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International perspective on ppp in health care

The document discusses the implementation of Public-Private Partnerships (PPPs) in healthcare, highlighting their advantages, challenges, and various models across the globe, including successful examples in countries like Turkey, Bangladesh, and Spain. Key findings indicate that PPPs can improve service delivery, enhance facility conditions, and increase staff involvement, though they may face issues related to complexity and public trust. It emphasizes the importance of government support and robust contractual frameworks to ensure positive outcomes in healthcare PPPs.

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INTERNATIONAL PERSPECTIVE ON PPPS IN HEALTH CARE IMPLEMENTING PPP TO AID DEVELOPMENT OF HEALTH CARE FACILITIES IN THE REGION October, 2017 - Dubai Loay Ghazaleh – BSc. Civil Eng. , MBA Advisor, Ministry of Works – Bahrain 1
INDEX Brief on Some PPP KPI’s World Examples of PPPs in Healthcare Overview of PPPs The Turkish Health Campuses PPP Program PPP Models Used In Healthcare PPP for Health Care PPP Lessons learned Health care in GCC 2
BRIEF ON SOME PPP KPI’S 3
PPP KPI’S - INPUTS AND CAPACITY TO OFFER CARE Theme Changes noted in the PPP Facilities, Equipment, And Technology PPP replaced aging buildings, had an efficient hospital design, and introduced new equipment and new electronic data systems for admissions, medical records, and pharmacy and support services. Patient rooms were updated for bedside care. Clinical Services PPP Gateway clinic decreased crowding in Casualty unit. PPP added specialty services (including ICU and NICU). The pharmacy and laboratory functioned 24/7. The pharmacy tracked medications and dispensed them at the patient level. Support Services PPP strengthened security, cleaning services, maintenance, waste management, food and linen services. The focus shifted from repair to preventive maintenance, and toward planned redundancy (e.g. back-up power systems). 4
PPP KPI’S - POLICIES AND PROCESSES TO MANAGE SERVICE DELIVERY Theme Changes noted in the PPP Policies and Standards PPP more clearly defined staff roles, hospital-level policies, and procedures, clearly communicated expectations to staff, provided more structure, and tracked performance against standard. Communication PPP communications were more structured and formal. There was increased use of committees, department staff meetings, and teams, and a greater focus on patient feedback. Human Resources PPP upgraded staff qualifications and numbers, especially clinical staff, expanded roles of staff for more participatory decision making, put more emphasis on continuous education and competency testing, and increased compensation and benefits, accountability, and discipline. Organizational Culture PPP organizational culture focused on individual and team accountability, goal-setting, quality improvement, and use of data for monitoring and decisions. 5
PPP KPI’S - PATIENT AND STAFF OUTCOMES Theme Changes noted in the PPP Service Volume And Patient Mix PPP increased service volume (inpatient admissions, deliveries, outpatient visits) and there was a perceived increase in severity of case mix. Quality of Care PPP reduced wait times for elective surgery, faster laboratory test turn-around times and a perception of improved access to medicines. Staff Outcomes PPP staff felt more empowered, appreciated, motivated and capable of doing their work. 6
WORLD EXAMPLES OF PPPS IN HEALTHCARE 7
MANY COUNTRIES ARE ADOPTING PPPS IN HEALTH CARE 8
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 9
HOSPITAL SERVICES PPP IN SPAIN  First wave of 8 PPP (DBFO) contracts awarded in 2006  8th 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 10
NUTRITION SERVICES PPP IN BANGLADESH  Government contracted with NGOs to control areas with no organized nutrition services  15 million people covered  Cost per person = $0.96 Results:  Malnutrition rates declined by 18% (compared with 13% in publicly covered areas)  Program now expanded to cover 30 million 11
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 12
TB CONTROL PPP IN INDIA  State government contracted with NGO hospital to provide TB control services to 500,000 population (Highest burden of TB worldwide)  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) 13
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)
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
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)
OVERVIEW OF PPPS 20
WHAT IS PPP? 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 5. Each party shares the potential risks and rewards in the delivery of the service and/or facility. 21 1 2 Improve Services Mobilize Capital 3 Increase Efficiency
MOVEMENT OF SELECTED PUBLIC SECTORS TOWARDS PRIVATE STRUCTURES Public Administration PPP Private sector •Rail •Post •Waterways •Telecommunications •Road •Energy supply •Defence •Water supply •Water supply •Water supply •Health care •Health care •Health care •Social services •Social services •Social services •Waste disposal •Waste disposal •Waste disposal •Sewage disposal •Sewage disposal •Sewage disposal 22
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 23
WHY PPPS ? Demand Market Supply PPPs can fill this gap Resources time 24
DIFFERENT PPP MODELS , DIFFERENT COUNTRIES Each Country’s approach to PPP need to be;  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 PPP to be used whenever private providers can perform government functions as well or better. 25
ADVANTAGES AND DISADVANTAGES OF PPPS Potential Benefits  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. Potential Issues  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 26
PPP TYPICAL STAKEHOLDERS Government Loan providerLicensee /Project company General contractor Investors Maintenance Public sector or private sector use Operator Rentor fee Provisionof service Concession Grant Interest/re- payment Return Equity capital Loan Service Construction Constructionatagreed priceandtimeframe Remuneration 27
