Challenges and constraints in successful implementation of PPP initiatives in the

health sector.

Regional Workshop on PPP in the health sector in Asia

West Bengal 29 September, 2011

Dr Christopher C. Potter

1. Ideological/ political barriers• Earlier revolutions/ struggles were about protecting rights from

church and monarchs (and colonial powers!): free speech, assembly, private property.

• Rule of law to cover all.• LaSalle and Marx: “you reduce the State to a watchmen to

protect the few”.• New growth of States and “rights” means education, health care,

equality, justice.• Great hope and expectations which haven’t always been realised.• Residual tensions about role and size of State: good guys or bad

guys?

Private sector- Only interested in a fast profit– Exploit environment,

public and staff– Not accountable

– Creative and innovative– Competitive so effective

and efficient– Consumer oriented– Offer choice– Capacity: skills, access to

finance, people– Not bogged down by

rules and regulations

Public sector• Accountable• Value driven• Sacrifice high salaries to

serve public.• Concern for the poor and

marginalised.• Guardians of

environment.• Based on past learning

and protecting the future.

• Traditionalist and slow.• Self-serving.• Contemptuous of non-

public.• Bureaucratic.

2. Lack of shared understanding about what we mean by PPP

Wide spectrum of models.

• Not privatisation.• Not out-sourcing.• Not the State washing its hands of

responsibility.

Need for clarity

• Models• Expectations and objectives• Not just between partners but to different

parts of government, public, press, beneficiaries.

Pilots?Advocacy?

3. Lack of experience and skills in partnership working.

• What is a partnership?• Think about marriages or commercial

partnerships: Formal, lasting.• Shared risks, responsibilities, opportunities.– “We are in this together”– “Sink or swim”

Imbalanced partnerships

Multiple partners with potentially different expectations, values, rules…

Yesterday heard about variety of stakeholders being involved:- Supra-national bodies: bilaterals, etc.– National governments (not monolithic/

homogenous)– Regional/municipal governments/ Panchayeti Raj

(India)– Social insurance funds– IFRO/ Roshan mobile (Afghanistan)

Missing partners?

– Drug companies?– Investment institutions?– Professional bodies?

– Patients???

4. Lack of stable policy context.

• Elections, ministerial changes, officials promoted or transfer.

• Failure of new people to understand PPP.

• Corruption and “interference”.

• Lack of interest in “continuity of administration”.

5. Non-congenial legal and financial context.

• Do the existing laws, procedures and regulations allow for effective private activity?

• Will all government departments accept the proposed changes?

Determinants of policy effectiveness

Potter & Harries, WHO Bulletin, November, 2007

6. Lack of capacity within public sector

• Poor design and procurement skills for PPP (rather than contracting).– Tender criteria?– Performance indicators?– Dispute management?– Adaptability

7. Failure to design in partnership

• Will private sector be interested? • One private partner or competition?• Locations: remote, war-torn – if public servants

won’t go there, why should the private sector?• Performance indicators?• What happens if company defaults and the bank

wants to sell off the infrastructure and govt can’t continue services?

• Dispute resolution mechanisms?

If state doesn’t consult

• No tenderers or only one.• If PPP is not awarded private sector has lost

money and will be reluctant to participate next time.

• Becomes out-sourcing not partnership.• BUT process can take too long, and may look

like too close a relationship with a few potential partners.

8. Contractual arrangements not sufficiently adaptive.

• Tariff/ fees don’t keep pace with costs (or reflect falling prices from competitors).

• Contract proves too expensive (NB PFIs in UK).• Emergent issues: not defining beneficiaries well

enough, unexpected problems in logistics or security, want to extend scope of services.

• Recession.• Unwillingness by officials to share risks and

responsibilities.

9. Governance matters

• Lack of legal frameworks to underpin PPPs.– How can we cope with non performance/ non payment?

• Assuring quality – worries about the “inspectorate raj”.– Professionals reluctant to criticise each other– Companies not signed up to international standards (Ottawa

Charter, paris and Dakkar Declarations, Jo’burg on sustainability, etc).

– Officials on Boards are still officials whose bosses sign their annual performance reports.

– Accreditation? (One standard for public sector and another for private?)

10. Lack of motivation & incentives

• PPP must be big enough market to interest the private sector– Hard if public sector competing alongside?– Is population base big enough?– Is there demand?

• Must overcome existing status quo and vested interests: high officials, labour organisations, existing private service providers…