Public Private Partnership in Health

State Institute of Health & Family Welfare, Jaipur

 Public Private Partnership
 Not all interactions between the
 private and the public sector is PPP


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 ……then what is Partnership?

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 PPP ?
 Public-Private Partnerships (PPP) are
collaborative efforts, between private and
public sectors, with clearly identified
partnership structures, shared objectives,
and specified performance indicators for
delivery of a set of health services
(MOHFW,GOI)

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 PPP v/s Privatization

Attribute Privatization PPP

Responsibility Entrepreneur Govt.
Ownership Private sector Govt.
Nature of Decided by Mutual agreement
services private operator
Risk & Reward Private sector Shared between
Govt. & Private
party

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Selection of Service Provider

Ø Competitive Bidding
Ø Swiss Challenge Approach
Ø Competitive Negotiation
Ø

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 Payment Mechanism

Ø Contractual payments
Ø Grants-in-aid
Ø Right to levy user charges for the asset
created/leased-in
Ø

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Risk & Revenue Sharing

Ø Construction/implementation risk,
arising from:
ØDelay in project clearance
ØContractor default
ØEnvironmental damage


Ø Market risk, arising from:

ØInsufficient demand
ØImpractical user levies
Ø
Ø
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Ø Finance risk, arising from:
ØInflation
ØChange in interest rates
ØIncrease in taxes
ØChange in exchange rates
Ø Operation and maintenance risk, arising
from:
ØTermination of contract
ØTechnology risk
ØLabour risk
•
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Ø Legal risk, arising from:
ØChanges in law
ØChanges in title/lease rights
ØInsolvency of developer/service
provider
ØChange in security structure
•

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Potential Benefits of PPP
Ø Cost-effectiveness
Ø Higher Productivity-by linking payments
to performance
Ø Accelerated Delivery – since the
contracts generally have incentive and
penalty clauses vis-a-vis
Ø Clear Customer Focus - the shift in
focus from service inputs to outputs
Ø Enhanced Social Service
Ø Recovery of User Charges- Innovative

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 PPP Messages
Ø PPPs is about health impact not just
resource generation
Ø Start early in developing partnerships
Ø Take the time to look for opportunities for
PPPs
Ø Not all projects lend itself to
partnerships/alliances
Ø Some successful country examples exists
Ø There are tools & resources to help you to
develop PPPs
Ø
Ø SIHFW: an ISO 9001: 2008 certified institution 12
 Public-Private Equilibrium

Public Private
Sector Sector

Advantages: Advantages:

ØImprovement in Health ØMarket/Choice

is the primary and Access
objective ØEfficiency
ØEconomies of Scale ØFlexibility
ØMore Equitable

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 Public Private
Sector Sector

Things to watch:

Things to watch:


Ø Efficiency Ø Primary objective is

Ø Inflexibility/Respons- profit
iveness Ø Quality of services
Ø Customer satisfaction Ø Cost


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 Objectives

Ø Improving access to essential

services
Ø Improving the quality of services
Ø Exchange of expertise
Ø Mobilize additional resources for
activities
Ø Improve efficiency


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Ø Better Management of Health
services
Ø Increasing scope and scale of
services
Ø Increasing community ownership of
programs.
Ø Ensuring optimal utilization of govt.
investment and infrastructure


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 Basics of PPP

Ø Problem
Ø Profile of Partners
Ø Process of Building a partnership
Ø Profit – Mutual Benefit
Ø Phase – start small & build
Ø Proliferate –Grow, Expand, & Sustain
Ø Priorities & Preferred group
Ø Policing – Mechanism of Monitoring
& Transparency
Ø
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Ø Politics – Governance, Administration,
People’s audit
Ø Protection/proof: A security system
Ø Price: A cost share in terms of
money/kind
Ø Professional Network
Ø Platform
Ø Prize: Acknowledgement/recognition

