Corruption and the Corruption and the Health Sector Health Sector Lessons from Albania Lessons from Albania Taryn Vian, Assistant Professor of Taryn Vian, Assistant Professor of International Health International Health Boston University International Health Grand Rounds Boston University International Health Grand Rounds Presentation Presentation June 13, 2003 June 13, 2003
Outline Outline � Corruption Corruption as a as a health issue health issue � � Background Background on Albania and anti on Albania and anti- - � corruption activities corruption activities � Scope of work Scope of work � � Assessment Methods Assessment Methods � � Findings Findings � � Recommendations Recommendations �
Corruption is a Health Issue Corruption is a Health Issue � Abuse of Abuse of public or entrusted public or entrusted � power for private gain for private gain power � Students should be Students should be prepared prepared � � Corruption is universal, but Corruption is universal, but � effects are are worse worse in lower in lower- - effects income and transitional countries income and transitional countries � Corruption = Corruption = cause cause of under of under- - � development, not just effect development, 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 are things 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)
Background Background � 3.1 million 3.1 million � � Isolated prior to Isolated prior to � 1991, pyramid 1991, pyramid scheme collapse scheme collapse in 1997 in 1997 � $1,200 GDP (PPP $1,200 GDP (PPP � adjusted) adjusted) � Muslim Muslim �
MSI and ACAC MSI and ACAC � USAID/Albanian Civil Society USAID/Albanian Civil Society � Corruption Reduction Project Corruption Reduction Project � Albanian Coalition Against Albanian Coalition Against � Corruption (ACAC) (ACAC) Corruption • Citizen Advocacy Office Citizen Advocacy Office • • Press Coverage Press Coverage • • Working Group on Procurement Working Group on Procurement •
Scope of Work Scope of Work � Assess Assess vulnerabilities vulnerabilities � � Identify Identify partners and activities partners and activities � for reducing vulnerability to for reducing vulnerability to corruption corruption � Share lessons Share lessons learned through a learned through a � workshop workshop
Methods Methods
Vulnerability Assessment Vulnerability Assessment Method 1 Method 1 � Inherent Inherent risk risk � of corruption of corruption � Control Control � environment environment � Existing Existing � safeguards safeguards
Klitgaard Assessment Tasks Klitgaard Assessment Tasks � Disaggregate Disaggregate the types of the types of � corruption corruption � Determine the Determine the scope scope and and � seriousness of each type of each type seriousness � Identify the Identify the beneficiaries beneficiaries and the and the � losers losers Klitgaard, Controlling Corruption, 1988
More Assessment More Assessment Challenges: Challenges: � How to talk about corruption How to talk about corruption � � Avoid the “ Avoid the “C C- -word word” ? ” ? � � Forward Forward- -looking looking— —improving improving � incentives, not pointing fingers incentives, not pointing fingers � Start with a Start with a vulnerability ranking vulnerability ranking � exercise exercise
Vulnerability Ranking � Procurement of goods and services � Pharmaceutical promotion � Drug distribution & sale � Health regulation � Education of health professionals � Personnel management & informal payments � Budget and financial management
Citizen Voice & Choice Management Information Tools Strategies (for hierarchical control) Appropriate Incentives & Discretion Consequences (+/-) (including detection & sanctions)
Findings Findings
Types of Corruption Activity Types of Corruption Likely in Albania Provision of services by Informal payments; private practice during public work hours; frontline health workers, absenteeism; over-utilization due to financial incentives; personnel management favoritism in personnel appointments and hiring Drug selection and use 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 Procurement of drugs and Private financial interests affecting decisions of what to procure; medical equipment 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 Distribution and storage of Theft from public facilities for resale in private sector drugs Regulatory systems 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 Budgeting, pricing Leakage of official fee revenue, overcharging patients
Informal Payments Informal Payments
Informal Payments Informal Payments � Some Some previous studies previous studies, more , more � data available to analyze (LSMS, data available to analyze (LSMS, Abt data) data) Abt � A wide A wide spectrum of opinion spectrum of opinion on on � acceptability acceptability � Little appreciation of Little appreciation of negative negative � impacts of informal payments of informal payments impacts
Frequency of Informal Payments In Selected Countries in Eastern Europe and Central Asia Frequency of Informal Payments in Selected Countries Bulgaria (1997) Albania (1996)* Latvia (2000) Slovak Republic (1999) Tajikistan (1999) Moldova (1999) Russian Federation (1997) Kyrgyz Republic (1996) Azerbaijan (1995) Poland (1998) Albania (2000)* Vietnam (1992) Armenia (1999) 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 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 Systems Informal Systems Salaries If you can’t pay Gifts are a are too you may die cultural practice low Corruption Acceptable Staff Some Most payments are after service is demand docs delivered payment have 3 before 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, 3/03 Health 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. Participant Health and Corruption Workshop,Tirana, March 2003
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