The high rates of non-communicable diseases combined with large expatriate populations leads GCC countries to use different strategies to control healthcare expenditure among which is the PPP solution. This presentation highlights the formula for PPP success based on international cases.

1. INTERNATIONAL PERSPECTIVE ON PPPS IN
HEALTH CARE
IMPLEMENTING PPP TO AID DEVELOPMENT OF
HEALTH CARE FACILITIES IN THE REGION
October, 2017 - Dubai
Loay Ghazaleh – BSc.
Civil Eng. , MBA
Advisor, Ministry of
Works – Bahrain
1

2. INDEX
Brief on Some PPP KPI’s
World Examples of PPPs in Healthcare
Overview of PPPs
The Turkish Health Campuses PPP Program
PPP Models Used In Healthcare
PPP for Health Care
PPP Lessons learned
Health care in GCC
2

3. BRIEF ON SOME PPP KPI’S
3

4. PPP KPI’S - INPUTS AND CAPACITY TO OFFER
CARE
Theme Changes noted in the PPP
Facilities,
Equipment,
And
Technology
PPP replaced aging buildings, had an efficient hospital
design, and introduced new equipment and new
electronic data systems for admissions, medical
records, and pharmacy and support services. Patient
rooms were updated for bedside care.
Clinical
Services
PPP Gateway clinic decreased crowding in Casualty
unit. PPP added specialty services (including ICU and
NICU). The pharmacy and laboratory functioned 24/7.
The pharmacy tracked medications and dispensed
them at the patient level.
Support
Services
PPP strengthened security, cleaning services,
maintenance, waste management, food and linen
services. The focus shifted from repair to preventive
maintenance, and toward planned redundancy (e.g.
back-up power systems).
4

5. PPP KPI’S - POLICIES AND PROCESSES TO
MANAGE SERVICE DELIVERY
Theme Changes noted in the PPP
Policies and
Standards
PPP more clearly defined staff roles, hospital-level policies,
and procedures, clearly communicated expectations to staff,
provided more structure, and tracked performance against
standard.
Communication
PPP communications were more structured and formal.
There was increased use of committees, department staff
meetings, and teams, and a greater focus on patient
feedback.
Human Resources
PPP upgraded staff qualifications and numbers, especially
clinical staff, expanded roles of staff for more participatory
decision making, put more emphasis on continuous
education and competency testing, and increased
compensation and benefits, accountability, and discipline.
Organizational
Culture
PPP organizational culture focused on individual and team
accountability, goal-setting, quality improvement, and use of
data for monitoring and decisions.
5

6. PPP KPI’S - PATIENT AND STAFF OUTCOMES
Theme Changes noted in the PPP
Service Volume
And Patient Mix
PPP increased service volume (inpatient admissions,
deliveries, outpatient visits) and there was a perceived
increase in severity of case mix.
Quality of Care
PPP reduced wait times for elective surgery, faster
laboratory test turn-around times and a perception of
improved access to medicines.
Staff Outcomes
PPP staff felt more empowered, appreciated, motivated
and capable of doing their work.
6

7. WORLD EXAMPLES OF PPPS IN
HEALTHCARE
7

8. MANY COUNTRIES ARE ADOPTING PPPS IN
HEALTH CARE
8

9. HOSPITAL FACILITIES PPPS IN THE UK (DBFO):
 >60 new hospitals built
 >90% of hospital projects have been delivered on time
 All projects were delivered within the public sector
budgets
 77% of hospital managers stated that the projects met
their expectations (only 4% described value-for-money
as poor)
 Estimated that PPP projects cost 17% less than public
sector projects – a saving of $4 billion on a $22 billion
programme – the equivalent of 25 hospitals
BUT:
 PPPs have failed to win the people’s trust 9

10. HOSPITAL SERVICES PPP IN SPAIN
 First wave of 8 PPP (DBFO) contracts awarded in 2006
 8th hospital: Valdemoro Hospital – includes Care
Contract
 €72 million investment – awarded to Capio
 Care Contract includes full responsibility for local
population
 30 year concession – total value c. €1.3 billion
10

