Role of GDC: to identify „windows of opportunity“ for private companies, but not to support their market strategy. i.e. there has to be a substantial own contribution Sponsoring: Sponsoring for social/ecological purposes reputational benefit for company. Usually small amounts. Multi-stakeholder dialogues and formal networks: institutionalised platforms for exchange between public and private stakeholders and civil society. Example: Federations that are supported by public and private stakeholders and civil society Development partnerships with the private sector: development partnerships (criteria: compatibility, complementarity, subsidiarity, neutrality in competition, contribution); strategic alliances (criteria: flagship character, structural impact, participation of several private partners, innovation, replicability, connection to priority sector) Public Private Partnerships: longterm, contractual relationship, common organisational frame and risk participation. Examples: OBA, performance-oriented service contracts (TPAs), management contracts, leasing, concessions, credit lines through commercial banks, privat fund management, BOT (build-operate-transfer, i.e. development of a discrete new or greenfield asset + operation under concession), BOOT (build-own-operate-transfer, i.e. BOT without early buyout option), DBO (design-build-operate, i.e. public sector owns and finances, private does DBO. No financing risk for operator) Mobilisation and bundling of private and public capital: structured funds with risk tranches, syndications, investments in micro finance institutions, development of capital markets Financial services and counselling for private investments in developing countries: financing of infrastructure, SMEs… DEG
Experiment / pilot before designing a national policy Quality competition Broad existing experience with different approaches Risk participation of private sector ensures quality and high efficiency
Challenges in OBA: - Addressing still high administrative costs through improved systems and also through t echnological advances, such as cell-phone claims processing - Increasing efforts to reaching rural populations - Increasing uptake for Family planning vouchers - Introducing a youth-focus in services - Voucher programs integrating with other financing systems, including social franchising and national insurance systems.
2012 ppp in dev cooperation eahf_may_final_short
Private Sector Participation inDevelopment Cooperation –experiences and potentialEast Africa Healthcare FederationConference 2012:„Partnerships: Harnessing opportunities and Innovation“Julia Fimpel (Program Manager, KfW)Presenting on behalf of the Health Program ofGerman Development Cooperation, KenyaMay 2012
1. The role of the private sector in the present GDC portfolio● Germany‘s strategy on Public Private Partnership in Development Cooperation Objectives: ● Mobilizing private capital and know how to drive development ● Increase efficiency in the delivery of public services ● Complement government regulations by voluntary commitment by private companies ● Enhancement of development programs by private contributions ● Supporting small and medium enterprises in tapping a new market„…a dynamic and innovative private sector is the ultimate engine for growth, creating new, productive jobs, generating tax revenues and thus making a major contribution to the funding of social security systems. An effective strategy for boosting the private sector can result in lasting increases in employment and income levels, also for the poor and disadvantaged. In a context of sound public policy and in close cooperation with the public sector, these can be used to boost a country‘s development prospects.“ Dirk Niebel, Minister for Economic Cooperation and Development, April 2012 2
Example 1: Demand side financing systems in Kenya and Uganda … shift purchasing power to consumers Choice! address demand-side barriers aimed at stimulating demand for health services Solidarity! To clients, introduce the concept of a pre-payment, which is unrelated to risk Pay providers for outputs (e.g. no of deliveries), rather Efficiency! than inputs (like salaries and supplies) To providers, introduce a competitive environment, Quality/service where providers need to advertise their services and orientation! adopt a client oriented and quality conscious perspective Guarantee payment to providers Confidence! Provide services without additional payment Complementarity! Integrate private and public provision of health care Develop systems for long-term health financing (e.g. claims processing, accreditation systems) Sustainability! Photo: Dirk Mueller
Impact of voucher programsUtilisation Uganda contracted clinics: 200% increase in STI visits; 15% increase of STI treatment among those with STI symptomsTargeting Successful targeting of poor and at risk populations. Uganda: fewer women reported lack of money as barrier to care after program began.Knowledge Uganda: Knowledge of the program spread significantly in the population and more people were able to identify STI symptoms.
Impact of voucher programsHealth impact Uganda: marked reduction of syphilis prevalence in just one year from 7.3% (2006) to 2.9% (2007) in areas near to contracted facilities (<11 km) – a reduction of 57%! Utilisation of STI treatment went up in the same timespan from 30% to 39%Cost-effectiveness Uganda: Safe motherhood programme is most likely cost-effective when comparing existing public services with the added voucher scheme: Incremental cost-effectiveness ratio: < $ 200 per DALY averted More detailed cost-effectiveness analyses needed
Example 2: Social Franchising Network „AMUA“ The AMUA-network ● Franchisor and Franchisees pursuing a social objective ● By end of 2012 there will be 270 franchisees in 5 regions in Kenya Results ● Over 700.000 clients served and over 230.000 CYP generated between July 2010 and January 2012 ● Cervical Cancer Screening introduced (effective and highly demanded)Public-Private-Cooperation ● Effective linking HIV/AIDS and FP (over 30.000 PMTCT, over 100.000 VCT/PICT)● Use of national guidelines for medical ● Community health workers are essential for interventions sensitizing and mobilizing target groups● Strengthening cooperation with DHMTs, ● Cost-efficient approach (counselling, choice of especially in reporting and contraceptive FP method) supplies● Private providers receive FP commodities through public system● Steering committee with the Ministry of Health 6
Example 3: Promising practiceViable Solutions for Health Care Waste Managment (HCWM)Partners HCWM PackageNWH (Nairobi Women’sHospital) Regulation by NEMA, MoPHS, MoMsGIZ (German Technical Collection Transport Storage Treatment DisposalCooperation) GIZ: Facilitation, Training, MIS developmentRegulationNational EnvironmentalAuthority (NEMA) Target ClientsRules, Inspection and Licensing Small and medium sized private clinics and hospitals forTransportation which formal HCWM set up is not cost-effectiveContracted Transportation Results till dateCompanies Affordable HCWM services NWH runs its waste mgt facility at margin with 10 regularTreatment of Waste customersNWH NEMA licensed transportation companies and NWHagainst service fee/ kg waste 7 Clarified mandate of regulatory bodies (NEMA, MoPHS
2. Mutual benefits of cooperation for donors/government and private stakeholders Donor Agencies and Private Sector GovernmentAdvantages - More support in addressing the - Strategic partnerships, e.g. throughfrom Health Care Challenge Joint Venturescooperation - Mobilising private ressources for - Long-term business relationships health - Market entry / extension of - Direct and cost-effective coverage achievement of outputs (MDGs) - Risk mitigation through subsidies - Outsourcing of services can yield (e.g. Funds with first loss tranches, efficiency gains subsidies to cover the poorest etc.) - Innovative solutions - Reputational advantages - Well trained staff and expertise - Dialogue with government - Better access to information on private sector activities and quality monitoring 8
3. Challenges in working with the Private Sector● Sustainability aspects (knowledge transfer, funding…)● Communication / government ownership / „Steering", i.e. continuous coordination/cooperation between public and private sector● Different circumstances (e.g. costs of service provision)● Own contribution (financial or in kind) by private sector● Compatibility of objectives: market entry; profit, turnover, reputation, CSR…vs. coverage, quality, low-cost products for the poorest, risk sharing… 9
4. Outlook: Innovative solutions by the private sector● Outsource certain activities to TPA but insist on knowledge/systems transfern (BOT)● Make use of existing well-developed private networks to reach out to more people, esp. In the informal sector● Joint Ventures between public and private institutions to increase their efficiency and enable organisational learning● Innovative and adapted solutions, to reduce cost and address the people at base of the pyramid● Incentives to deliver quality and evidence 10