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Factors Influencing PPP
Ø Clarity of Purpose
Ø Creation of value
Ø Congruency of Mission, Strategy and
Values
Ø Connection with purpose and people
Ø Communication between partners
Ø Continual learning
Ø Commitment to the partnership
Ø

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Action Principles for PPP
Ø Combined action at all stages
Ø planning,
Ø follow up and
Ø termination
Ø Complimentary roles
Ø expectation of each other are clarified
and stabilized
Ø Creation of a temporary system
Ø task force with representatives from
both sides
Ø Continuous Communication
Ø
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 How PPP Helps:

Economies of scale
Utilizing existing capacity

Create synergy

Targeting poor Better Better

Flexibility in action
Services
Resource mobilization
Health
Technical Up-gradation

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 Models of PPP
Ø Social Franchising
Ø Branded Clinics
Ø Contracting
Ø Social Marketing
Ø Build, Operate and Transfer
Ø Joint Venture Companies
Ø Voucher System
Ø Donations from individuals


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Ø Involvement of Corporate sector
Ø Partnership with Professional
Associations
Ø Capacity Building of Private
Providers
Ø Autonomous Institutions
Ø Mobile Health Vans
Ø Health Insurance
Ø Partnerships with Social Clubs and
Groups

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 STRAIGHT Approach to PPP-
Ø Identifying the Scope of partnership
Ø Identifying the appropriate Target Population
Ø Selecting the RightPartners and Model
Ø Ensuring Accountability
Ø Ensure active Involvement of the Govt.
Ø Generate Support of stakeholders through
IEC, advocacy and rapport building
Ø Highlight achievements
Ø Build Trust of all the partners and clients
Ø
Ø SIHFW: an ISO 9001: 2008 certified institution 24
 Some PPP Models in India
Conventional SMS Hospital, Jaipur Radiology & Private Company/
Contracting in Bhagajatin Hospital Drug store Individual
Kolkata Diet, Cleaning, Entrepreneurs
Laundry, security

Contracting out Karuna Trust, PHC Mgt. Charitable NGO

Karnataka CHC Mgt. Charitable NGO
Shamlaji Hospital Tertiary care hospital Private company
Gujarat
Rajiv Gandhi
Hospital, Raichur

Performance APUHS Project, RCH Services Charitable NGO

Management Adilabad, AP RCH/MH services Private clinics
Contracts Chiranjeevi Yojana, Charitable NGO
Gujarat

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Community/ Health Yeshashvini Surgical Care Private Hospitals
Insurance Scheme,Karnataka consortium

Voucher Scheme Arogya Raksha Hospitalization Private Hospitals/

Scheme, AP Maternity Care/ PSU insurance
SIFPSA, Agra UP Institutional Delivery Private Hospitals
SCOVA, Haridwar,
UK
Hospital Autonomy RKS, Bhopal / & Patient welfare Public Hospital
Other Places committee

Franchising Merri Tarang; Merri M CH / Other Franchised private

Silver; Merri Gold; curative services entrepreneurs
Life Spring-
HLFPPT/ SIFPSA’
Janani, Bihar

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 Contracting –In and Out

Legally enforceable
Contract
ØDefined Set of
healthcare services
Public ØQuantity of services Private
ØQuality of services
ØDuration of Service
Provisioning

Remuneration
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Voucher System/Demand Side Financing
Government or Donor Agency

A voucher is a


document that can Voucher Agency

be exchanged for
defined goods or

de er
ed

en er
re uch
services as a token

em

ym id
t
pa rov
of payment (tied- Vo

P
cash). Service
Providers
Voucher Distributor

V
re ouc
de he
mp r
ti
Agra Model on
Voucher Recipients

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Partnerships with Professional
Associations
Expert Pool
ØIAPSM, IPHA
ØFOGSI – Vande Matram
scheme
ØIMA – Aao Gaon Chalein

Protocols/ Quality
Assurance/ Accreditation
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Rajasthan :Success Stories in PPP-