11. NUTRITION SERVICES PPP IN BANGLADESH
 Government contracted with NGOs to control areas
with no organized nutrition services
 15 million people covered
 Cost per person = $0.96
Results:
 Malnutrition rates declined by 18% (compared with
13% in publicly covered areas)
 Program now expanded to cover 30 million
11

12. PRIMARY HEALTH CARE PPP
IN PAKISTAN
 Management contract with 104 basic health units in
one district
 3.3 million people covered
 Annual cost per person $0.44
Result:
 Four-fold increase in number of outpatient visits
12

13. TB CONTROL PPP IN INDIA
 State government contracted with NGO hospital to
provide TB control services to 500,000 population
(Highest burden of TB worldwide)
 Better outcomes than Control Comparison:
 Cost per patient 10% lower ($88)
 21% more TB cases found
 14% better treatment success rate
 Cost per successful treatment 14% lower ($118)
 Being extended across other parts of India (with
ongoing independent evaluation)
13

14. 98,800 people with improved
access to services
$6 million in investment
Upgraded diagnostic imaging
and radiology facilities.
7-year concession to provide
advanced imaging and radiology
services across 4 government
hospitals/medical
colleges.
Awarded to Wipro GE Healthcare
Ltd. and Medall Healthcare Private
Ltd.
India: Andhra Pradesh Radiology (2010)

15. 500,000 citizens of the greater
Calabar area to benefit
A new referral hospital for
underserved Cross River State.
10 year concession to
design, build, and manage the
clinical and non-clinical services of a
new hospital.
Awarded to UCL Healthcare
Services Ltd.
Nigeria: Cross River Health (2013)

16. 78,500 people with improved
access to services.
$225 million in investment.
Two new hospitals (maternity
and neurology services) and
blood bank facility with a
combined 424-bed capacity.
20-year concessions to
finance, design, construct, furnish,
equip, maintain, and provide non-
clinical management services.
Awarded to an international
consortium: Egypt’s Bareeq Capital,
G4S, Siemens & Detac.
Egypt: Alexandria University Hospitals (2012)

17. Moldova: Radiology and Diagnostic Imaging (2011)
12-year concession to
construct, equip and operate a new
diagnostic imaging and radiology
center.
First PPP in Moldova.
Awarded to Magnific a Moldovan
health care services provider.
Over 100,000 people with
improved access to service
$7 million in private investment
5% of annual revenues
returned by operator to Republican
Hospital

18. 400,000 people with improved
access to services
$50 million in investment
New 298-bed emergency
hospital in Periperi district of
Salvador, Bahia.
10-year concession to
equip, maintain, and operate both
clinical and non-clinical services.
Awarded to Promedica and
Dalkia.
Brazil: Hospital do Subúrbio (2010)

19. 330,000 people with improved
access to services.
$77 million in investment.
New 425-bed hospital and
network of public filter clinics
forming a regional health network.
18-year PPP to design, build,
finance and operate facilities,
including clinical services.
Awarded to Tsepong
Consortium, headed by
NetCare including local doctors and
investors.
Lesotho Hospital PPP (2009)

20. OVERVIEW OF PPPS
20

21. WHAT IS PPP?
1. PPPs are long-term contracts for
governments to buy a bundled service
(facility, staff, supplies, equipment)
2. PPPs involve payments over long-
term after facility commissioning
3. Payment is tied to performance or
outputs NOT inputs/milestones
4. Private party is typically responsible for
all or part of the capital financing
5. Each party shares the potential
risks and rewards in the delivery of
the service and/or facility.
21
1
2
Improve
Services
Mobilize
Capital
3 Increase
Efficiency

22. MOVEMENT OF SELECTED PUBLIC SECTORS
TOWARDS PRIVATE STRUCTURES
Public Administration PPP Private sector
•Rail •Post
•Waterways •Telecommunications
•Road •Energy supply
•Defence
•Water supply •Water supply •Water supply
•Health care •Health care •Health care
•Social services •Social services •Social services
•Waste disposal •Waste disposal •Waste disposal
•Sewage disposal •Sewage disposal •Sewage disposal
22

23. PUBLIC
SECTOR
PRIVATE
SECTOR

Free Provision of Products
and Services
Unsustainable for Government &
Donors
Unsustainable for Consumers
Profit Maximization
Break Even 




