March 31, 2023
Elusive data can unlock the anti-corruption impasse in global health
Research Manager Tom Wright shares insights from Uganda demonstrating why effective anti-corruption strategies hinge on understanding where corruption hotspots within systems lie.
At the opening of the most recent International Anti-Corruption Conference, held in Washington last December, USAID leader Samantha Power referenced the “$500 billion” lost annually in the health sector due to corruption. This figure is now regularly attributed back to Transparency International Global Health, although it actually originates from a study conducted in 2014.
A study of seven high income countries published in 2014 found that on average, seven per cent of money spent on health was lost to fraud, corruption and error. A subsequent study in 2015 found that figure to be slightly lower, an average of 6.19 per cent. If we apply this percentage to 2020 global health expenditure, this represents nearly $560 billion dollars a year.
We have always acknowledged that this figure comes with disclaimers. The extrapolation does not encompass the full spectrum of activities comprising corruption, fraud and loss. Corruption has and continues to manifest in different forms around the world. So the real figure is likely to be much higher than $560 billion.
Having said that, the 2015 study fundamental to our best estimate focusses on fraud and outlines 15 areas which were measured. Not all of these (for example, “prescription fraud by patients” or “the evasion of dental charges by patients”) fit within Transparency International’s definition of corruption, as the “entrusted power” element is missing.
Approaches such as the recent study in Uganda by Fazekas et al are an example of the type of information that is needed to allow anti-corruption advocates and governments to move conversations forward and begin to first pinpoint and then robustly address corruption within systems.
Their research estimated that 26 per cent of the health budget was lost to corruption, with absenteeism the largest driver. Healthcare workers are often absent because they need to earn extra income from other sources to compensate for low or delayed wages from healthcare employers.
Absenteeism means patients cannot access healthcare It also creates potential detrimental effects on confidence in the healthcare system and willingness to travel to clinics and hospitals for treatment.
According to Fazekas, absenteeism leads directly to annual losses of more than UGX495 billion (131 million USD) to the state budget in “wasted” payments for salaries to healthcare workers. There is an argument that this cost could be recovered through ensuring wages are paid on time and set at fair levels.
Anti-corruption strategies vary by country and context, but prospects for success are contingent on investment in research of the type seen in Uganda.
While we make the calls for that investment to be made, our best estimate of US $560 billion lost annually to corruption and fraud remains a strong galvanising force to act.
Though probably still an underestimate of the toll of corruption in health, it nevertheless paints a harsh reality of financial losses that could instead be used to save lives and advance universal health coverage. It’s an issue that demands collective action from government, private sector, media and civil society to tackle corruption and fraud in the health sector. No country is immune.
Join our webinar in partnership with USAID and GNACTA on April 18, when Mihaly Fazekas will contribute to a panel discussion exploring how to best quantify corruption losses within the health sector.