COMMON PPP MODELS • To provide Services the government previously performed Service Contract • To cooperate or manage a facility or provide multiple services Management Contract • Government leases infrastructure for a fee • Private Operator takes operational risk, may include investments requirements Lease to Private Sector • Granting exclusive rights to provide & maintain infrastructure for specific time period. Private partner takes significant investment risk Concession • Transfer of asset in full or in part, Generally certain conditions included to ensure services continue to be delivered Divestiture (Privatization) 28Concessions can include a number of variations PLAN - DESIGN - BUILT - CONSTRUCT – FINANCE - OWN OPERATE - MAINTAIN - TRANSER - LEASE
GOVERNMENT SUPPORT MECHANISMS (A)Cash subsidy: Provides cash subsidy as total lump sum or a fixed amount on a per unit basis, & payments in installments or all at once (B)Payment Guarantee: Govt. agrees to fulfill the obligations of purchase in case of non performance by the purchaser (C) Debt Guarantee: Govt. secure entity’s borrowings by guaranteeing repayment to creditors in case of default (D) Revenue Guarantee: Govt. sets a minimum variable income for private partner; typically his income is from customer user fees. 29
THE TURKISH HEALTH CAMPUSES PPP PROGRAM 30
THE TURKISH HEALTHCARE SYSTEM highly regulated market with increasing private sector involvement 31
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33
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THE TURKISH MINISTRY OF HEALTH PPP HEALTH CAMPUSES MODEL (BLT)  Under the Build-Lease-Transfer (BLT) model, the private sector finances and builds a facility and then leases it to the relevant public authority, with the state providing the public service.  The infrastructure facility is leased for a maximum of 30 years and the public authority pays a lease fee to the private investor and operates the facility during the lease period.  The SPV provides the design, construction works, medical devices/equipment, and furniture for the health campus. Non- medical services are provided by SPV.  MoH provides health services and takes all responsibility of medical treatment.  Lease payments are increased annually by the arithmetic average of the Turkish Producer Price Index and Turkish Consumer Price Index for the preceding year.  Healthcare facilities are to be transferred to the public at the end of the operation period in good operating, well-maintained and usable condition, free of all charges, encumbrance or undertakings upon the termination of the Project Agreement. 35
NO LIFECYCLE RISK  The SPV is only responsible for the initial investment.  The SPV will be only responsible for the delivery of the first set of all medical equipment and furniture as set out in the Project Agreement  The renewal of the medical equipment and the furniture will be handled and provided by the Ministry.  The maintenance under Furniture and Medical Equipment Support Services will be carried out by the SPV 36
SUCCESSFUL PARTNERSHIPS WITH MIGA, EBRD AND IFC Successful partnerships enabled Turkey’s first greenfield project bond (Elaziğ’s Project) issuance of a 20-year, €288 million euro-denominated bond to finance the PPP.  The European Bank for Reconstruction and Development (EBRD) and the World Bank’s Multilateral Investment Guarantee Agency (MIGA) have developed an innovative risk mitigation scheme:  EBRD provided €89 million to mitigate the risks of construction and operation.  MIGA provided political risk insurance for the bond as well as for the project’s equity investment.  This involvement bumped up the Moody rating to Baa2, two notches above Turkey’s rating.  Also the International Finance Corporation (IFC) invested on a parallel basis in an unenhanced tranche of the bond.  As a result, the credit enhancement mechanism enabled the participation of a larger pool of investors and mobilized new sources of funding.  The 28-year concession was awarded to a consortium to design, build, finance, equip and maintain the integrated hospital campus. 37
LESSONS ON THE LEASE MODEL & CREDIT ENHANCEMENTS  Government support is a precondition for success ; PPPs provide funding and expertise. Private sector participation in healthcare projects brings money and experience to the table, and enabling investments that government cannot afford by itself.  A robust contractual framework with a well-defined revenue payment mechanism, risk allocation and a favorable termination regime is fundamental to attract new classes of private investors.  Rating agencies recognize the EBRD-MIGA risk mitigation product and the multilateral involvement specifically; the MIGA PRI policy covers currency transfer, expropriation and breach of contract while EBRD standby facilities provide liquidity in construction and operations mitigating risk of protracted arbitration.  This approach can be replicated. Credit enhancement may be rolled out across many markets and sectors for PPPs (both for Greenfield financing and brownfield refinancing) helping to crowd in private investment. 38
PPP MODELS USED IN HEALTHCARE 39
PPPS IN THE HEALTHCARE SECTOR 40 PPP model Common term Definition / Explanation Health services only (can be selective) (Private management of a public hospital) Operating contract, performance-based contract, lease, outsourcing. A private operator is brought in to operate and deliver publicly funded health services in a publicly owned facility. Facility Finance (accommodation and medical equipment), can include refurbishment Design, build, finance, operate(DBFO), build, own, operate, transfer (BOOT), Build Lease Transfer ( BLT). A public agency contracts a private operator to design, build, finance, and operate a hospital facility. Health services within the facility are (mostly) provided by government. Combined (accommodation, equipment and health Services) Twin accommodation/ clinical services joint venture/ Franchising, or full DBFO, BOOT concessions A private operator builds a facility and provides free (or subsidized) healthcare services to a defined population.