GOAL IS TO CREATE FINANCIALLY
SUSTAINABLE SYSTEM
23

24. WHY PPPS ?
Demand
Market
Supply
PPPs can
fill this
gap
Resources
time 24

25. DIFFERENT PPP MODELS , DIFFERENT
COUNTRIES
Each Country’s approach to PPP need to be;
 Designed to meet the policy objectives of its
Government
 Developed to complement other public procurement and
public service delivery methods
 Designed according to the available private sector
resources
 Implemented according to the available public sector
resources
PPP to be used whenever private providers can perform
government functions as well or better.
25

26. ADVANTAGES AND DISADVANTAGES OF PPPS
Potential Benefits
 More incentives for
private sector to perform
 New facilities available
earlier
 Increased levels of
efficiency and innovation
 Risks transferred to
private sector
 Forward spending
commitments known and
able to be planned for.
Potential Issues
 PPP contracts can be
very complex
 Results assessment is
often subjective
 Public sector may be
locked into contracts
while health demands
change
 PPPs may not gain the
population’s trust
26

27. PPP TYPICAL STAKEHOLDERS
Government
Loan providerLicensee /Project
company
General contractor
Investors
Maintenance
Public sector or
private sector use
Operator
Rentor
fee
Provisionof
service
Concession
Grant
Interest/re-
payment
Return
Equity capital Loan
Service
Construction
Constructionatagreed
priceandtimeframe
Remuneration
27

28. COMMON PPP MODELS
• To provide Services the government previously
performed
Service Contract
• To cooperate or manage a facility or provide multiple
services
Management Contract
• Government leases infrastructure for a fee
• Private Operator takes operational risk, may include
investments requirements
Lease to Private
Sector
• Granting exclusive rights to provide & maintain
infrastructure for specific time period. Private partner
takes significant investment risk
Concession
• Transfer of asset in full or in part, Generally certain
conditions included to ensure services continue to be
delivered
Divestiture
(Privatization)
28Concessions can include a number of variations
PLAN - DESIGN - BUILT - CONSTRUCT – FINANCE - OWN
OPERATE - MAINTAIN - TRANSER - LEASE

29. GOVERNMENT SUPPORT MECHANISMS
(A)Cash subsidy:
Provides cash subsidy as
total lump sum or a fixed
amount on a per unit basis, &
payments in installments or
all at once
(B)Payment Guarantee:
Govt. agrees to fulfill the
obligations of purchase in
case of non performance by
the purchaser
(C) Debt Guarantee:
Govt. secure entity’s borrowings
by guaranteeing repayment to
creditors in case of default
(D) Revenue Guarantee:
Govt. sets a minimum variable
income for private partner;
typically his income is from
customer user fees.
29

30. THE TURKISH HEALTH CAMPUSES
PPP PROGRAM
30

31. THE TURKISH HEALTHCARE SYSTEM
highly regulated market with increasing private sector involvement
31

32. 32

33. 33

34. 34

35. THE TURKISH MINISTRY OF HEALTH PPP
HEALTH CAMPUSES MODEL (BLT)
 Under the Build-Lease-Transfer (BLT) model, the private sector
finances and builds a facility and then leases it to the relevant
public authority, with the state providing the public service.
 The infrastructure facility is leased for a maximum of 30 years
and the public authority pays a lease fee to the private investor
and operates the facility during the lease period.
 The SPV provides the design, construction works, medical
devices/equipment, and furniture for the health campus. Non-
medical services are provided by SPV.
 MoH provides health services and takes all responsibility of
medical treatment.
 Lease payments are increased annually by the arithmetic
average of the Turkish Producer Price Index and Turkish
Consumer Price Index for the preceding year.
 Healthcare facilities are to be transferred to the public at the end
of the operation period in good operating, well-maintained and
usable condition, free of all charges, encumbrance or
undertakings upon the termination of the Project Agreement. 35

36. NO LIFECYCLE RISK
 The SPV is only responsible for the initial
investment.
 The SPV will be only responsible for the delivery of
the first set of all medical equipment and furniture
as set out in the Project Agreement
 The renewal of the medical equipment and the
furniture will be handled and provided by the
Ministry.
 The maintenance under Furniture and Medical
Equipment Support Services will be carried out by
the SPV
36

