has to do with the basic costs needed to set up the latter. “One of the conditions required to establish a school of medicine is to establish a large teaching hospital capable of treating advanced cases and of capturing rare medical cases. The cost of setting up the attached teaching hospital represents 75 percent of the budget of the university.”

It is not a question of denying physiotherapists respect, for Mina. “A medical team is one unit whose members all work together,” she says. “However, respect and appreciation are one matter and compromising the basics of the profession is another.”

Translated by Assmaa Naguib

 

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Mohamed Hamama