Healthcare privatisation: a roadblock on the way to universal health coverage

Healthcare privatisation: a roadblock on the way to universal health coverage

Rasha Kaloti 
Health Policies Researcher, ImpACT International for Human Rights Policies

Healthcare systems around the world have been undergoing reforms since the 1970s in order to reduce public funding.1 The role of the private sector in healthcare has been expanding worldwide. It provides a range of services, such as (but not limited to) the direct provision of healthcare services, medical products, infrastructure, and information technology.2 Privatisation in healthcare could also be through different mechanisms, such as an increased share of national healthcare expenditure by private insurance or paid by out-of-pocket payments. Most countries have “mixed healthcare systems”, (i.e., where healthcare services are available by both private and public providers). 1,3

The motives for moving towards privatisation vary from one country to another. A leading cause is governments’ financial difficulties, which encourage more dependence on the private sector.4 Other motives include the changing needs and demands of users (e.g., increasing ageing populations).3 The global direction towards neoliberal socioeconomic models worldwide has resulted in the increasing role of the private sector, and has decreased governments’ roles and spending on welfare systems, including healthcare.3

This report will explore if and how healthcare privatisation can help in achieving universal health coverage and how this relates to people’s human right to health. This will be done by analysing how healthcare privatisation affects healthcare systems’ outcomes in multiple countries, based on the WHO health systems framework shown in Figure 1 below.5

Universal Health Coverage & Health as a Human Right

The third Sustainable Development Goal is: “ensure healthy lives and promote well-being for all at all ages”. It is one of the 17 global Sustainable Development Goals (SGDs) set by the United Nations General Assembly in 2015 with the aim of achieving it by 2030. Target 8 of this third goal (Target 3.8) is to “Achieve universal health coverage, including financial risk protection, access to quality essential healthcare services and access to safe, effective, quality and affordable essential medicines and vaccines for all”.6

The right to health does not merely concern access to healthcare services but also extends to the determinants of health such as housing, access to good food, financial situation, and environmental factors.

According to the World Health Organisation (WHO), Universal Health Coverage (UHC) is when all individuals and communities receive the essential health services they need without facing any financial hardship. According to WHO, countries which progress towards UHC will progress towards other SDG health related targets and other SDG goals.7

The WHO Constitution in 1946, stated that “the enjoyment of the highest attainable standard of health is one of the fundamental rights of every human being without distinction of race, religion, political belief, economic or social condition”.8 Article 25 of the 1948 Universal Declaration of Human Rights referred to health as fundamental towards the right to a standard of living.9 

While UHC refers to the coverage of healthcare services within a healthcare system, the ‘right to health’ covers more than just the right to healthcare. It does not merely concern access to healthcare services but also extends to the determinants of health such as housing, access to good food, financial situation, and environmental factors.10 Therefore, supporting and pursuing UHC helps to achieve the right to healthcare (which is one aspect of the right to health in Article 25).


WHO Health System Framework


Moving towards UHC requires strengthening health systems in all countries.7 Improving health service coverage and outcomes depends on the building blocks formulated by WHO health systems framework (as shown in Figure 1).5

According to the WHO, as per Figure 1, the overall health system outcomes or goals are to improve health and health equity, in a responsive and financially fair manner, while managing available resources efficiently. The intermediate goals, which help in achieving the overall goals, include ensuring greater access to and coverage for health interventions and ensuring provider quality and safety. 11


The Impact of Healthcare Privatisation on Health Systems’ Outcomes

This section will analyse how healthcare privatisation affects each of the four overall health system’s outcomes.



Health system responsiveness is a key outcome defined by the WHO as: “how well the health system meets the population’s legitimate expectation regarding their interaction with the health system”. Expectations of improvements in health or wealth are not considered part of these ‘responsiveness’ expectations.12

One study, which explores the effects of mixed public-private healthcare systems as a form of privatisation, concluded that private patients in a mixed system have an advantage over public patients in terms of access and waiting time. While this might be interpreted as a better response in private facilities, this privatisation results in increased discrimination towards those who cannot afford private insurance and are therefore deprioritised.3

A comparative study in rural Bangladesh showed that physicians in the private sector outperformed those in the public sector in different responsiveness measures, such as ‘friendliness’ and ‘respect’. However, public physicians scored higher for the domains of ‘gaining trust’ and ‘financial sensitivity’. Additionally, responsiveness was not optimal for physicians in both sectors.13

