Public Private Partnership in Health Service Delivery

Digvijay TrivediMBA (HR), MA(Eco.) PGDCPM, PGDRD

Public Private Partnership

An arrangement

Provide public servicesINVESTMENTS AND/OR MANAGEMENT

Fixed duration

Allocation of risk

Performance

PRE-DETERMINED STANDARDS

Measurable Indicators Entity

Government

Private

Setting the tone…..

A quick introduction to Public-Private Partnership.mp4

WHY PARTNER WITH THE PRIVATE SECTOR?

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)

Andhra Bihar Gujarat Himachal Karnataka MP Orissa Punjab Rajasthan Uttrakhand UP W.Bengal0

102030405060708090

100

79

95

79

32

66

77

49

84

56

8290

818089

82

14

8477

46

82

47

65

8780

Rural Urban

Share of Pvt. Sector- Hospitalized care (60th NSS-2004)

Andhra Biha

r

Gujarat

Himach

al

Karna

taka

M.Prad

eshOris

saPu

njab

Rajasth

an

Uttarak

...

U.Prad

esh

W.Benga

lInd

ia

73

86

69

22

60

42

21

71

48

57

73

21

5864

7974

11

71

52

27

74

36

66 69

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 additional7,50,000 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 investmentsBest Management practicesEfficiency in service deliveryEfficient use of capital resources

Providing institutional commitmentProject Development Selection of Developer Viability gap funding (VGF), if any

PPP MODELS & TYPES

Not all interactions between the Government and Private sector are PPPs

Putting the projects on “shelf”

ProjectPreparation

PartnershipManagement

ProjectIdentification

Viability Structuring Do-ability ProcurementStrategy

Bid ProcessManagement

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 Autonomy Private 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

PPP Models in Practice

Demand side Financing- Voucher Scheme

Voucher Scheme, ANC, PNC Institutional Deliveries

Primarily for poor

Demand side Financing- “चि�रंजीवी, यशस्वि�वनी”

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 SchemeKarnataka

Hospitalization and care for more than 1600 surgeries

Only for the members of farmers’ co-operatives and their dependents

Social Franchising

Social Franchising, ANC, PNC Institutional Deliveries

Primarily for poor

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

Key Lessons & Challenges in PPP: Indian Experience

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, including oversight role

• Administrative framework and readiness to meet requirements

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, but

not an alternative to public delivery or better governance.

THANK YOU