Public/Private Partnership in Health Care Services in India

While reviewing the health sector in India, the World Bank (2001) and the National Commission on Macroeconomics in Health (2003, 2005) strongly advocated harnessing the private sectors energy and countering its failures by making both public and private sectors more accountable. The Tenth Five-Year Plan (2002-2007) envisioned in detail the need for private sector participation in the delivery of health services.

Why Partnership
Neither the public sector nor the private sector alone can operate in the best interest of the health system. Public and private sectors in health can potentially gain from one another (ADBI 2000; Bloom et al. 2000; Agha et al. 2003) - resources, technology, knowledge and skills, management practices, cost efficiency and even a makeover of their respective images . Under partnerships, public and private sectors can play innovative roles in financing and providing health care services

What is Partnership?
A collaborative effort and reciprocal relationship between two or more parties. With clear terms and conditions, Clearly defined partnership structures. Specified performance indicators for delivery of a set of health services in a stipulated time period.

Elements of partnership

Beneficence (joint gains), Autonomy (of each partner), Joint-ness (shared decision-making and accountability) Equity (fair returns in proportion to investment & effort).

Benefits
Help in ameliorating the problem of poor health services delivery at two levels: I. Improve delivery mechanisms. II. Increase mobilization of resources for health care (Government of India 2005).

Benefits cont
Better quality of services, Reduced cost of care ( either due to competition or through economies of scale) Redirecting the public resources to other areas, Reduction in the duplication of services, Adoption of best practices, Targeted services to the poor Better self-regulation and accountability

Succeeding factors
It is often observed that partnerships are formed between organizations but succeed because of individuals who are strong leaders and who champion the partnership projects with vision, energy and enthusiasm. Partnerships work typically with one providing the financing and the other providing the services (Paoletto 2000; ADBI 2000).

Health Sector Reforms(HSR).

The deficiencies in public sector health system can only be overcome by significant reforms. To address the inefficiency and inequity in the health system. to collaborate with the private sector through Public/Private Partnership (PPP).

HSR definition
A sustained, purposeful change to improve the efficiency, equity and effectiveness of the health sector (Berman 1995). a sustained process of fundamental change in policy and institutional arrangements of the health sector, usually guided by the government. ..It is designed to improve the functioning and performance of the health sector and ultimately the health status of the people (WHO 1997) .

Reform strategies
1. Alternative financing (user-fees, health insurance, community financing, private sector investment); 2. Institutional management (autonomy to hospitals, monitoring and management by local government agencies, contracting); 3. Public sector reforms (civil service reforms, capacity building, productivity improvement); 4. Collaboration with the private sector (public/private partnerships, joint ventures) (World Bank 1993; Thomason 2002; Abrantes 2003).

Challenges
1. 2. 3. 4. 5. Motives of the private sector Scope and objectives of partnership Policy and legal frameworks Benefits of such partnerships Technical and managerial capacity of governments and private agencies to manage and monitor 6. Incentives for the private sector 7. Stakeholders perspectives towards partnership, 8. Explicit benefits to the poor

Issues covered
Type of partnership Scope and objectives for the partnership Services covered and special provisions for the poor. Obligations of the public and private partners. Mechanisms used for the selection of private partner. Performance monitoring. Payment mechanisms. Incentives to the private provider. Stakeholder/ beneficiary perspectives. Sustainability of the partnership.

Facts
Approximately 29 percent of the Indian population (almost 300 million people) live below the poverty line and depend on free health services from the public sector. public spending on health has remained stagnant at around one percent of GDP (0.9%) compared to the global average of 5.5%. more than 40% of hospitalized people borrow money or sell assets to cover expenses. 35% of hospitalized Indians fall below the poverty line because of hospital expenses. The poorest quintile of the population uses only one-tenth of the public (state) subsidies on health care while the richest quintile accesses 34 percent of the subsidies (Mahal et al. 2002)

Private Sector
At independence the private sector in India had only eight percent of health care facilities (World Bank 2004) later estimates indicate that 93% of all hospitals, 64% of beds, 85% of doctors, 80% of outpatients and 57% of inpatients are in the private sector (World Bank 2001).

Public
Includes organizations or institutions that are financed by state revenue and that function under government budgets or control.

