The role of the private sector in healthcare:
An approach to assessing national readiness and capacity for
PPPs
The Role of Non-State Providers in Delivering Basic Social Services for Children
UNICEF-ADB Regional Workshop
19-20 April, Manila
Tony Nash
Global Director, Client Research
Economist Intelligence Unit
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Agenda
 The role of the private sector and PPPs in healthcare
 Observations from the healthcare sector
 The use of benchmarking in developing and implementing PPPs
 Case study of the Economist Intelligence Unit’s “Infrascope” Index
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Healthcare in Asia 2010: A public-private affair
Two-day initiative organised by the Economist
Group, convening more than 180 healthcare
professionals from across Asia
Speakers and participants from the public and
private sector including:
 health ministers
 representatives from government
 academia
 regulators
 associations
 hospital administration
 pharmaceutical
 medical equipment
 insurance
 doctors and patient groups.
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There is no single regional model for the public-private split of healthcare funding and
provision.
 How any country decides to pay for its health system involves a complex balancing act of efficiency
considerations with matters of equity and morality.
 The result is invariably a combination of public and private funding and provision.
 As governments in the region struggle to expand and adapt their healthcare systems, there is a growing
reliance on the private sector either through choice or neglect.
 If wealthier countries are looking at increasing private funding, poorer ones are seeing an even greater role
for the private sector and non-state actors.
 The profit-seeking tendencies of private-sector involvement may further effect health equity.
 Already the access gap is manifested in the polarisation of medical facilities and personnel in urban
settings, at the expense of rural patients. The increasing disparity in wealth in many Asian countries
will exacerbate problems with access to care.
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Most countries seem to be heading for a bigger private-sector role in funding and investing
in healthcare
Developed Asia
 Currently, governments are struggling to
contain costs and find new sources of
funding.
 Taiwan and South Korea, have both
attempted to use regulation to cut
prescription drug costs and looked at
increasing medical tourism.
 Hong Kong, meanwhile, is considering
raising the level of private financing, either
through greater use of private insurance or
the creation of medical savings accounts.
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Developing Asia
 Governments seek the participation of
private and non-state actors for the rapid and
efficient mobilisation of capacity.
 Such strategies are typically linked to
short term programmes—with
implications for long-term health
system sustainability.
 For instance, Indonesia is actively
encouraging private sector investment to
bridge the gaps which the state cannot afford
to fill.
 The biggest exception to this slow shift
towards more private sector involvement is
China, which is engaged in a major effort to
reform its public-health system.
© Economist Intelligence Unit
Current healthcare sector thinking on the private sector’s role in driving innovation in
healthcare
 Healthcare in Asia delegates noted that
there is a currently a lack of engagement
between governments and the private
sector in terms of proactive discussion of
policy and reforms.
 There is a need for creating such regular
frameworks for dialogue at a national level
across Asia, so that private sector views are
taken into account at an early stage in
policy development.
 The private sector could work together
through industry associations to make
substantial progress and greater impact on
key initiatives, so that efforts are not
piecemeal and of little overall impact.
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In particular, collaboration and knowledge sharing is required in the development and
implementation of health PPPs in Asia-Pacific.
Asian governments that have already made progress with establishing private-public
partnerships need to engage with other Asian governments, to assist in developing
PPPs across Asia.
Healthcare in Asia, 2010
Key questions:
While lessons can be learnt from
other Asian countries, can PPP
solutions be regional given that
healthcare systems are national, or
even sub-national creations?
To what extent are Asian countries
ready for PPPs?
Are national frameworks in place to
manage potentially complex privatepublic partnerships and contracts,
particularly in resource-constrained
settings?
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Lessons from benchmarking research: The “Infrascope” Index
Governments worldwide have long
partnered with the private sector to develop
and maintain infrastructure economic growth.
But structuring deals between the public
and private sectors is complex and timeconsuming, with financial and political risks
for all sides.
To understand the potential for these PPPs
in Latin America and the Caribbean, the
Multilateral Investment Fund (MIF) and the
Program to Promote Public-Private
Partnerships in Latin America and the
Caribbean commissioned the Economist
Intelligence Unit to measure the readiness of
governments in the region to carry out such
essential projects.
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A tool for private- and public-sector stakeholders in designing and implementing PPPs
Legal and regulatory framework
1
Peru
2
Chile
=3
Costa Rica
=3
Mexico
5
Brazil
6
Colombia
7
Argentina
=8
Jamaica
=8
Panama
=8
Paraguay
=8
Trinidad & Tobago
=8
Uruguay
13
El Salvador
=14
Dominican Rep.
=14
Guatemala
=14
Honduras
17
Venezuela
=18
Ecuador
=18
Nicaragua
66.7
Operational maturity
61.1
1
50.0
2
50.0
3
47.2
4
33.3
5
27.8
6
25.0
7
25.0
8
25.0
9
25.0
10
25.0
11
19.4
12
16.7
13
16.7
14
16.7
15
8.3
=16
5.6
=16
5.6
18
19
9
Chile
73.9
Brazil
66.7
Costa Rica
55.0
Peru
53.0
Mexico
47.3
Colombia
44.7
Ecuador
39.4
Dominican Rep.
