UNECE IFC Talking Points

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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 non-
communicable
diseases

Shift in Lack of
Shortage of
provision of infrastructure
trained staff
care

Increasing
costs and Limited
expectations resources
Types of health PPPs

Hospitals & health networks Primary care

Detailed designs, building construction or Primary care, public health, vaccinations,

refurbishment, medical equipment. maternal & child care.

Non-clinical services Clinical support services

IT equipment & services, maintenance, food, Lab analysis, diagnostic tests, medical

laundry, cleaning, buildings & equipment, equipment maintenance, and other support

management. services

Specialized clinical services


Operations management
Dialysis, radiotherapy, day surgery, other
Management of entire facility or network of
specialist services.
hospitals and/or clinics.
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
Improve
Services
 Better identification & allocation of long-term risks.

2
Mobilize  Maintain affordable tariffs.

capital  Ensure predicable budget commitments.

 Provide access to industry best practices & private-


sector expertise.

3
Increase
efficiency
The evolution of the PPP model

Infrastructure Services Integrated

Clinical and non-clinical Construction and facilities


Construction and facilities management and full range of
management services
clinical and non-clinical
At primary, secondary or services
In hospitals, primary care or
community care facilities tertiary level
At primary, secondary or
Asset-light tertiary level
Asset-heavy
Could include medical
training/health insurance or
vouchers
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 Focus on
political services
will delivery, not
Fit with Legislative facilities
wider and
health regulatory
strategy environment
Public Private
sector sector
capacity capacity

Appropriate
?
risk sharing
Be
Fiscal opp aware
ortu of
Space niti
es
Recipe for failure?

re of
e a wa es
Limited B
a l l eng
ch
monitoring
capacity
?
Long term
fiscal
affordability
in question
Changing
environment
impacts key
parameters
PPP isolated
from wider
health
system
Lessons learnt from health PPPs

Use PPPs to expand Not as means to simply finance new


buildings/equipment
service / improve quality

Define services needed Give operators flexibility on how to


provide
(not facilities)

Maximize private sector “Full” PPPs deliver more benefits


responsibility

Contract management Monitoring is essential, but often


overlooked
capacity

Long-term fiscal
affordability is essential
Promote competition and efficiency
Provider payment reforms
PPPs as part of a broader Accreditation
health sector reform 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 non-
clinical 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
Over 100,000 people with
diagnostic imaging and radiology
improved access to service
center.
First PPP in Moldova. $7 million in private investment
Awarded to Magnific a Moldovan 5% of annual revenues
health care services provider. 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)


New298-bed emergency
hospital in Periperi district of
Salvador, Bahia.

10-year concession to
equip, maintain, and operate both
clinical and non-clinical services.
400,000 people with improved
access to services
Awarded to Promedica and
$50 million in investment
Dalkia.

Brazil: Hospital do Subúrbio (2010)


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)

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