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Public Private Partnership in Health Service Delivery
Digvijay TrivediMBA (HR), MA(Eco.) PGDCPM, PGDRD
Setting the tone…..
A quick introduction to Public-Private Partnership.mp4
Omnipresence of 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)
Share of Pvt. Sector-Non- Hospitalized care (60th NSS-2004)
0
10
20
30
40
50
60
70
80
90
100
79
95
79
32
66
77
49
84
56
82
90
8180
89
82
14
84
77
46
82
47
65
87
80
Rural Urban
Share of Pvt. Sector-Hospitalized care (60th NSS-2004)
73
86
69
22
60
42
21
71
48
57
73
21
58
64
7974
11
71
52
27
74
36
6669
35
62
Rural Urban
Implications
>80% of health expenditure is out-of-pocket (World Bank 2011)
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
14%
86%
Out of pocket expenditure in health
Government Expenditure Out of pocket expenditure
Source: www.data.worldbank.org
Private sector is needed because...
India needs an additional
7,50,000 beds5,20,000 doctors
Overall investment Rs 1,50,000 Cr.
80% likely to come from the private sector (NMCH,2005)
PPP Approach
PPP approach
•Attract private investments Goal
•Lack of Budgetary Resources•Need to improve efficiency in service delivery
Need
Private Sector contribution for: Public Sector contribution limited to:
Financial investments
Best Management practices
Efficiency in service delivery
Efficient use of capital resources
Providing institutional commitment
Project Development
Selection of Developer
Viability gap funding (VGF), if any
Putting the projects on “shelf”
ProjectPreparation
PartnershipManagement
ProjectIdentification
Viability Structuring Do-abilityProcurement
StrategyBid Process
Management
OperationsManagement
Identification/Assessment
Financing vs Delivery: Public vs Private modes
Public Provision Private Provision
Public Financing
Public Hospitals
Voucher
Contracting
Insurance
Private Financing
User Fee
Hospital AutonomyPrivate Hospitals
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
Core Principles of Partnership
True partnerships entails
• 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
Demand side Financing- Voucher Scheme
Voucher Scheme, ANC, PNC Institutional Deliveries
Primarily for poor
Demand side Financing- “चिरंजीवी, यशस्ववनी”
Chiranjeevi Yojana, Gujarat
Institutional deliveries through private obstetricians and gynecologists
Scheme is primarily for women from poor families, with prior ANCs from a govt. hospital
Yeshasvini Health Insurance Scheme
Karnataka
Hospitalization and care for more than 1600 surgeries
Only for the members of farmers’ co-operatives and their dependents
Ambulance Service
Ambulance service ANC, PNC Institutional Deliveries, sick child, Emergency services etc.
Primarily for poor
Mobile Medicare Units
Uttaranchal Mobile Health and Research Clinic
Clinical & Radio diagnostics through health camps, lab tests
Free to all BPL cardholders
Contracting Out
SMS Hospital
Jaipur Rajasthan
Radiological (CT/MRI Scan) Diagnostics
Free for all BPL Patients; Subsidized rate for others
Build, Operate, Transfer
Karuna Trust, Karnataka
Management of PHCs and sub-centers; 24-hrs clinical services
Free services- diagnosis, consultation, treatment and drugs
Contracting in
Karnataka Integrated Tele-medicine & Tele-health, Chamrajnagar
Tele-diagnosis and consultation in cardiac care and specialist care
Free diagnosis, medicines and treatment for the BPL patients
EMERGING MODELS
• Regional Diagnostic Centres- Hub/Spoke
• Medicity
• Co-location of Specialty services
• District Hospital + Medical College (Hub)
• Franchised /Accredited Health Units
• Private surgical teams
Political and Administrative Commitment
• Half hearted support for PPP
• Policy makers enthusiastic but lack of positive outlook
amongst implementors
• Misunderstood as ‘privatization’
• Lack of Trust on both sides
Institutional Capacity
• Requirement for technical/ managerial skills for designing,negotiating, implementing and monitoring PPP contracts
• Lack of institutional capacity at all levels, includingoversight role
• Administrative framework and readiness to meetrequirements
Policy and Institutional Framework
• Lack of policy driven strategy
• Lack of information on Private sector thus poor regulatory
leverage
• No institutional structures to manage PPP contracts
• Non functional specialized PPP cell
Diversity and Complexity of Private Sector
• Private sector is diverse; Predominantly individualistic
(owner operated units) and in both recognized and
unrecognized systems of medicine;
• Diversity of tariffs, thus complicating information on cost
vs tariff and tariff negotiations
Risks
•Private partner- Non-timely release of funds; Fear of
enquiry
•Government- unsuccessful/ failed contract leading to
lack of services – patients suffer, resources wasted
Few Constraints
• Payment delays
• Personality styles and trust level
• Local political interference / political flip-flaps
• Lack of capacity or willingness to supervise / monitor / guide the project
• Perceptual and attitudinal orientation to private sector
Limitations in Contract Features
• Defining & 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
Enabling Environment
• Successful partnerships are contextual
• Enabling conditions include
• leadership from both partners
• prior consultations
• relational / trust based contracting
• pilot testing
• timely payment
• periodic review and amendments / revision of contract
• specific performance indicators
Conclusion
• Public-private partnership (PPP) is not privatization
• Government continues to play a key role
• Requires high degree of institutional capacity
Contd…
• It does help in benefiting the poor.
• It is one of the pragmatic options for health service delivery, butnot an alternative to public delivery or better governance.