Trade in Health Services in Pakistan

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1 Trade in Health Services in Pakistan A country case study Key findings and reflections Dr Zafar Mirza Interregional Workshop on Trade and Health, WHO/SEARO, New Delhi, October 2004

2 Structure of the Presentation 1. Introduction to the methodology used 2. Key findings of the case study 3. Experience sharing 4. The way ahead

3 Introduction to the methodology used General Framework for Country Analysis by Rupa Chanda, Richard Smith & Nick Drager 1. General Macroeconomic and Trade Environment 2. State of Domestic Health Care System 3. State of Trade and Investment in Health Sector 4. State of data/information in the Health Sector 5. Institutional Capacity and Capabilities with regard to Trade in Health Services

4 The questionnaire General Macroeconomic and Trade Environment State of Domestic Health Care System State of Trade and Investment in Health State of data/information in the Health Sector Institutional Capacity and Capabilities with regard to TiHS 32 questions 6 sub-sections, 61 questions; 28 questions 11 questions 12 questions. 143 questions

5 The Country - Pakistan 57 years old country Second largest in South Asia after India Neighbors: India, Afghanistan, Iran, China Population of 145 million, >tripled since 1947 Makes up about 40% population of EMR Parliamentary democracy but politically instable Nuclear capability Weak economy but picking-up fast Diverse geographically and culturally

6 Macroeconomics & Trade 1 Low income country per capita GDP $ 490 Total GDP $ 65 billion Economic growth rate 5.5 % Population in poverty 32 million, app. 40% Trade share in GDP 15.5% Trade growth rate 3%, 4.1% - projected Total exports $ 10 billion Trade deficit $ 1.25 billion Share in global exports 0.15% in 2000 Export composition manufactured goods 75%, 65% textile FDI in 2003 $ 820 million (US, UK, UAE, Japan)

7 Macroeconomics & Trade 2 Important trading partners USA 24.7%, Dubai 7.9%, UK 7.2%, Germany 4.9%, Hong Kong 4.8%, Saudi Arabia 3.6% and Japan 1.8% Average tariff rate is 25% Founding member of GATT and WTO Pursuing Economic liberalization since 1977, SAP in 1988 the principles of (trade) policy formulation: market driven policies; liberalization; and deregulation 1 Currently member of G 22 group in WTO 1. Quote from Trade Minister s speech on the occasion of announcing the Trade Policy

8 Trade in Services Sector 3 More than half of the GDP is made up of services sector. Services sector is broken into 6 categories in national accounts. Health services belong to 6 th category i.e. other services and its further breakdown is not available. Balance of payments (BOP) statistics are the major source of information on international trade in services in Pakistan. Among other services, these accounts also include remittances routed through various modes of service supply defined under the GATS. Major destinations for migrating labor are: Middle East, UK, USA, Germany, Norway, Canada and others. All economic sectors have been opened up for FDI and 100% foreign equity has been allowed

9 State of Health Care System 1 Double burden of disease > 50% preventable One child dies every minute mainly from EPI Diseases, diarrhea and ARI: IMR % births are low weight; 45% anemia in 4-5 years old children; 34% mothers are under-weight and 65% of women in child bearing age are anemic 30,000 women die every year from pregnancy-related causes. 6th largest burden of TB in the world: 177 cases per 100,000 population.

10 State of Health Care System 2 Ratio of public to private expenditure in 1998 was 22:78 Government spends less than 1% of the GDP on health 40-50% of the population does not have reliable access to needed medicines Around 2/3 rd population buys health care through out-ofpocket expenditures from the private sector We do have a national health policy document

11 State of Health Care System 3 The Article 38 (d) of the Constitution of Pakistan reads: The State shall...provide basic necessities of life, such as food, clothing. housing, education and medical relief, for all such citizens, irrespective of sex, caste, creed or race, as are permanently or temporarily unable to earn their livelihood on account of infirmity, sickness or unemployment;. Constitutional basis for Health-for-All

12 Some Key Challenges in Health Sector 1 Neglect of quality and equity dimensions in health service delivery. Neglect of linkages with the private sector Lack of inter-sectoral coordination and limitation of prevalent sectoral approach Urban tertiary orientation vis-à-vis PHC approach with an effective referral system Lack of institutional capacity, including measurement and monitoring skills. Insufficient levels of resource allocation for the health sector. 1. From Federal Secretary Health s presentation to Pakistan Development Forum in 2002

