PPPs IN HEALTH CARE AN INTERNATIONAL PERSPECTIVE

PPPs IN HEALTH CARE: AN INTERNATIONAL PERSPECTIVE © Atos KPMG Consulting 2003 Emmett Moriarty Senior Health Sector Specialist

Public Private Partnerships in the Health Sector ØIntroduction ØOverview of PPPs ØViews on PPPs ØAdvantages and disadvantages ØPPPs in other countries ØLessons learned L 11095 – 2

Definition of a PPP ØA Public-Private Partnership is a contractual agreement between a public agency and a private sector entity. ØThrough PPP agreements, the resources of each sector (public and private) are shared in delivering a service or facility for the use of the general public. ØIn addition to the sharing of resources, each party shares the potential risks and rewards in the delivery of the service and/or facility. L 11095 – 3

There are different types of health PPPs ØOutsourcing non-clinical support services ØOutsourcing clinical services ØPrivate management of a public hospital ØPrivate financing, construction and operation of a public hospital L 11095 – 4

Many countries are adopting PPPs in Health Care L 11095 – 5

What is the difference between privatisation and PPP ? Where does accountability for public services delivery lie? L 11095 – 6

Why should we consider PPPs ? Health Care Resources Demand Can PPPs fill this gap ? Supply time L 11095 – 7

What should determine the model of PPP in China ? Each Country’s approach to PPP is: Ø Designed to meet the policy objectives of its Government Ø Developed to complement other public procurement and public service delivery methods Ø Designed according to the available private sector resources Ø Implemented according to the available public sector resources L 11095 – 8

Views on PPPs vary widely L 11095 – 9

Can PPPs solve China’s health issues ? “Our ten year programme of modernisation includes the biggest ever hospital building programme in the history of the National Health Service. The PPP Initiative is a vital element in renewing the fabric of the NHS” Alan Milburn - Secretary of State for Health 2001 L 11095 – 10 PPP

Or will PPPs make matters worse ? “The political consequences are not to be under estimated. There will be a mobilization like hundreds of forest fires burning slowly against each PPP scheme. They haven’t ignited but they will. You can fool the public for quite a long time using technical and arcane jargon but it only takes an Enron for the public to realize the way in which private finance is removing rights and entitlements and the whole thing does begin to come apart. ” Dr. Allyson Pollock, Head of Health Policy Research Unit, University College London L 11095 – 11 PPP

Advantages and disadvantages of PPPs L 11095 – 12

Potential Benefits of PPPs Ø More incentives for private sector to perform Ø New facilities available earlier Ø Increased levels of efficiency and innovation Ø Risks transferred to private sector Ø Forward spending commitments known and able to be planned for L 11095 – 13

Potential Issues with PPPs ØPPP contracts can be very complex ØResults assessment is often subjective ØPublic sector may be locked into contracts while health demands change ØPPPs may not gain the population’s trust L 11095 – 14

Hospital Facilities PPPs in the UK (DBFO): Ø >60 new hospitals built Ø >90% of hospital projects have been delivered on time Ø All projects were delivered within the public sector budgets Ø 77% of hospital managers stated that the projects met their expectations (only 4% described value-for-money as poor) Ø Estimated that PPP projects cost 17% less than public sector projects – a saving of $4 billion on a $22 billion programme – the equivalent of 25 hospitals BUT: Ø PPPs have failed to win the people’s trust L 11095 – 15

Hospital services PPP in Spain Ø First wave of 8 PPP (DBFO) contracts awarded in 2006 Ø 8 th hospital: Valdemoro Hospital – includes Care Contract Ø € 72 million investment – awarded to Capio Ø Care Contract includes full responsibility for local population Ø 30 year concession – total value c. € 1. 3 billion L 11095 – 16

TB Control PPP in India Ø Highest burden of TB worldwide Ø State government contracted with NGO hospital to provide TB control services to 500, 000 population Ø Better outcomes than Control Comparison: ØCost per patient 10% lower ($88) Ø 21% more TB cases found Ø 14% better treatment success rate ØCost per successful treatment 14% lower ($118) Ø Being extended across other parts of India (with ongoing independent evaluation) L 11095 – 17

Nutrition services PPP in Bangladesh Ø Government contracted with NGOs to control areas with no organised nutrition services Ø 15 million people covered Ø Cost person = $0. 96 Results: Ø Malnutrition rates declined by 18% (compared with 13% in publicly covered areas) Ø Programme now expanded to cover 30 million L 11095 – 18

Primary Health Care PPP in Pakistan Ø Management contract with 104 basic health units in one district Ø 3. 3 million people covered Ø Annual cost person $0. 44 Result: Ø Four-fold increase in number of outpatient visits L 11095 – 19

Conclusions and lessons learned L 11095 – 20

Lessons learned ØDesign to meet policy objectives ØPolitical commitment ØPlanning and piloting ØEnabling legislation ØTransparency ØGood governments get good PPPs L 11095 – 21

谢 谢 (Thank you !) L 11095 – 22