PPP Solutions for healthcare in India

Saurav Kumar Das

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KEY HEALTHCARE CHALLENGES

Access to specialty healthcare, advanced diagnostics

86 hospital beds / 1000 population – heavily skewed, the metro areas (6% of population) account for 25% of hospital bedsTravel upwards of 90 km to access specialty careStrong private sector - 64% of all hospital beds, 80% of outpatients and 57% of inpatients receive treatment from private hospitals

Affordability and equity One of the world’s highest levels of private out-of-pocket financing

of medical expenses, at about 85 percent, with debilitating effects on the poor - 35% of hospitalized patients fall below the poverty line because of hospital expenses

Public spending on health has remained stagnant at around one percent of GDP (0.9%)

The poorest quintile of the population uses only one-tenth of the public (state) subsidies on health care while the richest quintile accesses 34 percent of these subsidies

Critical workforce shortages India is short of 600,000 Doctors; 1,000,000 nurses and 200,000

dental surgeons, only 0.9 doctors and 1.2 nurses for every 1,000 Indians

NEED OF PUBLIC PRIVATE PARTNERSHIP

Source: National Health Accounts Report 2004-05 of MOHFW/GOI. (With Provisional Estimates from 2005-06 to 2008-09)

PUBLIC

SECTOR

PRIVATE

SECTOR

Free Provision of Products and Services

Unsustainable for Government & Donors

Unsustainable for Consumers

Profit Maximization

Break Even

GOAL IS TO CREATE FINANCIALLY SUSTAINABLE SYSTEM

Develop strategies to utilize untapped

resources and strengths of the private sector

Reducing financial burden of government

expenditure

Reaching remote areas & target specific group

of populations

Improving efficiency through evolving new

management structures

CURRENT FOCUS OF PPP IN HEALTHCARE

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KEY RISKS & CONSTRAINTS

Payment delaysDifferences in Operating styles and trust level Local political interference Non-revision of contract clauses (Tariffs) Lack of capacity or willingness to supervise /

monitor / guide the projectNegative attitudinal orientation towards

private sector

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POLITICAL AND ADMINISTRATIVE COMMITMENTS

Half hearted government support for PPPTop officials are enthusiastic, but lower level

officials suspect PPP as ‘privatization’ or show disdain towards the private provider

Need for technical / managerial skills for designing, negotiating, implementing and monitoring PPP contracts

Develop institutional capacity at all levels

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CHALLENGES FOR PPPDefining and verifying beneficiaries (BPL

patients)- especially high cost servicesDefining Quality or Performance or Outcome

indicatorsEfficient Supervision and Monitoring

mechanismTimely revisions / updating of contractOmbudsman for dispute settlementClarity on setting user fee

Franchising & Social marketingContracting out & Contracting-inJoint venturesVoucher schemesRunning mobile health unitsCommunity based health insuranceInvolving professional associations

PUBLIC-PRIVATE-PARTNERSHIP MODELS IN

HEALTHCARE SECTOR

Franchising: Franchise is a business model where the franchiser grants exclusive rights to franchisees to conduct business in a prescribed manner over a specified period. The franchisees contribute resources of their own to set up a clinic and pay membership to franchiser

Social Marketing: Application of marketing techniques to achieve a social objective. Associated with expanding access to contraceptives and medicine. It intends to increase the available products, including oral rehydration solution, IFA tablets and other health products to make marketing more self-sustaining.

FRANCHISING & SOCIAL MARKETING

Janani social marketing and social franchise program

Non-profit organization that provides family planning and maternity care services in the states of Bihar, Jharkhand and Madhya Pradesh.

It combines social marketing with a clinic-based service delivery program and a franchisee program through which doctors in rural areas provide low-cost services.

Family planning and reproductive health services through Surya Clinics.

Titli centres sell condoms, pills and pregnancy test kit

EXAMPLE OF FRANCHISING AND

SOCIAL MARKETING

Contracting out: Refers to situation in which private providers receive a budget to provide services and manage a government health unit. Vacancies for a long period, high absenteeism,

and consistent low performance could be the critical criteria to identify those government health clinics that need to be contracted out

Contracting In: Hiring of one or more agencies or individuals to provide services.

CONTRACTING OUT & CONTRACTING IN

Example of contracting out:Sawai Man Singh Hospital in Jaipur has contracted

out the installation, operation and maintenance of CT-scan and MRI services to a private agency

The agency is paid monthly rent by the hospital and the agency has to render free services to 20% of the patients belonging to the poor socio-economic categories

Example of contracting in:Hiring of medical specialists for certain days of the

week in Primary Health Centers (PHC) or Community Health Centers CHC.

EXAMPLE OF CONTRACTING

Joint ventures are companies launched with equity participation of government and private sector.

Example: The Rajiv Gandhi Super-specialty Hospital in Raichur Karnataka is a joint venture of Govt. of Karnataka and Apollo hospitals Group, with financial support from OPEC

The basic reason for establishing the partnership was to give super specialty health care at low cost to the people living below the Poverty Line.

The Govt. of Karnataka has provided land, hospital building and staff quarters as well as roads, power, water and infrastructure.

