Dr Rajmohan Panda, Senior Public Health Specialist, Public Health Foundation of India, highlights that strategic purchasing through PPPs will minimise out-of-pocket expenditure at the point-of-care for patients while delivering good quality health services
Deficiencies in the public sector health system in providing good quality and timely health services to the population are well documented. This has forced poor and vulnerable sections of the population to purchase health services from the private sector, perceiving it to be better and more responsive to their needs. The private sector today provide a large volume (around 70 per cent of OPD and IPD) of health services in the country but with little or no appropriate regulation. Efforts by state health departments to reign in these sector with policy reforms has met with limited success. The private sector is not only India most unregulated sector but also its most potent and untapped. To address the inefficiency and inequity in the health system, many state governments have undertaken health sector reforms. One of these reforms has been to collaborate with the private sector through public private partnership (PPP) to reach the poor and underserved sections of the population and to prevent large out of pocket expenditure which pushes significant numbers of people into poverty. Some of these PPP models have been through insurance mechanisms, referral transport, diagnostics, contracting out primary health services, and even high end tertiary care services like kidney dialysis centres.
However such partnerships have their share of issues and challenges. These issues are usually around the motives of the private sector, scope and objectives of partnership, policy and legal frameworks, benefits of such partnerships. These issues are mostly due to lack of technical and managerial capacity of governments and private agencies to manage and monitor such partnerships, appropriate incentives for the private sector, and explicit benefits to the poor through these arrangements. In its simplest form, a public private partnership (PPP) is an arrangement between the public and private sectors with clear agreement on shared objectives for the delivery of public infrastructure and/ or public services by the private sector that would otherwise have been provided through traditional public sector procurement. The PPP approach has the potential to offer value for money and timely delivery of infrastructure when applied to projects of the right scale, risk and operational profile. One key aspect of the PPP approach is that risk is transferred to the party that can manage it best but without a measurable outcome of the risk, the PPP can just be another instrument of ineffectiveness.
Evidence on the efficiency of such partnerships in India has been scanty. Impact and outcomes of such partnerships are difficult to measure as outcomes of healthcare delivery cannot be easily attributed to just the provision of hospital and clinical care. In this regard it is important to examine the framework of these partnerships and the level of transparency of decision making in the execution of these models. These PPP healthcare organisations have a leading role in health promotion in the society and their coordinated action with a set of political, social, and cultural factors can improve people’s health at minimal cost to the consumer. Since this sector is the recipient of a large part of the healthcare expenditure in the country, full attention to its performance and costs is of particular importance. Trying to implement the principles of the private sector to solve major problems in the public sector can have intended as well as unintended consequences. In fact, PPP can be a powerful political tool for improving and promoting the survival and quality of services in public hospitals too. There is a growing belief that partnership between public and private sectors can lead to increased efficiency, equality, accountability, quality and accessibility in the health system. In the health sector, the PPPs can make use of mutually competitive advantages of each other in the fields of technology, knowledge, resources, skills, and management capabilities. Several factors have been identified for the implementation and success of executing PPP projects. Consumer awareness and participation are critical elements of any partnerships especially so in PPPs where public resources are being used by the private sector to deliver services. Also without effective governance and stewardship from the public partner these partnerships will not be able to deliver on that promise of good quality health services in the country. Strategic purchasing by state health departments will minimise out-of-pocket expenditure at the point-of-care for patients while delivering good quality health services. At scale such models can help in achieving universal health coverage (UHC) and help in covering the last mile.
This will also be in tune with the government’s move to a cashless economy as all transactions by such partnerships will be in digital mode. Effective governance and institutionalising such models with regular monitoring and evaluation will help to dispel notions that the private sector in PPP is only interested in profiteering. Harnessing private resources for public goods is a challenging task, however we have to move beyond the idea that the public and private sectors are always at odds. It is the responsibility of the government to lay the groundwork for private equity to productively invest in things like health. We must remember that the best partnerships aren’t dependent on only a mere common goal but on a shared path of equality, desire, and a great deal of commitment.
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