lessons for indonesia? - inaheainahea.org/files/hari2/aiphss ina hea 2015 revised and final.pdf ·...

Australia Indonesia Partnership for www.aiphss.orgHealth Systems Strengthening(AIPHSS)

Kementerian KesehatanRepublik Indonesia

PUBLIC PRIVATE PARTNERSHIPS IN CARE DELIVERY

LESSONS FOR INDONESIA?

INA-HEA 2015

Thanks to April Harding

http://www.aiphss.org/

Public-Private Partnerships

Contracting:Government or public agency

establishes contractual relations for a private entity to deliver healthcare

services.

Co-investment or assetuse transaction

Harding, 2012



Indonesia Private HospitalsContracted Under BPJS

1000900800700600500400300200100

0Private Hospitals Contracted

14 Mar-15

919

690

Jan-










Why are contracting initiatives and PPPs happening?Seen as a possible solution to various challenges in finance and deliveryof health services

Contracting and PPPs can potentially:• mobilize private finance• increase access (?)• introduce efficiencies (?)• improve quality (?)in the delivery of health services and improve health outcomes

5










Contracting/PPP Categories• Buying Services (Romania)

– Non-clinical (catering; drug purchasing)– Specific clinical services (off-site, from a private facility; on-site,

within a public facility)

• Buying packages/ coverage (Estonia)– PHC (low capital)– Hospital (public capital)

• Finance & facility access (PFI in UK)

• Combined – facility and services/operation (Spain)




1. CONTRACTING

7




Contracting/ Public Private Partnership ExamplesEstonia PHC contracting

• Established PHC package

• Social health insurance organization began to contractprivate primary care practices

• Payment goes to provider patient chooses and registers with

Impact

• Increased responsiveness/ quality (practitioners wantto attract patients)

• Increased efficiency (more care delivered at PHC level)

• Independent evaluation

8










ISTC Program UK

Early 2000s, NHS tendered for specified outpatient servicescontracts with initial contracts for 5 years dx &tr

NHS patients are treated free

Operators are paid on the basis of fixed volume contract

per treatment

Operator provides capital and services at their facility

Over 20 ISTC’s currently openISTC’s delivering care for 250,000 patients each year

Mobilized capital -- expanded services

Reduced waiting listsImproved efficiency/ cost savings; some signs of better quality from high

volume of services).

Contracting/ Public Private Partnerships Examples




Contracting/ Public Private Partnership ExamplesRomania Dialysis Centers

• PPPs for 8 dialysis centers covering 25% of the country’s dialysispatients, to address unmet demand, aging facilities, shortage oftrained staff, and lack of national standards

• Operators receive per treatment payments

• New best-practice national standards developed and implemented

• Improved facility and services quality

• Significant capital mobilization (private operators invested US$40m to upgrade facilities)

• Improvements in management• Cost savings: nearly US$4.5m in savings created for the National Health

program










Contracting/ Public Private Partnership ExamplesRomania Dialysis Centers

Price and Quality !!




2. CO-INVESTMENT OR ASSET USEPPP…FOR PURISTS

12




Valencia, Spain

SOURCE: Health Policy Monitor; Observatory; WHO Bulletin, Dec 2009; McKinsey team analysis

Deficiencies in the Spanish health system before 1999

Transformation process in the Valencia region, since 1999

Budget deficit▪ Public finance deficits; the budget did not

cover middle- and long-term needs

Inefficient use of public resources▪ Lack of inefficiency, flexibility, and

participation of medical staff in hospital management (Abril Commission 1991)

▪ Process of▪ E.g., political promise to build a hospital in

Alcira in 1982, however, no sufficient funding for such kind of investment

Quality lower than government'sexpectations▪ Insufficient medical care for chronically ill

population▪ Access to registered medical facilities only

▪ Management of health system in5 out of 21 health districts in theValencia region was successivelyoutsourced to private consortia

▪ Capitation financing system

▪ Health departments with privatized health systems performwith lower cost, higherproductivity, and more flexibility than other privatization models in Spain and the NHS – achievedby combination of lower cost and increased efficiency

▪ Structured evaluation lacking

Enablers

regionalization and decentralizationcompleted

▪ Aligned politicalsituation1

▪ Changes in legalframework allowinginvolvement of private sector2




Capitated full risk contracts for third party operators (TPOs) to deliver integrated model of care

Healthcare system management in 5 districts is outsource to private Third PartyOperators (TPOs)

1

5

2

3

4

▪ TPOs are experienced (private) companies with capabilities in financing and managing large-scale projects

▪ TPOs are given full autonomy to manage the network of providers andsystem governance in a given district, within the terms (standards, capitationfee) defined by the Department of Health in the SLA

▪ TPOs have strong incentive to improve service/reduce costs:– Freedom of patient to choose provider also outside the district of

residence1

– Fixed income per patient (capitation fee)14

▪ 21 healthcare districts in Valencia, with population ranging from 140-250 thousand people each

▪ Each district include a large set of providers,ranging from FDs, to policlinics, to generaland (sometimes) specialized hospitals

▪ As of today, 5 healthcare districts of theValencia region are today operating underleadership of (different) private TPOs










