Privatizing Healthcare: Neoliberalism and Health Policy

Jomer Malonosan
7 min readNov 14, 2021
Image from Ralph Zabel

I. Introduction

Healthcare is conceived as one of the three integral dimensions of social policy along with education and income security (de Leeuw, 2007). These social policies ensure that human life and dignity are enhanced through the collective action of society. Furthermore, health policy encompasses government decisions that concern the cost, delivery, and quality of programs funded through taxation that aim to improve the physical well-being of its population (Moralez-Gomez and Torres, 1999). This cements the idea that politics and health are inextricably intertwined. Under this paradigm, the government is a central actor that ensures the distribution of healthcare resources amongst its citizen. Hence, an ideal healthcare system policy is one that is publicly funded for the accessible operation of hospitals and healthcare professionals (Alkhamanis, 2017).

However, external globalizing forces have influenced the nature of health policies across different countries. According to Mooney (2012), neoliberalism has been a powerful ideology that has affected the distribution of healthcare resources. It is defined as a policy model and ideology that places precedence on the forces of the free market through privatization, liberalization, and deregulation. In terms of healthcare policy, the neoliberal agenda includes framing healthcare as a private commodity rather than a public good in order to reduce the costs for efficiency and to deregulate healthcare services to local and regional private institutions (Beckfield et al., 2013). This framework perceives the government as an inefficient economic planner that hinders cost-effective and consumer-friendly delivery of healthcare services. Thus, the government is relegated to a minimal role in terms of regulating the policies of private markets on healthcare (Gupta and Pauchali, 2015).

Nonetheless, numerous scholars (Isaac, 2017; Humber, 2019; Muntaner et al., 2006; Reading 2010) have identified deleterious consequences of neoliberalsim on health policy. It has been linked to the exponential rise of healthcare fees and the perpetuation of existing structural inequalities in the healthcare system (Humber, 2019). Therefore, it is necessary to expound on the impacts of neoliberalism on the healthcare system by recognizing its different dimensions. Moreover, a profound understanding on the mechanisms of neoliberalism can provide more insights on the formulation of better alternative healthcare policies that are free and accessible to ensure a healthy population (Chalk, 2021).

II. Healthcare and the Three Principles of Neoliberalism

According to McGregor (2001), neoliberalism has three salient dimensions that impact the creation of healthcare policies: (a) individualism, (b) privatization and deregulation, and © decentralization. This triad serves as core principles that guide the crafting neoliberal health policy in a country. Although neoliberalism may come in different forms, practices, and derivatives, these basic rules dictate the decision-making process of policy makers towards the healthcare system that can determine how healthcare resources must be ideally distributed.

Firstly, individualism is a central tenet of neoliberal health policy. Neoliberalism asserts that humans are inherently selfish and utility-maximizing beings (Ganti, 2014). Hence, individuals are assumed to act independently of their surroundings and have no concern for the impact of their actions on other individuals. This world view posits that issues such as health and illness are individual troubles rather than social problems. Thus, this logic dictates that people must solely rely on themselves to find solutions for their personal troubles such as illness. The lens of rugged individualism in neoliberal health policy has detrimental effects on marginalized groups such as people living in poverty (McGregor, 2001). Neoliberal policy makers decrease government expenditure on healthcare because it is conceived to be a private interest rather than public issue (Brown and Baker, 2017). Consequently, the underfunding of public healthcare results to the rise of healthcare fees, lack of healthcare professionals, and deficiencies in healthcare facilities (Yeo, 2017). This in turn, makes healthcare inaccessible to poor individuals who could not afford private healthcare and are left to fend for themselves rather than having government support.

The process of privatization and deregulation is another critical aspect of neoliberal thought in health policy. This involves the deregulation and privatization of all publicly-owned enterprises such as hospitals in order to create a free market (Chen, 2017). One crucial example of this policy’s impact on healthcare is the transfer of public funding from the government to another social group. For neoliberals, they believe that the forces of demand and supply are more reliable and efficient compared to the government in shaping health policies (Toebes, 2006). Further, the profit generated from the privatization of healthcare can further benefit society as it naturally trickles down to the ordinary citizens (McGregor, 2001). Hence, any form of preferential treatment for certain individuals (particularly marginalized sectors such as children, elderly, poor, women, etc.) is considered to be harmful for the operation of free market mechanisms. Such selective treatment is considered to be a form of discrimination for those who do not get to benefit from social support but get to pay the taxes that fund them. Hence, neoliberals transfer healthcare responsibilities to private institutions because they are reluctant to spend public funds on healthcare that they perceive to only benefit a particular group of people (Waitzkin, 2007).

Finally, decentralization is another manifest idea of neoliberal health policy. Any form of transfer of power arrangements, authority, and accountability from one government body to another is considered as decentralization (Gill, 2000). Supposedly, decentralizing health policies bolster equity, accountability, quality, and efficiency of healthcare because the bureaucratic processes in government intervention is inefficient and costly (McGregor, 2001). However, the World Bank (1997) has dispelled any positive relationship between deregulation and healthcare. According to studies (Anh, 2017; Malesky and Hutchinson, 2016), the relegation of government healthcare responsibilities to lower tiers of governments and private entities has led to the formation of “more and smaller less accountable, less visible and less accessible health care centers”. The dispersion of responsibility leads to the possibility of substandard healthcare services and practices across autonomous units due to the lack of a centralized authority (Malesky and Hutchinson, 2016). In turn, this decreases the quality and standard of healthcare especially for countries with expansive territorial boundaries.

III. Conclusions

Two concepts on health policy can provide a critique and alternative to the hegemony of neoliberalism: collective responsibility and social being ethos. Firstly, it is necessary to reframe the discourse of health policy on the role of government in social responsibility (Brown and Savulesco, 2019). In an increasingly urbanized and industrial society, living together with other people entails costs. This includes diseases that plague entire communities and happen in a scale that transcends the individual’s capacity. Hence, it is only through the collective resources and power of governments that illness can be prevented from affecting the health of other individuals in society. Rather than private interest that is narrow, healthcare policy should be guided by the principle of collective responsibility. On the other hand, the social being ethos redefines our conception of human nature. The value of social being allows us to perceive individuals as social rather than economic ones (McGregor, 2001). This will allow health policy to be guided by an imperative to balance profit-driven interests of private institutions with the public good. Furthermore, the ethos of social being will allow policymakers to understand how structural inequalities (e.g. poverty) and identities (gender, race, class, ethnicity, disability), hinder individuals from relying on themselves. Thus, social support from society through public funding can help in addressing these gaps in the healthcare system. Through the application of these two concepts in health policy, reforms in healthcare system will allow the formulation of inclusive, accessible, universal, and quality, healthcare for society.

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