Additionally, a literature review showed that even though healthcare privatisation in Saudi Arabia can (but does not always) lead to improved productivity, service quality indicators are not significantly affected by privatisation. Accessibility was shown to be worsened as a result of privatisation.14 


Social and Financial Protection

Social and financial protection are essential in achieving UHC and are vital for a well-functioning healthcare system. The WHO urges all countries to take the necessary steps to improve social protection. This is done by ensuring that vulnerable people have access to required services, and that paying for services does not result in financial hardship for anyone.11

People who do not suffer from any diseases, or patients suffering from mild issues (low cost) or who are younger, are often prioritised in the private sector for a higher profit.

Fund deficiency in the public sector in India and the increasing needs of the rising population pushed the Indian government to promote the privatisation of healthcare. It was argued that privatisation would solve the issue of high demands for doctors in rural areas. However, the privatisation did not solve this issue, but rather worsened it; 80% of doctors in India work in urban areas, serving only 25% of India’s population.15 This would in turn augment the responsiveness and efficiency (as important health system outcomes) of health services in these rural areas. 

Affordability can also be determined by social demographics due to the close correlation between race and income (or poverty). For example, in 2017, 31% of the Jewish population in Israel had access to private insurance, allowing them access to surgical procedures in the private sector, while only 5% of the Palestinian Arab population had access to the same services.3 Another example is the lack of affordable private insurance for the Black majority in South Africa, which further widens the rural-urban gap and increases financial barriers for people with a low income.16 

‘Cream skimming’ or ‘cherry picking’ are terms used in business when services are mainly (and purposely) being provided to low-cost, low-risk and/or high-value customers for profit gains. Privatisation of healthcare has been shown to increase these practices. People who do not suffer from any diseases, or patients suffering from mild issues (low cost) or who are younger, are often prioritised in the private sector for a higher profit.17

Studies have shown that patients receiving private care are often richer and have less comorbidities, while those with severe medical conditions (who are often also poorer) are less likely to receive timely treatment.17 Healthcare privatisation in the European Union has shown that ‘cherry picking’ or ‘cream skimming’ increases the inequality in healthcare services. This is because high risk and poorer patients, or those requiring emergency care, end up depending on under-resourced public healthcare services.18

Improved Efficiency

Efficiency in healthcare has been linked to waste elimination with respect to resources required for healthcare provision. Technical efficiency in healthcare is defined as “producing the maximum amount of output from a given quantity of input”.19 According to the WHO, efficiency in healthcare financing is a crucial step towards achieving UHC.20
While utilisation of operation rooms in the private sector is often perceived as more efficient than in the public sector, the served patients differ largely in these two systems. As mentioned previously, cream skimming results in the selection of ‘low risk’ patients. This makes the private healthcare system appear more ‘efficient’ since it has a small number of patients with severe conditions who are ‘high risk and high cost’, as these patients are more likely to receive care in the public sector. 3

One study investigating the effects of cream skimming on Italian hospitals’ efficiency, found that private hospitals had the lowest technical efficiency in comparison to public and non-profit hospitals. 21 Another study in the United States concluded that, while privatisation could enhance efficiency and productivity, other aspects of healthcare delivery such as healthcare access and quality are compromised as a result. 22

Overdiagnosis and overtreatment are common features of private healthcare systems, which often see patients merely as payers and not patients. This results in an inefficient allocation of money and resources. The increased privatisation in India resulted in an excessive increase in the use of diagnostic tests, antibiotic prescriptions, and unnecessary surgical operations. Doctors tend to serve the interests of their employers rather than those of patients, and this results in a large financial waste. 15


Improved and Equitable Health Outcomes

Overtreatment or selecting more profitable treatments can have negative effects on health outcomes. A review from the United States showed that birthing women using private health insurance are more likely to go for a Caesarean section than natural birth when compared to women using public insurance.23 In Chile, 75% of women who have public insurance who give birth at private hospitals go for a Caesarean section, compared to 25% of women who attend public hospitals for delivery.24 The WHO strongly advises against unnecessary Caesarean sections, due to the higher risk they have on the health of birthing people and their babies both in the short and long term. These risks could include: a potential organ injury for the labouring person, neonatal respiratory distress, and a higher risk of developing asthma and obesity in children.25 

In Brazil, the increased privatisation of fertility services has led to higher rates of abortions, improper use of oral contraceptives and sterilizations. These practices are linked to a higher risk of mortality especially among younger women. The same study also showed how privatisation increased the health disparity between rural and urban areas. Healthcare coverage is lower in rural areas and therefore infant mortality was higher there.26

Multiple examples from the United Kingdom show that outsourcing services for the National Health Service (NHS) results in reduced quality of care, reduced safety, lower access to healthcare services and ultimately worse patient outcomes.27

Towards Achieving Universal Health Coverage


States need to take the necessary action to strengthen the public sector, because the private healthcare sector alone will not lead us to universal health coverage.

