Public Private Partnership in Health Service Delivery: Experiences & Lessons A.Venkat Raman Faculty of Management Studies University of Delhi

WHY PARTNER WITH THE PRIVATE SECTOR? 2 A.VENKAT RAMAN FMS-DU

Omnipresence of the 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 Rs. 39,000Cr.. for health insurance (NCMH 2005) A.VENKAT RAMAN FMS-DU3

Share of Pvt. Sector- Non- Hospitalized care (60 th NSS-2004) A.VENKAT RAMAN FMS-DU 4

(60 th NSS-2004) Share of Pvt. Sector- Hospitalized care (60 th NSS-2004) A.VENKAT RAMAN FMS-DU5

Share of Private Sector in Rural Areas (NCMH,2005) A.VENKAT RAMAN FMS-DU6

Relative expenditure in the private sector - in Rural Areas (NCMH,2005) A.VENKAT RAMAN FMS-DU7

Who Pays for the Services? Percentage of Private Expenditure (NHA ) A.VENKAT RAMAN FMS-DU8

Implications >80% of health expenditure is out-of-pocket. (NSS 2005; NHA, ) 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 A.VENKAT RAMAN FMS-DU 9

Private sector is needed because.... India needs an additional 750,000 beds 520,000 doctors overall investment of Rs 1,50,000Cr. 80% likely to come from the private sector (NMCH,2005) A.VENKAT RAMAN FMS-DU10

PPP MODELS & TYPES A.VENKAT RAMAN FMS-DU11

Not all interactions between the Government and Private sector are PPPs A.VENKAT RAMAN FMS-DU12

Financing vs Delivery: Public vs Private modes (Bloom, 2001) Public ProvisionPrivate Provision Public Financing Public Hospitals ????? Voucher Contracting ?????? Private Financing User Fee Hospital Autonomy ???????? Private Hospitals ?????? A.VENKAT RAMAN FMS-DU13

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 A.VENKAT RAMAN FMS-DU14

Core Principles of Partnership True partnerships entail ◦ 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 A.VENKAT RAMAN FMS-DU15

PPP Models in Practice: A.VENKAT RAMAN FMS-DU16

A.VENKAT RAMAN FMS-DU17 Uttaranchal Mobile Health and Research Clinic Clinical & Radio diagnostics through health camps, lab tests Free to all BPL cardholders.

A.VENKAT RAMAN FMS-DU18 Mobile (Boat) Health Service in Sunderbans, WB Diagnostics; Consultation- health clinics; Drugs; Health promotion All services are free; All beneficiaries are assumed to be BPL

SMS Hospital Jaipur Rajasthan Radiological (CT/MRI Scan) Diagnostics Free for all BPL Patients; Subsidized rate for others A.VENKAT RAMAN FMS-DU19

A.VENKAT RAMAN FMS-DU20 Karuna Trust, Karnataka Management of PHCs and sub-centers; 24-hrs clinical services Free services- diagnosis, consultation, treatment and drugs.

Shamlaji Hospital, Sabarkantha, Gujarat Management of a government built CHC; 24-hrs services Except select surgeries all services are free for poor patients A.VENKAT RAMAN FMS-DU21

A.VENKAT RAMAN FMS-DU 22 Arpana Swasthya Kendra, Delhi (CO) Management of Maternity health center under RCH Free Lab Tests, ANCs, select surgeries, community health services, sanitation, IEC

A.VENKAT RAMAN FMS-DU 23 Rajiv Gandhi Hospital, Raichur Karnataka Super-specialty clinical and surgical services 40% beds are for BPL patients; Free OPD services to poor.