38.6
Honduras
21.3
El Salvador
20.8
Jamaica
17.0
Argentina
16.8
Uruguay
13.3
Panama
8.8
Guatemala
8.7
Nicaragua
8.5
Paraguay
8.5
Venezuela
4.8
Trinidad & Tobago
4.3
 The index and study that emerged from this research
evaluated and ranked the legal, regulatory, institutional
and financing environment for public-private infrastructure
projects in 19 countries.
 The index focuses on a country’s readiness and capacity to
carry out infrastructure projects using PPP models.
 By placing countries under a microscope for infrastructure
project readiness, the “Infrascope” evaluates
 a country’s legal and regulatory framework for
PPP projects
 the institutions that prepare, award and
oversee projects;
 the government’s ability to uphold laws and
regulations for concessions, as well as the
number and success rate of past projects (that
is, “operational maturity”);
 the business, political and social environment
for investment, and
 the financial facilities for funding infrastructure
© Economist Intelligence Unit
Indicators
Legal and regulatory framework
Consistency and quality of PPP regulations
Investment climate
Political distortion
Effective PPP selection and decision making
Fairness/openness of bids, contract changes
Dispute resolution mechanisms
Institutional framework
Quality of institutional design
Business environment
Social attitudes towards privatisation
Financial facilities
Government payment risk
PPP contract, hold-up and expropriation risk
Operational maturity
Public capacity to plan and oversee PPPs
Methods and criteria for awarding projects
Capital market: private infrastructure
finance
Marketable debt
Government support for low income users
Regulators' risk allocation record
Experience in transport & water concessions
Quality of transport and water concessions
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Developing the index
Data collection
Activities
Sources
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Research and analysis Construction, weighting,
scoring of Index
 Search relevant, publicly
available data sources
including quantitative
resources as well as legal
texts and regulatory reports
 Interview country
and sector experts,
distribute survey
 Review laws and
regulations
Compile secondary
reports and
assessments
 Qualitative analysis of
laws, regulations and
institutions
 Data normalisation
 Compare index results
against survey responses,
interviews, World Economic
Forum Index
 World Economic Forum, PPIAF
PPI data base, World Bank,
Economist Intelligence Unit,
Transparency International,
Latinobarometro survey,
Multilateral Investment
Guarantee Agency data,
Fitch/S&P/Moody’s
 PPIAF sector reports,  Economist Intelligence
IADB reports, Economist Unit analysts and model
Intelligence Unit
builders
publications (Country
Commerce, Country
Finance, Risk Briefing)
© Economist Intelligence Unit
Research findings from Latin America
 Results from the Infrascope Index were published in a white
paper— “Partnerships for Progress? Evaluating the
environment for public-private partnerships in Latin America
and the Caribbean” (2009)
 The index measures countries on a scale of 0 to 100, where
100 represents the perfect environment for PPP projects.
 Chile scored 64.3 due to a high degree of project experience,
low project-cancellation rates, and a reasonably developed
legal, regulatory and institutional framework (albeit one of the
best in the region). Attractive investment conditions and good
facilities for project finance also helped boost Chile’s score.
 The second and third-ranked countries, Peru and Brazil,
exhibited similar characteristics.
 Venezuela finished last in the Infrascope index, just after
Nicaragua and Ecuador. All three countries, with scores
ranging from 7 to 15, must improve the consistency and
quality of their legal, regulatory and institutional frameworks
to better facilitate concession projects. These countries also
score in the bottom half of all countries for their investment
and financial climates.
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© Economist Intelligence Unit
What are the benefits of benchmarking research for PPP stakeholders?
OVERALL SCORE
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1
Chile
64.3
2
Peru
58.9
3
Brazil
57.8
4
Mexico
47.5
5
Costa Rica
45.1
6
Colombia
39.1
7
Uruguay
27.3
8
Dominican Rep.
25.2
9
Jamaica
25.1
10
El Salvador
23.9
11
Honduras
23.7
12
Trinidad & Tobago
22.9
13
Paraguay
22.3
14
Argentina
21.9
15
Panama
21.0
16
Guatemala
18.0
17
Ecuador
14.5
18
Nicaragua
10.0
19
Venezuela
7.1
 Increases transparency and accountability for policy
makers, regulators and private-sector/ non-state
providers
 Provides a clear, concise and central source of
information on key laws and regulations
 Assesses country performance on past initiatives and
identifies areas of improvement

Highlights key country strengths and weaknesses
 The approach is applicable to social protection,
healthcare and other public service “pillars”
© Economist Intelligence Unit
Thank you
Tony Nash
Global Director, Client Research
Economist Intelligence Unit
Tel: +65 6428 2611
Email: tonynash@eiu.com
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© Economist Intelligence Unit