Corruption and the Corruption and the Health SectorHealth SectorLessons from AlbaniaLessons from Albania

Taryn Vian, Assistant Professor of Taryn Vian, Assistant Professor of International HealthInternational Health

Boston University International Health Grand Rounds Boston University International Health Grand Rounds PresentationPresentation

June 13, 2003June 13, 2003

OutlineOutline

CorruptionCorruption as a as a health issuehealth issueBackgroundBackground on Albania and antion Albania and anti--corruption activitiescorruption activitiesScope of workScope of workAssessment MethodsAssessment MethodsFindingsFindingsRecommendationsRecommendations

Corruption is a Health IssueCorruption is a Health Issue

Abuse of Abuse of public or entrusted public or entrusted powerpower for private gainfor private gainStudents should be Students should be preparedpreparedCorruption is universal, but Corruption is universal, but effectseffects are are worseworse in lowerin lower--income and transitional countriesincome and transitional countriesCorruption = Corruption = causecause of underof under--development, not just effectdevelopment, not just effect

“Something is wrong in societies where corruption takes over….We should not lose this sense of moral violation. But as we reflect on questions of why, we should also do our best on questions of how. We should not yield to the temptation to escape from the hardest and most ethically loaded problems on the grounds there is nothing we can do about them. …With regard to corruption, policymakers and citizens are not helpless. There arethings we can do about even this most difficult of problems. At least this practical and normative assumption should drive more of our work on the problems of the poorer nations.”

Robert Klitgaard, Controlling Corruption, 1988 (p. 210)

BackgroundBackground3.1 million3.1 millionIsolated prior to Isolated prior to 1991, pyramid 1991, pyramid scheme collapse scheme collapse in 1997in 1997$1,200 GDP (PPP $1,200 GDP (PPP adjusted)adjusted)MuslimMuslim

MSI and ACACMSI and ACAC

USAID/Albanian Civil Society USAID/Albanian Civil Society Corruption Reduction ProjectCorruption Reduction ProjectAlbanian Coalition Against Albanian Coalition Against Corruption Corruption (ACAC)(ACAC)•• Citizen Advocacy OfficeCitizen Advocacy Office•• Press CoveragePress Coverage•• Working Group on ProcurementWorking Group on Procurement

Scope of WorkScope of Work

Assess Assess vulnerabilitiesvulnerabilitiesIdentify Identify partners and activitiespartners and activitiesfor reducing vulnerability to for reducing vulnerability to corruptioncorruptionShare lessonsShare lessons learned through a learned through a workshopworkshop

MethodsMethods

Vulnerability Assessment Vulnerability Assessment Method 1Method 1

Inherent Inherent riskriskof corruptionof corruptionControl Control environmentenvironmentExisting Existing safeguardssafeguards

Klitgaard Assessment TasksKlitgaard Assessment Tasks

DisaggregateDisaggregate the types of the types of corruptioncorruptionDetermine the Determine the scopescope and and seriousnessseriousness of each typeof each typeIdentify the Identify the beneficiariesbeneficiaries and the and the loserslosers

Klitgaard, Controlling Corruption, 1988

More Assessment More Assessment Challenges:Challenges:

How to talk about corruptionHow to talk about corruptionAvoid the “Avoid the “CC--wordword” ?” ?ForwardForward--lookinglooking——improving improving incentives, not pointing fingersincentives, not pointing fingersStart with a Start with a vulnerability rankingvulnerability rankingexerciseexercise

Vulnerability RankingProcurement of goods and services

Pharmaceutical promotionDrug distribution & saleHealth regulationEducation of health professionals

Personnel management & informal payments

Budget and financial management

Citizen Voice & Choice

ManagementTools (for hierarchical control)

StrategiesInformation

Appropriate Discretion (+/-)

Incentives & Consequences (including detection & sanctions)

FindingsFindings

Types of Corruption

Leakage of official fee revenue, overcharging patientsBudgeting, pricing

Bribes or influence used in drug registration and licensing/control of quality of drugs; lack of standards or regulatory control of public and private facilities

Regulatory systems

Theft from public facilities for resale in private sectorDistribution and storage of drugs

Private financial interests affecting decisions of what to procure; collusion among bidders; kickbacks or bribes that allow certain bidders access to confidential procurement information during the selection process; low quality performance that has no repercussions; use of direct procurement rather than competitive, without good reason

Procurement of drugs and medical equipment

Financial influence used by private companies or pharmacies to get drugs added to reimbursement lists; illegal financial relationships between public doctors and private pharmacies; over-prescription for financial gain