A.VENKAT RAMAN FMS-DU24 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

Yeshasvini Health Insurance Scheme Karnataka Hospitalization and care for more than 1600 surgeries Only for the members of farmers’ co-operatives and their dependents A.VENKAT RAMAN FMS-DU 25

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 A.VENKAT RAMAN FMS-DU26

Voucher Scheme, Haridwar, Uttarakhand ANC, PNC Institutional Deliveries Primarily for BPL women A.VENKAT RAMAN FMS-DU 27

A.VENKAT RAMAN FMS-DU28 OTHER MODELS IN OPERATION

A.VENKAT RAMAN FMS-DU29 Arogyasri Scheme, Andhra Pradesh Hospitalization & Surgical Procedures (more than 800 procedures) Free Hospitalization/ Medicines/Follow-up

Franchising / Social Marketing A.VENKAT RAMAN FMS-DU30

A.VENKAT RAMAN FMS-DU31 EMRI/ HMRIHyderabad/ Ahmedabad…….. Call 108 Emergency, Accident/ Trauma services ALS / BLS

Regional Diagnostic Centres- Hub/Spoke Medicity Co-location of Specialty services District Hospital + Medical College (Hub) Franchised /Accredited Health Units RBF – Incentive Contracts A.VENKAT RAMAN FMS-DU 32 EMERGING MODELS

Key Lessons & Challenges in PPP: Indian Experience A.VENKAT RAMAN FMS-DU33

Political and Administrative Commitment Half hearted support for PPP Top officials are enthusiastic, but success takes them away- leadership vacuum; Lower level officials suspect PPP as ‘privatization’ or show disdain towards the private provider A.VENKAT RAMAN FMS-DU34

Institutional Capacity Need for technical / managerial skills for designing, negotiating, implementing and monitoring PPP contracts Develop institutional capacity at all levels, including oversight role. A.VENKAT RAMAN FMS-DU35

Policy and Institutional Framework Lack of policy driven strategy towards PPP in health sector. Need for a PPP policy. Lack of information on Private sector thus poor regulatory leverage. No institutional structures to manage PPP contracts. Need for specialized PPP cell in Health Dept. A.VENKAT RAMAN FMS-DU36

Social Context of PPP Antipathy or suspicion towards the private sector and govt’s failure to regulate -raise suspicion. Unwillingness of ‘civil society’ organisations to explore PPP as an option. ‘Squeamishness’ about profit making in services meant for poor patients A.VENKAT RAMAN FMS-DU37

Diversity and Complexity of Private Sector Private sector is diverse; Predominantly individuals (owner operated units) and from both recognized and unrecognized systems of medicine; Diversity of tariffs, thus complicating information on cost vs tariff and tariff negotiations A.VENKAT RAMAN FMS-DU 38

Process of Contracting : Partner selection Primarily ‘input’ based contracting rather than outcome based. (Only) competitively selected partners are less effective. Priorities of : ◦ Govt. Officials: Compulsion of L1 & Completing procedural formalities. ◦ Private Sector: Winning the bid by all means A.VENKAT RAMAN FMS-DU 39

Risk Financial risk to the private partner- Non- timely release of funds; Fear of enquiry. Risk of unsuccessful/ failed contract leading to lack of services – patinets suffer, resources wasted. A.VENKAT RAMAN FMS-DU40

Enabling conditions for success Successful partnerships are contextual. Enabling conditions include ◦ leadership from both partners; ◦ prior consultation; ◦ relational / trust based contracting; ◦ pilot testing, ◦ timely payment; ◦ periodic review and amendments / revision of contract; ◦ specific performance indicators….. A.VENKAT RAMAN FMS-DU41

Key Constraints Payment delays Personality styles and trust level Local political interference / political flip-flaps Non-revision of contract clauses (Tariffs) Lack of capacity or willingness to supervise / monitor / guide the project Perceptual and attitudinal orientation to private sector Lack of clarity of the objective of PPP A.VENKAT RAMAN FMS-DU42

Limitations in Contract Features Defining and 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 A.VENKAT RAMAN FMS-DU43

Summary Public-private partnership (PPP) is not privatization Government continues to play a key role Requires high degree of institutional capacity A.VENKAT RAMAN FMS-DU44

In conclusion…. Public Private Partnership ……does help benefiting the poor. …………one of the pragmatic options for health service delivery, but not an alternative to public delivery or better governance. A.VENKAT RAMAN FMS-DU45

THANK YOU Ref. Book: A.Venkat Raman & J.W.Bjorkman Public Private Partnership in Health Care in India: Lessons for Developing Countries. Routledge, London, A.VENKAT RAMAN FMS-DU 46