Healthcare PPPs Back in Vogue
As per the World Health Organization (WHO), less than half the people have access to health services and 13M people die annually from respiratory, heart, diabetes, cancer. Healthcare Public-Private Partnerships (PPPs), through collaboration between the private sector and government, address these needs by adding capacity, reducing fiscal burden, and improving efficiencies by employing private sector expertise.
The UK pioneered PPPs in 1991 by employing the Private Finance Initiative (PFI) model to design, build, finance and operate facilities. 130 PPP projects were executed over 22 years investing £12B of capital, aiding capacity and capability. In establishing a strong healthcare framework, the UK Universal Healthcare scheme – National Health Services (NHS) has developed considerable expertise in procuring, contracting, and running PPP projects. This includes developing efficient procurement with standard-form contracts to minimize costs. These contracts have been customized and adopted by other countries.
Turkey, in 2010, launched its Health PPP Program to improve the healthcare infrastructure; the program’s main objective was to build up to 50 hospitals and deliver up to 50,000 public hospital beds, with an estimated investment of ~€12 billion. The program provides significant value for the government – under the PPP scheme, the private partner assumes the financial, technical, and operational risk, allowing the public sector to focus on delivering much-needed health services.
Recently, the Kingdom of Saudi Arabia embarked on an ambitious privatization plan (including PPPs) across sectors, including healthcare. Saudi Arabia’s Vision 2030 features improving the efficiency of healthcare facilities, increasing private sector investment and developing medical clusters to impart efficient and high-quality healthcare. The government plans to invest over $65 billion to develop the healthcare infrastructure and increase private sector contribution. With a growing pipeline of projects, the goal is to set up 290 hospitals and 2,300 primary healthcare centers together with the private sector. The Ministry of Health and the NCP have recently tendered a few projects with several others in the pipeline; the initial projects witnessed participation from local and global players.
Post-COVID, there has been a renewed focus on developing healthcare facilities; PPP is increasingly being considered the way forward to bridge the demand-supply gap. Countries establishing a framework for PPPs and having a defined healthcare program successfully attract global investors and expertise, allowing for best practices to achieve a balanced cost structure. A strong foundation helps keep the focus on improving access to healthcare, attracting capital, and thus optimizing value for money.