37. SUCCESSFUL PARTNERSHIPS WITH MIGA,
EBRD AND IFC
Successful partnerships enabled Turkey’s first greenfield project bond
(Elaziğ’s Project) issuance of a 20-year, €288 million euro-denominated
bond to finance the PPP.
 The European Bank for Reconstruction and Development (EBRD) and
the World Bank’s Multilateral Investment Guarantee Agency (MIGA) have
developed an innovative risk mitigation scheme:
 EBRD provided €89 million to mitigate the risks of construction and
operation.
 MIGA provided political risk insurance for the bond as well as for the
project’s equity investment.
 This involvement bumped up the Moody rating to Baa2, two notches
above Turkey’s rating.
 Also the International Finance Corporation (IFC) invested on a parallel
basis in an unenhanced tranche of the bond.
 As a result, the credit enhancement mechanism enabled the participation
of a larger pool of investors and mobilized new sources of funding.
 The 28-year concession was awarded to a consortium to design, build,
finance, equip and maintain the integrated hospital campus.
37

38. LESSONS ON THE LEASE MODEL & CREDIT
ENHANCEMENTS
 Government support is a precondition for success ; PPPs provide
funding and expertise. Private sector participation in healthcare projects
brings money and experience to the table, and enabling investments that
government cannot afford by itself.
 A robust contractual framework with a well-defined revenue
payment mechanism, risk allocation and a favorable termination
regime is fundamental to attract new classes of private investors.
 Rating agencies recognize the EBRD-MIGA risk mitigation product
and the multilateral involvement specifically; the MIGA PRI policy
covers currency transfer, expropriation and breach of contract while
EBRD standby facilities provide liquidity in construction and operations
mitigating risk of protracted arbitration.
 This approach can be replicated. Credit enhancement may be rolled
out across many markets and sectors for PPPs (both for Greenfield
financing and brownfield refinancing) helping to crowd in private
investment. 38

39. PPP MODELS USED IN HEALTHCARE
39

40. PPPS IN THE HEALTHCARE SECTOR
40
PPP model Common term Definition / Explanation
Health services only
(can be selective)
(Private management of a
public hospital)
Operating contract,
performance-based
contract, lease,
outsourcing.
A private operator is brought in to
operate and deliver
publicly funded health services in
a publicly owned
facility.
Facility Finance
(accommodation and
medical equipment), can
include refurbishment
Design, build, finance,
operate(DBFO), build,
own, operate, transfer
(BOOT), Build Lease
Transfer ( BLT).
A public agency contracts a
private operator to
design, build, finance, and
operate a hospital facility.
Health services within the
facility are (mostly)
provided by government.
Combined
(accommodation,
equipment and
health Services)
Twin accommodation/
clinical services joint
venture/ Franchising, or
full DBFO, BOOT
concessions
A private operator builds a facility
and provides free (or subsidized)
healthcare services to a defined
population.

41. OUTSOURCING CLINICAL & NON-CLINICAL
SERVICES
Non-clinical services
IT equipment & services,
maintenance, food, laundry,
cleaning, buildings &
equipment, management.
Primary Care
Primary care, public health,
vaccinations, maternal &
child care.
Clinical Support Services
Lab analysis, diagnostic
tests, medical equipment
maintenance, and other
support services
Specialized Clinical
Services
Dialysis, radiotherapy,
day surgery, other
specialist services.
41

42. PPPS IN THE HEALTHCARE SECTOR
42
PPP Type Political
Will
GOV. Capital
Investment
Gov. Operational
Requirements
Problems and Challenges
Service
Contract
Low High Low
Local government unit (LGU)
must be able to administer
multiple contracts
simultaneously. LGU must
have strong contract policing
powers and political will.
Management
Contract
Moderate Moderate Moderate
Private sector partners usually
encounter problems with LGU
budgetary process, staff hiring
and firing.
Lease To
Private
Contract
Moderate Moderate High
Issues of low maintenance of
infrastructures and
equipment’s
Concessions
(Including
Lease to
Government)
High Low High
LGU must be powerful
enough in ensuring
reasonable fees and quality
outcomes. Issues of
inefficiencies and low
innovations

