dinah roberts build and beyond pwc
TRANSCRIPT
![Page 1: Dinah Roberts Build and Beyond PwC](https://reader033.vdocuments.site/reader033/viewer/2022052504/5537b26c5503464e418b45b5/html5/thumbnails/1.jpg)
Build and Beyond: The (R)evolution of Healthcare PPPs May 2011
www.pwc.com
![Page 2: Dinah Roberts Build and Beyond PwC](https://reader033.vdocuments.site/reader033/viewer/2022052504/5537b26c5503464e418b45b5/html5/thumbnails/2.jpg)
PwC
Agenda & Speakers
Dinah Rowe-Roberts, Director, Health
Paul Clifford, Director, Infrastructure Advisory
• Introduction & Key Findings
•The Evolution
•The (R)evolution
2
![Page 3: Dinah Roberts Build and Beyond PwC](https://reader033.vdocuments.site/reader033/viewer/2022052504/5537b26c5503464e418b45b5/html5/thumbnails/3.jpg)
PwC
Introduction
3 3
![Page 4: Dinah Roberts Build and Beyond PwC](https://reader033.vdocuments.site/reader033/viewer/2022052504/5537b26c5503464e418b45b5/html5/thumbnails/4.jpg)
PwC
About the research
Findings and estimates are based on:
• In-depth interviews with global thought leaders and executives from the healthcare and PPP industry
• Review of literature, reports, and publications
• An advisory group of 15 professionals from PwC’s health industries advisory, tax and assurance practices
• Economic analysis based on publicly available data sources
4
![Page 5: Dinah Roberts Build and Beyond PwC](https://reader033.vdocuments.site/reader033/viewer/2022052504/5537b26c5503464e418b45b5/html5/thumbnails/5.jpg)
PwC
The Evolution
5 5
![Page 6: Dinah Roberts Build and Beyond PwC](https://reader033.vdocuments.site/reader033/viewer/2022052504/5537b26c5503464e418b45b5/html5/thumbnails/6.jpg)
PwC
Level-setting: PPPs offer a mechanism for governments to finance better healthcare infrastructure and clinical service delivery
• Public-private partnerships (aka, P3, PPP, PFI) establish a contractual partnership between two public and private sector entities where the skills and assets of the private sector are mobilised by the public sector to deliver services and/or infrastructure (e.g., facilities) to the general public.
• Each one does what it does best in the partnership.
PPPs can be structured around any or all of the following areas:
• Infrastructure – hospitals and clinical facilities
• Clinical services – delivery of medical care, including doctors, nurses, and know-how
6
![Page 7: Dinah Roberts Build and Beyond PwC](https://reader033.vdocuments.site/reader033/viewer/2022052504/5537b26c5503464e418b45b5/html5/thumbnails/7.jpg)
PwC
In the beginning: Healthcare PPPs started as a way for governments to build new or revamp crumbling infrastructure
United Kingdom
• Upgraded decaying hospital facilities
• Surgical service PPPs injected competition into market & improved access
Australia
• Focus is on developing / modernising hospital infrastructure and providing support services
Drivers of Healthcare PPPs
• Investment need • Government budget constraints • Better procurement • Access to skills and knowledge • Service capacity
Examples
“The fact that infrastructure PPPs were a success gave government confidence that the private sector could deliver.”
-Peter Coates, Department of Health, England
7
![Page 8: Dinah Roberts Build and Beyond PwC](https://reader033.vdocuments.site/reader033/viewer/2022052504/5537b26c5503464e418b45b5/html5/thumbnails/8.jpg)
PwC
Recently: Healthcare PPPs started to take on a broader scope…in response to broader problems
• The sustainability of health systems around the globe is threatened by growing spending and challenging demographic and epidemiological trends.
• More efficient, value-based models of infrastructure development and care delivery are needed now more than ever.
• PPPs have evolved over time from a primarily infrastructure-oriented model to a clinical services delivery model, increasing in complexity. Some include both.