Drug selection and use

Informal payments; private practice during public work hours; absenteeism; over-utilization due to financial incentives; favoritism in personnel appointments and hiring

Provision of services by frontline health workers, personnel management

Types of Corruption Likely in AlbaniaActivity

Informal PaymentsInformal Payments

Informal PaymentsInformal Payments

Some Some previous studiesprevious studies, more , more data available to analyze (LSMS, data available to analyze (LSMS, AbtAbt data)data)A wide A wide spectrum of opinionspectrum of opinion on on acceptabilityacceptabilityLittle appreciation of Little appreciation of negative negative impactsimpacts of informal paymentsof informal payments

Frequency of Informal PaymentsIn Selected Countries in Eastern Europe and Central Asia

Frequency of Informal Payments in Selected Countries

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Armenia (1999)

Vietnam (1992)

Albania (2000)*

Poland (1998)

Azerbaijan (1995)

Kyrgyz Republic (1996)

Russian Federation (1997)

Moldova (1999)

Tajikistan (1999)

Slovak Republic (1999)

Latvia (2000)

Albania (1996)*

Bulgaria (1997)

Source: All data except the second Albania study are from Maureen Lewis, Who is Paying for Health Care in Eastern Europe and Central Asia? (Washington, DC: World Bank,2000). Data points for Albania are from:World Bank, Albania: Growing Out of Poverty 1997 (data from 1996, cited in Lewis’s paper), and World Bank, Albanian Public’s Perceptions of the Health Care System September 2000 (data from 2000).

Informal SystemsInformal Systems

Acceptable Corruption

Most payments are after service is delivered

Gifts are a cultural practice

Salaries are too low

Staff demand payment before

If you can’t pay you may die

Some docs have 3 houses

Here, there is the mentality Here, there is the mentality that you have to give a that you have to give a

reward to someone who gives reward to someone who gives you service. For example, you you service. For example, you give a tip to the barber who give a tip to the barber who serves you. So much more serves you. So much more

grateful you must be to the grateful you must be to the doctor who saves you.doctor who saves you.

Participant Participant Health and Corruption Workshop, Tirana, 3/03Health and Corruption Workshop, Tirana, 3/03

The informal payment system is so accepted that doctors leave at the end of the day and turn to each other to ask “How much did you make today?” Although patients are reluctant to complain to the doctors, they will get angry and disillusioned when they leave the facility, and they lose confidence in the system.

ParticipantHealth and Corruption Workshop,Tirana, March 2003

Informal Payments

•Patients who receive unnecessary interventions merely to increase staff’s compensation•Patients who cannot afford fees but feel obliged to pay (may not seek care, or may sell assets to have cash to pay under-the-table)•Patients who try to get free care (may be refused or get lower qualitycare)•Government (loss of control over health care policy, creation of private system operating in a “shell” of public sector)

Losers

•Almost all levels of staff (payments may be shared when given todoctor, or patients may pay each staff member directly)•Well-connected individuals (may not be asked to pay because of relationships)•Patients who can afford to pay (feel safer, more likely to get quality service)•Government (less pressure for health reforms by health personnel)•Surgeons (make most money)

Beneficiaries

No consensus. A lot of recent, negative press and some vocal critics; however, many people feel the payments are fair since health personnel are so poorly paid, and there is a direct quid-quo-pro

Seriousness

Pervasive, estimated 89% of inpatients and 80% of outpatients make the payments (WB 2000) versus 20% as measured four years earlier

Scope

A successful experimentA successful experimentTirana Maternity HospitalTirana Maternity Hospital2001: 2001: strengthened formal payment strengthened formal payment system, increased revenues from system, increased revenues from 900K to 2,590 K (900K to 2,590 K (LeksLeks))Increased doctors’ salaries 4x, others Increased doctors’ salaries 4x, others tootooPatient education: no other payments Patient education: no other payments neededneededSuggestion boxes, exit interviews for Suggestion boxes, exit interviews for monitoringmonitoringResults: increased utilization; some Results: increased utilization; some evidence of decreased informal evidence of decreased informal paymentspayments

RecommendationsRecommendations

Criteria for StrategiesCriteria for Strategies

Who?Who?•• ACAC (e.g. Citizens Advocacy Office, ACAC (e.g. Citizens Advocacy Office,

ACACACAC--sponsored grantees)sponsored grantees)•• USAID collaborating agencies USAID collaborating agencies

working on other health issuesworking on other health issues•• Government officialsGovernment officials

Technical capacityTechnical capacityGovernment Government commitmentcommitment

Citizen Voice & Choice (C)

ManagementTools (M) Strategies

Information (I)

Appropriate Discretion (D)

Incentives & Consequences (I&C)

StrategiesStrategies

Citizen Voice & Choice (C)Citizen Voice & Choice (C) Local health Local health boards, complaint offices, exit options, boards, complaint offices, exit options, shown to decrease informal payments and shown to decrease informal payments and procurement prices in Boliviaprocurement prices in Bolivia

Information (I)Information (I) Increase accountability, Increase accountability, probability of detection. When people know probability of detection. When people know they are watched, they are less likely to they are watched, they are less likely to abuse system. Evidence from price abuse system. Evidence from price reporting system in Argentina.reporting system in Argentina.

