© Atos KPMG Consulting 2003 PPPs IN HEALTH CARE: AN INTERNATIONAL PERSPECTIVE Emmett Moriarty Senior Health Sector Specialist

L11095 – 2 Public Private Partnerships in the Health Sector  Introduction  Overview of PPPs  Views on PPPs  Advantages and disadvantages  PPPs in other countries  Lessons learned

L11095 – 3 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.

L11095 – 4 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

L11095 – 5 Many countries are adopting PPPs in Health Care

L11095 – 6 What is the difference between privatisation and PPP ? Where does accountability for public services delivery lie? Where does accountability for public services delivery lie?

L11095 – 7 Why should we consider PPPs ? Demand Supply Can PPPs fill this gap ? Health Care Resources time

L11095 – 8 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

L11095 – 9 Views on PPPs vary widely

L11095 – 10 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

L11095 – 11 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

L11095 – 12 Advantages and disadvantages of PPPs

L11095 – 13 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

L11095 – 14 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

L11095 – 15 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

L11095 – 16 Hospital services PPP in Spain  First wave of 8 PPP (DBFO) contracts awarded in 2006  8 th 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

L11095 – 17 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)

L11095 – 18 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

L11095 – 19 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

L11095 – 20 Conclusions and lessons learned

L11095 – 21 Lessons learned  Design to meet policy objectives  Political commitment  Planning and piloting  Enabling legislation  Transparency  Good governments get good PPPs

L11095 – 22 谢谢 (Thank you !)