Privatization of Healthcare in Egypt: A Step Backward?

The implications of healthcare privatization in Egypt, highlighting economic impacts and concerns over patient rights.
Nadia Ibrahim

In the last week of April, Egyptians woke up to the news that the Health Committee of the House of Representatives had approved a bill allowing the private sector to invest in the healthcare sector. This law grants the private sector the right to establish, manage, and operate public health facilities, as well as to manage existing ones.

The bill was not initially on the parliament’s agenda; the government presented it just a week before the Health Committee discussed it on April 16. The bill quickly moved through the health committees and the general committee, gaining approval after minor amendments and two days of discussions on the 20th and 21st of the month.

Public Opposition

According to the new law, the private sector and investors have the right to manage, establish, develop, and operate health facilities, excluding primary healthcare centers, family health centers, blood collection centers, and plasma collection centers, which are governed by the Blood and Plasma Collection Act No. 8 of 2021. Blood operations remain as complementary services under the law.

The law was passed amid widespread public opposition from several health organizations and entities, led by the Medical Syndicate, which considered it as privatization of the health sector. The law sparked angry reactions and questions from citizens on social media about what will happen to hospitals that currently provide paid services, which already exceed their financial capacity despite being subsidized. The “Our Destiny is One” campaign rejected the law and launched a petition against its enactment. The Medical Syndicate also issued a statement urging President Abdel Fattah El-Sisi not to sign and approve the law, a stance echoed by the Egyptian Initiative for Personal Rights (an NGO).

Article 123 of the Egyptian Constitution states: “The President of the Republic has the right to issue or object to laws. If the President objects to a bill approved by the House of Representatives, he shall return it to the House within thirty days from being notified. If the bill is not returned within this period, it shall become a law and be issued. If the bill is returned within the specified period and re-approved by a two-thirds majority of the House members, it shall become a law and be issued.”

The Medical Syndicate stated in its declaration: “The law approved by the House of Representatives threatens the safety and health of Egyptian citizens and the stability of the health system. It does not provide any guarantees for the continued provision of services to low-income Egyptian citizens or for the investor’s commitment to the specified rate of treating patients covered by health insurance and state expenses. Furthermore, the law does not outline any rules for determining which hospitals will be leased.” The Syndicate emphasized that it does not object to involving the private sector in the health and medical field, but only if new hospitals are built, rather than investing in and leasing existing government hospitals that serve low-income and impoverished citizens.

According to official data from the Central Agency for Public Mobilization and Statistics for 2022, the total number of government hospitals was 664 in 2021, compared to 662 in 2020. The total number of beds in government hospitals was 83,034 in 2021, compared to 88,579 in 2020.

In a statement, the Egyptian Initiative for Personal Rights listed several reasons for rejecting the new law. According to the initiative, the law is an additional step in the commodification of services like education and public transport, which are supposed to be public services not aimed at profit. The initiative added: “The law disrupts the implementation of the comprehensive health insurance law, deviates from the gradual expansion path of its application, and not only hands over government hospitals to Egyptian and foreign investors but also allows new investors to keep these government hospitals outside the insurance system and not subject them to the service prices associated with the system, merely obliging them to allocate a percentage of the total services to beneficiaries of the comprehensive health insurance law, at the same prices set by the state.”

Sale in the Form of Leasing

Before the final approval of the law by the Egyptian House of Representatives, the Egyptian Investment Authority listed several investment opportunities in the healthcare sector on its website, including establishing and managing government hospitals in several areas. It also offered several hospitals for investment, including Maadi Martyr Hospital (Therapeutic Institution), Heliopolis Hospital (Therapeutic Institution), Agouza Hospital (Specialized Medical Centers Authority), Sheikh Zayed Al-Nahyan Hospital, and Helwan Oncology Hospital (Hermel), serving millions of Egyptians.

