SHOPS is funded by the U.S. Agency for International Development.Abt Associates leads the project in collaboration withBanyan GlobalJhpiegoMarie Stopes InternationalMonitor GroupO’Hanlon Health Consulting

Public Private Partnership as a Sustainability Strategy

Dr. Nelson GitongaPrivate Sector Advisor, SHOPS Project

June 2013 Mombasa

Presentation Outline

• Sustainability approaches

• Overview of private sector

• Why engage the private sector?

• What is PPP? –Levels, Types, Mechanisms & Objectives

• Examples of PPP’s

• Opportunities for RATN/ACA in PPP’s

1. Sustainability Approaches in Health Development

• Emphasize country-led and country-owned programs• Alignment between country and development partner

strategies• Investment in leadership, capacity building & systems• Maximizing a client-centred approach through integration

of services and systems.• Increased engagement and involvement of the private

sector - Commercial/NGO/FBO/CSO in improving health systems and delivery

• Ensure strategic collaboration and coordination of all key stakeholders

• Focus on results and mutual accountability

(USAID Kenya Guiding Principles in health programming).

Sustainability Approaches in Health Development contd.

• Key determinants of sustainability.• Local ownership and leadership• Relevance and alignment first to national then regional and global

health context and priorities• Mobilization of local resources and capacities• Demonstration of results

• Funds and resources both local and international will follow sustainable and innovative approaches.

• The new era of Sustainable Development Goals – SDG’s (Ref: SAT presentation)

• Relative roles and links between trade and aid will change (?More trade and less aid?)

2. Who is the private sector?

• Non-state actors within the health sector.• Private for profit entities • Private not-for profit entities – NGO, FBO. CSO’s

• Non-state actors outside the health sector• Businesses – ICT, telecommunication, financial services, mining,

agriculture etc• Employer groups• Education institutions and foundations

Who is the Private Sector in Health?

Providers and facilities exist in both FBO/NGO and for-profit sectors – more commonly a solo practitioners (small scale

providers)

Understanding of the Many Roles of the Private Sector in Health

Myths about the Private Commercial Sector in Africa !

• Myth #1: Health in Africa is financed primarily by the public sector

• Myth#2: The private health sector only or mostly benefits the wealthy

• Myth #3: The private health sector is insignificant in Africa

• Information about the private sector is available in:• Various research publications such as the Private Sector

Assessments (West, East and Southern Africa) (USAID, IFC/WB) (SHOPS website –www.shopsproject.org)

• Health System Assessments (USAID HS 20/20)• National Health Accounts series• DHS series

3. Why engage the private sector?

Broad Rationale::

A ‘whole sector approach’ is more effective and efficient

Promote local ownership and leadership

Enhance relevance and alignment in programs

Mobilize local resources and capacities to fill in funding and capacity gaps

Public health case

Business case

Business Case for Health PPPs

Attracts private capital investment and managerial expertise (often to either supplement public resources or release them for other public needs)

Realizes long-term value-for-money through appropriate risk transfer to the private sector over the life of the PPP

Rationalizes the use of existing health resources and infrastructure – public and private alike –effectiveness and efficiency

Reforms sectors through a reallocation of roles, incentives, and accountability

Public Health Case for Health PPPs

Improves access to key health services and products

Leverages private sector resources – expertise and infrastructure – to health

Introduces innovations and new technologies into the health sector

Increase efficiencies in service delivery

Promotes greater equity and helps ensure universal coverage of health

Risks of Health PPPs

Requires new and different capacity to ensure “value for money”

If not structured well, can pass the cost of H/PPP to consumers

Requires political and financial stability and support to implement PPP/H

Government still has responsibility for ensuring access and quality of services and products

Difficult to plan for all contingencies that may arise over the life of a PPP/H

4. What is PPP? Different Levels of Engagement with the Private Sector

Engagement & dialogue between the public and the private sectors to share ideas and concerns, to build trust, common vision

Public and private sector working together to reform policies and collaborate on health priorities

Public and private sectors partnering to deliver health services and products and/or address health system gaps

P1 Public private dialogue

P2 Public private interaction

P3 Public private partnership

Different Concepts for Health PPPs by “Tribe”

Gov’t establishes an on-going relationship to work with private sector on health sector issues of common interest

Gov’t establishes long-term contract for services (may include use of public assets)

Gov’t incentivizes private actors to invest capital in delivery of health services and products

Defining Public Private Partnership (P3)

• PPP is a contractual arrangement between a public sector entity (government agencies, regulatory bodies and government-owned health facilities) and a private sector entity (entity with majority non-governmental ownership).

• Through this agreement, the skills and assets of each sector (public and private) are shared in delivering a service or facility for the use of the general public.

• In addition to the sharing of resources, each party shares in the risks and rewards potential in the delivery of the service and/or facility.

