HEALTH PPPs
An introduction
Is there a recipe for
success?
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
Challenges & Constraints
Rise in noncommunicable
diseases
Shift in
provision of
care
Lack of
infrastructure
Increasing
costs and
expectations
Shortage of
trained staff
Limited
resources
Types of health PPPs
Hospitals & health networks
Detailed designs, building construction
or refurbishment, medical equipment.
Primary care
Primary care, public health, vaccinations,
maternal & child care.
Non-clinical services
IT equipment & services, maintenance,
food, laundry, cleaning, buildings &
equipment, management.
Clinical support services
Lab analysis, diagnostic tests, medical
equipment maintenance, and other
support services
Operations management
Management of entire facility or network
of hospitals and/or clinics.
Specialized clinical services
Dialysis, radiotherapy, day surgery, other
specialist services.
Key advantages of a PPP
1. Combine skills and resources of public and private partners in
innovative ways
2. Public partner concentrates on fixing the objectives to be attained
3. Risks are allocated to the party which is best able to manage them
4. Bring value for money as a result of the competitive bidding
process
5. Provide access to industry best practices
The role of a PPP
1
2
3
Improve
Services
 Better identification & allocation of long-term risks.
Mobilize
capital
 Maintain affordable tariffs.
 Ensure predicable budget commitments.
 Provide access to industry best practices & privatesector expertise.
Increase
efficiency
The evolution of the PPP model
Infrastructure
Services
Construction and facilities
management
Clinical and non-clinical
services
In hospitals, primary care or
community care facilities
At primary, secondary or
tertiary level
Asset-heavy
Asset-light
Could include medical
training/health insurance or
vouchers
Integrated
Construction and facilities
management and full range of
clinical and non-clinical services
At primary, secondary or
tertiary level
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
Strong
political
will
Fit with
wider
health
strategy
Public
sector
capacity
Appropriate
risk sharing
Legislative
and
regulatory
environment
Private
sector
capacity
?
Fiscal
Space
Focus on
services
delivery, not
facilities
Recipe for failure?
Limited
monitoring
capacity
Changing
environment
impacts key
parameters
?
Long term
fiscal
affordability
in question
PPP isolated
from wider
health
system
Lessons learnt from health PPPs
Use PPPs to expand
service / improve quality
Define services needed
(not facilities)
Maximize private sector
responsibility
Contract management
capacity
Not as means to simply finance new
buildings/equipment
Give operators flexibility on how to
provide
“Full” PPPs deliver more benefits
Monitoring is essential, but often
overlooked
Long-term fiscal
affordability is essential
PPPs as part of a broader
health sector reform
Promote competition and efficiency
Provider payment reforms
Accreditation
Developing hospital management
capacity
International
PPP Stories
A new referral hospital for
underserved Cross River State.
10 year concession to
design, build, and manage the
clinical and non-clinical services of a
new hospital.
Awarded to UCL Healthcare
Services Ltd.
500,000 citizens of the greater
Calabar area to benefit
Nigeria: Cross River Health (2013)
Two new hospitals (maternity
and neurology services) and
blood bank facility with a
combined 424-bed capacity.
20-year concessions to
finance, design, construct, furnish,
equip, maintain, and provide nonclinical management services.
Awarded to an international
consortium: Egypt’s Bareeq Capital,
G4S, Siemens & Detac.
78,500 people with improved
access to services.
$225 million in investment.
Egypt: Alexandria University Hospitals (2012)
12-year concession to
construct, equip and operate a new
diagnostic imaging and radiology
center.
First PPP in Moldova.
Awarded to Magnific a Moldovan
health care services provider.
Over 100,000 people with
improved access to service
$7 million in private investment
5% of annual revenues
returned by operator to Republican
Hospital
Moldova: Radiology and Diagnostic Imaging (2011)
Upgraded diagnostic
imaging
and radiology facilities.
7-year concession to provide
advanced imaging and radiology
services across 4 government
hospitals/medical
colleges.
Awarded to Wipro GE Healthcare
Ltd. and Medall Healthcare Private
Ltd.
98,800 people with improved
access to services
$6 million in investment
India: Andhra Pradesh Radiology (2010)
298-bed emergency
hospital in Periperi district of
New
Salvador, Bahia.
10-year concession to
equip, maintain, and operate both
clinical and non-clinical services.
400,000 people with improved
Awarded to Promedica and
Dalkia.
$50 million in investment
Brazil: Hospital do Subúrbio (2010)
access to services
New 425-bed hospital and
network of public filter clinics
forming a regional health network.
18-year PPP to design, build,
finance and operate facilities,
including clinical services.
Awarded to Tsepong
Consortium, headed by
NetCare including local doctors and
investors.
330,000 people with improved
access to services.
$77 million in investment.
Lesotho Hospital PPP (2009)