Partnerships in Health Creating opportunity where its needed most - PowerPoint PPT Presentation

Public-Private Partnerships in Health Creating opportunity where it’s needed most

“ Health is as critical as institutions, infrastructure and education for economic competitiveness and growth. It is a prerequisite for human energy, entrepreneurship, ” dynamic markets and a productive society. Haskell Ward, Chairman of the Global Health Strategic and Advisory Committee of the American Cancer Society

The health challenge

Challenges Rise in non- communicable diseases such as cardiovascular disease, cancer, respiratory illnesses, and diabetes, make up the largest contribution to mortality in most low-income countries and globally. Paradigm shift Chronic conditions require a different skill and workforce mix, centered around primary care. This means fewer hospital specialists, but more nurses and other health professionals. Increasing costs and expectations Ageing populations, more advanced and costly technology, and increasing expectations from patients.

Constraints Lack of infrastructure Many low-income countries lack the facilities necessary to provide basic health care services and products. Limited resources Shortage of trained staff Resources from all sources are Many low-income countries have a limited which means that shortage of adequately trained staff governments increasingly need to to meet the needs of the do more with the same amount of population. resources.

How PPPs help

What is a PPP? “A partnership between the public and private sector to deliver a public service with full or partial transfer of risks to the private sector”

What is a PPP? a contractual arrangement between a public body and a private sector entity, where the skills and assets of the private sector are mobilised by the public sector to deliver services and/or assets to the general public

Key advantages of PPPs 1. Combine the different skills and resources of various partners in innovative ways. 2. Allow for the sharing of risks and responsibilities a. Public partner concentrates on fixing the objectives to be attained b. Risks are allocated to the party which is best able to manage them 3. Provide access to industry best practices, as well as the experience and expertise of the private sector. 4. Allow governments to focus on policy, planning and regulation. 5. Bring value for money as a result of the competitive bidding process. 6. Ensure high quality service standards and ongoing training programs.

The evolution of the PPP model Integrated Services Infrastructure Construction and facilities Clinical and non-clinical Construction and facilities management and full range of services management clinical and non-clinical services At primary, secondary or In hospitals, primary care or tertiary level community care facilities At primary, secondary or tertiary level Asset-light Asset-heavy Could include medical training/health insurance or vouchers

How do PPPs differ from traditional public procurement? 1. PPPs are long-term contracts for governments to buy a bundled service (facility, staff, supplies, equipment) 2. PPPs involve payments over long-term after facility commissioning 3. Payment is tied to performance or outputs NOT inputs/milestones 4. Private party is typically responsible for all or part of the capital financing

Ingredients for a Successful PPP Focus on Strong services political will delivery, not facilities Legislative and Fit with regulatory wider health environment strategy Public sector Private sector capacity capacity Appropriate ? risk sharing Fiscal Space

Recipe for failure? Limited ? monitoring capacity Long term fiscal affordability in question Changing environment impacts key parameters PPP isolated from wider health system

Advantages of PPPs in Health

Public Private Partnerships in Health Possible Solution to Challenges in Finance and Delivery of Public Health • Health care spending is the biggest component of GDP globally – 9% and rising • Governments are facing not only increasing demand for health care services, but also rising costs (medical technology, changing disease patterns) • Governments are looking for new models to respond to these challenges PPPs can mobilize private finance, increase access, introduce efficiencies in the delivery of public health services, and improve health outcomes

Advantages of PPPs in Health 1 • New/refurbished infrastructure Improve • Higher quality service standards • Access to scarce clinical skills Services • Regular maintenance and technology upgrades • Ongoing training programs

Advantages of PPPs in Health 1 • New/refurbished infrastructure Improve • Higher quality service standards • Access to scarce clinical skills Services • Regular maintenance and technology upgrades • Ongoing training programs 2 • Provide access to new private financing. • Eliminate subsidies. Mobilize • Improve budgetary efficiency. capital • Deliver top value for money through competitive bidding and optimal risk allocation.

Advantages of PPPs in Health 1 • New/refurbished infrastructure Improve • Higher quality service standards • Access to scarce clinical skills Services • Regular maintenance & technology upgrades • Ongoing training programs 2 • Provide access to new private financing. • Eliminate subsidies. Mobilize • Improve budgetary efficiency. • Deliver top value for money through competitive bidding & capital optimal risk allocation . 3 • Better identification & allocation of long-term risks. • Maintain affordable tariffs. Increase • Improve building efficiency. efficiency • Ensure predicable budget commitments. • Provide access to industry best practices & private- sector expertise.

Lessons learnt from health PPPs Use PPPs to expand Not as means to simply finance new buildings/equipment service / improve quality Define services needed Give operators flexibility on how to provide (not facilities) Maximize private sector “Full” PPPs deliver more benefits responsibility Contract management Monitoring is essential, but often overlooked capacity Long-term fiscal affordability is essential Promote competition and efficiency Provider payment reforms PPPs as part of a broader Accreditation health sector reform Developing hospital management capacity

PPP Design & Execution

Approach to Public Private Partnerships in Health Providing Public Healthcare through Private Delivery • PPPs do not necessarily require an introduction of user fees or an increase of existing user fees • The services delivered by the private sector under a PPP are still public services; the government’s role is now the strategic purchaser from private providers • All patients receive equal treatment (no two-tiered service) • Service quality is well-regulated to ensure patient care/safety and contract compliance • Payment to operator is tied to performance

Health PPP- Different solutions for different needs Management Non-clinical Services Infrastructure PPP (PFI) Contracts Contracting out works Management of Contracting a private and services such as IT hospitals or networks of provider to design, build equipment and service, hospitals and/or clinics and manage facilities cleaning, catering, maintenance, etc. Country examples: UK, Spain, Italy, Mexico, Country examples: Country examples: South Africa, France, global Brazil Australia Infrastructure and Clinical Services Services PPP Contracting a private Contracting out services provider to design, build, and such as dialysis, manage facilities as well as radiotherapy, day surgery deliver clinical services etc. Country examples: Country examples: Romania, Peru, UK Portugal, Lesotho, Spain, Turks and Caicos

Types of health PPPs Hospitals & health networks Primary care Detailed designs, building Primary care, public health, construction or refurbishment, vaccinations, maternal & child care. medical equipment. Non-clinical services Clinical support services IT equipment & services, Lab analysis, diagnostic tests, maintenance, food, laundry, cleaning, medical equipment maintenance, and buildings & equipment, management. other support services Specialized clinical services Operations management Dialysis, radiotherapy, day surgery, Management of entire facility or other specialist services. network of hospitals and/or clinics.

Roles of the Private Provider and the Public Sector Typical PPP Transaction Private Ministry of Health or Consortium National Health Insurer $ $ • Detailed designs • Legal permits and authorization • Capital financing • Reimbursement for services • Construction • Performance monitoring • Medical supplies & equipment • Define service package and • Maintenance standards • Non-clinical services • Outline needs and strategy for • Staffing sector • Clinical services

Health PFI Contract Structure Public Entity Direct Agreement (?) Project/Concession Agreement PPP Project Holding Share Loan Lender Company Company Capital/Sub Agreement Debt Construction Services Subcontract Subcontract Services (FM) Construction Contractor Contractor