Apollo provided fully qualified, experienced and competent medical facilities for operating the hospital.

JOINT VENTURES

Govt. of Karnataka, Narayana Hrudalaya hospital in Bangalore and Indian Space Research Organization initiated project called ‘Karnataka Integrated Tele-medicine and Tele-health Project’ , which is an on-line health-care initiative in Karnataka.

Tele-diagnosis and consultation in cardiac care and specialist care. Free diagnosis, medicines and treatment for BPL patients

EXAMPLE OF JOINT VENTURE

A voucher is a document that can be

exchanged for defined services as a token of

payment

The government offers vouchers at subsidized

rates to below poverty line people

Packages can be bought, used when required

and ensures privacy for the client.

VOUCHER SYSTEM

Chiranjeevi Yojna :

Concept A voucher system for the Below Poverty Line maternity

population to enable them to avail of private obstetricians in Gujarat

Design The Government deliberated the scheme with SEWA, the

acclaimed NGO and the Federation of Obstetric and Gynecological Society of India (FOGSI), the professional organization representing practitioners of obstetrics and gynecology in India, to devise a package rate for a delivery.

The package included the weighted average of rates of a normal delivery, complicated delivery, caesarian section, travel reimbursement to mother and the accompanying trained birth attendant etc.

A pilot project was conducted in five of the most backward districts empanelling almost three-fourth of those districts’ private obstetricians

EXAMPLE OF VOUCHER SYSTEM

Innovation The doctors were paid a sum of Rs. 15000 in advance at

signing of an MoU, unlike most PPPs where payment comes in months after the service has been delivered. This advance amount was to be topped up after a certain amount of deliveries. Hence, the government always paid for service in advance to gain credibility with the doctors

Results Between January 2007 and January 2010, about 4,35,047

safe deliveries were carried out by 768 obstetricians. These represented roughly 55-60% of the total deliveries by

the Gujarat BPL population in this period. Over 26 months of the scheme, each doctor earned on an

average almost Rs.10 lakh, which is a fair amount of marginal income.

Each pregnant woman, on the other hand, paid INR 654 on an average as costs of medicines for the child and herself

CHIRANJEEVI YOJNA:

Vans go to identified central points on fixed days and provide primary health services to a cluster of villages.

Vehicle, medical equipments, medicine are provided by govt. and primary health care services are provided by NGOs

Bihar adopted the MMU scheme under the name “Arogya Rath” in 2009 with three private providers – Spake Systems, Jagran Solutions and Jain Studios . The units provide primary health care services free of cost to people in underserved areas of the state

Madhya Pradesh adopted the scheme under the name “Deen Dayal Chalit Aspatal Yojana”

RUNNING MOBILE HEALTH UNITS

Government pays health insurance premium for families below poverty line. These families in turn are insured against expenses on health and hospitalization, up to a certain amount.

Community members pay a minimum insurance premium per month and get insured against certain level of health expenditure

Community based schemes ensure that local needs and expectations of people are met

COMMUNITY BASED HEALTH INSURANCE

Provides protection to BPL households Beneficiaries are entitled to get up to Rs.

30,000/- per year Beneficiaries need to pay only Rs. 30/- as

registration fee while Central and State Government pays premium to the insurer selected by State Government on basis of a competitive bidding

Rashtriya Swasthya Bima Yojna (RSBY) 

AAROGYASRI COMMUNITY HEALTH INSURANCE SCHEME

Unique community health insurance programme through the Aarogyasri Health Care Trust

The trust defines premium package, treatment protocols, empanelment criteria

A private insurance company/ Third-Party Administrator (TPA), selected through competitive bid process , to administer patient enrolment, hospital empanelment, claims management, risk coverage

Network hospitals, both public and private – strong response by private hospitals to invest/move to district and sub-districts

Professional associations such as Indian Medical Association, Gynaecologists federation, nurses associations

Extended help in launching new programmes such as Vande Mataram SchemeScheme of social franchising: Involving the

interested private practitioners to popularize contraceptives like oral pills, emergency contraceptives and life saving Oral Rehydration Salt (ORS) packets etc.

Government facilities will be shared with the private doctors on cost basis (e.g. X ray machines, laboratory investigations).

INVOLVING PROFESSIONAL ASSOCIATIONS

Public/private DOTS model established on pilot basis in Hyderabad at Mahavir Trust Hospital

Mahavir Trust Hospital acts as a coordinator and intermediary between govt. and private medical practitioners

PMPs refer TB suspected patients to hospitalGovt. benefits as DOTS medicines are not

wasted

PARTNERSHIP BETWEEN THE GOVERNMENT AND THE NON PROFIT SECTOR

Partnerships in Healthcare: A Public Private Perspective, CII-Hosmac Whitepaper, 2010

Public Private Partnerships for Healthcare in India, IFC White Paper

Issues in Health, Public Private Partnership, Ramesh Bhat (December, 2010) Economic and Political Weekly Paper

Public and Private Roles in Health: Theory and Financing Patterns, Philip Musgrove (July, 1996). HNP

Public-Private Partnerships & Collaboration in the Healthcare Sector, Irina A. Nikolic and Harold Maikisch (October, 2006). HNP

References:

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