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

Rise in non- communicable diseases Shift in provision of care Increasing costs and expectations Challenges & Constraints Lack of infrastructure Shortage of trained staff Limited resources

Types of health PPPs Hospitals & health networks Detailed designs, building construction or refurbishment, medical equipment. Non-clinical services IT equipment & services, maintenance, food, laundry, cleaning, buildings & equipment, management. Operations management Management of entire facility or network of hospitals and/or clinics. Primary care Primary care, public health, vaccinations, maternal & child care. Clinical support services Lab analysis, diagnostic tests, medical equipment maintenance, and other support services 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 Improve Services Mobilize capital 3 Increase efficiency  Better identification & allocation of long-term risks.  Maintain affordable tariffs.  Ensure predicable budget commitments.  Provide access to industry best practices & private- sector expertise.

The evolution of the PPP model Infrastructure Construction and facilities management In hospitals, primary care or community care facilities Asset-heavy Services Clinical and non-clinical services At primary, secondary or tertiary level 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 Public sector capacity Fiscal Space Legislative and regulatory environment Fit with wider health strategy Appropriate risk sharing Private sector capacity Strong political will Focus on services delivery, not facilities ? Be aware of opportunities

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

Lessons learnt from health PPPs Use PPPs to expand service / improve quality Not as means to simply finance new buildings/equipment Define services needed (not facilities) Give operators flexibility on how to provide Maximize private sector responsibility “Full” PPPs deliver more benefits Contract management capacity 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

500,000 citizens of the greater Calabar area to benefit 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. Nigeria: Cross River Health (2013)

78,500 people with improved access to services. $225 million in investment. 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 non- clinical management services. Awarded to an international consortium: Egypt’s Bareeq Capital, G4S, Siemens & Detac. Egypt: Alexandria University Hospitals (2012)

Moldova: Radiology and Diagnostic Imaging (2011) 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

98,800 people with improved access to services $6 million in investment 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. India: Andhra Pradesh Radiology (2010)

400,000 people with improved access to services $50 million in investment New 298-bed emergency hospital in Periperi district of Salvador, Bahia. 10-year concession to equip, maintain, and operate both clinical and non-clinical services. Awarded to Promedica and Dalkia. Brazil: Hospital do Subúrbio (2010)

330,000 people with improved access to services. $77 million in investment. 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. Lesotho Hospital PPP (2009)