© Atos KPMG Consulting 2003

PPPs IN HEALTH CARE:AN INTERNATIONAL PERSPECTIVE

Emmett MoriartySenior Health Sector Specialist

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Public Private Partnerships in the Health Sector

Introduction

Overview of PPPs

Views on PPPs

Advantages and disadvantages

PPPs in other countries

Lessons learned

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Definition of a PPP

A Public-Private Partnership is a contractual agreement between a public agency and a private sector entity.

Through 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.

In addition to the sharing of resources, each party shares the potential risks and rewards in the delivery of the service and/or facility.

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There are different types of health PPPs

Outsourcing non-clinical support services

Outsourcing clinical support services

Outsourcing clinical services

Private management of a public hospital

Private financing, construction and operation of a public hospital

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Many countries are adopting PPPs in Health Care

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What is the difference between privatisation and PPP ?

Where does accountability forpublic services delivery lie?

Where does accountability forpublic services delivery lie?

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Why should we consider PPPs ?

Demand

Supply

Can PPPs fill this gap ?

Hea

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time

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What should determine the model of PPP in China ?

Each Country’s approach to PPP is:

Designed to meet the policy objectives of its Government

Developed to complement other public procurement and public service delivery methods

Designed according to the available private sector resources

Implemented according to the available public sector resources

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Views on PPPs vary widely

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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

PPP

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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

PPP

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Advantages and disadvantages of PPPs

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Potential Benefits of PPPs

More incentives for private sector to perform

New facilities available earlier

Increased levels of efficiency and innovation

Risks transferred to private sector

Forward spending commitments known and able to be planned for

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Potential Issues with PPPs

PPP contracts can be very complex

Results assessment is often subjective

Public sector may be locked into contracts while health demands change

PPPs may not gain the population’s trust

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Hospital Facilities PPPs in the UK (DBFO):

>60 new hospitals built

>90% of hospital projects have been delivered on time

All projects were delivered within the public sector budgets

77% of hospital managers stated that the projects met their expectations (only 4% described value-for-money as poor)

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:

PPPs have failed to win the people’s trust

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Hospital services PPP in Spain

First wave of 8 PPP (DBFO) contracts awarded in 2006

8th hospital: Valdemoro Hospital – includes Care Contract

€72 million investment – awarded to Capio

Care Contract includes full responsibility for local population

30 year concession – total value c. €1.3 billion

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TB Control PPP in India

Highest burden of TB worldwide

State government contracted with NGO hospital to provide TB control services to 500,000 population

Better outcomes than Control Comparison:Cost per patient 10% lower ($88)

21% more TB cases found

14% better treatment success rate

Cost per successful treatment 14% lower ($118)

Being extended across other parts of India (with ongoing independent evaluation)

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Nutrition services PPP in Bangladesh

Government contracted with NGOs to control areas with no organised nutrition services

15 million people covered

Cost per person = $0.96

Results:

Malnutrition rates declined by 18% (compared with 13% in publicly covered areas)

Programme now expanded to cover 30 million

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Primary Health Care PPP in Pakistan

Management contract with 104 basic health units in one district

3.3 million people covered

Annual cost per person $0.44

Result:

Four-fold increase in number of outpatient visits

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Conclusions andlessons learned

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Lessons learned

Design to meet policy objectives

Political commitment

Planning and piloting

Enabling legislation

Transparency

Good governments get good PPPs

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谢谢(Thank you !)