Public Private Partnership in Health Service

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Public Private Partnership in Health Service
Delivery Experiences Lessons

• A.Venkat Raman
• Faculty of Management Studies
• University of Delhi

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WHY PARTNER WITH THE PRIVATE SECTOR?
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Omnipresence of the Private Sector

• 93 of all hospitals
• 64 of all beds
• 80 doctors
• 80 of OP and
• 57 of IP .are in the Pvt. Sector
• (World Bank 2001)
• Estimated at Rs. 1,56,000 Cr. in 2012 Rs.
  39,000Cr.. for health insurance (NCMH 2005)

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Share of Pvt. Sector- Non- Hospitalized care
(60th NSS-2004)
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Share of Pvt. Sector- Hospitalized care (60th
NSS-2004)
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Share of Private Sector in Rural Areas
(NCMH,2005)
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Relative expenditure in the private sector - in
Rural Areas (NCMH,2005)
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Who Pays for the Services?Percentage of Private
Expenditure (NHA-2004-05)
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Implications

• gt80 of health expenditure is out-of-pocket.
  (NSS 2005 NHA,2004-05)
• Debilitating Effects on the poor Liquidation of
  assets, indebtedness. 40 of hospitalized 2 in
  the country every year end up BPL
• (World Bank, 2001).
• Compounded by poor regulation of private sector

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Private sector is needed because....

• India needs an additional
• 750,000 beds
• 520,000 doctors
• overall investment of Rs 1,50,000Cr.
• 80 likely to come from the private sector
  (NMCH,2005)

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PPP MODELS TYPES
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• Not all interactions between the Government and
  Private sector are PPPs

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Financing vs DeliveryPublic vs Private modes
(Bloom, 2001)
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Common PPP Models

• Contracting (in and out)
• Joint Ventures
• Build/ Rehabilitate, Operate, Transfer
• Health Financing (Vouchers, CBHI, Illness fund)
• Mobile Health Units
• Franchising
• Social Marketing
• Technology demos (e.g. Telemedicine)
• Public-Private Mix

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Core Principles of Partnership

• True partnerships entail
• 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

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PPP Models in Practice
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OTHER MODELS IN OPERATION
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EMERGING MODELS

• Regional Diagnostic Centres- Hub/Spoke
• Medicity
• Co-location of Specialty services
• District Hospital Medical College (Hub)
• Franchised /Accredited Health Units
• RBF Incentive Contracts

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Key Lessons Challenges in PPP Indian
Experience
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Political and Administrative Commitment

• Half hearted support for PPP
• Top officials are enthusiastic, but success takes
  them away- leadership vacuum
• Lower level officials suspect PPP as
  privatization or show disdain towards the
  private provider

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Institutional Capacity

• Need for technical / managerial skills for
  designing, negotiating, implementing and
  monitoring PPP contracts
• Develop institutional capacity at all levels,
  including oversight role.

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Policy and Institutional Framework

• Lack of policy driven strategy towards PPP in
  health sector. Need for a PPP policy.
• Lack of information on Private sector thus poor
  regulatory leverage.
• No institutional structures to manage PPP
  contracts. Need for specialized PPP cell in
  Health Dept.

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Social Context of PPP

• Antipathy or suspicion towards the private sector
  and govts failure to regulate -raise suspicion.
• Unwillingness of civil society organisations to
  explore PPP as an option.
• Squeamishness about profit making in services
  meant for poor patients

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Diversity and Complexity of Private Sector

• Private sector is diverse Predominantly
  individuals (owner operated units) and from both
  recognized and unrecognized systems of medicine
• Diversity of tariffs, thus complicating
  information on cost vs tariff and tariff
  negotiations

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Process of Contracting Partner selection

• Primarily input based contracting rather than
  outcome based.
• (Only) competitively selected partners are less
  effective.
• Priorities of
• Govt. Officials Compulsion of L1 Completing
  procedural formalities.
• Private Sector Winning the bid by all means

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Risk

• Financial risk to the private partner- Non-timely
  release of funds Fear of enquiry.
• Risk of unsuccessful/ failed contract leading to
  lack of services patinets suffer, resources
  wasted.

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Enabling conditions for success

• Successful partnerships are contextual. Enabling
  conditions include
• leadership from both partners
• prior consultation
• relational / trust based contracting
• pilot testing,
• timely payment
• periodic review and amendments / revision of
  contract
• specific performance indicators..

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Key Constraints

• Payment delays
• Personality styles and trust level
• Local political interference / political
  flip-flaps
• Non-revision of contract clauses (Tariffs)
• Lack of capacity or willingness to supervise /
  monitor / guide the project
• Perceptual and attitudinal orientation to private
  sector
• Lack of clarity of the objective of PPP

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Limitations in Contract Features

• Defining and verifying beneficiaries (BPL
  patients)- especially high cost services
• Defining Quality or Performance or Outcome
  indicators
• Supervision and Monitoring mechanism
• Timely revisions / updating of contract
• Ombudsman for dispute settlement
• Clarity on user fee

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Summary

• Public-private partnership (PPP) is not
  privatization
• Government continues to play a key role
• Requires high degree of institutional capacity

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In conclusion.Public Private Partnership

• does help benefiting the poor.
• one of the pragmatic options for health
  service delivery, but not an alternative to
  public delivery or better governance.

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THANK YOU

• Ref. Book
• A.Venkat Raman J.W.Bjorkman
• Public Private Partnership in Health Care in
  India Lessons for Developing Countries.
  Routledge, London, 2009
• http//south.du.ac.in/fms/idpad/idpad.html