Privatization and the Pandemic

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By Jacob Assa and Cecilia Calderon

Unlike other epidemics or pandemics – such as tuberculosis, SARS, MERS or HIV/AIDS – COVID-19 has hit hardest at the world’s wealthiest countries. As of early June 2020, the 37 industrialized countries of the OECD accounted for 59% of all cases and 78% of deaths, even though they constitute less than 18% of the total population affected.

Looking at the pandemic’s effects in another way – using cases and deaths per million population – paints an even starker picture. OECD countries have a prevalence ratio of 2,890 cases per million and a mortality rate of 225 per million, compared with 869 cases and 51 deaths per million in the rest of the world. Furthermore, the case fatality ratio (CFR) – the ratio of deaths to cases – is also higher in the OECD (7.8%) than in the rest of the world (5.9%).

What can explain this phenomenon, the world’s richest countries impacted more than middle-income and poor countries?  One explanation is that COVID-19 spreads faster in countries that are more integrated to the globalized economy, as the OECD members certainly are. A recent study found that globalized countries have indeed experienced more cases per population, but less mortality.

We find this explanation incomplete. First, the extent of a country’s globalization may be masking other factors. And second, some of the most globalized countries have lower COVID-19 prevalence and mortality than countries more integrated into the global economy. For example, Germany has a higher KOF globalization index than the United states, but the latter has more than double the prevalence and mortality rates. Likewise, the UK is more globalized than Spain, but Spain has fared worse in cases per one million people.

Country KOF Globalization Index COVID-19 Cases per Million COVID-19 Deaths per Million
United Kingdom 90.0 4,229 599
Germany 88.7 2,240 105
Spain 85.8 5,187 584
United States 82.5 5,704 329

Clearly something else is at play. One possible reason for the virus’s differential impact on countries is the relative structure of their health systems. In fact, a 2015 study of tuberculosis (TB) rates in 99 countries found that cuts in public spending on healthcare and the privatization of the health sector were related to higher prevalence of TB. This was set against decades of privatization of health-care systems in developing countries, often encouraged by the World Bank and IMF.

However, the TB sample only included developing countries, while COVID-19 has struck across the entire world. We set out to find whether a similar difference in the financing structure of health care – private vs. public – had something to do with COVID-19 prevalence and mortality rates in countries at all different stages of development. We used data for 147 countries accounting for 93% of the world’s population, and spanning the five continents and all income levels. 

We ran several regression models for both COVID-19 prevalence – cases per million people – and mortality – deaths per million, and in each case the extent of private expenditure on health care had a large and positive relationship with the impact of the pandemic (see our full paper here). 

The first chart shows that, even when controlling for the level of income, the extent of urbanization, globalization and democracy, a 10% increase in private health expenditure results in a 4.85% increase in COVID-19 cases. 

Screenshot 2020-06-14 at 23.11.25

The second chart shows that, controlling for the same variables, a 10% increase in private health expenditure results in a 6.91% increase in COVID-19 deaths. This is an average, and some countries perform worse (e.g. the United States in the top right corner) while some fare a little better (e.g. New Zealand). But the relationship is clear and statistically significant. 

Screenshot 2020-06-14 at 23.13.09

For COVID-19 mortality we also looked at the proportion of people over 65 in the population. Since this is a high-risk group, we were not surprised to find that, on average, 10% increase in the percentage of older people results in a 1.18% increase in COVID-19 deaths.

While policymakers cannot change the demographic structure of the population very quickly, they do have control of policies such as cost-cutting and privatization, which also affect hospital capacity. We found that a 10% increase in the percentage of hospital beds per 1,000 people results in a 1.67% decrease in COVID-19 deaths. Some of the highest mortality rates are in the US, Italy and Spain (which have around 3 hospital beds per 1,000 people), whereas less privatized systems have a much higher ratio of hospital beds per people, e.g. Germany (8.2), South Korea (10.9), and Japan (13.4).

These findings suggest that short-term gains from privatization of health-care systems (such as cost-cutting and in some cases shorter waiting times at clinics) have to be weighed against long-term risks of lower capacity (in both equipment and staffing), less equitable coverage, lower adherence to medical standards and often over-prescription of antibiotics. In the case of COVID-19, the equity element may have played a large role, as uninsured people feeling ill are more likely to avoid costly testing or treatment, as well as less likely to be able to work from home, thus facilitating the spread of the virus.

While the most urgent task is coping with the pandemic at hand, it is not likely to be the last or even worst. Recent research has linked the emergence of zoonotic diseases such as COVID-19 to increased pressure from human economies on nature, leading to declines in wildlife populations and thus a higher risk of animal-to-human transmission of such diseases. With this in mind, policy-makers need to urgently re-evaluate neoliberal policies such as privatization and commercialization of healthcare systems, if these are to become sustainable in the long-run.

Dr. Jacob Assa, The New School for Social Research. He Tweets at @jacob_assa.

Cecilia Calderon, statistics specialist, United Nations Development Program.

