Trade in Health Services in PakistanA country case studyKey findings and reflections

Dr Zafar MirzaInterregional Workshop on Trade and Health,WHO/SEARO, New Delhi, 12-13 October 2004

Structure of the Presentation1. Introduction to the methodology used2. Key findings of the case study3. Experience sharing4. The way ahead…

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 Sector4. State of data/Information in the Health Sector5. Institutional Capacity and Capabilities with

regard to Trade in Health Services

The questionnaireGeneral Macroeconomic and Trade EnvironmentState of Domestic Health Care System State of Trade and Investment in HealthState of data/Information in the Health SectorInstitutional Capacity and Capabilities with regard to TiHS

32 questions

6 sub-sections, 61 questions;

28 questions

11 questions

12 questions.

143 questions

The Country - Pakistan57 years old country - 1947Second largest in South Asia after IndiaNeighbors: India, Afghanistan, Iran, ChinaPopulation of 145 million, >tripled since 1947Makes up about 40% population of EMRParliamentary democracy but politically instableNuclear capabilityWeak economy but picking-up fastDiverse geographically and culturally

Key findings of the case studyKey findings of the case studyKey findings of the case studyMacroeconomics & Trade 1

Low income country per capita GDP $ 490Total GDP $ 65 billionEconomic growth rate 5.5 %Population in poverty 32 million, app. 40%Trade share in GDP 15.5%Trade growth rate 3%, 4.1% - projectedTotal exports $ 10 billionTrade deficit $ 1.25 billionShare in global exports 0.15% in 2000Export composition manufactured goods

75%, 65% textileFDI in 2003 $ 820 million (US, UK, UAE, Japan)

Key findings of the case studyKey findings of the case studyKey findings of the case studyMacroeconomics & Trade 2

Important trading partnersUSA 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 WTOPursuing 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 WTO1. Quote from Trade Minister’s speech on the occasion of announcing the Trade Policy 2003-2003

Key findings of the case studyKey findings of the case studyKey findings of the case studyTrade 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 6th 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

Key findings of the case studyKey findings of the case studyKey findings of the case studyState of Health Care System 1

Double burden of disease – > 50% preventableOne child dies every minute mainly from EPI Diseases, diarrhea and ARI: IMR 80-9025% 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 anemic30,000 women die every year from pregnancy-related causes.6th largest burden of TB in the world: 177 cases per 100,000 population.

Key findings of the case studyKey findings of the case studyKey findings of the case studyState of Health Care System 2

Ratio of public to private expenditure in 1998 was 22:78Government spends less than 1% of the GDP on health40-50% of the population does not have reliable access to needed medicines Around 2/3rd population buys health care through out-of-pocket expenditures from the private sectorWe do have a national health policy document

Key findings of the case studyKey findings of the case studyKey findings of the case studyState 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

Key findings of the case studyKey findings of the case studyKey findings of the case studySome Key Challenges in Health Sector1

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 approachUrban tertiary orientation vis-à-vis PHC approach with an effective referral systemLack 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

Key findings of the case studyKey findings of the case studyKey findings of the case studyPakistan’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 commitmentsRepresentative 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-to-case basisPresence of foreign staff; limitations on market access under Mode 4. professional staff not > 50%

Key findings of the case studyKey findings of the case studyKey findings of the case studyPakistan’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 servicesGroup 3: Construction and related engineering

servicesGroup 7: Financial (insurance and banking) servicesGroup 8: Health-related and social servicesGroup 9: Tourism and travel related services

Key findings of the case studyKey findings of the case studyKey findings of the case studyPakistan’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.

Key findings of the case studyKey findings of the case studyKey findings of the case studyTrade 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 isfacing acute scarcity of health specialists as most of them havemoved abroad in search of better prospects.

4. Few students from other countries had been coming for medical education – Mode 2 (export)

Key findings of the case studyKey findings of the case studyKey findings of the case studyTiHS under GATS - Mode 1Cross-border supply of health services

- confusion: within country and cross-border1. Imports:

negligible, only few big hospitals, but Pakistan is preparing for it, national tele-medicine forum has been established, Pak-net – TelMedPak - ATN, SAATHIPakistan 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

Key findings of the case studyKey findings of the case studyKey findings of the case studyTiHS under GATS - Mode 2Consumption of health services in other countries

- conusmers / patients, students / trainees1. 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.

Key findings of the case studyKey findings of the case studyKey findings of the case studyTiHS under GATS - Mode 3Commercial 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)

Key findings of the case studyKey findings of the case studyKey findings of the case studyTiHS under GATS - Mode 4Movement 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 whatportion is contributed by health professionals abroad.

2. Exports:Very few

Key findings of the case studyKey findings of the case studyKey findings of the case studyTiHS 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 equitablefinancing; and interviewed 15 key health policy makersResultsa. Lack of data relevant to TiHS in Pakistan came up as the most

striking limitationb. 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.

Experience sharingMethodology was unnecessarily lengthy and complexStruggle to get data, unappreciated and scatteredVery few people would understand the purpose of the studyBut once they understood, they appreciate it very much, especially health policy makersIt 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 progressFormat 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.

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.

Thank youfor your attention