OUTSOURCING CLINICAL & NON-CLINICAL SERVICES Non-clinical services IT equipment & services, maintenance, food, laundry, cleaning, buildings & equipment, management. 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. 41
PPPS IN THE HEALTHCARE SECTOR 42 PPP Type Political Will GOV. Capital Investment Gov. Operational Requirements Problems and Challenges Service Contract Low High Low Local government unit (LGU) must be able to administer multiple contracts simultaneously. LGU must have strong contract policing powers and political will. Management Contract Moderate Moderate Moderate Private sector partners usually encounter problems with LGU budgetary process, staff hiring and firing. Lease To Private Contract Moderate Moderate High Issues of low maintenance of infrastructures and equipment’s Concessions (Including Lease to Government) High Low High LGU must be powerful enough in ensuring reasonable fees and quality outcomes. Issues of inefficiencies and low innovations
VARIOUS PPP MODALITIES PPP Type Recommended Years of Partnership O & M Outcomes Responsibility Risk Assumed by GLU Competitive Pressure Service Contract Annual Government Low High Management Contract 3 – 5 Years Government Low to Moderate High During Bids Lease To Private Contract 3 – 5 Years Private Moderate High During Bids Concessions (Including Lease to Government) 10 – 25 Years Private High Moderate to Low During Bids 43
TYPICAL PPP PRIVATE PARTNER COMPENSATION  Government provides financial support to mitigate demand risk,  OR ensure full cost recovery is compatible with affordability criteria & the public’s ability to pay.  Contribution, Investments, Guarantees & Subsides are common.  Provides strong incentives for the private sector to complete the projects in time & within budget  Thus allows government & public authorities to spread the cost of public infrastructure over several decades.  Thus more budget certainty for govt., while liberating scarce public resources for other social priorities User Based Payments Availability (Lease) Payment 44
MORE ON PRIVATE PARTNER COMPENSATION IN HEALTHCARE  Payment by Clinical Activity Lines  Variable payment according to effective clinical production  Availability payment component related with special and specific clinical units  Pharmaceutical’s savings sharing  Performance Failures Deduction  No Availability-No Payment  Annual Service Payment  Fixed Component: annual, not subject to revision  Variable Component: annual according to treated patients  Performance Failures Deduction User Based - Inpatient Outpatient Payment Availability (Lease) Payment 45
PRIVATE SECTOR TYPICAL REVENUES IN A PPP 46
PPP LEASE PAYMENTS  Availability Payments (Lease Payments)  Availability payments account for around 90% of EBITDA  Collected independent of hospital occupancy rates.  Guaranteed by MoH, Adjusted quarterly by Inflation and Devaluation  Service Payments  Non-Volume services ( extraordinary Maintenance, Utilities, Furniture, Landscape, Pest Control, Car parking, Cleaning, Security, Administrative – Help Desk, reception, guiding, etc.) independent of volume, occupancy, consumption  Volume Medical Services (Lenin, Catering, Waste Management), minimum amount guaranteed by MoH.  Volume Non-Medical Services (Laboratories, sterilization, imaging and disinfection, rehabilitation), minimum amount guaranteed by MoH.  For services rendered for an occupancy rate above such threshold the MoH will pay a discounted unit price  Commercial Revenues (Retail , Advertisement Space)  Accounting for near 2% of total turnover, 3rd Party risk 47
INTERNATIONAL PPP SCOPE & PAYMENT MODELS FOR PUBLIC HOSPITALS United Kingdom Availably Payment Basically, Infrastructure Services and Hard & Soft FM Valência (Spain) Payment by a per capita fee Integrated Delivery of Primary and Acute Hospital Care for a population area Portugal Availably Payment Payment by Clinical Episodes (“Case Mix”) Hospital Management, Infrastructure and Clinical Services Victoria (Australia) Payment by Clinical Episodes (“Case Mix”) Hospital Management, Infrastructure and Clinical Services 48
RISK Lease Model RISK ALLOCATION & MITIGANTS Land Issue All risks arising out of the land will be under the responsibility of the Administration. The third parties' allegations related to the land shall be settled by the Administration. Permits/ Planning The Administration is responsible for planning and zoning. The construction permit shall be flowed down to the EPC Contractor. Delay Risk In case of a delay at the completion of the Project, the Project Co will have to submit bonds for delay-liquidated damages for each phase. The bond requirement for delay liquidated damages shall be flowed down to the EPC Contractor. Environmental Environmental and social impact assessment report in line with the IFC's guidelines. The EPC Contractor and O&M Company shall follow this report. Guaranteed Payments Administration guarantees for Availability Payments and Services Payments and the minimum quantity for the volume based services. Change in Law The Project Co shall be entitled to claim a variation in case of change in law. Unavailability of Insurance In case of any unavailability of a particular special hazard insurance, the Project Co shall be exempted from its insurance obligation until such insurance will be available again in the insurance market. Expropriation and Nationalization Expropriation and project nationalization issues addressed in the Project Agreement will be an Administration event of default. Assignment The Project Co shall be entitled to assign the payments and insurance proceeds to the lenders. 49
HOSPITAL PPP’S: TYPICAL ASSUMPTIONS Item Cost / Expense Revenue Distribution Capex Assumptions: Gross area per bed (m2) 170 Constructions costs/m2 2000 USD Construction/Equipment Cost Ratio 1.4 Annual Maintenance Capex: 10% Building (as % of original cost) 2.5% Equipment (as % of original cost) 15% Operating Assumptions: Operating cost/bed/year($) 140,000 USD 57% Financing Assumptions Debt/Equity Ratio 70/ 30 Target Equity IRR 16% 16% Debt Service 17% 50
PPP BANKABILITY ISSUES (ONLY IN LERASE / AVAILABILITY MODEL)  Granting Lenders STEP-IN RIGHTS  Senior Debt payable by MoH / Government on Project termination by Government / SPV  Providing Lenders with “Sovereign Guarantee” or Lenders signing Direct Agreements with the MoH Government 51
PPP FOR HEALTH CARE 52
Rise in non- communicable diseases Shifts in provision of care Increasing costs and expectations COMMON HEALTHCARE CHALLENGES & CONSTRAINTS Lack of infrastructure Shortage of trained staff Limited resources 53
TYPICAL PPP NATIONAL HEALTH STRATEGY (NHS) Managing Change Competition & Sector Regulation Increasing competition between providers Increase patients’ choice Creation of a Health Regulator 3 PPP’s Schemes Proper Legal Framework Partnerships. Health PPP Programs with emphasis on hospital renewal and modernization 1 Hospital Corporatization Transforming public hospitals into private/public owned corporations / IPO’s Introducing a new hospital finance system Improving efficiency and quality of hospital operations 2 54
CURRENT FOCUS OF PPP IN HEALTH  To utilize untapped resources and strengths of the private sector (exchange skills and expertise between the public and private sector).  To enhance the capacity to meet growing health needs  To reduce financial burden of government expenditure on tertiary care  To reduce geographical disparity in provision of services and its access (reaching remote areas; target specific group of populations).  To improve efficiency through evolving new management structures  To improve quality, accessibility, availability, acceptability and efficiency  To strengthening existing health system / widen the range of services and number of services providers. 55
PPP’S IN HEALTHCARE BASIC CONCEPTS AND TENDER DESIGN PRINCIPLES Public-Private Partnerships Long term association with a private operator or a social entity within the context of the NHS Partnership duration related with assets life cycle (maximum duration 30 years) Emphasis on Output Specification and Performance Levels Risk Transfer to Private Operator, accordingly to the party best able to manage them Competitive Procurement based on Standardize Documentation PPP schemes and contracts subject to economic / financial appraisal (Affordability and Value for Money) 56
LESSONS LEARNED Is there a recipe for success?57
PPP’S ARE COMPLEX! Focus Hospitals Primary Care Centres Continuing Care Centres Functional Hospitals Units Diagnostic & Treatment Services Activities Design Construction Financing Maintenance Hard and Soft FM Services Management Clinical Services Payment Mechanisms Single Payment Mechanism Service Availability Per Capita Rates DRG´s & Casemix Global Package Combined Payment Mechanism Scope Single Projects By Health Facility By Area/Residential Population “Clusters” Vertical Integration Horizontal Integration PPP 58Access for the poor and affordability need to be considered at the PPP design stage and tracked to ensure achieving equitable and efficient healthcare services whereas the poor actually benefit from PPPs.