Amid increasing controversy over the law, the Cabinet issued a statement denying the state’s intention to sell hospitals: “Government hospitals will remain state-owned and continue to provide all health services to citizens regularly. The law aims to allow the private and non-governmental sectors to participate in the health field by establishing, developing, operating, and managing government health facilities.”

Government statements and the Cabinet’s statement denying the sale of health facilities are seen by Ahmed Hussein, coordinator of the “Our Destiny is One” campaign and former member of the Medical Syndicate, as an attempt to beautify the picture, akin to the old rental law, where the property is nominally owned by the landlord, but the beneficiary is the tenant.

Hussein explains to Zawia3 that the health facilities offered for investment are the leading government hospitals with the highest capabilities, quality, and location, such as Agouza and Helwan Oncology hospitals, which provide services when primary hospitals fail. Low and middle-income citizens resort to them because they match the capabilities of distinguished university and private hospitals.

Hussein adds: The constitution, in its Article 18, guarantees the preservation of state facilities. The current law circumvents the constitution by using the term leasing, considering that the facility will return to the state after the commitment period ends. However, during the lease period, thousands of health services that citizens rely on will be wasted. Instead of expanding such facilities and developing less efficient ones, the state rushes to lease them to investors, whether they are Egyptian or foreign. In this case, citizens will be left with less efficient and quality facilities, making the competition between the government and private sectors in healthcare like “a dwarf facing a giant.”

Hussein points out that the law gives investors the right to control healthcare service prices, as it removes the restriction of Law No. 129 of 1947, which limits the investor’s profit margin to 10% of the rental amount, allowing the investor to set healthcare service prices freely.

The Public Utilities Obligations Law No. 129 of 1947 stipulates that no public utility obligations should be granted for more than 30 years. The grantor (in this case, the Egyptian government) has the right to review the price lists periodically based on the principles specified in the obligation document, and the annual share of the obligated party’s net profits from operating the public utility should not exceed 10% of the invested capital.

Regarding the specific amendments approved by the parliament on the law, Hussein states that these amendments are insignificant. For instance, one of the amendments was to allocate a percentage of services to health insurance and state-funded treatment, but the government did not specify this percentage and refused to define it even when some parliament members pressed the health ministry on this point. The ministry said it is left to each facility, and this provision is unachievable because investors will not leave beds and services empty waiting for patients covered by this percentage unless the state pays for these services in advance.

Hussein points out another issue in the law, which is the provision restricting the investor to retain only 25% of the facility’s staff, meaning the possibility of laying off the remaining 75%. This was mentioned by officials during the law discussions under the pretext that the state will reassign them to other hospitals in the governorate, without considering social aspects. He adds that the parliament’s discussion of the law was superficial because the Investment Authority had offered several health facilities for investment before the law discussions, which were conducted very quickly and without any societal dialogue, even formally. Before approval, five hospitals were contracted, including Maadi Martyr Hospital, which was invested by the Nasr City Development Association, whose vice president is also the head of the therapeutic medicine sector at the ministry, indicating clear corruption and misuse of power. The campaign is currently awaiting the president’s decision on the law, and if approved, they will appeal to the constitutional court as the law violates constitutional provisions.

Improving Hospital Efficiency

In its statement, the Cabinet’s media center said that the law would improve the quality of these services, enhance their efficiency, and ensure their fair geographical distribution, confirming that the law prohibits granting commitments for some essential health facilities and services provided by the state to citizens.

On the other hand, Osama Abdel Hai, the Medical Syndicate’s president, rejects this claim. He says: “The syndicate’s position against the law is clear because it does not protect the rights of patients or doctors,” pointing out that the Health Insurance Law of 2018 required the Health Insurance Authority to retain the entire staff of any government medical facility it acquires. Is it reasonable to give investors a right not even granted to the state itself?

He adds: “The syndicate insists on implementing the Health Insurance Law of 2018, in line with the constitutional provisions on the right to health in the 2014 Constitution, as the law stipulates that the Comprehensive Health Care Authority acquires all hospitals in any governorate where the law is implemented, and works to improve their efficiency to provide good health services to citizens.”

