Corruption in the Health Sector

by Konstantina Briola, member of the Social Issues Research Team

The purpose of every National Health System across the globe is to promote the health of its citizens through the provision of high quality services. However, they do not always achieve their goal due to a number of factors. An important factor is the period of economic recession that a country can go through. In 2010, the Greek economy entered a deep structural and multifaceted crisis. In this environment, the health sector has been at the heart of restructuring. Through this process, old and new pathogens of the health system emerged. One of these pathogens is corruption.

Definition of corruption

The concept of corruption  exists since ancient times, and in recent decades, has been the subject of research and study by many scientists. It refers to a complex phenomenon that is difficult to define precisely. However, a widely accepted definition of corruption is «abuse of power for private gain» (European Commission, 2017). In fact, describes a phenomenon which is due to the behavior of people who go against the common good (Δρόσος, 2014) 

Types of corruption

According to Transparency International (2011) and other researchers  (Σπυράκη & Σπυράκης, 2011; Begovic, 2005), there are several types of corruption: a) political corruption, which can take the form of blackmail, bribery etc, b) corruption in the adoption and implementation of policies, c) corporate corruption, which includes the abuse of power by senior corporate executives, and finally d) bribery, which is observed in all areas of the economy and society, such as politics, business, health, education, sports, information etc. 

Also, corruption can be divided into small and large depending on its scale (Στίγγα, 2011). Small scale corruption is mainly considered acts of corruption of civil servants in their daily dealings with citizens, in order to obtain illegal additional income. Large scale corruption is considered to be the acts of corruption of politicians or high-ranking public officials in their relations with large companies, with the aim of illegally obtaining profits or other advantages.

Causes of corruption

A reasonable question that can be raised at this point  is related to the multiple causes of this complex and multifaceted phenomenon, which are also multiple.  There are some general factors that work in favor of corruption and mismanagement of the public sector. Some of these factors are (Ροκάκη, 2017): a) the lack of appropriate mechanisms for controlling administrative process, such as the various bureaucratic obstacles, which lead to corrupt behaviors, b) the uncontrolled power provided to decision-makers, c) lack of transparency, such as absence of rules or failure to implement them, d) the lack of preventive control and slowness of suppressive control, e) the failure of courts to enforce the law and provide justice.

Corruption has significant effects on the operating framework for modern democracies. Corruption in the public sector, apart from the financial loss, creates dysfunction to the state and bureaucratic inefficiency. 

Corruption in the health sector

Corruption in the health sector is a global phenomenon that is destabilizing health systems. It has been extensively studied by researchers as it has a number of negative effects on the economy, the utilization of the workforce and the development of a country on the basis of equality, transparency and equity. 

The health sector, due to its peculiarities, is particularly vulnerable to the manifestation of corrupt practices, such as bribery, embezzlement and conflict of interest, especially in the field of supply of health services, like pharmaceutical and medical devices (Vian, 2008). Such a phenomenon often deprives citizens of equal access to health services, leads to misdiagnosis and unnecessary surgeries and it can also be fatal to the pharmaceutical supply chain.  

Informal (out-of-pocket) payments in the health sector

The need for good healthcare is a fertile ground for the development of informal economy phenomena. This type of informal economy is related to the insecurity that the patient experiences in the National Health System, which is obviously magnified in the years of economic crisis (European Commission, 2013). In this context, public funding in our country decreased while private spending in the form of additional payments, of which informal payments are part, increased. 

However, corruption in the health sector does not seem to be a feature of a particular health system. It is a phenomenon that occurs in all health systems, especially in those dominated by the public health sector, but also in those dominated by the private sector, in those that are well funded but also in those that are underfunded, in those that use high biotechnology but also in those who do not have this kind of technology (Σπυράκη & Σπυράκης, 2011).

Health systems are particularly vulnerable to the informal economy and corruption. A number of factors contribute to this, for instance the uncertainty about the effectiveness of medical treatments, asymmetries in patient information, the large number of actors involved in the processes, preventing transparency and accountability etc (Vian, 2020). 

In 2017, Greece had one of the highest levels of spending on direct private payments as a percentage of the household budget in the European Union (4.2 % compared to the EU average of 2.2 %), which of course can lead to inequalities in access to the medical services (European Commission, 2019). Meanwhile, among people who do access health services in Greece, the share of catastrophic spending (household out-of-pocket spending exceeding 40% of total household spending net of subsistence needs such as food, housing and utilities) increased from 7 % in 2010 to 10 % in 2016, the fourth highest in the EU after Lithuania, Latvia and Hungary (European Commission, 2019) (Figure 1). In this context, informal payments are also a problem in Greece, as they represent about a quarter of all out-of-pocket payments and are a major risk to access, financial protection, and equity (European Commission, 2019). 

Figure 1. Greece has one of the highest levels of catastrophic spending on health in the EU

Source: European Commission, 2019. State Of Health In The EU: Greece. Health Profile 2019, pp. 17

According to a recent report by the World Health Organization (2018) it was found that the bulk of informal payments stems from patients wanting to ensure better or faster care, demands from doctors, and insufficient knowledge about entitlements, particularly among poorer people and those living in rural areas (WHO Regional Office for Europe, 2018).

Corruption as a global phenomenon: The role of the European Union

Due to the large scale of the phenomenon, not only in Greece but in all European countries, a series of actions have been taken by the European Union in order to combat the corruption in each country. 

The first European Union anti-corruption report, published in February 2014, states that there are differences among  EU countries in the nature and level of corruption (European Commission, 2014). The report devotes a chapter to the vulnerability of public procurement to corruption, an issue that requires special attention. 

Over the past years, the Commission has emphasised anti-corruption as a key element contributing to attaining the growth and has regularly organised several  anti-corruption experience-sharing workshops across the EU (European Commission, 2019). At international level, the main existing monitoring and evaluation mechanisms are the Council of Europe Group of States against Corruption (GRECO), the OECD Working Group on Bribery, and the review mechanism of the UN Convention against Corruption (European Commission, 2019). Those mechanisms provide an impetus for states-parties to implement and enforce anti-corruption standards. However, they each have several features limiting their potential to address effectively the problems associated with corruption at EU level, even if sometimes some EU member states fall under their activities and policies (European Commission, 2011). 

The “Europe 2020” is the EU’s growth strategy for the current decade to promote a smart, sustainable and inclusive economy, thus helping the EU and its Member States achieve high levels of employment, productivity and social cohesion (European Commission, 2014). The success of the “Europe 2020” strategy also depends on institutional factors, such as good governance, the rule of law, and the control of corruption (European Commission, 2014). So, although European Union Member States do have the necessary institutions to prevent and fight corruption, the results are not satisfactory across the EU. Anti-corruption rules are not strictly enforced, systemic problems are not addressed effectively, and the institutions are not always sufficiently able to enforce the rules (European Commission, 2014). 

Epilogue

Indeed, corruption has many faces and forms, it can be low or high level and it can involve huge or small amounts. In any case, it causes great damage to the economy and mainly affects the poorest strata, directly or indirectly.

In general, health systems are particularly vulnerable to the informal economy and corruption due to a number of factors such as uncertainty about the effectiveness of medical treatments, asymmetric information etc. Greece is among the countries with the highest levels of corruption in the field of healthcare. Corruption in the form of informal payments, constitutes a dark or hidden economy within the health system. The hidden economic activities are a key feature of the health sector in Greece, which of course prevent the access to health services.  Due to the large scale of the phenomenon worldwide, a series of actions have been taken by the European Union in order to combat the corruption in each country.

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