Promoting Private Sector Engagement in Health in Mongolia

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    Promoting Private SectorEngagement in Health

    Mongolia

    Eglantine Germain

    Intern for EASS Health Sector

    Supervisors:

    Claude Bodart

    Altantuya Jigjidsuren

    28th November 2013

    The views expressed in this paper are the views of the author and do not necessarily reflect the views or policies of the Asian Development Bank

    (ADB), or its Board of Governors, or the governments they represent. ADB does not guarantee the accuracy of the data included in this paper and

    accepts no responsibility for any consequence of their use. The countries listed in this paper do not imply any view on ADB's part as to sovereignty

    or independent status or necessarily conform to ADB's terminology.

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    1. OBJECTIVES : UNDERSTANDING THE PRIVATE HOSPITAL SECTOR 

    PRIVATE HOSPITALS’ ROLE  – INSTITUTIONAL, LEGAL & BUSINESS ENVIRONMENT  – PPPS 

    Private

    Public

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    STUDY DEFINITION:1. Owned by a profit company or non-profit organization2. Privately funded by out-of-pocket payments, & government health

    insurance3. Provide out & in patient care

    2. A PRIVATE HOSPITAL OVERVIEW: UNREGULATED  AND GROWING 

    36% 16% 15%

    851 PRIVATE CLINICS IN UB

    ~100 PRIVATE HOSPITALS IN UB 

    NO DEFINITION OF PRIVATE HOSPITALS IN THE HEALTH LAW 

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    Problems:

    -Concentration of private hospitals beds-Erratic variations

    Reasons:

    - Legal and regulatory loop holes

    6Promoting Private Sector Engagement in Health Mongolia

    Facility 2004  2005  2006  2007  2008  2009  2010  2011  2012 

    1  Private hospitals  143  160  168  159  159  160  166  171  179 

    growth rate  -  12%  5%  -5%  0%  1%  4%  3%  5% 

    2  Private clinics  434  523  612  698  904  922  947  1013  851 

    growth rate  21%  17%  14%  30%  2%  3%  7%  -16% 

    Table: Number of private clinics, hospitals and patients in Mongolia, 2004-2012

    Source: Health development centre, 2012

    2. A PRIVATE HOSPITAL OVERVIEW: UNREGULATED AND GROWING 

    District   No. of private beds/10 000

     population 

     No. of public

     beds/10000

     population 

     No. of total

     beds/ 10000

     population Chingeltei  1.3  22.7  24 Songinokhairkhan  27.3  10.6  37.9  Nalaikh  4.6  42.9  47.7 Baganuur   3.7  50.2  53.9 Khan Uul  32  26.6  56.6 Bayanzurkh 19.7  76.7  95.4 Sukhbaatar   30.2  88.7  118.9 Bayangol  65.4  92.0  157.4 

    1] Statistics Department of UB, 2011 – population / district[2] Ministry of Health, 2011 – number of private beds/ district

    Table. Public and Private Hospital Bed Density per District, 2012

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    7Promoting Private Sector Engagement in HealthMon olia

    Entities that license private hospitals

    Entities that accredit private hospitals 

    3. THE INSTITUTIONAL FRAMEWORK : KEEN & UNSETTLED 

    Figure: Health system’s organizational hierarchy 

    Source: Developed from MOH website 

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     Area Public PrivateDefinition of role Health Law 2011 No definition

    Licensing Standards Six standards for the publichospitals

    No standards

    Training HR 2 programs No trainings

    Importing Equipment Government provides Technology is very difficult toimport & high import taxes

    Tax No taxes No tax privileges

    Financing Composition of all the publichospitals’ income:76% State budget20.9% HIF3% Other revenue

    Composition of all the privatehospitals’ income:0% State budget7.9% HIF92.1% OOP

    HIF rates are much higher half the amount reimbursed to

    government hospitals.

    MOH approved user chargedservices

    No regulations to set ceilings orlimit OOP.

    OOP : Out of Pocket Payments

    4. THE LEGAL AND BUSINESS ENVIRONMENT 

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    Table: Discrepancies between public and private regulations and business environment

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    Complaints

    Problems

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    5. PUBLIC PRIVATE PARTNERSHIPS Graph IX.1: Problems faced by public and private providers and the problems in public health.

    “ institutional relationships between the state and the private for-profit and/or the

     private not for-profit sector, where the different public and private actors jointly participatein defining the objectives, the methods and the implementation of an agreement of

    cooperation” . 

