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PUBLIC PRIVATE PARTNERSHIPS IN

HEALTH CARE
POLICY AND PLANNING FRAMEWORK

The framework has been designed and developed by:


Deepak Bhandari and Rajesh Jha
EPOS School of Health. 2008
All Rights reserved
Publisher:
EPOS School of Health

POLICY AND PLANNING FRAMEWORK PUBLIC PRIVATE PARTNERSHIPS IN HEALTH CARE


Public Private Partnerships (PPP) have begun in the heath sector. And they are here
to stay. Many talk about it. Few understand its implications. Some get lost in
semantics and related discussions, while others see this to be a simplistic solution
for many challenges in the health sector. Result is a myriad configuration of
opinions and approaches to public private partnerships in the Indian health sector
today.
What has this complex configuration manifested in:
*
Isolated experiments with mixed results.
*
Mismatch between the intent to venture into partnerships and the capacity to

design and manage them.


*
Design of PPP Models without much perspective thinking, planning and evidence.
*
Implementation of initiatives without adequate preparation (environment,
structures and systems).
*
Absence of evidence and data to support the costing frameworks or to
understand the financial implications.
Although it is widely known that public private partnerships are:
*
not an end in themselves.
*
a means to an end.
*
a strategic approach to derive synergy between the comparative

strengths and weaknesses of the public and the private sectors.


Despite this knowledge and understanding how many times have questions like the
ones below challenged us and led us to finding answers based on worldwide
experience:
*
Can this service gap be addressed through PPP?
*
Which services could be covered through PPP and which not?
*
Would private partners be interested in such a partnership? If yes, to what
extent and with what scope? If no, why?
*
How to ensure that the sanctity of socially-driven service-orientation of the
public sector remains undiluted and at the same time the private sector gets
adequate returns (financial and non-financial) on its investments?
*
How can the PPP Scheme be designed to ensure that private partners can get
interested in joining hands?
*
How to select the right private partners?

If wishes were horses,


chapels could have been
churches. This
framework could have
given us answers to all
the questions.

But

the answers lie in the


context within which
the proposed
partnership in expected
to operate. One
framework cannot
capture every context,
because context by
nature is myriad and
specific.
This framework
therefore is an attempt
to equip policy makers
and planners with a
structured tool and a
sequential approach to
design and implement
PPPs.

POLICY AND PLANNING FRAMEWORK - PUBLIC PRIVATE PARTNERSHIPS IN HEALTH CARE

The Approach
We recommend a nine-pronged approach to structured PPP design and implementation:

A. Policy Environment

B. Feasibility Assessment

C. Designing the Partnership


D. Securing the Partnership

E. Enabling the Partnership

F. Managing the Partnership


G. Promoting the Partnership

H. Regulating the Partnership

I. Assessing the Partnership

POLICY AND PLANNING FRAMEWORK - PUBLIC PRIVATE PARTNERSHIPS IN HEALTH CARE

A. Policy Environment
Need:
Evidence-based PPP policy framework based on pre-existing policy prescriptions of the health and
inter-related sectors at the central and state levels.

Tool:
*
Policy Document on Public Private Partnerships in the Health Sector

Implications if not addressed adequately:


*
Governments' decisions related to PPPs may be ad-hoc and may lack consistency.
*
Private partners may perceive lack of commitment and lack of long term perspective and thus shy

away.
*
Serious and large private players may not be attracted in the absence of a clear
statement from the government as to what lies in store for them in the longer-term.
*
Element of mistrust on continuity may sustain among the private partners.
*
May inhibit private partners for bringing in large investments which need longer

time frame for adequate returns on investment .

POLICY AND PLANNING FRAMEWORK - PUBLIC PRIVATE PARTNERSHIPS IN HEALTH CARE

B. Feasibility Assessment
Need:
*
What are the service gaps? Is PPP the best way to strengthen that particular service? Is there

adequate demand and captive market for that particular service? Are there adequate numbers of
private providers available for that particular service? Would the private partners be interested
in such partnerships?
*
What will be the impact of PPP in a particular service on other services provided by the Government

health facilities.
*
What does it cost government to provide a particular service? Would it be cost effective as well as
beneficial in terms of access, quality and utilisation to enter into PPP for a particular service?