43. VARIOUS PPP MODALITIES
PPP Type
Recommended
Years of
Partnership
O & M
Outcomes
Responsibility
Risk
Assumed
by GLU
Competitive
Pressure
Service Contract Annual Government Low High
Management
Contract
3 – 5 Years Government
Low to
Moderate
High During
Bids
Lease To Private
Contract
3 – 5 Years Private Moderate
High During
Bids
Concessions
(Including Lease to
Government)
10 – 25 Years Private High
Moderate to
Low During
Bids
43

44. TYPICAL PPP PRIVATE PARTNER
COMPENSATION
 Government provides
financial support to
mitigate demand risk,
 OR ensure full cost
recovery is compatible
with affordability criteria &
the public’s ability to pay.
 Contribution,
Investments, Guarantees
& Subsides are common.
 Provides strong incentives
for the private sector to
complete the projects in
time & within budget
 Thus allows government &
public authorities to spread
the cost of public
infrastructure over several
decades.
 Thus more budget certainty
for govt., while liberating
scarce public resources for
other social priorities
User Based Payments
Availability (Lease)
Payment
44

45. MORE ON PRIVATE PARTNER COMPENSATION
IN HEALTHCARE
 Payment by Clinical Activity
Lines
 Variable payment
according to effective
clinical production
 Availability payment
component related with
special and specific
clinical units
 Pharmaceutical’s savings
sharing
 Performance Failures
Deduction
 No Availability-No
Payment
 Annual Service Payment
 Fixed Component:
annual, not subject to
revision
 Variable Component:
annual according to
treated patients
 Performance Failures
Deduction
User Based - Inpatient
Outpatient Payment
Availability (Lease)
Payment
45

46. PRIVATE SECTOR TYPICAL REVENUES IN A
PPP
46

47. PPP LEASE PAYMENTS
 Availability Payments (Lease Payments)
 Availability payments account for around 90% of EBITDA
 Collected independent of hospital occupancy rates.
 Guaranteed by MoH, Adjusted quarterly by Inflation and
Devaluation
 Service Payments
 Non-Volume services ( extraordinary Maintenance, Utilities,
Furniture, Landscape, Pest Control, Car parking, Cleaning,
Security, Administrative – Help Desk, reception, guiding, etc.)
independent of volume, occupancy, consumption
 Volume Medical Services (Lenin, Catering, Waste Management),
minimum amount guaranteed by MoH.
 Volume Non-Medical Services (Laboratories, sterilization, imaging
and disinfection, rehabilitation), minimum amount guaranteed by
MoH.
 For services rendered for an occupancy rate above such threshold
the MoH will pay a discounted unit price
 Commercial Revenues (Retail , Advertisement Space)
 Accounting for near 2% of total turnover, 3rd Party risk
47

48. INTERNATIONAL PPP SCOPE & PAYMENT
MODELS FOR PUBLIC HOSPITALS
United Kingdom Availably Payment
Basically, Infrastructure
Services and Hard & Soft
FM
Valência (Spain)
Payment by a per capita
fee
Integrated Delivery of
Primary and Acute
Hospital Care for a
population area
Portugal
Availably Payment
Payment by Clinical
Episodes (“Case Mix”)
Hospital Management,
Infrastructure and
Clinical Services
Victoria
(Australia)
Payment by Clinical
Episodes (“Case Mix”)
Hospital Management,
Infrastructure and
Clinical Services
48

