With countries increasingly interested in public–private partnerships (PPPs) to mobilize funds and promote reforms in their health systems, a new WHO/Europe report offers key actions governments can take to optimize PPPs in health care. PPPs are long-term contracts between private and public entities to provide health facilities, equipment or services.
Middle-income countries in the WHO European Region face common challenges to the efficiency of their health systems, such as lack of capacity at the primary care level, obsolete infrastructure, high out-of-pocket payments, or even an excess of hospitals and specialized facilities. In many countries, there is a perception that PPPs can play a role in addressing these challenges.
“As health budgets are under pressure in several countries, especially in the current economic situation, PPPs may seem a relief to public budgets,” said Dr Tamás Evetovits, Head of the WHO Barcelona Office for Health Systems Financing. “But the solution is not always straightforward. The PPP contracts signed today will place a significant call on public budgets tomorrow, especially once those facilities, equipment and services are established, and the bill must be paid.”
Dr Evetovits added, “Securing value for money means implementing PPPs only when they represent the most cost-effective solution compared to other procurement options. To make these partnerships work for people, governments must be able to design, plan and monitor complex and long-term contracts, and consider the long-term implications for their health budget.”
The report notes that, to be effective, PPPs need to be an integral part of countries’ health financing, purchasing and organizational strategies. This is particularly important, as evidence has demonstrated a tendency to overcommit future revenues by, for example, entering into contracts that are too costly for public authorities, with users ultimately paying the bill.
That is why the report recommends that public authorities ensure they can afford such costs without compromising other social obligations and without reducing investment in areas unlikely to be part of PPP projects, such as primary care.
Among other recommendations, the report suggests starting small when using PPPs – piloting the model on smaller projects such as specialist clinical or diagnostic services – and building up the capacities of the government with these kinds of partnerships over time before contracting in more complex service areas.
Steps to ensure success with PPPs in health care
To optimize PPPs in health care, the report lays out a series of concrete steps governments can take. First, before entering into this kind of partnership, ministries of health should prioritize the areas or services of the health system where investments will be needed. Then, they should decide which would be the best way to finance those investments, implementing PPPs only if they are the most cost-effective solution.
Second, governments should have the internal capacity to design an overall strategic plan for how to modernize the health infrastructure (an investment decision), and how to pay for it in a way that safeguards the future financial sustainability of the health system (a procurement decision). The report highlights that these are core government functions essential to the health system's long-term efficiency and should not be done by external agencies.
Finally, as many PPPs may happen at the local level, governments should have the internal capacity to support local health authorities in running competitive procurement processes, designing effective contracts and monitoring the performance of the contract. Institutional checks and balances should also be in place to ensure transparency, minimize fiscal risks and safeguard the public interest.