Evidence shows that while the private sector may improve some health systems’ outcomes in certain contexts, it is generally more likely to impede the functions and intended goals of health systems. Many studies have shown that increased privatisation of the healthcare sector has resulted in lower efficiency, reduced responsiveness, higher financial inequality and worse health outcomes. This decreases the likelihood of achieving universal health coverage, diminishes equity and makes ensuring the right to health for all more difficult.

Investing more in (i) the public sector, (ii) primary healthcare and (iii) preventative healthcare will be essential to achieving universal health coverage. Private-public partnerships in healthcare could help in responding to the high need and demand of healthcare services. However, states should be responsible for ensuring that private healthcare providers are responding to the actual needs of their population. This will help to ensure an equitable access to health regardless of people’s socioeconomic situations and their financial abilities. States need to take the necessary action to strengthen the public sector, because the private healthcare sector alone will not lead us to universal health coverage.



1.  Janssen. Privatisation in health care: concepts, motives and policies. 1990.
2.WHO. Technical Series on Primary Healthcare. 2018.
3.Filc et al. BMC. From public vs. private to public/private mix in healthcare: lessons from the Israeli and the Spanish cases. 2020.

4.Al Khamis. Critical analysis and review of the literature on healthcare privatisation and its association with access to medical care in Saudi Arabia. 2014.

5.WHO. Monitoring the building blocks of health systems: a handbook of indicators and their measurement strategies. 2010.

6.United Nations. Goal 3 – Ensure healthy lives and promote well-being for all at all ages. 2015.

7.WHO. Universal Health Coverage. 2021.

8.WHO. Constitution of the World Health Organization. 2006.

9.United Nations. Universal Declaration of Human Rights. 2015.

10.WHO. Anchoring universal health coverage in the right to health. Policy brief. 2015.;jsessionid=4DABDA76767441005169713C47735124?sequence=1

11.WHO. Strengthening health systems to improve health outcomes. 2007.

12.WHO. Health Systems responsiveness.

13.Joarder et al. Health Policy and Planning. Who are more responsive? Mixed-methods comparison of public and private sector physicians in rural Bangladesh. 2017.

14.Al Mutairi & Al Shamsi. Global Journal of Health Sciences. Healthcare system accessibility in the face of increasing privatisation in Saudi Arabia: lessons from Australia. 2018.

15.Ghosh. Hindustan Times. National Health Policy must not push privatisation of healthcare in India. 2017.

16.Naylor. Private medicine and the privatisation of healthcare in South Africa. 1988.

17.Cheng et al. Social Science and Medicine. Cream skimming and hospital transfers in a mixed public-private system. 2015.

18.Corporate Europe Observatory. The creeping privatisation of healthcare - problematic EU policies and the corporate lobby push. 2017.

19.Hollingsworth. Health Economics. The measurement of efficiency and productivity of health care delivery. 2008.

20.WHO. Health financing for universal coverage. 2019.

21.Berta et al. The effects of upcoding, cream skimming and readmissions on the Italian hospitals efficiency: A population-based investigation. 2009.

22.Ramamonjiarivelo. Health Care Finance. The Impact of Privatisation on Efficiency and Productivity: The Case of US Public Hospitals. 2016.

23.Hoxa et al. BMJ. Caesarean sections and private insurance: systematic review and meta-analysis. 2016.

24.Borrescio-Higa & Valdes. BMJ. Publicly insured caesarean sections in private hospitals: a repeated cross-sectional analysis in Chile.

25.WHO. Non-clinical interventions to reduce unnecessary caesarean sections. 2018.

26.Rehman. Down to Earth. Rapid privatisation has worsened health care services in poor and middle-income nations: study. 2012.

27.Evans. The Lowdown. Why does NHS privatisation matter? 2021.




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