CORE PRINCIPLES OF PARTNERSHIP True partnerships entails  Relative Equality between partners  Mutual Commitment to Public Health objectives  Benefits for the Stakeholders  Autonomy for each partner  Shared decision-making and accountability  Equitable Returns / Outcomes SOMETIMES;  Policy makers enthusiastic at the onset  THEN; Half hearted support for PPP  LASTLY: Lack of Trust on both sides 59
IMPORTANT ISSUES IN HEALTH PPPS Use PPPs to expand service / improve quality Not as means to finance new buildings/equipment Define services needed (not facilities) Give operators flexibility on how to provide service Maximize private sector responsibility “Full” PPPs deliver more benefits, Integrated Approach Contract management capacity Monitoring is essential, but often overlooked Long-term fiscal space is essential PPPs part of a broader sector reform REFORM FOCUS ON Promoting competition and efficiency Availability PPP are contingent Government Liability 60
CRITICAL SUCCESS FACTORS IN HEALTHCARE PPP’S  Public sector backing-reassurance to private sector.  Existence of a vibrant private sector. A catalyst can bring partners together whom can offer expertise.  Commitment of private sector decision-makers.  Road Map , Clear Ownership, Understanding Roles, Responsibilities, Expectations.  Defining Quality or Performance or Outcome indicators.  Timely revisions / updating of contract.  Defining & verifying beneficiaries especially high cost services.(WHO PAYS)  Clarity on user fees.(HOW MUCH) 61
LESSONS LEARNED  Design to meet policy objectives  Political commitment  Planning and piloting  Enabling legislation  Transparency  Advantages of PPP efficiency can be achieved through:  Life-cycle approach  Right distribution of tasks and risks  Improved incentives  For many administrative bodies this can entail:  New way of thinking – output instead of input  Tasks of greater complexity  More responsibility  HOWEVER: Challenges REMAIN;  Cost Containment  Capacity of Private Partner  Accreditation  Regulation by the Government  Compulsory Insurance Coverage NEED 62
INGREDIENTS FOR A SUCCESSFUL PPP IN HEALTHCARE Public sector capacity Fiscal affordability Legislative and regulatory environment Fit with wider health strategy Appropriate risk sharing Private sector capacity Strong political will Focus on services delivery, not facilities 63
RECIPE FOR FAILURE? Changing environment impacts key parameters ? Long term fiscal affordability in question Limited monitoring capacity PPP isolated from wider health system 64
PPP AND HEALTH CARE IN GCC 65
GCC HEALTHCARE STATISTICS 66
HEALTHCARE PPP FINANCE CHALLENGES IN GCC COUNTRIES  The high rates of non-communicable diseases in most GCC countries are having increasingly effects on the health system.  Specialty Areas in GCC with significant capacity gaps ; intensive and critical care, emergency care, neonatology, oncology, pediatrics, orthopedics, rehabilitation and psychiatry.  Large expatriate populations which leads GCC countries to use different strategies to control expatriate healthcare expenditure; People are spending more and more out of their own pockets to receive healthcare services.  Perceived Private Hospitals “Over” billing & “ Over” testing. Blended with NEW “ Patients Experience” MARKEING TOOLS (making patients pay more for a HOSPITAL BRAND)!  ONLY UAE & Saudi Arabia have fully implemented a Compulsory Employment-based Health Insurance.  Minimal integration between healthcare system players prohibiting effective care coordination, healthcare prevention and causing service inefficiencies and clinical variations. 67
REFERENCES 68
loayg@works.gov.bh; loay.ghz@gmail.com 00973-36711547 http://bh.linkedin.com/in/loayghazaleh 69

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International perspective on ppp in health care

  • 1.
    INTERNATIONAL PERSPECTIVE ONPPPS IN HEALTH CARE IMPLEMENTING PPP TO AID DEVELOPMENT OF HEALTH CARE FACILITIES IN THE REGION October, 2017 - Dubai Loay Ghazaleh – BSc. Civil Eng. , MBA Advisor, Ministry of Works – Bahrain 1
  • 2.
