Back to KPMG Global Healthcare

 

The global picture of public private partnerships (PPPs) in healthcare is tipping on its head. Following more than 15 years of expansion and innovation in high-income health systems, enabling in some markets the largest renewal of healthcare infrastructure in their history, PPP appears to be a declining force. At the same time, health systems in Asia, Africa, Latin America and the Middle East are gearing up for their own unprecedented expansions in access to care. Universal health coverage (UHC) is an idea whose time has come, and governments around the world are looking to how private sector partners can contribute investment and skill to help them achieve it.

For governments and citizens, PPP offers one way of containing the seemingly ‘bottomless pit’ of UHC’s potential costs, by capping commitments into the long term and leveraging ultra-lean models of care provision. For the private sector, UHC-focused PPPs offer the opportunity for large-scale projects in healthcare markets experiencing levels of growth not seen in the West for a generation. The ultimate goal of both is a ‘triple win’ of countries getting:

1. for governments: maximum benefit from limited public capital
2. for patients and the public: higher-quality health services at the same or less cost
3. for private players: a sustainable return on their investment and expertise.

Yet the challenge of making this relatively complex contracting mechanism work in the most complex of sectors is considerable. Countries will need to learn the lessons of the past where PPPs sometimes failed to achieve the desired results, including:

• selecting the wrong kinds of priorities and projects as applications for PPP
• setting objectives that incentivize
• an overly narrow focus on service targets rather than high-value healthcare
• choosing the wrong partners to work with
• making erroneous or overly restrictive assumptions about the future
• failing to generate sufficient competition and contestability.

Low- and middle-income countries will not only be content with learning from the past, however. They are also showing that they have something to teach mature health systems about the possibilities and potential of PPP for health system development. While much of the initial focus of UHC PPPs will be traditional hospital estate and equipment deals, we will also see innovation, with new forms and applications of PPP springing up from emerging economies, including:

• new public sector uses for PPP in pursuit of UHC, including public insurance functions and large-scale primary care
• new private sector partners coming to the fore, including telcos, training institutes, life science firms and multinational provider chains
• new partnership forms, taking forward the value- and population-based models to reward health outcomes rather than more narrow activity-based or ‘estate’ outcomes.

The success or failure of PPP in helping to achieve UHC will stand or fall on the ability to combine the lessons of the past with the creativity of the future. This report concludes with six insights from KPMG’s most experienced global leaders on what this means, practically, for countries on the ‘health for all’ path:

1. sweat the small stuff — be obsessed with the detail of the deal
2. active market management — don’t retreat into ‘tender mode’
3. scaling up capacity in the public sector — the importance of a well-resourced, specialized PPP unit
4. embrace, rather than resist, the politics of UHC
5. data systems you can trust — a PPP can only be as good as the intelligence on which it is built
6. from clarity of objectives to clarity of requirements — goals, behaviors and expectations are often implicit and assumed, but a stable partnership requires as much as possible to be discussed and set out clearly.
   

 

Back to KPMG Global Healthcare