    Private hospital

    Unregulated growth

    Disparity of quality ofservices offered

    Inaccessible to the poor

    Lack of financial assistance

    Lack government support

    Unfair competition

    Public hospital

    Over burdened facilities

    Under equipped and staffed

    Inefficiency

    insufficient funds

    Line-item budget restrictions

     No autonomy

    PPP- Long Term Risk Sharing

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    5. PUBLIC PRIVATE PARTNERSHIPS: TYPE 

    Infrastructural

    PPP 

    Integrated

    PPPs 

    Facility based

    hospital PPP 

    Lease contract 

    Servicesprovided by

    private sector 

    Infrastructure +non clinical

    services 

    Infrastructure +clinical and non

    clinical services 

    Diagnostic +clinical services 

    Diagnostic

    Type of

    contracts

    DBFM  DBFO  BOT or BOO or

    franchises 

    BLT 

    Initial situation   No hospital   No hospital  In pre-existing

     public hospital 

    Out of the

     public hospital 

    Best countries  Developed Developing Developing Developing

    Examples Canada, UK,Australia 

    Lesotho andBrazil 

    India  India 

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    11Promoting Private Sector Engagement in Health Mongolia

    National PPPlegal

    framework

    State Policy onPPP

    2009

    Concession Law2010

    amended in2012

    PPP potential projects:

    •Center for burnt victims•Research center•Hemodialysis centers•General tertiary hospital

    Tripartite PPP

    Medical waste management:

    •US$240,000 investments•792 hospitals

    5. PUBLIC PRIVATE PARTNERSHIPS : LAWS 

    Health specificPPP legal

    framework

    GovernmentResolution #198

    2010

    Health PPPpolicy

    2011

    MinisterialOrder

    #305/320, 2011

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    6. PRIVATE HOSPITAL QUALITATIVE ANALYSIS 

    Selection:15 hospitals in UB

    3 hospitals in Khovd and Arkhangai

    4 clinics

    Criteria:Good reputation

    More than 50 beds or a special license from MOH

    Accreditation and receives Health insurance fund

    Opened less than 14

    years

    Opened for more than

    14yrs

    Number of hospitals 

    8 7 

    Average number of inpatients  4208 3625 

    Average number of outpatients  24 375 13 429 

    Average number of beds  108  90 

    Average price of a room for 1 person  For one person 51 000  27 000 

    Most popular specialties offered  Internal medicine,

    general surgery and

    obstetrics 

    Internal, emergency,

    neurology and traditional 

    Number of hospitals with CT and MRI  3 CT and 1 MRI  2 CT 

    Number of hospitals with Laboratories  5  5 

    Number of hospitals that own theirbuilding 

    7  6 

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    6. PRIVATE HOSPITAL QUALITATIVE ANALYSIS 

    Business climate & Government relations

     Number of private hospitals thathave borrowed

    86%

    Willingness to pay increased

    50%

    Lack of income & competent staff

    80%

    Offer & demand of health services

    increased

    100%

    Agreed to work withgovernment

    86%

    Bad relations with government

    60%

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    7. R ECOMMENDATIONS 

    GENERAL ORGANIZATIONAL RECOMMENDATIONS 

    • Build institutionalmemory 

    • Data collection andtransmission

    • Reassessment of tasksand workload

    • Plan the Health Market – Certificate of Need

    GOAL 1 :ESTABLISH LEGAL ENVIRONMENT FOR FREE MARKET CONDITIONS 

    • Defining the private

    sector  

    • Drafting licensingstandards

    • Insitu accreditation andcommunication

    GOAL 2: INCREASE EFFICIENT INVESTMENT IN HEALTH 

    • Fairer financing of

    private facilities: HIF +credit loans

    • Increasing HIFefficiency: software,HR, tariffs

    GOAL 3: ESTABLISH A LONG TERM RELATIONSHIP WITH PRIVATE SECTOR 

    • Organize seminarsincluding private andpublic sector

    • Jointly define potentialprojects & discuss withprivate companies

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    7. R ECOMMENDATIONS: PUBLIC PRIVATE PARTNERSHIPS 

    Primary health care franchises- Facility based PPP-- South Africa

    - Cambodia

    Improving technology- Facility based PPP or Lease contracts-- Radiology in Andhra Pradesh

    - Hemodyalisis in Andhra Pradesh

    A general or specialized tertiary hospital - Integrated PPP- Mamohato Memorial Hospital Lesotho

    - Hospital do Suborbio Brazil

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    Thank you

    16

    1031 private

    health facilities

    in UB

    Erratic growth

     patterns

    POORLY

    REGULATED

    Business

    Opportunities

    Political

    Will

    BETTER

    MEDICALCARE

    Establish Legal

    Environment for free

    market conditions

    Increase efficient

    investment in Health

    Establish a long term

    relationship with private sector

    +

    +

    =

    =

    3 THINGS TO R EMEMBER  FROM THIS PRESENTATION 

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    THANK YOU

    QUESTIONS?