    INDEX Brief on SomePPP KPI’s World Examples of PPPs in Healthcare Overview of PPPs The Turkish Health Campuses PPP Program PPP Models Used In Healthcare PPP for Health Care PPP Lessons learned Health care in GCC 2
  • 3.
    BRIEF ON SOMEPPP KPI’S 3
  • 4.
    PPP KPI’S -INPUTS AND CAPACITY TO OFFER CARE Theme Changes noted in the PPP Facilities, Equipment, And Technology PPP replaced aging buildings, had an efficient hospital design, and introduced new equipment and new electronic data systems for admissions, medical records, and pharmacy and support services. Patient rooms were updated for bedside care. Clinical Services PPP Gateway clinic decreased crowding in Casualty unit. PPP added specialty services (including ICU and NICU). The pharmacy and laboratory functioned 24/7. The pharmacy tracked medications and dispensed them at the patient level. Support Services PPP strengthened security, cleaning services, maintenance, waste management, food and linen services. The focus shifted from repair to preventive maintenance, and toward planned redundancy (e.g. back-up power systems). 4
  • 5.
    PPP KPI’S -POLICIES AND PROCESSES TO MANAGE SERVICE DELIVERY Theme Changes noted in the PPP Policies and Standards PPP more clearly defined staff roles, hospital-level policies, and procedures, clearly communicated expectations to staff, provided more structure, and tracked performance against standard. Communication PPP communications were more structured and formal. There was increased use of committees, department staff meetings, and teams, and a greater focus on patient feedback. Human Resources PPP upgraded staff qualifications and numbers, especially clinical staff, expanded roles of staff for more participatory decision making, put more emphasis on continuous education and competency testing, and increased compensation and benefits, accountability, and discipline. Organizational Culture PPP organizational culture focused on individual and team accountability, goal-setting, quality improvement, and use of data for monitoring and decisions. 5
  • 6.
    PPP KPI’S -PATIENT AND STAFF OUTCOMES Theme Changes noted in the PPP Service Volume And Patient Mix PPP increased service volume (inpatient admissions, deliveries, outpatient visits) and there was a perceived increase in severity of case mix. Quality of Care PPP reduced wait times for elective surgery, faster laboratory test turn-around times and a perception of improved access to medicines. Staff Outcomes PPP staff felt more empowered, appreciated, motivated and capable of doing their work. 6
  • 7.
    WORLD EXAMPLES OFPPPS IN HEALTHCARE 7
  • 8.
    MANY COUNTRIES AREADOPTING PPPS IN HEALTH CARE 8
  • 9.
    HOSPITAL FACILITIES PPPSIN 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 9
  • 10.
    HOSPITAL SERVICES PPPIN SPAIN  First wave of 8 PPP (DBFO) contracts awarded in 2006  8th 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 10
  • 11.
    NUTRITION SERVICES PPPIN BANGLADESH  Government contracted with NGOs to control areas with no organized nutrition services  15 million people covered  Cost per person = $0.96 Results:  Malnutrition rates declined by 18% (compared with 13% in publicly covered areas)  Program now expanded to cover 30 million 11
  • 12.
    PRIMARY HEALTH CAREPPP 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 12
  • 13.
    TB CONTROL PPPIN INDIA  State government contracted with NGO hospital to provide TB control services to 500,000 population (Highest burden of TB worldwide)  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) 13
  • 14.
    98,800 people withimproved 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)
  • 15.
    500,000 citizens ofthe 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)
  • 16.
    78,500 people withimproved 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)
  • 17.
    Moldova: Radiology andDiagnostic 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
  • 18.
    400,000 people withimproved 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)
  • 19.
    330,000 people withimproved 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)
  • 20.
  • 21.
    WHAT IS PPP? 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 5. Each party shares the potential risks and rewards in the delivery of the service and/or facility. 21 1 2 Improve Services Mobilize Capital 3 Increase Efficiency
  • 22.
    MOVEMENT OF SELECTEDPUBLIC SECTORS TOWARDS PRIVATE STRUCTURES Public Administration PPP Private sector •Rail •Post •Waterways •Telecommunications •Road •Energy supply •Defence •Water supply •Water supply •Water supply •Health care •Health care •Health care •Social services •Social services •Social services •Waste disposal •Waste disposal •Waste disposal •Sewage disposal •Sewage disposal •Sewage disposal 22
  • 23.
    PUBLIC SECTOR PRIVATE SECTOR  Free Provision ofProducts and Services Unsustainable for Government & Donors Unsustainable for Consumers Profit Maximization Break Even      GOAL IS TO CREATE FINANCIALLY SUSTAINABLE SYSTEM 23
  • 24.
    WHY PPPS ? Demand Market Supply PPPscan fill this gap Resources time 24
  • 25.
    DIFFERENT PPP MODELS, DIFFERENT COUNTRIES Each Country’s approach to PPP need to be;  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 PPP to be used whenever private providers can perform government functions as well or better. 25
  • 26.
    ADVANTAGES AND DISADVANTAGESOF PPPS Potential Benefits  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. Potential Issues  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 26
  • 27.
    PPP TYPICAL STAKEHOLDERS Government LoanproviderLicensee /Project company General contractor Investors Maintenance Public sector or private sector use Operator Rentor fee Provisionof service Concession Grant Interest/re- payment Return Equity capital Loan Service Construction Constructionatagreed priceandtimeframe Remuneration 27
  • 28.
    COMMON PPP MODELS •To provide Services the government previously performed Service Contract • To cooperate or manage a facility or provide multiple services Management Contract • Government leases infrastructure for a fee • Private Operator takes operational risk, may include investments requirements Lease to Private Sector • Granting exclusive rights to provide & maintain infrastructure for specific time period. Private partner takes significant investment risk Concession • Transfer of asset in full or in part, Generally certain conditions included to ensure services continue to be delivered Divestiture (Privatization) 28Concessions can include a number of variations PLAN - DESIGN - BUILT - CONSTRUCT – FINANCE - OWN OPERATE - MAINTAIN - TRANSER - LEASE
  • 29.