49. RISK Lease Model RISK ALLOCATION & MITIGANTS
Land Issue
All risks arising out of the land will be under the responsibility of the Administration.
The third parties' allegations related to the land shall be settled by the
Administration.
Permits/
Planning
The Administration is responsible for planning and zoning. The construction permit
shall be flowed down to the EPC Contractor.
Delay Risk
In case of a delay at the completion of the Project, the Project Co will have to
submit bonds for delay-liquidated damages for each phase. The bond requirement
for delay liquidated damages shall be flowed down to the EPC Contractor.
Environmental
Environmental and social impact assessment report in line with the IFC's
guidelines. The EPC Contractor and O&M Company shall follow this report.
Guaranteed
Payments
Administration guarantees for Availability Payments and Services Payments and
the minimum quantity for the volume based services.
Change in Law The Project Co shall be entitled to claim a variation in case of change in law.
Unavailability of
Insurance
In case of any unavailability of a particular special hazard insurance, the Project Co
shall be exempted from its insurance obligation until such insurance will be
available again in the insurance market.
Expropriation and
Nationalization
Expropriation and project nationalization issues addressed in the Project
Agreement will be an Administration event of default.
Assignment
The Project Co shall be entitled to assign the payments and insurance proceeds to
the lenders.
49

50. HOSPITAL PPP’S: TYPICAL ASSUMPTIONS
Item
Cost /
Expense
Revenue
Distribution
Capex Assumptions:
Gross area per bed (m2) 170
Constructions costs/m2 2000 USD
Construction/Equipment Cost Ratio 1.4
Annual Maintenance Capex: 10%
Building (as % of original cost) 2.5%
Equipment (as % of original cost) 15%
Operating Assumptions:
Operating cost/bed/year($) 140,000 USD 57%
Financing Assumptions
Debt/Equity Ratio 70/ 30
Target Equity IRR 16% 16%
Debt Service 17%
50

51. PPP BANKABILITY ISSUES (ONLY IN
LERASE / AVAILABILITY MODEL)
 Granting Lenders STEP-IN RIGHTS
 Senior Debt payable by MoH / Government on
Project termination by Government / SPV
 Providing Lenders with “Sovereign Guarantee” or
Lenders signing Direct Agreements with the MoH
Government
51

52. PPP FOR HEALTH CARE
52

53. Rise in non-
communicable
diseases
Shifts in
provision of
care
Increasing
costs and
expectations
COMMON HEALTHCARE CHALLENGES &
CONSTRAINTS
Lack of
infrastructure
Shortage of
trained staff
Limited
resources
53

54. TYPICAL PPP NATIONAL HEALTH STRATEGY
(NHS)
Managing
Change
Competition
& Sector
Regulation
Increasing competition between
providers
Increase patients’ choice
Creation of a Health Regulator
3
PPP’s
Schemes
Proper Legal Framework
Partnerships. Health
PPP Programs with emphasis on
hospital renewal and modernization
1
Hospital
Corporatization
Transforming public hospitals into
private/public owned corporations /
IPO’s
Introducing a new hospital finance
system
Improving efficiency and quality of
hospital operations
2
54

55. CURRENT FOCUS OF PPP IN HEALTH
 To utilize untapped resources and strengths of the
private sector (exchange skills and expertise between
the public and private sector).
 To enhance the capacity to meet growing health needs
 To reduce financial burden of government expenditure
on tertiary care
 To reduce geographical disparity in provision of services
and its access (reaching remote areas; target specific
group of populations).
 To improve efficiency through evolving new
management structures
 To improve quality, accessibility, availability, acceptability
and efficiency
 To strengthening existing health system / widen the
range of services and number of services providers.
55

56. PPP’S IN HEALTHCARE
BASIC CONCEPTS AND TENDER DESIGN PRINCIPLES
Public-Private
Partnerships
Long term association
with a private operator
or a social entity
within the context of
the NHS
Partnership duration
related with assets life
cycle (maximum
duration 30 years)
Emphasis on Output
Specification and
Performance Levels
Risk Transfer to
Private Operator,
accordingly to the
party best able to
manage them
Competitive
Procurement based
on Standardize
Documentation
PPP schemes and
contracts subject to
economic / financial
appraisal
(Affordability and
Value for Money)
56

57. LESSONS LEARNED
Is there a recipe for success?57

58. PPP’S ARE COMPLEX!
Focus
Hospitals
Primary Care Centres
Continuing Care Centres
Functional Hospitals Units
Diagnostic & Treatment
Services
Activities
Design
Construction
Financing
Maintenance
Hard and Soft FM
Services Management
Clinical Services
Payment Mechanisms
Single Payment Mechanism
Service Availability
Per Capita Rates
DRG´s & Casemix
Global Package
Combined Payment
Mechanism
Scope
Single Projects
By Health Facility
By Area/Residential
Population
“Clusters”
Vertical Integration
Horizontal Integration
PPP
58Access for the poor and affordability need to be considered at the PPP
design stage and tracked to ensure achieving equitable and efficient
healthcare services whereas the poor actually benefit from PPPs.

