The private sector moves into Spain’s public hospitals

No sooner had the conservative Popular Party taken office at the very end of 2011 than it began drawing up plans to extend private sector involvement in Spain’s public health system, a process begun in 1997 with the support of the Socialist Party. Two years later, La Ribera hospital, built and run by a private consortium led by health insurers Adeslas, opened. Valencia has subsequently created Public Private Partnerships (PPP) in four other health districts.

Other PP controlled regions, such as the Balearic Islands, Castilla y León, Castilla La Mancha, and Galicia, are also pushing ahead with the privatisation of healthcare.

But Madrid is where the PP wants PPP to really come into its own. The PP-controlled Madrid regional government under Esperanza Aguirre, has been steadily increasing spending on health sector PPPs, to almost half a billion euros last year. Private funding now makes up almost 20 percent of Madrid’s total health budget. Of the 10 regional public hospitals opened between 2003 — when Aguirre took office — and 2012, six will now be run as PPPs.

The man in charge of this unprecedented privatisation push in Madrid is health department boss Javier Fernández Lasquetty, who has risen up through the ranks of the PP under the combined patronage of former party leader and prime minister, José María Aznar, and Aguirre. Nothing in his CV suggests that he has any experience of running health services.

He joined the youth wing of the PP’s predecessor, Alianza Popular, when he was 16, in 1982. After finishing his law degree, he worked for two years for a public relations firm, becoming a PP apparatchik in 1990. After a few minor appointments within City Hall, in 1996, following the PP’s election win, he joined Aguirre, who had been appointed education minister.

In 2001, Lasquetty was hired by Aznar, working with his team until the conservatives lost the 2004 election, when he was made head of the former prime minister’s think tank, the FAES.

In 2007, he was appointed head of the Madrid regional government’s immigration department; three years after that, at the age of 41, he took over the region’s health department.

Lasquetty has also been linked to the Gürtel corruption case, and his signature appears on a number of contracts for events, while several of his subordinates during his tenure as head of immigration, have been arraigned.

Healthcare overhaul

Winning the 2011 general elections — the party already had control of all but four regions by then — gave the PP carte blanche to press ahead with a “restructuring” of the health system prompted by the economic crisis. On October 31, 2012, Lasquetty unveiled a plan to fully privatise six hospitals and 27 primary healthcare centres. He also introduced a one-euro prescription tax.

In response, healthcare workers staged huge demonstrations supported by popular petitions. Spaniards are proud of their healthcare system, which is ranked among the top 10 in the world by the WHO, and third in a survey by US magazine Newsweek. The country is also a benchmark for organ donations.

What’s more, the cost of running Spain’s public health system is relatively low, at €70 billion a year, about €1,500 per capita, a feat achieved mainly through low wages, which account for only 50 percent of the budget, among the lowest in Europe. The health service is also the country’s largest employer, with a workforce of 600,000, generating a further 1.5 million jobs.

Critics of the PP’s privatisation plans for the health service accuse the government of using Spain’s worsening economic situation as an excuse to privatise healthcare without providing any evidence to back up Lasquetty’s claims that privately run hospitals are cheaper or more efficient.

In fact, the evidence shows that building hospitals under private finance initiatives can increase costs by four to seven times.

How much?

Earlier this month, Lasquetty announced that the cost of running those six PPP hospitals in Madrid was now going to be €56 million a year more than had been calculated. The initial estimate per patient was based on €441 per patient per year (the Madrid Public Health Service’s figure is €380), based, says Lasquetty, on figures for 2011; using figures for 2012, the cost has now risen to €496. Last year saw unprecedented cuts in public health spending, amounting to €1 billion, which Lasquetty says will have to be covered by the regional government.

In other words, the total budget for the six hospitals in question has fallen by almost 8 percent, but the cost per capita (to the taxpayer) of privatising them has increased by 12.69 percent.

Outsourcing medical assistance in these six hospitals based on a cost of €441 per person would mean that the taxpayer would be paying up to €118 million more to private companies.

Furthermore, there is evidence that privately-managed hospitals limit the transfer of patients to public facilities in order to avoid additional costs, and therefore a reduction in profits. In short, the money follows the patient, and as has been shown in the UK, privately run hospitals take measures to prevent patients from going elsewhere.

Part of the difficulty in assessing the merits of the PP’s privatisation push is the lack of transparency that characterises politics; Spain has no independent health oversight agency to weigh up government policy in this key area. The absence of a freedom of information act means that the health ministries at regional or central government level do not release data that would help to form a bigger picture about how well hospitals are managed.

A worrying precedent

The backlash against the privatisation push may yet sink Lasquetty’s plans; the Socialist Party’s promise to put hospitals back in public hands if it wins the next election will also give private companies pause for thought.

If the career of his predecessor, Juan José Güemes, is anything to go by, Lasquetty will always find a job in the private sector. Güemes joined Swiss company Unilabs after stepping down in 2010.

In November 2012, the firm acquired a majority stake in UTE, which won a tender at six Madrid hospitals to carry out clinical analyses, a service that was privatised under Güemes.