• Sao Paolo State Government financed, built and equipped 16 new hospitals under traditional public works contracts

• State then contracted with ‘not -for-profit ’ hospital operators to operate the hospital under a services coverage contract (including all clinicaland non- clinical services)

• Operator obliged to treat all local residents

Contracting/ Public Private Partnership ExamplesHospital Geral de Pedreira Brazil




l

• Sao Paolo State Government financed, built and equipped 16 new hospitals under traditional public works contracts

• State then contracted with ‘not-for-profit’ hospital operators to operate the hospital under a services coverage contract (including all clinical and non-clinica services)

• Operator obliged to treat all local residents

• Operator receives global fixed budget (Capital and Variable)•Specified patient volume targets and quality parameters such

as hospital acquired infections•Financial management systems standardized and monthly

reports sent

Contracting/ Public Private Partnership ExamplesHospital Geral de Pedreira Brazil










Sao Paulo: Impacts

SOURCE: Health Affairs – Public-Private Partnerships And Public Hospital Performance In São Paulo, Brazil

Study in 2003 compared 12 hospitals each under PPP and directly managed. The PPP hospitals are more efficient andcost saving.

4

1

53

5

4Bed substitution rate2

Bed turnover rate1

Average length of stay

Discharges perbed (General) 46

60

Efficiency Indicators

34Per discharge

Per bed 187177

Annual spending (‘000s Reals

1 Annual number of discharges per bed2 Average number of days a bed remains unoccupied between patients

Red=BeforeBlue=After

17




A NOTE ON HOSPITAL MARKETS IN EUROPE










Europe’s Hospital systems’ Organized in 2 WaysSegmented• private hospital services are separate from public

hospitals (UK, Nordics, Soviet Union)• Start as charitable institutions/niche business• private hospitals receive private payment

Integrated• private services are core element of public delivery

system• some private hospitals receive significant public funding










Hospitals by Ownershipin the United Kingdom

Public hospitals; 1161

Private;162

Total: 1323


Public hospitals serve public patients;private hospitals serve private

• Direct governance & funding arrangements

Gove

rnm

ent

Public hospitals

• Regulation

Public patients

Private payers

UK: PPP even in Public Sector

• Direct governance & funding arrangements, throughprivate financingarrangements (PFI)

Gove

rnm

ent

Public hospitals

• Regulation

UK: PPP even in Public Sector

• Direct governance & funding angements, throughvate financingangements (PFI)

arrpriarr

Gove

rnm

ent

Public hospitals

Generated Private CapitalBuilt according to NHS standards

• Regulation

But…long term contract (30 years)… locks in baseline rigidities –demographics and technologychanges over time

Integrated Systems:Many common policy instruments for public & private

•Funding arrangements/ contracts

•Regulation (capacity planning and quality)

• Informationflows

Gove

rnm

ent

• Governance (public only)Public & private

hospitals



Hospitals in Germany: 90% SHI, 10% PHI

Public; 630

Privatenon-

profit; 755

Source: Roeder, F. C. (2012). The Private Sector within a Public Health System: The German Example, Montreal Economic Institute.

Privatefor-

profit; 679

Total: 2064








Ever more Quality information is Public

More information can be found at: http://www.health.gov.on.ca/english/public/contact/hosp/hosprep.html

http://www.health.gov.on.ca/english/public/contact/hosp/hosprep.html



Take Away Messages










Harding’s 5 Factor Framework

1. Service contractibilityHow hard to contract for the services? Well defined? Easily

priced? Easily regulated?

2. Investment s ize and “exposure” How much private sector investment? How repaid? (fiscal space?)How flexible? (PFI issues)Will the Government be ready to “bail out” if fails?




Take Away Messages

Non-clinical services

How hard to purchase services?

Clinical services- on-site

Clinical services- on-site

PHC coverage

Hospitalcoverage

Combined

How

risky

topr

ivat

epa

rty?


Take Away Messages from Europe/Global(Harding’s 5 Factor Framework)

1. Service contractibilityHow hard to contract for the services?

2. Investme nt size and “exposure”How much private sector investment? How repaid?How re-deployable?

3. Sectoral Goals – Are We Clear?Sector goals contracting/PPP potentially contributes to(and how much)? More funding, but for Whom? The Poor or

Rich? EG % of poor served in every contract?

4. Implications of non-performanceLarge or small?Only PPP/contracted provider effected or system

5. Impact evidence strength (always evaluate)

Take Away Messages from Europe/Global

5. Impact evidence strength (always evaluate)

(Harding’s 5 Factor Framework)

1. Service contractibilityHow hard to contract for the services?

2. Investme nt size and “exposure”How much private sector investment? How repaid?How re-deployable?

3. Sectoral Goals – Are We Clear?Sector goals contracting/PPP potentially contributes to(and how much)? More funding, but for Whom? The Poor or

Rich?

4. Implications of non-performanceLarge or small?Only PPP/contracted provider affected or entire system

Potential Gains….and Risks

Nonclinicalservices

Clinserv - on-site

PHCcoverage Hospcoverage Combined

Costsavings QltyImprvmt CapMob Coremgmt Perf Risk

0



TERIMA KASIH








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