13 Pakistan s schedule of commitments in GATS Pakistan s key interest in these negotiations was to get market access in mode 4 and to attract FDI. other countries were mainly interested in market access for telecommunication and financial sectors Horizontal commitments Representative offices of foreign firms; limitations on market access under Mode 3. equity shares not > 51% Representative offices of foreign firms; limitations on national treatment under Mode 3. real estate, case-tocase basis Presence of foreign staff; limitations on market access under Mode 4. professional staff not > 50%

14 Pakistan s schedule of commitments in GATS Pakistan's Schedule of Specific Commitments covers 47 activities in following six sectors Group 1: Business (including professional and computer) services Group 2: Communication services Group 3: Construction and related engineering services Group 7: Financial (insurance and banking) services Group 8: Health-related and social services Group 9: Tourism and travel related services

15 Pakistan s schedule of commitments in GATS In case of specific commitments in health sector, Pakistan has been more liberal than neighboring South Asian countries. Bangladesh and Nepal have not made any commitments in any health related services, so they are not among 83 countries. India has made commitment only in hospital services. Unlike its neighbors, Pakistan has made commitments in both hospital services and in medical and dental services.

16 Trade in Health Services before GATS Four types of movements were taking place: 1. Rich consumers going abroad for treatment consumption abroad i.e. Mode 2 of GATS (imports) 2. Medical students / health professionals going abroad for education / training also Mode 2 (imports) 3. Health professionals moving abroad for jobs movement of natural persons i.e. Mode 4 (exports) The former Federal health minister said in 2002 that Pakistan is facing acute scarcity of health specialists as most of them have moved abroad in search of better prospects. 4. Few students from other countries had been coming for medical education Mode 2 (export)

17 TiHS under GATS - Mode 1 Cross-border supply of health services - confusion: within country and cross-border 1. Imports: negligible, only few big hospitals, but Pakistan is preparing for it, national tele-medicine forum has been established, Pak-net TelMedPak - ATN, SAATHI Pakistan is a priority country in WHO for ehealth 2. Exports: Many private companies in Pakistan are providing Medical subscription services to big hospitals in the west there is no regulation of this, and no data is available

18 TiHS under GATS - Mode 2 Consumption of health services in other countries - conusmers / patients, students / trainees 1. Imports: More patients and students are going out than coming in, Pakistan is a net importer, data is scattered. 2. Exports: There is a growing trend of consumers coming in; Sharif Medical City Hospital e.g.; few students from other neighboring countries; Pakistan can attract students from EMR countries.

19 TiHS under GATS - Mode 3 Commercial presence of foreign health services providers - hosptials / labs / health insurance co. / medical institutions etc. 1. FDI imports: open investment policy in hospital sector; minimum foreign equity component US $ 0.5 million; 100% foreign ownership is allowed; conflict between horizontal commitments in GATS and investment policy; no major FDI in health sector at present; Cromwell liaison offices; Franchised clinics of Materna SA of France. 2. Exports: None (not known)

20 TiHS under GATS - Mode 4 Movement of health professionals - doctors / dentists / nurses / paramedics / etc. 1. Imports: labor surplus country but not health professionals surplus country, no clear policy; PMDC and Ministry of labor do not have figures but health professionals keep moving to other countries especially UK, US, GCC countries, Malaysia etc. It is also not clear that out of about $ 1 billion remittances what portion is contributed by health professionals abroad. 2. Exports: Very few

21 TiHS and Equity in Health GATS and Equity in Health Services in Pakistan: Opportunities, concerns and limitations a study by Dr Nabeel Akram, AKU 5 equity related benchmarks of fairness in health: inter-sectoral public health; financial barriers to equitable access; non-financial barriers to access; comprehensiveness of benefits and tiering; and equitable financing; and interviewed 15 key health policy makers Results a. Lack of data relevant to TiHS in Pakistan came up as the most striking limitation b. None of the criteria in any mode of service could indicate through direct or indirect evidence that it may improve equity in any or all related variables c. Key informant interviews conducted for an in-depth inquiry revealed that there is considerable lack of knowledge about GATS.

22 Experience sharing Methodology was unnecessarily lengthy and complex Struggle to get data, unappreciated and scattered Very few people would understand the purpose of the study But once they understood, they appreciate it very much, especially health policy makers It is important to highlight the issues even in the absence of data, which itself is a issue. It should be taken as a work in progress Format of the study report should be such that we can always easily add information as it become available. There must also be a dissemination strategy of the report.

23 The way ahead Methodology should be shortened and refined More countries in the region should conduct the studies from which our policy makers would immensely benefit because this would enable them to match their comparative advantage with the needs else where. A regional group of interested researchers and policy makers should be formed which can continue to share their experiences and findings with each other.

24 Thank you for your attention

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