    GOVERNMENT SUPPORT MECHANISMS (A)Cashsubsidy: Provides cash subsidy as total lump sum or a fixed amount on a per unit basis, & payments in installments or all at once (B)Payment Guarantee: Govt. agrees to fulfill the obligations of purchase in case of non performance by the purchaser (C) Debt Guarantee: Govt. secure entity’s borrowings by guaranteeing repayment to creditors in case of default (D) Revenue Guarantee: Govt. sets a minimum variable income for private partner; typically his income is from customer user fees. 29
  • 30.
    THE TURKISH HEALTHCAMPUSES PPP PROGRAM 30
  • 31.
    THE TURKISH HEALTHCARESYSTEM highly regulated market with increasing private sector involvement 31
  • 32.
  • 33.
  • 34.
  • 35.
    THE TURKISH MINISTRYOF HEALTH PPP HEALTH CAMPUSES MODEL (BLT)  Under the Build-Lease-Transfer (BLT) model, the private sector finances and builds a facility and then leases it to the relevant public authority, with the state providing the public service.  The infrastructure facility is leased for a maximum of 30 years and the public authority pays a lease fee to the private investor and operates the facility during the lease period.  The SPV provides the design, construction works, medical devices/equipment, and furniture for the health campus. Non- medical services are provided by SPV.  MoH provides health services and takes all responsibility of medical treatment.  Lease payments are increased annually by the arithmetic average of the Turkish Producer Price Index and Turkish Consumer Price Index for the preceding year.  Healthcare facilities are to be transferred to the public at the end of the operation period in good operating, well-maintained and usable condition, free of all charges, encumbrance or undertakings upon the termination of the Project Agreement. 35
  • 36.
    NO LIFECYCLE RISK The SPV is only responsible for the initial investment.  The SPV will be only responsible for the delivery of the first set of all medical equipment and furniture as set out in the Project Agreement  The renewal of the medical equipment and the furniture will be handled and provided by the Ministry.  The maintenance under Furniture and Medical Equipment Support Services will be carried out by the SPV 36
  • 37.
    SUCCESSFUL PARTNERSHIPS WITHMIGA, EBRD AND IFC Successful partnerships enabled Turkey’s first greenfield project bond (Elaziğ’s Project) issuance of a 20-year, €288 million euro-denominated bond to finance the PPP.  The European Bank for Reconstruction and Development (EBRD) and the World Bank’s Multilateral Investment Guarantee Agency (MIGA) have developed an innovative risk mitigation scheme:  EBRD provided €89 million to mitigate the risks of construction and operation.  MIGA provided political risk insurance for the bond as well as for the project’s equity investment.  This involvement bumped up the Moody rating to Baa2, two notches above Turkey’s rating.  Also the International Finance Corporation (IFC) invested on a parallel basis in an unenhanced tranche of the bond.  As a result, the credit enhancement mechanism enabled the participation of a larger pool of investors and mobilized new sources of funding.  The 28-year concession was awarded to a consortium to design, build, finance, equip and maintain the integrated hospital campus. 37
  • 38.
    LESSONS ON THELEASE MODEL & CREDIT ENHANCEMENTS  Government support is a precondition for success ; PPPs provide funding and expertise. Private sector participation in healthcare projects brings money and experience to the table, and enabling investments that government cannot afford by itself.  A robust contractual framework with a well-defined revenue payment mechanism, risk allocation and a favorable termination regime is fundamental to attract new classes of private investors.  Rating agencies recognize the EBRD-MIGA risk mitigation product and the multilateral involvement specifically; the MIGA PRI policy covers currency transfer, expropriation and breach of contract while EBRD standby facilities provide liquidity in construction and operations mitigating risk of protracted arbitration.  This approach can be replicated. Credit enhancement may be rolled out across many markets and sectors for PPPs (both for Greenfield financing and brownfield refinancing) helping to crowd in private investment. 38
  • 39.
    PPP MODELS USEDIN HEALTHCARE 39
  • 40.
    PPPS IN THEHEALTHCARE SECTOR 40 PPP model Common term Definition / Explanation Health services only (can be selective) (Private management of a public hospital) Operating contract, performance-based contract, lease, outsourcing. A private operator is brought in to operate and deliver publicly funded health services in a publicly owned facility. Facility Finance (accommodation and medical equipment), can include refurbishment Design, build, finance, operate(DBFO), build, own, operate, transfer (BOOT), Build Lease Transfer ( BLT). A public agency contracts a private operator to design, build, finance, and operate a hospital facility. Health services within the facility are (mostly) provided by government. Combined (accommodation, equipment and health Services) Twin accommodation/ clinical services joint venture/ Franchising, or full DBFO, BOOT concessions A private operator builds a facility and provides free (or subsidized) healthcare services to a defined population.
  • 41.
    OUTSOURCING CLINICAL &NON-CLINICAL SERVICES Non-clinical services IT equipment & services, maintenance, food, laundry, cleaning, buildings & equipment, management. 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. 41
  • 42.
    PPPS IN THEHEALTHCARE SECTOR 42 PPP Type Political Will GOV. Capital Investment Gov. Operational Requirements Problems and Challenges Service Contract Low High Low Local government unit (LGU) must be able to administer multiple contracts simultaneously. LGU must have strong contract policing powers and political will. Management Contract Moderate Moderate Moderate Private sector partners usually encounter problems with LGU budgetary process, staff hiring and firing. Lease To Private Contract Moderate Moderate High Issues of low maintenance of infrastructures and equipment’s Concessions (Including Lease to Government) High Low High LGU must be powerful enough in ensuring reasonable fees and quality outcomes. Issues of inefficiencies and low innovations
  • 43.