Abdel Hai confirms that the syndicate is not against encouraging private sector investment in the health sector, but there is a need to build new hospitals and add new capacities, as the sector suffers from a severe shortage of beds and facilities. The government should manage its hospitals and facilities, adding that private sector management of government facilities will not address the shortage of hospital beds or facilities but is expected to create new problems that Egyptian citizens do not need. Therefore, they urge the president not to approve this law.

Following in Mubarak’s Footsteps

In a statement, the Egyptian Center for Economic and Social Rights mentioned that this project perpetuates the hidden privatization policies of the health sector and marks the state’s withdrawal from one of its most strategic sectors. This could turn the health care services provided to citizens into a purely commercial activity, disregarding public interest and the citizens’ right to health, as mandated by the constitution and local and international legislations.

The center questioned whether the law aims to invest in the lives of Egyptians or gamble with them. This comes less than three months after the issuance of Decision No. 75 of 2024 regarding the organizational regulations of health facilities and public hospitals under local administration units, which increased the prices of free services provided to citizens. These include consultation and treatment fees for patients visiting outpatient clinics in the morning and visitation fees during visiting hours. The decision also reduced the minimum percentage of free treatment to 25% of the total number of beds and internal departments and raised the prices of services provided by these health facilities and public hospitals.

Approximately 17 years ago, in 2007, Mubarak’s regime attempted to privatize the health sector through a decision by Prime Minister Ahmed Nazif to transform health insurance into a holding company that could contract with health service providers. Civil society opposed this decision, and the Administrative Court annulled it in 2008, stating, “The state’s guarantee of health care prevents the right to health from being subjected to investment, bargaining, and monopoly.” In 2016, the Egyptian government began discussions on the new health insurance law, establishing the Health Insurance Authority as an economic entity aimed at profit, which was seen as a covert attempt to privatize the health sector.

Commenting on this, economic expert and vice president of the Popular Alliance Party, Elhamy Elmerghany, described the approval of the health sector participation law as a dark day in the history of Egyptian health. He considered the law a flagrant violation of Egyptians’ right to health, contravening all international covenants signed by Egypt, which are considered part of the state’s law.

He added, “Instead of inviting the private sector to build new hospitals and add additional capacities for hospital beds, as the share of the Egyptian citizen from hospital beds, doctors, and nursing has declined, we find this flawed law issued against everyone’s will.” He emphasized that this is not the first attempt, as the first attempt in the era of Minister Hatem El-Gabaly to transform health insurance into a holding company for health care in 2008 failed. The Administrative Court of the State Council ruled that “the decision changed the mission of the authority and removed it from the social solidarity system to profit and investment, contradicting the constitutional legislator’s intention to make health insurance a social solidarity insurance, not commercial and economic.”

Elmerghany continued that the ruling opposed attempts to control the health sector by the private sector and sell state assets at low prices because they were valued at their book value. However, 16 years after Judge Ahmed Mohammed Saleh El-Shazly’s ruling, the government has returned to the same idea, offering hospitals owned by the Ministry of Health to the Egyptian people for lease or usufruct. This allows the investor to dispense with 75% of the medical team, employ 25% foreigners, and set pricing policies that ensure investor profitability, with the facility returning to the government after 15 years, fully consumed along with its equipment and medical devices. This is a crime against Egyptian citizens, patients, and the poor.

He explained that Egypt suffers from a shortage of more than 44,000 doctors in the Ministry of Health alone, representing 33% in the government sector, in addition to a 34% shortage in nursing. Instead of addressing this shortage, the law gives the private sector the opportunity to dispose of 75% of the staff and provide services at profitable prices only the wealthy can afford.

As the nation awaits the president’s decision on the law, which is expected to be approved, the average Egyptian faces inadequate health services, which at least guarantee a hospital place when needed. However, this guarantee is on the verge of being taken away.

Nadia Ibrahim
Egyptian journalist specialized in investigative reporting

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