StrategiesStrategiesIncentives & Consequences (I&C)Incentives & Consequences (I&C)Increase likelihood corruption will be detected and Increase likelihood corruption will be detected and sanction, and increase benefits of staying clean. sanction, and increase benefits of staying clean. Provider payment systemsProvider payment systems

Appropriate Discretion (D)Appropriate Discretion (D) Reduce Reduce discretion where it is being abused, increase discretion where it is being abused, increase discretion where it permits earlier detection of discretion where it permits earlier detection of corruption, rewards for good behavior. Evidence corruption, rewards for good behavior. Evidence from Colombia.from Colombia.

Management Tools (M)Management Tools (M) Reinforce Reinforce hierarchical control systems. Internal financial hierarchical control systems. Internal financial control systems, performance auditing, drug control systems, performance auditing, drug inventory systems. Evidence from Latin America.inventory systems. Evidence from Latin America.

Anti-Corruption Strategies

Gov’tCommit-ment

High

Low

Implementation Capacity

Citizen representatives on committees (EDL, drug reimbursement, hospital management) (C)

Clear documentation of procurement results (I)

Statements condemning informal payments (I)

Disseminate pricing Information (I)

Citizen Advocacy Office for Health (C)

Consumer guides to health laws & system (I)

Promote awareness on informal pmts (I)

Develop performance standards, management tools (M)

Increase provider compensation and link pay to outputs (I&C)

Strengthen & enforce regulatory systems (I&C, D)

Trend analysis of drug margins, prices, and affordability (I)

Research and analysis of data on informal payments(I)

Citizen lobbying & advocacy for changes in policies (C)

StrongLow

Citizens Advocacy Office (CAO) Citizens Advocacy Office (CAO) for Health Concernsfor Health Concerns

CAO is popular and has dealt CAO is popular and has dealt with hundreds of complaintswith hundreds of complaintsHelp for worst abuse casesHelp for worst abuse casesMore data, operational details to More data, operational details to help with planning reforms, help with planning reforms, advocating legal changesadvocating legal changes

Citizens on CommitteesCitizens on Committees

How to promote citizen voice How to promote citizen voice through committees & local through committees & local health boardshealth boardsNot currently developed, though Not currently developed, though some models being testedsome models being testedVolunteerism? Volunteerism?

ResearchResearchResearch Research evidence that health evidence that health reforms do reduce informal paymentsreforms do reduce informal paymentsEvaluation of Evaluation of Tirana Maternity’s Tirana Maternity’s interventionintervention to fight corruptionto fight corruptionStudy and analysis of Study and analysis of culture and culture and corruptioncorruption in Albania, toward in Albania, toward development of informational development of informational messages, supportmessages, support

Awareness on Informal Awareness on Informal PaymentsPayments

Health professionalsHealth professionals and and citizenscitizensDiscussDiscuss results of studies, surveysresults of studies, surveysCase studies, videotapes of focus Case studies, videotapes of focus groups, exit surveys (what patients groups, exit surveys (what patients see, what motivates them). Use to see, what motivates them). Use to analyze vulnerabilitiesanalyze vulnerabilities. Asymmetrical . Asymmetrical information? Preferences? Culture?information? Preferences? Culture?Leadership role of doctorsLeadership role of doctors in in preventing abuses, promoting preventing abuses, promoting reformsreforms

ConclusionConclusionAssessment methods Assessment methods need to need to consider health reform progress. consider health reform progress. Consider presenting issues, Consider presenting issues, strategies for reactionstrategies for reactionHealth reformHealth reform is not a panacea. is not a panacea. Information and citizen voice Information and citizen voice strategies can be pursued while strategies can be pursued while health reforms are developed.health reforms are developed.

ConclusionsConclusions

Strategies must be evaluatedStrategies must be evaluated,,corruption perception surveys of corruption perception surveys of health staff & household surveys health staff & household surveys may be helpfulmay be helpfulMore coordination is needed More coordination is needed between between health and democracy health and democracy (anti(anti--corruption) programscorruption) programs, , resources are available to shareresources are available to share