New global healthcare PPP developments

Healthcare PPPs where clinical services as well as infrastructure are delivered by the private sector are coming under the spotlight as governments seek to achieve value for money in health budgets. Existing examples are being reported as successful, however this article urges caution as a closer look at the evidence shows that handing over control of service delivery to the private sector is difficult to monitor and evaluate, carries cost implications which remain largely unquantified and can create additional risk. Global provision of public infrastructure is under increasing scrutiny as governments grapple with rising costs and declining budgets. In this context Public Private Partnerships (PPPs) continue to be attractive to both governments and investors, despite the problems with debt financing caused by the financial crisis. Whilst transport infrastructure remains most popular (PwC 2010), in other sectors the private sector is moving beyond infrastructure to engage with what until recently has remained the preserve of the public sector – the delivery of core public services. Because of their potential size healthcare services are especially attractive. In OECD countries, where health spending as percentage of GDP is expected to increase from 9.9% in 2010 to 14.4% in 2020 (PwC 2010, p9), infrastructure projects represent only 5% of health spending. A shift to also deliver clinical services will open up a significantly wider market worth $68.1 trillion (PwC, 2010, p5). Such a move changes the fundamental nature of the relationship between the public and private sectors, with the public sector becoming just a commissioner of services provided and delivered in full by the private sector. This means that, although the public sector remains responsible for provision, control over delivery passes to the private sector, which in the case of healthcare means that clinical services become marketised. Recent New Public Management (NPM) rhetoric further emphasises this shift, being increasingly focused around the need to ‘transform’ traditional models of public healthcare provision to ensure ‘sustainability’ of services in the future. Consequently governments around the world are looking seriously at greater private sector involvement in clinical service delivery. Australia, Lesotho, Portugal, Romania, South Africa, Spain and the Turks and Caicos Islands have entered into contracts which pass control of clinical healthcare services over to the private sector (The Global Health Group (TGHG), 2010).