 

6 thoughts on “Privatization and the Pandemic

  1. Hi there!

    Why did you choose to measure the financing structure of the healthcare system by ‘Domestic private health expenditure (PVT-D) per capita in US$’ instead of ‘Domestic general government health expenditure (GGHE-D) as percentage of general government expenditure (GGE) (%)’ or ‘Domestic general government health expenditure (GGHE-D) as percentage of gross domestic product (GDP) (%)’?

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  2. […] Un estudio realizado por Jacob Assa y Cecilia Calderón muestra que hay una marcada diferencia en cuántas personas han muerto por el virus en, por ejemplo, el Reino Unido (599 por millón) y Alemania (105 por millón). Los investigadores querían una respuesta de por qué esto es así, de dónde viene esta gran diferencia. Utilizaron datos de 147 países y realizaron análisis informáticos de ellos. Descubrieron que existe un vínculo significativo entre la cantidad de camas de hospital y la cantidad de muertes por el coronavirus. […]

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  3. People are not understanding the COVID paradox

    In the USA,the exposed cases are at least 20 times the number of the current detected cases,of 3.5 million,AND THE ACTUAL INFECTED CASES ARE AT LEAST,1O TIMES the current detected cases.

    The current daily count in the USA is around 70000 and was around 25-30,000,a fortnught ago.These incremental 35000 were EXPOSED around 27 days ago (at the earliest) and were INFECTED ENOUGH,to take a TEST (after the symptoms came to light – 27 days,hence)

    Therefore,it is safe to assume that for every 70000 cases today, there are at least 70000 more INFECTED, BUT NOT WITH SUFFICIENT SYMPTOMS TODAY,plus some more,WHO DO NOT WANT TO GET TESTED AT ALL.

    Further,for every 1 COVID positive person WITH SYMPTOMS – it is safe to assume an EXPOSURE RATIO OF 10:1 IN A SPAN OF 30 DAYS – starting from the time when the COVID +ve person was 1st EXPOSED.We are ignoring the AYSMPTOMATICS – who CAN ALSO INFECT.

    So for the 70000 cases today, there are AT LEAST 70000 more COVID positive persons (based on 1 day’s data),which makes it 140,000.These people have exposed,at least 1.4 million, in the last 30 days !

    So,if you look at the number of cases in the USA, in the last 30 days,at 30000 a day,so you have a ROLLING stock of , 6 million EXPOSURES just in 30 days – who will show symptoms in the next 7-30 days,and so,the numbers will skyrocket.

    Based on a population of 350 million – IT IS ONLY WHEN THE USA has 17-20 million DETECTED CASES – that the COVID saga will end.There WILL be NO CURE,AND NO VACCINE – just trial and error diagnostics.

    So we are a long way away.dindooohindoo

    30 days ago,the USA COVID cases were around 1.5 million and so the EXPOSURES were at 30 million.From that 30 million – in the last 30 days – the USA has had around 35000 cases per day,in the last 30 days – which is around 3% of the EXPOSURES,as of 30 days ago.

    The Rolling stock as above,WILL DOUBLE IN A MINIMUM OF 30 DAYS, and the 3% will also DOUBLE, IN EVERY 60 DAYS, at the minimum.These are the coordinates of doom.

    There is NO STATISTIC on 1 PARAMETER.How many COVID discharged humans in the USA were re-infected,and in what duration ? That is the ONLY HOPE – id.est., to be infected and survive.Can it REALLY BE ZERO ? Or does it show THAT releasing a COVID cured patient into the jungle – is the biggest disaster – a ticking neutron bomb ? These are the VULNERABLES – whose immunity and anti-bodies,CANNOT last very long. That is HOW the VIRUS was PLANNED.

    USA numbers look devastating,as they have the infra,to test on that scale.The situation in other parts of the world, is BEYOND redemption.

    Even in the USA,the sharp rise in Cases,is NOT DUE to the re-opening of businesses – BUT DUE TO LACK OF TESTING.It is the people who WERE NOT TESTED,in the last 30 days, AND HAD synptoms, in the interim – which is reflecting in the current data,of 70000 a day.

    You can imagine the CATASTROPHIC DOOM,in Brazil and India – where THEY WILL NEVER be able to test,on the American scale.

    In essence,the entire population of 7 billion,HAS TO BE infected,and at least 10%,will die due to COVID,and 10% more will die,due to other morbidities,which will have no medical attention and another 10%,will die due to starvation.

    The persons who will die,are those,with a weak and infirm constitution,and low natural immunity – and whose body,is already damaged by medicines,steroids,nicotine, cocaine, adulterated food and alcohol.

    A Perfect Constitution,is an essential,for a Perfect Brain

    This is the Greek Formula,updated for AI + Robotics + Nanotech

    The Greeks used to discard their defective samples,at BIRTH,on Mt Olmypus,for the ravens and vultures.That was he Priori Best Practice.2000 years since then, AI + Robotics + Nanotech, has made Humans obsolete.

    Thence,comes in COVID – just like Pure Providence.After the 10+10+10% culling – we will get the NEXT virus – which will be in action,by November 2021.That virus will target,in Phase 1,the clowns CURED BY COVID – as the COVID bird has laid its nest in them.Then it will target those who were infected by COVID but did not show the symptoms.

    Like a never ending Geometric Progression – towards redemption and salvation,like Zeno’s Paradox.

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