    VARIOUS PPP MODALITIES PPPType Recommended Years of Partnership O & M Outcomes Responsibility Risk Assumed by GLU Competitive Pressure Service Contract Annual Government Low High Management Contract 3 – 5 Years Government Low to Moderate High During Bids Lease To Private Contract 3 – 5 Years Private Moderate High During Bids Concessions (Including Lease to Government) 10 – 25 Years Private High Moderate to Low During Bids 43
  • 44.
    TYPICAL PPP PRIVATEPARTNER COMPENSATION  Government provides financial support to mitigate demand risk,  OR ensure full cost recovery is compatible with affordability criteria & the public’s ability to pay.  Contribution, Investments, Guarantees & Subsides are common.  Provides strong incentives for the private sector to complete the projects in time & within budget  Thus allows government & public authorities to spread the cost of public infrastructure over several decades.  Thus more budget certainty for govt., while liberating scarce public resources for other social priorities User Based Payments Availability (Lease) Payment 44
  • 45.
    MORE ON PRIVATEPARTNER COMPENSATION IN HEALTHCARE  Payment by Clinical Activity Lines  Variable payment according to effective clinical production  Availability payment component related with special and specific clinical units  Pharmaceutical’s savings sharing  Performance Failures Deduction  No Availability-No Payment  Annual Service Payment  Fixed Component: annual, not subject to revision  Variable Component: annual according to treated patients  Performance Failures Deduction User Based - Inpatient Outpatient Payment Availability (Lease) Payment 45
  • 46.
    PRIVATE SECTOR TYPICALREVENUES IN A PPP 46
  • 47.
    PPP LEASE PAYMENTS Availability Payments (Lease Payments)  Availability payments account for around 90% of EBITDA  Collected independent of hospital occupancy rates.  Guaranteed by MoH, Adjusted quarterly by Inflation and Devaluation  Service Payments  Non-Volume services ( extraordinary Maintenance, Utilities, Furniture, Landscape, Pest Control, Car parking, Cleaning, Security, Administrative – Help Desk, reception, guiding, etc.) independent of volume, occupancy, consumption  Volume Medical Services (Lenin, Catering, Waste Management), minimum amount guaranteed by MoH.  Volume Non-Medical Services (Laboratories, sterilization, imaging and disinfection, rehabilitation), minimum amount guaranteed by MoH.  For services rendered for an occupancy rate above such threshold the MoH will pay a discounted unit price  Commercial Revenues (Retail , Advertisement Space)  Accounting for near 2% of total turnover, 3rd Party risk 47
  • 48.
    INTERNATIONAL PPP SCOPE& PAYMENT MODELS FOR PUBLIC HOSPITALS United Kingdom Availably Payment Basically, Infrastructure Services and Hard & Soft FM Valência (Spain) Payment by a per capita fee Integrated Delivery of Primary and Acute Hospital Care for a population area Portugal Availably Payment Payment by Clinical Episodes (“Case Mix”) Hospital Management, Infrastructure and Clinical Services Victoria (Australia) Payment by Clinical Episodes (“Case Mix”) Hospital Management, Infrastructure and Clinical Services 48
  • 49.
    RISK Lease ModelRISK ALLOCATION & MITIGANTS Land Issue All risks arising out of the land will be under the responsibility of the Administration. The third parties' allegations related to the land shall be settled by the Administration. Permits/ Planning The Administration is responsible for planning and zoning. The construction permit shall be flowed down to the EPC Contractor. Delay Risk In case of a delay at the completion of the Project, the Project Co will have to submit bonds for delay-liquidated damages for each phase. The bond requirement for delay liquidated damages shall be flowed down to the EPC Contractor. Environmental Environmental and social impact assessment report in line with the IFC's guidelines. The EPC Contractor and O&M Company shall follow this report. Guaranteed Payments Administration guarantees for Availability Payments and Services Payments and the minimum quantity for the volume based services. Change in Law The Project Co shall be entitled to claim a variation in case of change in law. Unavailability of Insurance In case of any unavailability of a particular special hazard insurance, the Project Co shall be exempted from its insurance obligation until such insurance will be available again in the insurance market. Expropriation and Nationalization Expropriation and project nationalization issues addressed in the Project Agreement will be an Administration event of default. Assignment The Project Co shall be entitled to assign the payments and insurance proceeds to the lenders. 49
  • 50.
    HOSPITAL PPP’S: TYPICALASSUMPTIONS Item Cost / Expense Revenue Distribution Capex Assumptions: Gross area per bed (m2) 170 Constructions costs/m2 2000 USD Construction/Equipment Cost Ratio 1.4 Annual Maintenance Capex: 10% Building (as % of original cost) 2.5% Equipment (as % of original cost) 15% Operating Assumptions: Operating cost/bed/year($) 140,000 USD 57% Financing Assumptions Debt/Equity Ratio 70/ 30 Target Equity IRR 16% 16% Debt Service 17% 50
  • 51.
    PPP BANKABILITY ISSUES(ONLY IN LERASE / AVAILABILITY MODEL)  Granting Lenders STEP-IN RIGHTS  Senior Debt payable by MoH / Government on Project termination by Government / SPV  Providing Lenders with “Sovereign Guarantee” or Lenders signing Direct Agreements with the MoH Government 51
  • 52.
  • 53.
    Rise in non- communicable diseases Shiftsin provision of care Increasing costs and expectations COMMON HEALTHCARE CHALLENGES & CONSTRAINTS Lack of infrastructure Shortage of trained staff Limited resources 53
  • 54.
