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The Lancet Study Reveals Healthcare Privatization Almost Always Diminishes Quality & Worsens Patient Outcomes

Written by : Arti Ghargi

May 17, 2024

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According to the research, hospitals transitioning from public to private ownership often prioritize profitability over patient care.

A recent study published in the medical journal - The Lancet revealed that privatization in healthcare may lead to diminished quality of care and worsened health outcomes for patients.

The findings, drawn from research across several high-income nations, challenge the notion that privatization improves efficiency and quality in healthcare systems.

The study, conducted by scholars from the Department of Social Policy and Intervention at Oxford University, scrutinized the impact of converting public hospitals to for-profit or not-for-profit entities, as well as the outsourcing of services previously managed by public hospitals.

The findings of the study were published in March this year.

Correlation between Privatization & Patient Outcome

As a part of its methodology, the study reviewed previous studies of high-income countries (HICs) such as the US, Germany, Canada, and South Korea, the review claims.

According to the research, hospitals transitioning from public to private ownership often prioritize profitability over patient care.

The study claims by selectively admitting patients and reducing staff, these privatized healthcare settings aim to maximize profits.

The findings suggest that privatization results in a reduction in the comprehensiveness and generosity of care.

Post-privatization, hospitals tend to decrease staff numbers, particularly among highly skilled nurses, while outsourcing leads to a decrease in staff-to-patient ratios, notably among housekeeping personnel. In contrast, the number of physicians has been found to be unchanged.

"Overall, the results suggest that accessibility of care might be affected in different ways, with more precise appointment times and reduced waiting times in some cases, but with effects that could disadvantage some groups, particularly those whose treatments have low profits for the private sector," stated the paper.

Proponents of outsourcing services to private firms argue that financial accountability motivates these companies to prioritize patient welfare and streamline processes.

They believe that competition from private entities enhances overall healthcare quality by incentivizing providers to improve service delivery standards.

However, the study challenges this assertion, highlighting that the profit motive does not always align with desired outcomes.

"At the very least, health-care privatisation has almost never had a positive effect on the quality of care. But outsourcing is not benign either, as it can reduce costs, but seems to do so at the expense of quality of care," the authors said in the study.

Moreover, the review indicates that competitive markets may discourage providers from disclosing information on the quality of their services, raising concerns about transparency and accountability in privatized healthcare systems.

The findings suggest that some aspects of the welfare state, including healthcare, may not respond favorably to market incentives.

"The evidence compiled here does not align with the expectations of mixed markets, namely that they would improve quality by increasing competition," the study observed.


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