Partnership -

Definitions

I. WHO 1999
Means to bring together a set of actors for the common goal of improving the health of a population based on the mutually agreed roles and principles

II. Axelsson, Bustreo and Harding 2003

A variety of co-operative arrangements between the government and private sector in delivering public goods or services provides a vehicle for coordinating with non-governmental actor to undertake integrated, comprehensive efforts to meet community needs, to take advantage of the expertise of each partner, so that resources, risks and rewards can be allocated in a way that best meets clearly defined public needs

III. Blagescu and Young 2005

A partnership means that both parties have agreed to work together in implementing a program, and that each party has a clear role and say in how that implementation happens

IV. World Economic Forum 2005

A form of agreement [that] entails reciprocal obligations and mutual accountability, voluntary or contractual relationships, the sharing of investment and reputational risks, and joint responsibility for design and execution.

Fundamental Themes
Relative sense of equality between the partners; Mutual commitment to agreed objectives; Mutual benefit for the stakeholders involved in the partnership.

Enabling conditions ADBI (2000)

i. A clear understanding between the partners about mutual benefits ii. A clear understanding of the responsibilities and obligations between the partners iii. Strong community support iv. Need for some catalyst to start the process of partnership (maybe an individual, a donor, a compelling vision or even a political or economic crisis)

Cont
V. Stability of the political (government) and legal
climate (laws) VI. Regulatory framework that is followed and enforced VII. Capacity and expertise of the government at different levels in designing and managing contracts (partnership) VIII. Appropriate organizational and management systems for partnerships IX. Strong management information system Clarity on incentives and penalties.

Types of partnership
1. contracting (contracting-out and contracting-in); 2. franchising; 3. social marketing; 4. joint ventures; 5. subsidies and tax incentives; 6. vouchers or service 7. purchase coupons;

Cont..
8. Hospital autonomy;

9. Build, operate, and transfer; 10.Philanthropic contributions; 11. Health co-operatives; 12. Grants-in-aid; capacity- building; 13. Leasing; and social 14. Health insurance

Contracting stages
Decision to contract and the services to contract. Tendering and selection of the contractor. Contract design. Implementation. Monitoring the performance. Evaluating implications of contract on the public health system.

Examples
Yeshasvini scheme, Dr Devi Shetty, founderdirector of Narayana Hrudayalaya

Thrust areas
Infrastructure Development - Development and strengthening of healthcare infrastructure that is evenly distributed geographically and at all levels of care 2. Management and Operations - Management and operation of healthcare facilities for technical efficiency, operational economy and quality 3. Capacity Building and Training - Capacity building for formal, informal and continuing education of professional, para-professional and ancillary staff engaged in the delivery of healthcare
1.

Cont
4. Financing Mechanism - Creation of voluntary as well as mandated third-party financing mechanisms 5. IT Infrastructure - Establishment of national and regional IT backbones and health data repositories for ready access to clinical information 6.Materials Management - Development of a maintenance and supply chain for ready availability of serviceable equipment and appliances, and medical supplies and sundries at the point of care

Key assessment principles

I. Effectiveness or the ability to meet program objectives II. Efficiency or the financial efficiency in transfer of ownership and associated risks III. Equity or the ability to accrue the benefits of the program to the poor people IV. Financial Sustainability or financial viability of the model

Policy initiatives along the key thrust areas

i. ii. iii. iv. Providing help in infrastructure set-up especially in areas like land acquisition Offer equity participation where possible or extend subsidized debt and other fiscal benefits Provide budgetary grants for capital and operating expenses of the PPP systems Ensure a non-compete policy within a predefined geographical limit of the PPP facilities Buy-back a share of capacity for government identified beneficiaries

v.

Infrastructure Development
Planning, Design and Development of healthcare facilities in whole or specialty wise Owning and Operating diagnostic services for public health systems Own and operate other services like mobile clinics

Management and Operations

Infrastructure maintenance and upkeep Key service delivery of medical treatment Hospital Management including Housekeeping, Catering etc. Medicine store and inventory management Medical equipment purchase and maintenance Transportation Security

Materials Management
Centralized purchase of all consumables for scale advantages and quality standardization Warehousing of materials for supporting an efficient distribution network, especially for consumables Establishing and managing a distribution network including PPP in areas such as operating a pan India network of general medicine shops