Health Affairs: A case for integrated public-private partnerships
An integrated public-private partnership has the potential to improve access, quality and efficiency in healthcare, according to an article published in the August edition of Health Affairs.
“More such partnerships should be launched and rigorously evaluated, and their lessons should be widely shared to guide policymakers in the effective use of this model,” wrote Neelam Sekhri, senior vice president of global access and alliances at Napo Pharmaceuticals in San Francisco, and colleagues.
“An integrated partnership consists of the government and a private partner—usually a consortium of health providers and financiers,” the authors continued. “These entities enter into a long-term agreement, in which the partner accesses private capital and expertise to build or renovate health facilities, and also agrees to deliver services to a broad segment of the population in those facilities over an extended period. The detailed contract is structured around a defined project and specifies financial, operational, and clinical standards that the private partner must meet.”
According to Sekhri and colleagues, the potential benefits of well-structured integrated partnerships are that they can provide greater stability in capital and operational public budgets, improve equity of access and improve quality.
“Bringing in private capital spreads government payments for infrastructure over the useful life of a facility, instead of requiring a large upfront investment,” they wrote. “Importantly, the government’s repayment includes maintenance over the life cycle of the asset, estimated at 30 to 35 percent of costs, which is often under-reserved as a result of constraints in annual public budgeting processes.”
Stability in operational budgets is achieved through payment methods that put the private provider at risk for budget overruns and that make payment contingent on outputs meeting defined performance standards, they added.
"[I]ntegrated partnerships can result in systemic quality improvements because they include explicit agreements on performance monitoring that specify measurable, internationally recognized standards,” the researchers wrote. “To guarantee compliance with service standards and assist the government with its new role of contract management, an independent monitoring and evaluation body is often created.”
The authors noted empirical evidence from models that have failed to deliver and those that have shown success, pointing to a number of risks that must be managed, including:
“Major improvements in health systems require approaches that must simultaneously address not only infrastructure and financing, but also access, service delivery, and management, to achieve better patient outcomes,” the authors concluded. “Many current initiatives offer a piecemeal approach to strengthening health systems. In contrast, the integrated partnership model is comprehensive and can deliver important benefits, as Spain’s experience illustrates.”
“More such partnerships should be launched and rigorously evaluated, and their lessons should be widely shared to guide policymakers in the effective use of this model,” wrote Neelam Sekhri, senior vice president of global access and alliances at Napo Pharmaceuticals in San Francisco, and colleagues.
“An integrated partnership consists of the government and a private partner—usually a consortium of health providers and financiers,” the authors continued. “These entities enter into a long-term agreement, in which the partner accesses private capital and expertise to build or renovate health facilities, and also agrees to deliver services to a broad segment of the population in those facilities over an extended period. The detailed contract is structured around a defined project and specifies financial, operational, and clinical standards that the private partner must meet.”
According to Sekhri and colleagues, the potential benefits of well-structured integrated partnerships are that they can provide greater stability in capital and operational public budgets, improve equity of access and improve quality.
“Bringing in private capital spreads government payments for infrastructure over the useful life of a facility, instead of requiring a large upfront investment,” they wrote. “Importantly, the government’s repayment includes maintenance over the life cycle of the asset, estimated at 30 to 35 percent of costs, which is often under-reserved as a result of constraints in annual public budgeting processes.”
Stability in operational budgets is achieved through payment methods that put the private provider at risk for budget overruns and that make payment contingent on outputs meeting defined performance standards, they added.
"[I]ntegrated partnerships can result in systemic quality improvements because they include explicit agreements on performance monitoring that specify measurable, internationally recognized standards,” the researchers wrote. “To guarantee compliance with service standards and assist the government with its new role of contract management, an independent monitoring and evaluation body is often created.”
The authors noted empirical evidence from models that have failed to deliver and those that have shown success, pointing to a number of risks that must be managed, including:
- The integrated partnership requires leadership from senior champions in the government with sufficient political stature to manage powerful stakeholders;
- Integrated partnerships create new and unfamiliar roles for government. To be successful in these roles requires dedicated resources and sufficient investment in capacity building;
- The success of the arrangement is determined by the ability of the public and private sectors to forge a partnership that can adapt to the inevitable changes that will occur over a multiyear relationship;
- Selection of the right private partner requires greater interaction and discussion with potential bidders during the pre-contracting phases and a more flexible approach to procurement than traditional public processes often allow;
- Investment in planning and expert resources is critical; and,
- These arrangements may require new institutions—government or independent bodies—that can develop and monitor performance standards to demonstrate continued value for investment and achievement of policy objectives. This maintains public confidence in the arrangement and ensures that appropriate course corrections take place as the partnership evolves.
“Major improvements in health systems require approaches that must simultaneously address not only infrastructure and financing, but also access, service delivery, and management, to achieve better patient outcomes,” the authors concluded. “Many current initiatives offer a piecemeal approach to strengthening health systems. In contrast, the integrated partnership model is comprehensive and can deliver important benefits, as Spain’s experience illustrates.”