US: Iraq healthcare system faces $1.6 billion financing gap

13 years of economic sanctions leave infrastructure in shambles Mass exodus of professionals, limited information further harm medical services

Dubai: After 13 years of economic sanctions, the healthcare system in Iraq is in disrepair. A further blow was dealt to it by the damage caused by the looting of hospitals and clinics since the war began and the ongoing disruptions in the delivery of supplies and equipment.

"The Iraqi healthcare system was one of the most advanced of its kind in the 1970s and 1980s,"says William Aaronson, associate professor of healthcare management at The Fox School, a US business school. "But the current war, coupled with the 1990 UN-imposed sanctions, the 1991 Gulf War and subsequent periods of lawlessness and looting, have left the healthcare system in total shambles. It has been set back almost 50 years."

The mass exodus of healthcare professionals, limited access to medical information and a declining standard of living have not helped matters either, he says. Aaronson believes that in addition to humanitarian donations of medical equipment, the real solution will be the development of community-based primary healthcare. "This will have the greatest impact on the reversal of negative health trends in the population."

During and immediately after the recent conflict, some 12 percent of hospitals were partially damaged and seven percent were looted. More than 30 percent of the facilities that provided family planning services were destroyed. The country's two major public health laboratories, in Baghdad and in Basra, were destroyed.

Medical facilities have not received significant investment in technology since the 1970s and it is estimated that 65 percent of the equipment in hospitals and health centers is nonfunctional. Last year, Iraq spent just $16 million on its healthcare system.

Investors in the country's healthcare system say they are committed to halving maternal and child mortality rates within two years, a target which will fall short should investment in infrastructure and supply of key equipment, medicines and vaccines, recruitment and training of healthcare workers not be forthcoming.

The US administration is under pressure from within Iraq

ˇ from doctors and the public ˇ to make "symbolic improvements'' to the healthcare system urgently, though plans to build a $150 million hi-tech hospital in Basra to provide top-level pediatric care, plastic surgery and treat burns, came under fire from some quarters for ignoring more pressing medical requirements, and was recently scrapped.

The only viable alternative is the decrepit 400-bed Basra Maternity and Children's Hospital, which has seen no renovations since 1990, yet is the main facility serving a region of 2 million people.

The World Bank says that more than $100 billion is required to rebuild Iraq over the next 10 years, $55 billion of which will be needed in the next three years.

While Iraqi Health Minister Khodeir Abbas estimates that an additional $1.6 billion will be required to rebuild the system over the next four years, limited financial data and general lack of information on underlying population health needs have made it difficult for a clear set of financial requirements to be drawn up for Iraq.

Total health spending is expected to have to rise to $70 per person (equivalent to seven percent of a $1,000 per capita GDP, considered by the World Bank to be "a reasonable estimate for Iraq at this time.")

If in the 2004 financial year 80 percent of such spending would be public, the public financing requirements equal $56 per capita. With an Iraqi Finance Ministry contribution of around $37 per capita, the gap is about $19 per capita (or a total financing gap in the fiscal year of some $500 million), and an estimate of a $1.6 billion financing gap over the four years.

The future of the Iraqi medical system model throws up many questions: What should the financing of the system look like? Where should new hospitals be located? How do the hospitals get accreditation? What about human resource development, nursing? A system which has had virtually no communication with the outside world for years could benefit greatly from the internet, from physician training to shared knowledge.

For now, Bechtel Corporation will lead the construction of hospitals and clinics as the main contractor. A lot of ink has already been wasted on the political clout of companies like Haliburton and Bechtel. But Bechtel is not the only company to gain a foothold in the Iraqi healthcare market, which is estimated by some at $1 billion.

Other US companies have been awarded a sizable amount of business. ABT Associates has been awarded an initial $10 million contract for a reformed Iraqi Health Ministry at national, regional and local levels. Some of its obligations include providing medical equipment and supplies, determining specific requirements of this sector, providing health information and education. It is no coincidence that the company's vice president of it's international development line of business recently left the US Agency for International Development USAID (which awarded the contract) after serving there for 26 years.

Another American company, International Resource group, has been awarded an initial $7.18 million contract to assist USAID with reconstruction and rehabilitation activities across a variety of sectors including health. David Joslyn, corporate vice-president was also formerly with USAID.

With active talk of privatization of the healthcare system, other US companies are sure to make an inroad sooner or later. Departments being considered for privatization include those involved in pharmaceuticals, supplies and equipment importation, warehousing and distribution, vehicle management and medical maintenance.

A report by UK-based charity Medact says 20,000 civilians were injured during the war and its aftermath to July. "Limited access to clean water and sanitation, poverty, malnutrition, and disruption of public services including health services continue to have a negative impact on the health of the Iraqi people,'' says the report's author Sabya Farooq. "There are thousands of maimed children with no safe access to adequate health services, let alone sophisticated rehabilitation,'' adds the report.

It is clearly recognized that the rebuilding of the healthcare system will not happen overnight. With the oil-for-food program now redundant (it expired on Nov. 21), the clock is ticking for the international community to deliver the necessary investment.

AMP Section Name:War & Disaster Profiteering

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