Why we need public-private partnerships in healthcare

The Covid-19 pandemic has made the government realise that more needs to be done to ensure quality healthcare for all. Photo: Mumit M

The United Kingdom pioneered the concept of public-private partnerships (PPP) in implementing public services projects and following their footsteps, other countries, such as the United States, Canada, Australia, South Africa, Malaysia, Thailand, Turkey, Japan, China, India and many others, along with the European Union, began implementing similar measures to develop various sectors. 

PPPs enable the delivery of efficient, cost-effective and measurable public services with modern facilities, whilst minimising the financial risk.

Likewise, under the able leadership of the Honourable Prime Minister, the Bangladesh government successfully utilised the PPP concept to rapidly develop its power and energy sectors. Moreover, to develop other sectors, in the same way, the government initiated a separate PPP policy in the year 2010 and later formulated the PPP Act-2015. 

In the seventh five-year plan, 3.8 percent of GDP was earmarked for infrastructural development, of which 1.8 percent was envisaged under the PPP model. 

Public-Private Partnerships (PPPs) refer to an arrangement between the government and the private sector, with the principal objective of providing public infrastructure, community facilities and other related services. Such long-term partnerships are characterised by a sharing of investments, risks, rewards and responsibilities for the mutual benefit of both parties involved. 

It has been an important instrument for addressing infrastructure needs, achieving growth across all socioeconomic areas, most notably meeting Sustainable Development Goals (SDGs) at a national level. 

In Bangladesh, a robust PPP framework has been formulated and enacted to encourage such projects. As a result, a number of ministries are taking on PPP projects.

Currently, two units of hemodialysis centres of a PPP project in the National Institute of Kidney Diseases and Urology (NIKDU) and Chattogram Medical College and Hospital (CMCH) under the Ministry of Health and Family Welfare are providing kidney patients with dialysis services, which has already caught the attention of many. This has been a very successful initiative of the government to provide quality dialysis services to the common people.

Why we need PPP models in healthcare

The current government took on many projects to improve the capacity and capability of the healthcare sector. Many new hospitals have been opened. The number of beds has been increased in existing hospitals. Even community health services centres/clinics are opening up in different unions. 

To meet the demand for qualified doctors and nurses, the government established new public medical colleges and nursing institutes. But these are not sufficient for the country's 160 million people. 

The lack of accessibility deprives poor and middle-class patients of quality healthcare while those who can afford it travel abroad to seek healthcare and spend a lot of foreign currency overseas. 

While combating the Covid-19 pandemic, we have realised that many more steps still need to be taken, even though the government is already working hard to fulfil the needs. To overcome the current challenges, the government needs to increase investment in this sector and ensure good governance. 

The government alone is not able to immediately invest the huge amount of money needed, and to ensure the management in providing efficient healthcare facilities to 160 million people. This is why the private sector partners and investors are the need of the hour. 

Partnering with the private sector with no initial investment from the government, or providing a small fund in case of a viability gap, may create a myriad of healthcare services under the ownership of the government. And there will be no operational and maintenance hassles for the government. 

If private investment/private partner is allowed in the government health care services, then facilities can be operated at a lower cost, in an efficient manner, by the existing government facilities and/or by creating new facilities. 

The business dynamics may be designed with the help of PPP health experts. 

We can also replicate what other countries have done with regards to devising health facilities through PPP initiatives. Considering the government's success with the earlier PPP projects, we hope the government will consider similar projects in the health sector.

A myriad of benefits

The potential benefits of adopting the PPP model in the health sector are huge. 

Firstly, the quality of service (including the reduction of waiting time) is the most important benefit, as it directly impacts people's experience and satisfaction with the service. 

Secondly, proper utilisation of resources, manpower and integration of expertise will improve the efficacy of the facilities. 

Thirdly, partnering with private enterprises can enable the inflow of much needed new cash into these facilities. Lastly, partnering with private organisations could significantly reduce the clutter created by abundant regulations, corruption and insufficient monitoring. 

Furthermore, adopting PPP would allow facilities to find innovative solutions to problems and take a bottom-up approach to deal with the overall situation.

The 'out of pocket expenses' associated with healthcare in Bangladesh is the highest in South Asia. 

Private investment in healthcare would result in partners providing all the necessary services at a fixed price set by the government in the same facilities. This will reduce the patients' expenses and increase the accessibility of healthcare services. This may also allow hospitals to provide completely free healthcare support for the ultra-poor.

In addition, as payments to private partners are outcome-based, it would increase accountability manifold as a result of strict monitoring from both the private and public organisations. The facilities created under PPP will provide better services, save a significant amount of money for patients while expanding the government services portfolio. 

And like a cherry on top of a cake, the healthcare facility created under the PPP model stays as an asset owned by the government. 

Therefore, it is safe to assume that adopting PPP in the health sector would significantly increase access and improve quality of service, lessen the lead time in service, and also save the government money in the process. This much-needed change can happen by onboarding the private sector and their innovative experiences under PPP models.

PPP model and its evolution

The majority of PPP healthcare facilities are based on the following three models: 

1. Infrastructure-based model: to build or refurbish public healthcare infrastructure. 
2. Discrete Clinical Services model: to add or expand service delivery capacity. 
3. Integrated PPP model: to provide a comprehensive package of infrastructure and service delivery.

Governments can take on either one of these three models or choose a unique combination between these models to run successful healthcare projects. 

Early PPPs focused on building and replacing critically-needed hospital infrastructure, integrated PPPs were the next evolution, adding clinical service delivery and private sector management practises to improve the quality of care delivered, as well as access to speciality care. 

The focus of most healthcare PPPs today is the sectors of specialist, diagnostics, ancillary, emergency and inpatient care. There are more opportunities in the future to extend the focus on other sectors like preventive, primary, immediate, rehabilitation, long-term, skilled nursing, home and end-of-life care.

A way out of the pandemic

The global economy took a step backwards because of this pandemic. 

Government earnings have fallen and as a result, their investment capability has reduced too. From infrastructure to other developments, private investment and participation have become extremely vital. The much-needed healthcare facilities were already insufficient and the pandemic had exacerbated the situation. 

The budget allocation for healthcare is less than 1 percent of the 2021-2022 budget, which is insufficient to increase the facilities in this sector. To reiterate, the government alone cannot fulfil the needs of the healthcare sector and the investment required. In order to counter the situation, private-sector involvement is, simply put, necessary. 

The Ministry of Health and Family Welfare may consider taking on new PPP healthcare projects to minimise the investment gap and to harness the innovation and skilled management capacity of the private sector to rise to the occasion.

Md Faruque Ahmed, additional secretary (Development) under the Ministry of Information and Broadcasting