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PPP Model: A right impetus on healthcare delivery

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PPP_Model

PPP model were first observed in late 90’s however they were not very successful at that time. Later, with government interventions like formulating guidelines and standardization of documents for PPP projects, the country experienced a spurt in PPP projects. A

PPP_ModelAs per the latest data by the Ministry of Finance, 1,539 PPP projects are successfully approved in India. Many states in India have formulated laws and policies for streamlining efficient and effective PPPs models.

Exponential growth is observed in utilisation of healthcare services leading to the huge demand of the services. Limited public sector and unapproachable private sector both are the reason behind the origin of PPP model.

PPP model is an aid in the present situation of scarcity of services. It is a best solution to augment healthcare delivery system.

For an effective PPP model, role of public policy is critical, since it is the public policy which influences the manner in which a nation’s healthcare resources and funds are collected, allocated and utilized as well as the extent to which the services are developed, distributed and accessed.

As a recommendation, the proposed PPP model primarily assumes a facilitator role for the public sector by offering support and aiding the private sector’s role of managing the service delivery and quality of care.

Specific policy initiatives recommended for increasing private sector’s interest and participation along the key thrust areas include:

  1.  Help in infrastructure set-up especially in areas like land acquisition.
  2.  Offer equity participation where possible or extend subsidised debt and other fiscal benefits.
  3.  Provide budgetary grants for capital of the PPP systems.
  4.  Ensure a non-compete policy within a predefined geographical limit of the PPP facilities.
  5.  Buy-back a share of capacity for government identified beneficiaries.

 Key areas of PPP in healthcare

Scope of PPP initiatives in India covers disease surveillance, purchase and distribution of drugs, national disease control program, social marketing, management of primary health centres joint ventures, medical education and training, engaging private sector consultants, pay clinics, discount vouchers, self- regulation, R&D investments, telemedicine, health cooperatives, and accreditation.

Opportunities for private player participation in PPP models in Indian healthcare system can be broadly classified along the following key thrust areas:

  1. Facility Development
  2. Management and Operations Management (MOM)
  3. Capacity Building
  4. Training
  5. Financing Mechanism
  6. IT infrastructure development
  7. Inventory Management

Different Types of Models in Healthcare

Different Types of Models in Healthcare

  1. Fully Private: Under control of private setup
  2. Concession: It is a long term lease model where a private player takes over the management of a state owned enterprise including significant investment risks
  3. Build Own and Operate (BOO)/ Build Operate, Own, Transfer (BOOT): BOO is the public sector contracts with a private entity to design, build, and operate the capital asset. The public sector remains responsible for raising the required capital and retains ownership of the facility. BOOT is the ownership of the new facility is transferred to the private sector
  4. Joint Venture: is equity participation from both the government and the private players. Government contributions can vary from upfront capital infusion
  5. Leasing: Public sector lease the facility to private players with specific buy back arrangements
  6. Management Contract: The infrastructure is owned by public sector with private participation in operating and managing the facility
  7. Fully Public: Under control of the public setup

Few such successful PPP models are Yeshasvini Health scheme in Karnataka, Arogya Raksha Scheme in Andhra Pradesh, Telemedicine initiative by Narayana Hrudayalaya in Karnataka, GVK EMRI, Chiranjeevi Yojana and many more.

Advantages and Disadvantage of PPP Model:

 

Advantages

 

Disadvantage
Accessible

Client oriented

Low cost

High quality

Targeted to poor community

Huge outreach / coverage

Efficient

Difficult to mainstream

High cost

Variable quality

Clustered in cities

Small coverage

Lack of resources

Lack of control

Challenges

The public and private contrary to each other from all the angles but successful integration is the key to success in PPP model. Following are major challenges faced in model:

  1. Cost containment
  2. To reduce duplication
  3. Effective use of private resources
  4. Logical diversion of public resources
  5. Resource mobilization

Future

It is well said that necessity is the mother of invention and the need of healthcare services will drive the PPP model to a prosperous path which is very well visible in many successful PPP partnership projects.

Conclusion

PPP is the need of the hour to improve healthcare services access for the general public but at the same time model should be planned in the way that the cost burden is not passed to the public and at the same time companies are encouraged to consider PPP model in their priority list for expansion.

While planning the PPP structure, following things should be considered to have successful model. It includes specific roles, rights and responsibilities, flexibility in the model, establishing clear standards, providing training for public sector managers, active dissemination of information, pricing of services, and constantly refining the process to make the system more efficient.

(Disclaimer: The writer is Neha Lal, Sr General Manager – Operations & HR, GCS Medical College, Ahmedabad. Views expressed are a personal opinion.)

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