    ANNEXES

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    ANNEXESname  institution  domain of interest 

    1  Ms. B Purevdav  MOH - Department of Policy Implementation andCoordination- Division of diagnostic, treatment technology   private hospital standards 

    2  Ms. Oyuntsegtseg G. MOH Department of Public Administration and Management

    - Division of health care organization, management and

    development accreditation 

    3  Ms. N. Gerelmaa  MOH-Policy planning department  HIF regulation

    4  Ms. Ts Tsolomongerel  MOH- Policy and planning department  Health PPP policy; new Health insurance law;

    5  Mr. B. Batarsukh  MOH-Policy planning department  Public Private Partnership 

    6  Ms. B. Soninkhu  MOH-Policy planning department  Public Private Partnership 

    7 Ms. G. Lkhomsuren  UB city Health Department Statistics on private hospitals and licensing

     procedures 

    8 Ms. Kh Zendmaa  UB city Health Department  Statistics on private hospitals 

    9 Mr. B. Bayarbold  GASI- Health, Education, Culture and Science Department in charge of hospital inspections for quality of

    medical care, epidemiology and pharmacology 

    10  Mr A. Bold  Fourth Health Sector Development Project Health service planning and private sector role in

    service provision 

    11  Ms Davaajargal  Health Development Center   Private hospital statistics 

    12  Ms. Aruntuya  Health Development Center   Private hospital statistics 

    13  Dr. Tumurtogoo  GIZ  Citizen Health Insurance Law specifications 

    14  Ms. T. Gantuya  SIGO- Health insurance fund Division Statistics of HIF reimbursement to private

    hospitals 

    15  Ms. G. Byambsuren  United Association of Private Sectors Health Organization  Understanding private hospitals’ perspective 

    ANNEXESName of the

    beds according to beds according to beds according to

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    ANNEXES№  Name of the

    Hospital  beds according to

    MOH  beds according to

    HDC  beds according to

    UBHD 

    1  Avitsena  -  -  43 

    2  Аchetan Elite  -  286  100 

    3  Bayangol  40  40 

    4 Bayanzurkh

    District Hospital -  250  310 

    5  Bolor Melmii  28 

    6  Gurun Gal  -  100  - 7  Mamba Datsan  14 

    8  Mangut  158  140  140 

    9  Mong-Em  - - 22 10   Nomin  65  -  115 

    11  Tani Tulu bid  70  50  50 12  Songdo  - 60  - 13  Elec  - - 7 14  EMJJ  -  - 35 15  Enk Undra  75  - 45 

    ANNEXESCharacteristics

    Indicators Private hospitals Private

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    ANNEXESCharacteristics  Indicators  Private hospitalsin UB 

    Private

    clinics in

    UB 

    Initial investment of the

     private facilities Personal investment  8  2 

    Commercial loans  4  0 

    Multiple owner's

    contribution 4  0 

    Father company  2  1 

    Foreign investment  1  0 Loan from commercial

    institutions Yes  13  0 

     No  2  3 

    Purpose of the Loan  Investment  13  0 

    Equipments  5  0 Own building  3  0 

    Expansion  2  0 

    ANNEXESCharacteristics

    Indicators Private hospitals in Private clinics

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    ANNEXESCharacteristics  Indicators  Private hospitals inUB 

    Private clinics

    in UB Intentions for the hospital for the

    next 2 years Investing in innovative equipment  4  2 

    Having big surgery department  4  0 

    Expansion of the hospital  3  0 Investing in human resource  2  0 

    Making hospital more comfortableand luxurious 

    2  0 

    Expanding specialization/service  1  2 

    Building 2 subsidiaries: pediatrics

    centre and adult centre 1  0 

    Building a sanatorium  1  0 

    Collaborating with foreign highquality and more experienced

    hospital, exchanging experience. 

    1  0 

    Plan of the investment  Equipment  7  2 Both infrastructure and equipment  4  1 

    Infrastructure  3  0 Training of doctors  2  0 Human resource  1  0 

    Redoing or rethinking investment

    in aspects of the hospital

    The building  4  0 The clientele  4  0 The size  3  1 The location  1  1 The specialties  1  1