PPP Models in India

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PPP Indian Health SectorCurrent Status ,
Sustainability viability

• DR DEEPAK YADUVANSHI
• Head Chief Consultant
• Department of Respiratory Critical Care Medicine
• Manipal Hospital
• Jaipur

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• Introduction
• Over view of Indian Health sector
• Background need
• PPP Models ( WB / IMF)
• Current Indian PPP models
• Way forward
• New PPP Inovations

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Overview India
India The Emerging Market
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India Will Be The 3rd Largest Economy
Top 10 Economies by 2050, GDP, USD Trillion
China
US
India
Japan
Brazil
Russia
UK
Ger-many
France
Italy
Source Goldman Sachs Dreaming with BRICs the
Path to 2050, October 2003
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Other side !
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Dr Man Mohan Singh

• As a nation, we should be doing more in both
  health and education.
• total expenditure on health, public and private
  does not compare favorably with South East Asian
• countries and the mix is excessively in favor of
  private spending.
• Indias Economic agenda, Mckinsey 2005 special
  edition, Fulfilling Indias Promise

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Disease Burden Lancet Report 2011..
d..1200 Million

• 40 MM asthmatics
• 34 MM diabetics
• 30 MM hypothyroid patients
• 5-8 MM people HIV
• 8 MM epileptics
• 3 MM cancer patients
• gt 2 MM cardiac related deaths/ yr
• 1.5 MM patients of Alzheimers
• 150 MM hypertensives

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Overview Healthcare Infrastructure NHFW
Healthcare System
Infrastructure
Heath Indicators

• Primarily self paid system
• Under evolved health insurance sector (state
  private) ? 4 population
• Private health insurance is expected to grow in
  future
• 82 hospital beds in urban areas

• 503,900 Practicing doctors
• 737,000 Practicing nurses
• 15, 000 Hospitals/Institutions
• 550,000 Pharmacies
• 870,000 Hospital beds
• 162 Medical colleges
• 163,000 Primary healthcenters
• Specialists are mostly concentrated in urban
  towns and General Practitioners dominate rural
  areas

• Lifestyle changes leading to increasing incidence
  of chronic diseases
• Healthcare expenditure 0.6 of GDP by Govt.
• Life expectancy 65 yrs

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Healthcare infrastructure is poor
Per 000 population 2001 estimates Per 000 population 2001 estimates Per 000 population 2001 estimates
Beds Physicians Nurses
India 1.5 0.5 0.9
Middle income countries 4.3 1.8 1.9
High income countries 7.4 1.8 7.5
World Average 3.3 1.5 3.3
Source Healthcare in India The Road Ahead
Mckinsey CII report
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Huge Unmet Demand

• Demand expected to outstrip supply over the next
  decade
• Beds in excess of 1 million need to be added to
  reach a ratio of 1.98 per thousand (world average
  is 3.3)
• Investment of US 88 billion. 74 from Pvt. 
• WHO. Recommends India to add 80,000 hospital
  beds a year for the next 5 years to meet the
  demands of healthcare sector

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HealthCare World wide (Why PPP)
Government Burden It Includes (1)Rising service
Demand( More elderly Population, More Awareness
for Quality Services) (2) Rising Costs(Medical
technology, Changing disease Pattern)

• Health Care spending (9 of Global GDP Rising
  )

• Possible Solutions( Public Private Partnership)-
• (1) Private Finances
• (2) Improved Efficiencies
• (3) Improved Health Outcomes

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What PPP
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What is PPP!
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Definitions..
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Classifying PPP in Health Care
One time/short partnership Donation of land, money, equipments etc Participation in campaigns
Continuous long term partnership Social franchising of service Contracting in and out Social marketing Capacity building
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Classifying PPP in Health Care
Service oriented Social marketing Social franchising Contracting health care providers Mobile vans
Information/advocacy oriented Contracting out IEC activities to NGOs Category campaign with private partners
Infrastructure oriented Construction of buildings Repair of buildings Donation of equipments Vehicles etc
Capacity Building Training for skill enhancement and counseling Sponsoring conferences for management capacity
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PPP Health initiatives
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Accessible , Affordable ,Accountable
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News Views
Press Conference 2nd Dec. 2012
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PPP Scope Interface(Source Malcolm
PautzPPPs-Rules Flexibilities)
Clinical (Public ) Non Clinical ( Private ) Infrastructure ( Private )
Clinical services Operations Management Laboratory Pharmacy Medical equipment Information Technology support Services Catering Facility Management Building construction
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Viability gap funding
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Strong tail winds
Healthcare expenditure to go up from 5.5 to 8
of GDP by 2016
Source Indian Minister of Health CII
McKinsey Report
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Summary

• Huge unmet and unfilled needs for HEALTH
  potential for growth far into the future
• Indian Health insurance is in infancy (2001)
• Requires refinement and consolidation in health
  sector
• Competing in the future will require focus on
  honest processes
• Funding initiatives/innovation will play a role
• Opportunity/competitive advantage exists in
  related areas like Healthcare BPO, diagnostics
  outsourcing
• Establish and formulate India specific PPP Models
  
• Opportunity to Innovate and Implementation.

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PPP Glossary.(1).
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Cont.
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Private Partner Compensation(SourceDeloitte)
User Based Payments (eg Toll Roads, health , Airport Charges )
Government needs to provide financial support to the project to mitigate specific risks such as demand risk,or to ensure full cost recovery is compatible with affordability criteria the publics ability to pay. Contribution, Investments, Guarantees Subsides.
Availibility Payment (eg PFI, PPAs, WPAs)
These are the heart of Private Finance Initiative Model. PFI Model provides capital assets for provision of public services. Provides strong incentives for the private sector to complete the projects in time within budget Thus allows government public authorities to spread rthe cost of public infrastructure over several decades. Thus more budget ceratinity for govt., while liberating scarce public resources for other social priorities
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Government Support Mechanisms ( source
Deloitte))
The aim is to provide financial support or reduce financial risk of a project in many ways
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 Payment Guarantee Govt. agrees to fulfill the obligations of purchase with respect to a pvt. Entity in case of non performance by the purchaser
(C) Debt Guarantee Govt. secure a pvt.entitys borrowings by guaranteeing repayment to creditors in case of default (D) Revenue Guarantee Govt. sets a minimum variable income for pvt. partner typically his income is from customer user fees .This form of guarantee is most common in roads with minimum traffic or revenue set by govt.
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