Ø Linear Accelerator
Ø MRI and Radio-imaging in Tertiary
care Teaching Hospitals
Ø Geriatric Clinic/ Diabetic centre at
Bikaner
Ø RMRS
Ø Contracting out of support services
Ø
Ø

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Mobile Health Vans

Ø Already implemented in
inaccessible areas
Ø Comprehensive Health Services
Ø Fixed Journey Plans
Ø Public Sector contribution
Medical Officers and
Medicines
Ø Private Sector for Purchase and
Management of Vans

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 Ø These vans are useful in:
Ø Provide access to services
people living in
inaccessible terrain
Ø Make services available at
central location to reduce
travel time and costs of
clients
Under NRHM many Ø states have introduced this scheme
Rajasthan has entered into an MoU with EMRI, to this
effect Ø
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What should Investor Look into?

Ø Policy prescriptions
Ø Procedural details
Ø Possibilities
Ø Provisions at its command
Ø Presence of Public sector
Ø Purchasing power
Ø Phasing
Ø Proliferation
Ø Profits
Ø
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Ø
What Public Sector should Look into:
Key Steering Variable
Ø Preparedness
Ø Land Bank
Ø Priorities
Ø Provisions
Ø Policy
Ø Procedures
Ø Paper work
Ø Time fame
Ø
Ø 34
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Ø Policing
Ø Regulatory
Mechanism
Ø Performance
Ø Promotion
Ø Accreditation
Mechanism

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Health Care Spending in India-2004-05

• AP : 1118 • Maharashtra :1576

• Bihar : 1497 • Punjab : 1813
• Gujarat : 1187 • Rajasthan : 808
• Karnataka : 997 • Tamil Nadu : 933
• Kerala : 2952 • UP : 1152
• MP : 1200 • WB : 1188

National Commission on Macro-economics & Health, GOI, 2005

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Source of Health Spending in India

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In Fact…India is One of the Most Private
Systems of Health Care in the World
The Heartless Capitalists
Percentage

Year

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 Healthcare Financing –
Rs. Billion
1993- 1994-95 1995- 1996-97 1997-98 2000-01 2002-
94 96 03BE
Public Centre 7 11 12 13 14 23 35
State 68 72 89 99 113 156 186
Total 75 83 101 112 127 179 221
%Govt. 2.91 2.13 2.98 2.94 2.70 2.91 3.17
%GDP 0.87 0.81 0.86 0.83 0.83 0.81 0.85

Private 195 279 329 373 459 982 1200

%GDP 2.27 2.75 2.77 2.73 3.00 4.46 4.62

Source: Public Expenditures - Finance Accounts up to 2001 and Budget for

2003; Private – CSO estimates on Consumption Expenditure 1985 series; BE
= Budget Estimate

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 Health Financing in India
6% 2%

20%
I ndividuals
Government
Private
Donors

72%

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 Objective

ØImmediate Objective:
ØQuality Health Care
ØWorld Class Infrastructure
ØReasonable Cost
ØInherent Objective:
ØPromote PPP
ØUltimate Objective:
ØPromotion of Medical
Tourism


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 Procedure

Ø Simple & Transparent

ØTime Bound Disposal (90 Days)
ØRebate gradient
ØCustomized Package For-
ØCorporate Health
Bodies
ØFacilities in
Place of
Tourism
importance
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 Rebate & Concession

Ø Land Allotment:
Ø Graded Rebate (0 to 75%)
Ø Rebate linked to:
Ø Size of Investment
Ø Geographical area
Ø Hospital in Place of Tourism
importance
Ø Tax exemption:
Ø Electricity Duty (50% for 7 Yrs.)
Ø Stamp Duty (50%)
Ø Land Conversion (50%)
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 Policy’s Priority

Ø Super specially Hospital

ØMedical Colleges
ØDental Colleges
ØGeneral Hospitals
ØSupport Units

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 Thank You

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