Tool:
*
Methodology for feasibility study
*
Checklists for feasibility study
*
Costing of selected service
*
Assessment of market practices in the private sector concerning that service

Implications if not addressed adequately:


*
Decisions may be inappropriate and lacking evidence
*
May be difficult to sell the proposition to the potential private partners
*
Governments may not be able to scientifically determine the scope and structure of the partnership
*
Lack of cost related evidence will lead to irrational decisions which may cost the government dear

or lead to private partners walking out after a while

POLICY AND PLANNING FRAMEWORK - PUBLIC PRIVATE PARTNERSHIPS IN HEALTH CARE

C. Designing the Partnership


Need:
Partnerships need to be designed on principles of equity, access and demand. Essential service package
needs to be designed on sound evidence. Investment and ownership patterns need to be determined.
Roles, responsibilities and mutual obligations need to be clearly delineated. Standardization of inputs,
processes and outputs need to be ensured through systems-based approach.

Tool:
*
Debriefing checklists
*
Options Papers
*
Group Consultations
*
Partnership Scheme
*
Standard Operating Procedures

Implications if not addressed adequately:


*
Government's intention remains inadequately known to the private partners.
*
Private partner views/reservations/concerns remain unknown until it is too late .
*
The PPP scheme is rejected by private partners or the response is inadequate to allow for

competition.
*
Standardization in service delivery and quality becomes difficult to ensure.
*
When the implications sink in partnerships are a casualty.
*
Governments find it difficult to monitor.
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Accountability reduces.

POLICY AND PLANNING FRAMEWORK - PUBLIC PRIVATE PARTNERSHIPS IN HEALTH CARE

D. Securing the Partnership


Need:
For partnerships to sustain, right kinds of partners are required. Requirement of expertise and
experience needs to be assessed keeping in mind the essential service package.

Tools:
*
Eligibility criteria for selection of partners (one-stage or two-stage depending on the nature of

proposed partnership).
*
RfQ and RfP documents.
*
Process/checklists of assessment, selection including grading / scaling method.
*
Memorandum of Understanding.
*
Contract document(s)

Implications if not addressed adequately:


*
Private partners' motive to enter into PPPs remains unknown
*
Level of commitment to sustain the partnership in a new environment remains unknown.
*
Lack of assessment of managerial and technical capacity may lead to irrational allocation of work

to private partners.
*
Will lead to higher mortality of PPPs.
*
Last minute dropouts of private partners when terms of agreement get known/unfold
*
Unscrupulous players attempt to corner partnerships.
*
Government's intention remains inadequately known to the private partners.
*
Standardization in service delivery and quality becomes difficult to ensure.
*
Governments find it difficult to monitor.
*
Accountability reduces.

POLICY AND PLANNING FRAMEWORK - PUBLIC PRIVATE PARTNERSHIPS IN HEALTH CARE

E. Enabling the Partnership


Need:
Partnerships need to be enabled. Systems need to be put in place. Capacities need to be built
capacity to manage contracts, capacity to manage partnerships, capacity to monitor and give feedback,
capacity to re-plan strategically, capacity to manage finances are some among them.

Tool:
*
Capacity needs assessment protocol / guidelines .
*
Systems development / augmentation protocol based on the needs identified.
*
Training manuals based on needs identified: audience-segment specific.
*
Training plan with a timeframe which synchronizes with the launch of the partnerships and start of

services.

Implications if not addressed adequately:


*
Inadequate skills among the public sector representatives at different levels who are the ground

level interface.
*
Overall objective may not be achieved.
*
Contracting authorities (State Health Departments, Rogi Kalyan Samities, District Health Societies,

Block Health Societies) may not have the capacity or the skills required to manage and monitor
contracts.
*
Conflict at operational levels and pre-occupation with conflict resolution at higher levels blame

games.
*
Suboptimal accountability of private partners to social objectives of the PPP.
*
Misuse by public and private partners.
*
Lack of sustainability of the partnerships.

