Egypt’s government approves private health investments

Imago/APAimages via Reuters Connect

• Involves new and existing hospitals
• Move linked to IMF reforms
• Concern over profit and prices

Egypt’s government on Wednesday approved executive regulations for a bill that allows private investment in its public hospitals for the first time.

The law, which obtained presidential ratification in June, allows Egyptian and foreign companies to bid to manage and operate existing public hospitals for a period of between three to 15 years.

A statement released by the country’s cabinet said that the law’s “primary goal” is “to preserve the health facilities that provide services to citizens by raising the efficiency of existing ones and creating new facilities”.

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According to the wording, the bill will mean private investors can “establish, manage, develop and operate health facilities”. The health ministry is set to release a list of facilities considered for privatisation contracts.

The contracts would make private sector partners responsible for investment in the hospital, the purchasing of hospital equipment over the period specified, and for the right to charge patients. At the end of the contract, the hospital and all its equipment would revert to the state.

The newly approved law also outlines regulations for the employment of foreign staff as long as they do not exceed 15 percent of total staff. A minimum of 25 percent of existing staff members must also be retained. 

Under the law, hospitals must continue to offer free medical care for patients on government-issued universal health insurance. There are also stipulations for hospitals to provide free medical care in cases of epidemics, disasters and emergencies.

The bill has been met with mixed reactions, with a number of politicians and civil rights groups expressing concern that it could push up medical prices.

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Speaking to Al-Ahram news outlet in June, the head of the Doctors’ Syndicate, Osama Abdel Hay, said that the group had no objection to investors establishing new hospitals.

However, allowing private companies to manage state-run hospitals would “introduce a profit motive and make basic treatment unaffordable for ordinary citizens,” he added.

In May, the Egyptian Initiative for Personal Rights, a human rights organisation based in Cairo, criticised the law, accusing it of disrupting the system of comprehensive public health insurance and opening the door to the privatisation of the healthcare sector.

Egypt’s government is working to increase private investment in the country and private sector involvement in its public services under the guidance of the IMF and other partners.

The reforms are linked to an $8 billion IMF loan made in March and after a number of previous foreign aid deals helped the country to stave off bankruptcy.