    TYPICAL PPP NATIONALHEALTH STRATEGY (NHS) Managing Change Competition & Sector Regulation Increasing competition between providers Increase patients’ choice Creation of a Health Regulator 3 PPP’s Schemes Proper Legal Framework Partnerships. Health PPP Programs with emphasis on hospital renewal and modernization 1 Hospital Corporatization Transforming public hospitals into private/public owned corporations / IPO’s Introducing a new hospital finance system Improving efficiency and quality of hospital operations 2 54
  • 55.
    CURRENT FOCUS OFPPP IN HEALTH  To utilize untapped resources and strengths of the private sector (exchange skills and expertise between the public and private sector).  To enhance the capacity to meet growing health needs  To reduce financial burden of government expenditure on tertiary care  To reduce geographical disparity in provision of services and its access (reaching remote areas; target specific group of populations).  To improve efficiency through evolving new management structures  To improve quality, accessibility, availability, acceptability and efficiency  To strengthening existing health system / widen the range of services and number of services providers. 55
  • 56.
    PPP’S IN HEALTHCARE BASICCONCEPTS AND TENDER DESIGN PRINCIPLES Public-Private Partnerships Long term association with a private operator or a social entity within the context of the NHS Partnership duration related with assets life cycle (maximum duration 30 years) Emphasis on Output Specification and Performance Levels Risk Transfer to Private Operator, accordingly to the party best able to manage them Competitive Procurement based on Standardize Documentation PPP schemes and contracts subject to economic / financial appraisal (Affordability and Value for Money) 56
  • 57.
    LESSONS LEARNED Is therea recipe for success?57
  • 58.
    PPP’S ARE COMPLEX! Focus Hospitals PrimaryCare Centres Continuing Care Centres Functional Hospitals Units Diagnostic & Treatment Services Activities Design Construction Financing Maintenance Hard and Soft FM Services Management Clinical Services Payment Mechanisms Single Payment Mechanism Service Availability Per Capita Rates DRG´s & Casemix Global Package Combined Payment Mechanism Scope Single Projects By Health Facility By Area/Residential Population “Clusters” Vertical Integration Horizontal Integration PPP 58Access for the poor and affordability need to be considered at the PPP design stage and tracked to ensure achieving equitable and efficient healthcare services whereas the poor actually benefit from PPPs.
  • 59.
    CORE PRINCIPLES OFPARTNERSHIP True partnerships entails  Relative Equality between partners  Mutual Commitment to Public Health objectives  Benefits for the Stakeholders  Autonomy for each partner  Shared decision-making and accountability  Equitable Returns / Outcomes SOMETIMES;  Policy makers enthusiastic at the onset  THEN; Half hearted support for PPP  LASTLY: Lack of Trust on both sides 59
  • 60.
    IMPORTANT ISSUES INHEALTH PPPS Use PPPs to expand service / improve quality Not as means to finance new buildings/equipment Define services needed (not facilities) Give operators flexibility on how to provide service Maximize private sector responsibility “Full” PPPs deliver more benefits, Integrated Approach Contract management capacity Monitoring is essential, but often overlooked Long-term fiscal space is essential PPPs part of a broader sector reform REFORM FOCUS ON Promoting competition and efficiency Availability PPP are contingent Government Liability 60
  • 61.
    CRITICAL SUCCESS FACTORSIN HEALTHCARE PPP’S  Public sector backing-reassurance to private sector.  Existence of a vibrant private sector. A catalyst can bring partners together whom can offer expertise.  Commitment of private sector decision-makers.  Road Map , Clear Ownership, Understanding Roles, Responsibilities, Expectations.  Defining Quality or Performance or Outcome indicators.  Timely revisions / updating of contract.  Defining & verifying beneficiaries especially high cost services.(WHO PAYS)  Clarity on user fees.(HOW MUCH) 61
  • 62.
    LESSONS LEARNED  Designto meet policy objectives  Political commitment  Planning and piloting  Enabling legislation  Transparency  Advantages of PPP efficiency can be achieved through:  Life-cycle approach  Right distribution of tasks and risks  Improved incentives  For many administrative bodies this can entail:  New way of thinking – output instead of input  Tasks of greater complexity  More responsibility  HOWEVER: Challenges REMAIN;  Cost Containment  Capacity of Private Partner  Accreditation  Regulation by the Government  Compulsory Insurance Coverage NEED 62
  • 63.
    INGREDIENTS FOR ASUCCESSFUL PPP IN HEALTHCARE Public sector capacity Fiscal affordability Legislative and regulatory environment Fit with wider health strategy Appropriate risk sharing Private sector capacity Strong political will Focus on services delivery, not facilities 63
  • 64.
    RECIPE FOR FAILURE? Changing environment impactskey parameters ? Long term fiscal affordability in question Limited monitoring capacity PPP isolated from wider health system 64
  • 65.
    PPP AND HEALTHCARE IN GCC 65
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    HEALTHCARE PPP FINANCE CHALLENGESIN GCC COUNTRIES  The high rates of non-communicable diseases in most GCC countries are having increasingly effects on the health system.  Specialty Areas in GCC with significant capacity gaps ; intensive and critical care, emergency care, neonatology, oncology, pediatrics, orthopedics, rehabilitation and psychiatry.  Large expatriate populations which leads GCC countries to use different strategies to control expatriate healthcare expenditure; People are spending more and more out of their own pockets to receive healthcare services.  Perceived Private Hospitals “Over” billing & “ Over” testing. Blended with NEW “ Patients Experience” MARKEING TOOLS (making patients pay more for a HOSPITAL BRAND)!  ONLY UAE & Saudi Arabia have fully implemented a Compulsory Employment-based Health Insurance.  Minimal integration between healthcare system players prohibiting effective care coordination, healthcare prevention and causing service inefficiencies and clinical variations. 67
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