POLICY AND PLANNING FRAMEWORK - PUBLIC PRIVATE PARTNERSHIPS IN HEALTH CARE

F. Managing the Partnership


Need:
Partnerships are delicate especially in early years. They need to be nurtured. This requires
investment of time and effort. This requires handholding, management support and on-site real
time trouble shooting. It requires facilitation. PPPs require effective and timely management
support along with review of rates of payment for service as soon as input cost change
substantially.

Tool:
*
List of process indicators, performance indicators and output and impact indicators.
*
Management Information System.
*
Guidelines and protocols for handholding, management support and on-site real time trouble

shooting
*
Market watch on trends in cost of inputs and cost of services.
*
Terms of Reference for hiring technical and management support agency for this task.

Implications if not addressed adequately:


*
Private partners will flounder with initial teething operational troubles may get

disinterested.
*
Lack of clarity in expectations and delivery can only get addressed over a period of time.
*
Unexpected delays in starting of services after the award of work / signing of partnership

agreements.
*
Governments will not be able to extend the support on their own in the initial period.

POLICY AND PLANNING FRAMEWORK - PUBLIC PRIVATE PARTNERSHIPS IN HEALTH CARE

G. Promoting the Partnership


Need:
Value propositions of each PPP need to be positioned in the population of the catchments especially
amongst the disadvantaged groups to promote utilisation. Partnerships need to be promoted. Resistance
pockets need to be allayed. Interest groups need to be involved. Service utilization needs to be
optimized.

Tool:
*
Advocacy Strategy
*
Promotion and Marketing Plan.

Implications if not addressed adequately:


*
Vested interest groups may disrupt services.
*
End users may not know about professionalized services.
*
Service off-take may not be optimal.
*
Private operators may not have the economy of scale affecting financial viability of the scheme.
*
Disadvantaged population groups may be deprived of the value added service although may be entitled

as part of the deliverables from the private partner .

POLICY AND PLANNING FRAMEWORK - PUBLIC PRIVATE PARTNERSHIPS IN HEALTH CARE

H. Regulating the Partnership


Need:
Partnerships need as much regulation as they need nurturing. This provides an institutional framework
for issues around licensing at the base level and accreditation at the optimal level.

Tool:
*
Institutional framework for a Regulatory Agency (on lines of IRDA, TRAI).
*
Grievance Redressal System framework, protocol, processes.
*
Physical and service quality standards.
*
Accreditation framework, guidelines and procedures for health care providers.
*
Service quality audit mechanisms.
*
Concurrent costing and cost regulation protocols .

Implications if not addressed adequately:


*
Sub-standard quality in service delivery.
*
Variations in quality and service delivery across different service sites.
*
Prices may go beyond the paying capacity of people.
*
Private partners bringing in huge investments may not have confidence in the absence of an

independent regulator .
*
Small disputes remain unaddressed; snowball into persistent conflict and walk outs by private

players; unnecessary litigation.

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POLICY AND PLANNING FRAMEWORK - PUBLIC PRIVATE PARTNERSHIPS IN HEALTH CARE

I. Assessing the Partnership


Need:
Ongoing assessment and monitoring is important. It helps in ensuring whether the desired objectives are
being met or not. It helps to take strategic and operational mid-course corrections, if required. This
may give insights into amendments in Partnership Scheme and Standard Operating Procedures based on
what is working and what not.

Tool:
*
List of indicators for assessment.
*
Assessment design and methodology.
*
Study instruments .
*
Framework for baseline, concurrent and annual assessments.

Implications if not addressed adequately:


*
Unable to assess whether things are moving on track or not.
*
Mid-course corrections and justifiable amendments to the Scheme and SOP may not be possible

rendering the Scheme and SOP irrelevant.

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POLICY AND PLANNING FRAMEWORK - PUBLIC PRIVATE PARTNERSHIPS IN HEALTH CARE

Conclusion
The framework suggested in this handbook is a crystallization of
hands-on experience of designing and managing PPPs in health care.
The framework has evolved by learning while doing.

For further information regarding:


Technical Assistance in Design and Management Support:
Head, Public Health Division
EPOS Health India

For Capacity Building and Training Support:


CEO, EPOS School of Health; and
Senior Vice President, EPOS Health India

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