Topic Guide: Corruption in Health Services

As with other public services, the health sector is characterised by large flows of money, specialised equipment and complex organisational structures, which makes the management of organisational resources, such as personnel, goods, supplies and budgets particularly complex and vulnerable to corruption.  

Procurement of medical services and supplies are especially at risk of corruption, due to the high costs and technical complexity of medicine, machinery and specialist services (for example, specialised equipment maintenance). Private companies often compete for a few, but highly lucrative contracts, providing incentives for corruption and rent-seeking. In addition, pharmaceutical and medical supply companies often have more information about their products than the purchasing public officials, resulting in an information asymmetry that can be manipulated for corrupt purposes. As a result, budgets can be distorted with large portions of healthcare centre budgets diverted to purchase equipment and drugs that are not needed or in unjustified quantities. Bribery, undue influence through lobbying and gift-giving may distort medical considerations during contract negotiations. When medical professionals are not consulted during the procurement process, contracts can be loaded with vague or unnecessary equipment and inputs. Further risks in the selection process include kickbacks from suppliers and payoffs so that selected drugs are not necessarily the most appropriate or cost-effective.  

Fraud and embezzlement can lead to the provision of substandard goods and services, resulting in the supply of faulty equipment or weak, dangerous, useless or even counterfeited pharmaceutical drugs.[1]

Theft of medical supplies and budget leakages lead to drug shortages and poor-quality services. In Cambodia, it is estimated that between 5 per cent and 10 per cent of the health budget disappears before it is even transferred from the Ministry of Finance to the Ministry of Health. In Kenya in 2004, the US$41 million allocated to set up the National Aids Control Council was marred by corruption.[2] Such egregious budgetary practices have direct effects on target populations, denying millions access to essential medicines and proper treatment.  

The management of health personnel, including appointment, training, promotion and compensation can also be affected by bribery, patronage and nepotism. In many developing countries, the quality of public service delivery is seriously undermined by high rates of absenteeism among medical staff.[3]