IMF reform demands leave Egyptians worried about healthcare

A new law to get the private sector more involved in the country’s public health system could be bad news, say patients and doctors. Others think it is the jab in the arm that Egypt’s hospitals need.

Ahmed HASAN / AFP

An Egyptian doctor wearing two protective masks checks a patient's lung X-ray at the infectious diseases unit of the Imbaba Hospital in Cairo.

IMF reform demands leave Egyptians worried about healthcare

Marcelle Nasr

last update on 08 Jun 2024

On the brink of economic crisis, Egypt breathed a huge sigh of relief earlier this year when it got billions of dollars from the International Monetary Fund (IMF), World Bank, European Union, and United Arab Emirates, the latter an investment. It followed two years of financial and social tension, caused in part by a decade of spending and state largesse. Inflation skyrocketed, while external factors such as Houthi attacks on Red Sea shipping cut Egypt’s core Suez Canal revenue.

But a key condition of the IMF’s $8bn infusion was the reform of Egypt’s public sector, which many argue is long overdue and was recently enacted into law. However, the move has unexpectedly created a new headache for President Abdel Fattah el-Sisi, especially in sensitive areas like education and health.

Impact on healthcare

The IMF deal requires the sale of state companies to boost Egypt’s private sector, which has prompted particular concern about the privatisation of the country’s public healthcare system. Private healthcare has existed in Egypt since 1974, but the laws passed to enact the IMF reforms allow public hospitals to be leased to companies—both local and foreign— for up to 15 years.

Keen to paint the changes in a positive light, Egyptian ministers have said that private sector involvement in the healthcare sector will rise from 30% to 50% by 2030. Among the reforms, private operators will now offer health insurance, and healthcare service prices will not be capped or limited for Egyptians, who have grown accustomed to the benefits of price controls and subsidies since the 1920s.

Government insurance currently covers roughly half the population, including public workers, their families, and schoolchildren. Yet because the state healthcare system is so bad, less than one in ten of those insured this way use public clinics.

Another change relates to the percentage of Egyptian workers in the healthcare system. This is being lowered to 75%. The remaining 25% can now be recruited from abroad. Again, this is a big shift, even though there have long been more Egyptian doctors in Saudi Arabia than there are in Egypt.

An Egyptian pharmacy employee reaches out to grab a box of medicine in a pharmacy in the capital, Cairo.

A threatening shift

The sensitivity is not surprising. Egypt has a long tradition of paternalism over hospitals and the provision of care. For years, rich industrialists built hospitals and then entrusted them to the Ministry of Health to treat the poor, who rely on the state, given that private treatment costs are prohibitively high.

Healthcare in Egypt has traditionally received less public funding as a percentage of gross domestic product (GDP) than the global average, but despite limited financial resources and specialist personnel, the public healthcare sector has been vital, especially in cities with high population density.

The IMF delegation is in Cairo until mid-June to review the reforms. Payment depends on their verdict. Yet, as the new law passed, Egyptians voiced concern about their right to healthcare, fearing the commodification of services and possible monopolies.

For his part, el-Sisi has been attentive to the issue of healthcare. The constitution adopted in 2014, a year after he came to power, mandated that 3% of GDP be spent on it. Long waiting lists are down, and hospitals—especially cancer centres—are more efficient. Additionally, the state has started rolling out universal health insurance, aiming for nationwide coverage, but patients now feel that they are being abandoned to ease budgetary pressures. Both patients and doctors have called on el-Sisi not to ratify the laws.

Private sector involvement in Egypt's healthcare sector is expected to rise from 30% to 50% by 2030.

Debating the merits

Others think the reforms will help. Egypt's public sector is hugely inefficient. Bureaucratic delays hamper service quality and technological progress. There are also whispers of corruption in a sector where doctors earn little more than minimum wage.

Some economists, including Dr Hanan Ramses, a financial market specialist in Cairo, have warned against privatising healthcare to meet IMF demands. She rejects the "shocking" law, telling Al Majalla that it would lead to higher costs. Due to widespread poverty, many Egyptians rely on low-cost or free healthcare, she said, warning of its potentially devastating impact. The doctors' Medical Syndicate have also objected, saying the law may hinder comprehensive coverage by removing some hospitals from the insurance system.

Proponents think privatisation will enhance the public healthcare sector, creating competition to improve care and drive improvements in healthcare management. The state's commitment of 3% of GDP is set to increase next year to $3.93bn, yet this still falls short of Egyptians' needs, with around 83,000 public hospital beds to cater for.

Still, the government can point to some success over the past decade, with 93 projects to establish, develop, or renovate hospitals and clinics and a rise in the number of Egyptians with health insurance to 53 million. But Egypt's poverty levels are also rising, according to figures from the World Bank and Egypt's own national statistics bureau, CAPMAS, which found that roughly one in every three Egyptians now falls below the threshold.

AFP / Mohamed el-Shahed — An Egyptian elderly man poses for a picture in the village of al-Nehaya, one of the poorest in the country, in the province of Assiut in central Egypt.

Calls to protect the vulnerable

Al Majalla toured the Nasr City Cancer Centre, where patients receive treatment, whether that be under private health insurance or at the state's expense. Many oncology patients expressed fears that the law would affect the hospitals that provide cancer care services. Hala Al-Asyouti, 40, who is receiving state-funded treatment for breast and neck cancer at the centre, said it would impact her treatment. She says the cost of similar treatment at a private hospital would be around $1,500 every three weeks.

Huda, 65, a state employee under the health insurance system, travels from Al-Arish in the Sinai for chemotherapy. She said the cost of cancer treatment in the private sector was prohibitive for almost everyone. Likewise, Samia Abdel Salam, 62, who has had chemotherapy for four years, could not afford private hospital costs, so she turned to health insurance for treatment. These and many others felt the law was unfair to those on low or average incomes.

Ramses called on the government to exercise caution when selling off up to 80% of healthcare assets, pointing to the lack of choice for some.

"From the state's point of view, it's within its rights to take steps that yield a return, but private hospitals are extremely expensive, and according to this law, the sick citizen is faced with the choice of not receiving treatment or dying," she said.

Another economist, Khaled Al-Shafei, thought the law was "positive", saying: "It may attract more local and foreign investors to enter this important and vital sector in light of the new standards set by the IMF." Al-Shafei added that it "represents a strong and promising start to providing excellent healthcare services, as bureaucracy in Egypt has always dominated the scene in all government institutions".

On the poor who may not benefit, he said the state "will commit to compensating the differences by extending health insurance to provide services to all citizens". For many Egyptians who fear this law could be fatal, the proof will be in the pudding.

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