Fundamental Features of a PPP/H

Clear definition, allocation of and agreement on Desired outcomes Roles and responsibilities of the parties Sensible risk-sharing among the public and the private

sector partners Available resources Financial rewards to the private party commensurate with

the achievement of pre-specified outputs

Rather than buying buildings, equipment and/or supplies, PPPs are long-term contracts for gov’t to buy a bundled services (facility, staff, supplies, equipment)

PPP Involve annual payments over long-term after facility commissioning

Payment is tied to performance not inputs/milestones

Private party is typically responsible for all or part of capital financing

Health PPPs How they differ from traditional public procurements

Resource Sharing

Contracts / MOUs

Design Build Operate

Leases and Concessions

Level of Private Sector Involvement

Deg

ree

of C

ompl

exity

for

MO

H

Staff Medicines Supplies Help in equipment maintenance

Resource sharing Services Management

Facilities Medical equipment Maintenance

Infrastructure

Most Common P3-level Arrangements / Structures in Health Sector

PPPs Arrangements in Health

Clinical Services

Non-Clinical Support Services

Clinical Support Services

Medicines and

Equipment

HRH Education and

Training

Facility/ Hospital

Management

Infrastructure

ICT Maintenance Food Laundry Cleaning Billing

Primary Care MCH RH/FP HIV/AIDs TB/Malaria Specialized Dialysis Radio-therapy Other

Lab analysis Diagnostics

tests Ambulance Medical

equipment maintenance

Open donor sponsored training

Joint labor & education planning

Other?

Management of Specific area

(e.g. maternity ward)

Entire hospital Network of

clinics and/or hospital

Medical equipment

Medical supplies

Specific medicines

Local manufacturing

Detailed design

Building construction

Medical equipment

Capital financing

Increase Access Improve Equity Decrease Costs Improve Efficiency

Contract for services

Contract for services

Service Level Agreements

Vouchers MOUs Subsidized

inputs Staff sharing

Contract for services

MOUs Subsidized

inputs Staff sharing Equipment

sharing

MOU Contract for

services Capital

financing

Management Contracts

Co-location Leasing

Contract for services

Lease contracts

Capital financing

Build-Operate-Transfer

Arr

ang

emen

t G

oal

A

ctiv

ity

Are

a

Health PPP Process

MOH MgmtPPP UnitMOH MgmtPPP Unit

PPP UnitMOH/Dept FinanceMOF

PPP UnitMOH/Dept FinanceMOF

Structure a Health PPPMarket it to the private sector

Prepare PPP arrangementConduct offer process

Structure a Health PPPMarket it to the private sector

Prepare PPP arrangementConduct offer process

Phase 1: Analysis and Prioritization

Conduct feasibility/ sustainability studyReview legal/policy framework

Assess MOH institutional capacityIdentify MOH PPP Team

Diagnose health sector needsAgree on health priorities and system gaps

Develop a PPP Strategy for Health

Diagnose health sector needsAgree on health priorities and system gaps

Develop a PPP Strategy for Health

Phase 2: Preparation

Phase 3: Design and Award

Phase 4: Implementation and Evaluation

Put financing in placeInitiate PPP activities

Regularly monitor progressClose PPP and Evaluate

Share lessons learned from PPP/H

PPP UnitOutside ExpertisePPP UnitOutside Expertise

PPP UnitMOH/Dept FinanceMOFOutside Expertise

PPP UnitMOH/Dept FinanceMOFOutside Expertise

Sta

ke

ho

lde

r Co

ns

ulta

tion

Priv

ate

Se

cto

r Co

ns

um

ers

Sta

ke

ho

lde

r Co

ns

ulta

tion

Priv

ate

Se

cto

r Co

ns

um

ers

Set PPP prioritiesEstablish selection criteriaApprove PPPsCreate regulatory/ legal framework and structure

Set PPP prioritiesEstablish selection criteriaApprove PPPsCreate regulatory/ legal framework and structure

Stakeholder Roles in the Health PPP Process

Roles and Responsibilities

Government

Agree on common goal for PPPs

Express interest to participate

Provide company data to assist in due diligence

Implement PPPs

Agree on common goal for PPPs

Express interest to participate

Provide company data to assist in due diligence

Implement PPPs

Private Sector

Participate in design of PPP’s

Communicate health needs and priorities

Adopt positive Health seeking behavior

Provide feedback on quality of services

Participate in design of PPP’s

Communicate health needs and priorities

Adopt positive Health seeking behavior

Provide feedback on quality of services

Consumers

Assist Gvt to establish PPP reforms and enabling environment

Provide unbiased evaluations on PPP options

Facilitate cooperation

Assist Gvt to establish PPP reforms and enabling environment

Provide unbiased evaluations on PPP options

Facilitate cooperation

Outside Expert

Factors Contributing to Successful Health PPPs

Clear definition of desired outcomes and each partners’ roles and responsibilities

