Public Private Collaboration in Health Care Provision Montenegro Workshop September 2007 Matthias Loening.
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Public Private Collaboration Public Private Collaboration in Health Care Provisionin Health Care Provision
Montenegro Workshop Montenegro Workshop September 2007September 2007
Matthias LoeningMatthias Loening
Overview Overview
Public-Private Partnerships - Options
Case Studies
– Inpatient Laboratory Services Outpatient Dialysis Services
– Radiology Services
– Independent Sector Treatment Centres
– Radiotherapy
– Private Wing - Maternity Services
Summary
Contact
Hospital Management
Hospital Management
Specialized Clinical Services
Specialized Clinical Services
Clinical Support Services
Clinical Support Services
Non-clinical Services
Non-clinical Services
• Detailed designs
• Building construction
• Medical equipment
• Capital financing
• Lab analysis
• Diagnostic tests
• Medical equipment maintenance
• Management of entire hospital or network of hospitals and/or clinics
• Hemodialysis
• Radiotherapy
• Day surgery
• Other
specialist
services
• IT equipment & services
• Maintenance
• Food
• Laundry
• Cleaning
• Billing
Design & Construction
Design & Construction
PPPs can be applied to a wide range of services
Public-Private PartnershipsPublic-Private PartnershipsOptionsOptions
Selected Case Studies
Inpatient Laboratory ServicesInpatient Laboratory Services
Colentina Hospital• A 1,000-bed general public hospital• Approx. 40,000 inpatients and 600,000 in-house lab
tests year Transaction Structure
• Hospital tendered for a private operator to take over, centralize, renovate, equip and operate all laboratory services for the hospital
• Operator would be reimbursed according to a specified fee schedule
Tender
• Bidders were required to meet specified prequalification criteria evidencing lab experience
• Winning bidder selected on the basis of proposed largest price discount to fee schedule
• Costs for hospital for lab tests have been reduced by 60%
Outpatient Dialysis ServicesOutpatient Dialysis Services
Dialysis Services
• IP and OP dialysis services are provided in approx. 40 public hospitals
• Dialysis supplies are purchased by the NHIF and equipment is purchased by the Ministry (if funds available) and allocated to the hospitals
• Backlog of patients and facilities in need of upgrading and expansion
Transaction Structure
• NHIF tendered for experienced private dialysis operators to take over and upgrade dialysis centers in 8 different public hospitals across Romania
• Operator to assume full responsibility service provisioning
Tender
• NHIF conducted simultaneous tender for 8 dialysis centers
• Winning bidders selected on basis of highest investment commitments
• Total investment commitments amounting to over $16m
Inpatient Radiology ServicesInpatient Radiology Services
Colentina Hospital
• A 1,000-bed general public hospital
• Lack of suitable imaging/radiology equipment (no MRI and one CT machine in need of repairs)
• No capital funding available to buy or repair radiology equipment
Transaction Structure
• Hospital tendered for a private operator to install and operate full range of radiology/imaging equipment for Colentina’s inpatients
Tender
• Hospital conducted a public tender to select the Operator
• All bidders bid on identical contract specifications and requirements
• Winner selected on the basis of bidder who bid the largest discount to a specified fee schedule. Winning bidder proposed a 35% discount to fee schedule
Radiotherapy ServicesRadiotherapy ServicesMalopolska Voivodship (Province)
• The province wished to locate a new radiotherapy clinic at St. Lukasz Hospital to provide radiotherapy to cancer patients of the Tarnow area.
• The proposed PPP did not go forward, however the transaction model is illustrative of the same model that IFC is attempting to replicate in other countries.
Transaction Structure
• A PPP contract for design, construction, financing, equipping and operation of the Radiotherapy Clinic.
• The expected capital expenditure for the project was $5m-$10m.
Tender
• The tender could be based upon least subsidy (per treatment) with a minimum volume level contracted.
• The operator may be allowed to provide services to private patients.
Facilities Management
ProviderBuilder
Equity Providers
ProjectCompany
RadiotherapyClinic
Banks/BondInvestors
Support Service
Provider (s)
Payment Payment
SupportServices
Construction
Funds
Dividends
Equity Funding
Repayment
Payment
PPP Contract Facilities & Non-Clinical Services
Payment
Facilities Maintenance Services
Hospital
Patients
Patients
Radiotherapy ServicesRadiotherapy Services
Independent Sector Treatment CentresIndependent Sector Treatment Centres
Independent Sector Treatment Centres
• The ISTC’s are projected to deliver care for 250,000 patients each year
• Part of the drive to decrease waiting times for elective surgeries, offer patients greater choice, allow for much needed capital investment and alleviate staffing and management bottlenecks
Transaction Structure
– NHS tendered for specified outpatient (volume) contracts with initial contracts for 5 years
– NHS patients will be treated free, paid by the NHS
Tender
• Initially 7 private health care providers received 19 tender awards in the fall of 2003 • Wave 2 currently in process for additional 250,000 patients per year
Private Wing – Maternity ServicesPrivate Wing – Maternity Services
Polizu Hospital
• The public hospital had spare capacity and needed additional funding for current operations.
Transaction Structure
• 25 year concession of OB-GYN services in a public hospital that includes: an outpatient clinic; medical diagnostic and imaging center; ambulatory surgery clinic; laboratory; and inpatient facility.
• The private operator would be responsible for renovating and equipping the facility.
• The private wing is completely separate from the public hospital with full market and financial risk taken by the private operator.
Tender
• Bid price based upon annual lease payment to the public hospital.
Public-private partnerships can allow for
– Increased access
– Lower costs
– Improved quality of the facilities and services
PPP’s can take many forms, each with a different degree of private sector responsibility and risk
However, there is a general trend within all of these case studies and the message is clear
SummarySummary
Buy Services Not Equipment !
Contact:
Matthias Loening
Senior Health Advisor
European Bank for Reconstruction and Development
Email: loeningm@ebrd.com
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