Traditional infrastructure –based
model
Clinical services–based model
Integrated model – combines both infra &
clinical service
Evolution
8
![Page 9: Dinah Roberts Build and Beyond PwC](https://reader033.vdocuments.site/reader033/viewer/2022052504/5537b26c5503464e418b45b5/html5/thumbnails/9.jpg)
PwC
Metrics to gauge success of PPPs are evolving
Infrastructure PPPs are measured by:
PPPs that include clinical services are measured by:
Value for Money Calculation
Estimated cost of the public sector delivering the project ($100 million) (minus) Expected cost of private sector delivering the project ($95 million) Difference in cost ($5 million) Value for money = 5%
Operational benchmarks Clinical benchmarks
Workforce productivity Patient outcomes
Wait times Patient satisfaction
9
![Page 10: Dinah Roberts Build and Beyond PwC](https://reader033.vdocuments.site/reader033/viewer/2022052504/5537b26c5503464e418b45b5/html5/thumbnails/10.jpg)
PwC
The Revolution
10
“The world’s health systems will, within the next 15 years, find themselves in an unsustainable situation if they do not carry out a
number of important changes in their health policies.” -Alberto de Rosa
Ribera Salud Grupo, Spain
![Page 11: Dinah Roberts Build and Beyond PwC](https://reader033.vdocuments.site/reader033/viewer/2022052504/5537b26c5503464e418b45b5/html5/thumbnails/11.jpg)
PwC
Today: The healthcare PPP revolution as told by numbers • Spending on health as a % of GDP is growing in all mature and developing economies (includes OECD and
BRIC nations, see graph below)
• In all cases, growth in health spending outpaces growth in GDP
• Governments are under pressure to consider new methods of financing and access private sector expertise and efficiency if they want to have any chance of sustaining required investment levels
11
![Page 12: Dinah Roberts Build and Beyond PwC](https://reader033.vdocuments.site/reader033/viewer/2022052504/5537b26c5503464e418b45b5/html5/thumbnails/12.jpg)
PwC
Sizing the market: Health spending is expected to increase by 65.5% between 2010 and 2020
• As health spending in OECD and BRIC nations grows, so will the need for alternative methods of financing and care delivery
• PPPs can revolutionise traditional approaches toward cutting costs and improving efficiencies
12
![Page 13: Dinah Roberts Build and Beyond PwC](https://reader033.vdocuments.site/reader033/viewer/2022052504/5537b26c5503464e418b45b5/html5/thumbnails/13.jpg)
PwC
The more the merrier (and cheaper)
The more aspects of healthcare that are included in the PPP, i.e., infrastructure + clinical services, the more the potential for savings increases
Drugs, devices, home, long-term care
Primary care
Hospital - non-clinical services and
clinical services
Infrastructure 2-5%
Estimated cumulative healthcare spending for OECD/BRIC countries, 2010-2020
Healthcare services/products (non- infrastructure)
$68.1 trillion
Infrastructure $3.6 trillion
15-25%
45%
*Percent of total health spending
Po
ten
tia
l fo
r s
av
ing
s &
e
ffic
ien
cy
ga
ins
13
25-45%
![Page 14: Dinah Roberts Build and Beyond PwC](https://reader033.vdocuments.site/reader033/viewer/2022052504/5537b26c5503464e418b45b5/html5/thumbnails/14.jpg)
PwC
Today: The revolution as told by the PPP players themselves Case Study: Independent Sector Treatment Centers, UK
• Initiative to create competition, reduce wait times and increase workforce
• Includes infrastructure and clinical services for elective surgery (including mobile solutions)
• NHS pays the hospital operator per procedure undertaken
• Initially provided volume and income guaranteed to providers (set-up cost)
• Second wave undertaken at NHS prices
• Procurement evolved to drive performance for both private and NHS providers
Critical roles for PPP players
Complexity increases with number of partners, financial terms, definition of value
14
![Page 15: Dinah Roberts Build and Beyond PwC](https://reader033.vdocuments.site/reader033/viewer/2022052504/5537b26c5503464e418b45b5/html5/thumbnails/15.jpg)
PwC
Today: The revolution as told by the PPP players themselves
Case Study: Health Authority Abu Dhabi
• Initiative to drive a step–change improvement in quality of hospital services
• HAAD contracted with leading international providers for the management of all public hospitals
• Providers included Cleveland Clinic, Johns Hopkins, Bumrungrad, University of Vienna (VAMED)
• Limited risk passed to private sector due to lack of reliable historical data
• 5 – 7 year contracts with aim to pass more risk to private sector in next round
15
• Providers playing key role in design of new facilities
![Page 16: Dinah Roberts Build and Beyond PwC](https://reader033.vdocuments.site/reader033/viewer/2022052504/5537b26c5503464e418b45b5/html5/thumbnails/16.jpg)
PwC
Key findings – the (R)evolution of Healthcare PPPs
• Globally new funding sources need to be identified for healthcare and PPP’s are a possible solution.
• PwC has estimated that between 2010 and 2020 spending on healthcare in the OECD and BRIC nations will increase from US$5.3 trillion in 2010 to US$7.94 trillion in 2020.
• Cumulative investment in capital will total US$3.6 trillion over that period.
• PPPs in healthcare have traditionally been infrastructure projects – they are now evolving to include clinical service delivery as well.
• Success in PPPs is evolving toward health outcomes and performance as well as value for money.
16
![Page 17: Dinah Roberts Build and Beyond PwC](https://reader033.vdocuments.site/reader033/viewer/2022052504/5537b26c5503464e418b45b5/html5/thumbnails/17.jpg)
Thank you! Q&A
CF10397.