Structured, regular and open stakeholder consultation

Clear sector strategy and roadmap creating certainty in the health sector

Clear government commitment and designated champions demonstrating credibility

Designing Pro-Poor Health PPPs

PPP Arrangements Incentives

Resource Sharing •Link inputs to services delivered to low income groups

MOUsService Contracts (SLAs)Management Contracts

•Link MOU/contract activities to agreed upon goals (e.g. increase access, remove financial barriers to poor)

•Link payments to performance indicators (quality, access, saving to subsidize poor)

•Create additional incentives for services targeting poor in remote areas

Lease Concessions Co-location

•Offer incentives to provide services to low income groups within catchment area – difficult to extend leasing to remote locations

•Offer concession in exchange for assured quality, convenience and affordable pricing for low income consumers

•Create additional incentives to operate in remote areas

B-O-T •Build facilities in underserved areas and for target population groups

5. PPP Examples:P1 Policy Dialogue: Kenya Example

PPP Health Kenya Signed a Letter of Intent outlining rules of engagement Functions as Board of Directors advocating for H/PPPs Established a road map of key areas to be addressed

through policy reform Participates actively in policy forums, strategic planning etc.

P1 Policy Dialogue: Other African examples

GhanaPrivate Health Sector Alliance in Ghana (PHSAG) set up with wide membership of private sector organizations Recently formed to organize private sector voiceMeets regularlyStarting to form direct relationship with public sectorWith MOH help, starting to attend policy and planning meetings

TanzaniaPPP-Technical Work Group set up as part of a larger donor coordination board. Focuses primarily on coordinating health programs between the sectors and donors. Have conducted a Private Sector Assessment similar to KenyaHave requested TA to establish a policy forum like PPP-Health Kenya to elevate the PPP-TWG to a sector-wide forum

P2 Interaction and Coordination: Kenya Example

Public sector, private sector and donors in Kenya are partnering to achieve the following: Develop laws, policies and plans that recognize private sector

contribution and define private sector roles:• Position paper on the implication of the constitution on the health sector• Kenya Health Policy Framework• General Health Law and Acts• A healthcare financing strategy• NHSSP III

MOU with private universities on training health workers MOU with FBO hospitals for provision of staff and

commodities

P2 Interaction and Coordination: Other African Examples

UgandaKakira Sugar Works and MoH are collaborating to expand HIV/AIDS prevention services including male circumcision and workplace prevention program at Kakira Sugar clinic. MOH provides training, equipment and IEC

NamibiaGovernment and the Namibia Business Coalition on AIDS (NABCOA) collaborated in Global Fund Round, with MoHSS and MoE secunding staff to private sector implementers

TanzaniaMoHSW and the private sector association APHFTA worked together to revise the Health Sector Policy in 2007 recognizing the private health sector as well as the PPP act in 2010 setting the foundations for PPPs in health

P3 PPP: Kenya Examples

Existing PartnershipsEast Africa Latex Manufacturing: the company and GoK signed an MoU whereby the company will produce condoms and other rubber products and the government will be a major buyer

Gold Star Network Social Franchise: MoH/NASCOP donates HIV/STI commodities, facilitates training, and oversees guidelines and standards; Gold Star Network/FHI360 certifies and accredits franchise providers

Reproductive Health Social Franchise Networks: Tunza and AMUA (PSI Kenya and Marie Stopes Kenya respectively) franchise providers and offer RH commodities and services at subsidized rates, while DRH/MOH donates commodities, facilitates training, oversees guidelines and standards

OBA Project: PWC distributes vouchers funded by GoK and KfW to the poorest families to access safe motherhood and family planning services from certified public, private for-profit, and private not-for-profit service providers

P3 PPPs: Other African Examples

NamibiaRosh Pinah PPP: Mining company and MoHSS entered an agreement giving public patients access to mine-operated medical facilities and diagnostics equipment that is not available at the nurse-staffed public clinic

TanzaniaService Agreements: MOH contracts with private and FBO/NGO providers to deliver primary health care services

ZambiaHIV Program: To lower cost of private sector HIV/AIDS treatment, Trust Hospital entered into agreement with NGO to get subsidized ARVs. Trust Hospital convinced private insurance to include HIV/AIDS treatment and care as benefit package

6. PPP Opportunities for RATN (ACA)

In view of RATN/ACA’s new strategic direction, where do you see opportunities for the network in the PPP model?

•Capacity building of national and regional health authorities

•Capacity building of private sector to engage and implement PPP’s

•Participation in selected PPP’s as an implementer/service provider

•Adopt PPP as a cross cutting issue in all strategies

SHOPS is funded by the U.S. Agency for International Development.Abt Associates leads the project in collaboration withBanyan GlobalJhpiegoMarie Stopes InternationalMonitor GroupO’Hanlon Health Consulting

Dr. Nelson Gitonga Private Sector Policy Advisor, SHOPS Project

www.shopsproject.org