59. CORE PRINCIPLES OF PARTNERSHIP
True partnerships entails
 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
SOMETIMES;
 Policy makers enthusiastic at the onset
 THEN; Half hearted support for PPP
 LASTLY: Lack of Trust on both sides 59

60. IMPORTANT ISSUES IN HEALTH PPPS
Use PPPs to expand
service / improve quality
Not as means to finance new
buildings/equipment
Define services needed
(not facilities)
Give operators flexibility on how to
provide service
Maximize private sector
responsibility
“Full” PPPs deliver more benefits,
Integrated Approach
Contract management
capacity
Monitoring is essential, but often
overlooked
Long-term fiscal space is
essential
PPPs part of a broader
sector reform
REFORM FOCUS ON Promoting
competition and efficiency
Availability PPP are contingent
Government Liability
60

61. CRITICAL SUCCESS FACTORS IN
HEALTHCARE PPP’S
 Public sector backing-reassurance to private sector.
 Existence of a vibrant private sector. A catalyst can bring
partners together whom can offer expertise.
 Commitment of private sector decision-makers.
 Road Map , Clear Ownership, Understanding Roles,
Responsibilities, Expectations.
 Defining Quality or Performance or Outcome indicators.
 Timely revisions / updating of contract.
 Defining & verifying beneficiaries especially high cost
services.(WHO PAYS)
 Clarity on user fees.(HOW MUCH)
61

62. LESSONS LEARNED
 Design to meet policy objectives
 Political commitment
 Planning and piloting
 Enabling legislation
 Transparency
 Advantages of PPP efficiency can be achieved through:
 Life-cycle approach
 Right distribution of tasks and risks
 Improved incentives
 For many administrative bodies this can entail:
 New way of thinking – output instead of input
 Tasks of greater complexity
 More responsibility
 HOWEVER: Challenges REMAIN;
 Cost Containment
 Capacity of Private Partner
 Accreditation
 Regulation by the Government
 Compulsory Insurance Coverage NEED
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63. INGREDIENTS FOR A SUCCESSFUL PPP IN
HEALTHCARE
Public
sector
capacity
Fiscal
affordability
Legislative
and
regulatory
environment
Fit with
wider
health
strategy
Appropriate
risk sharing
Private
sector
capacity
Strong
political
will
Focus on
services
delivery, not
facilities
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64. RECIPE FOR FAILURE?
Changing
environment
impacts key
parameters
?
Long term
fiscal
affordability
in question
Limited
monitoring
capacity
PPP isolated
from wider
health
system
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65. PPP AND HEALTH CARE IN GCC
65

66. GCC HEALTHCARE STATISTICS
66

67. HEALTHCARE PPP FINANCE
CHALLENGES IN GCC COUNTRIES
 The high rates of non-communicable diseases in most GCC countries are
having increasingly effects on the health system.
 Specialty Areas in GCC with significant capacity gaps ; intensive and critical
care, emergency care, neonatology, oncology, pediatrics, orthopedics,
rehabilitation and psychiatry.
 Large expatriate populations which leads GCC countries to use different
strategies to control expatriate healthcare expenditure; People are spending
more and more out of their own pockets to receive healthcare services.
 Perceived Private Hospitals “Over” billing & “ Over” testing. Blended with
NEW “ Patients Experience” MARKEING TOOLS (making patients pay more
for a HOSPITAL BRAND)!
 ONLY UAE & Saudi Arabia have fully implemented a Compulsory
Employment-based Health Insurance.
 Minimal integration between healthcare system players prohibiting effective
care coordination, healthcare prevention and causing service inefficiencies
and clinical variations.
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68. REFERENCES
68

69. loayg@works.gov.bh; loay.ghz@gmail.com
00973-36711547
http://bh.linkedin.com/in/loayghazaleh
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