Give healthcare the PPP booster shot

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Give healthcare the PPP booster shot

Saturday, 26 October 2019 | Bhavesh shah

The significant gap in existing infrastructure for medical services in Tier-2 and Tier-3 cities is the biggest reason why people are forced to come to metros for treatment. A public-private partnership can help solve this problem

Going by the Constitution, public health is a State subject, which implies that access to adequate and affordable health services is a citizen’s right and hence, the Government needs to ensure that. However, the growth of medical care in India has been largely restricted to big cities where both public and private healthcare providers are battling to care for an increasing number of patients, many of whom are residents of smaller cities and villages.

The abysmal State-level doctor-patient ratio remains at 1:1,700, far below the international norm of 1:1,000 as directed by the World Health Organisation (WHO).

In spite of being the fifth-largest economy in the world, India’s healthcare industry has been ranked a poor 145th globally in terms of quality and accessibility. This is because a large portion of the rural population lacks adequate healthcare due to a shortage of drugs and the prohibitive cost of prescribed medicines in their areas.

Many specialised, experienced and newly-qualified doctors in the country, especially in Tier-2 and Tier-3 cities, do not have a platform to provide and share knowledge due to lack of opportunities or enough support in terms of financial capabilities to deliver their expertise and knowledge.

The significant gap in existing infrastructure for healthcare in Tier-2 and Tier-3 cities is the biggest reason why people are forced to come to urban hubs for treatment.

However, most of these people are not insured, and even if they are, insurance does not pay for other necessary spending such as lodging, transport, and food. It is no wonder that healthcare constitutes a large share of the annual out-of-pocket expense Indians have to bear.

According to a FICCI report released last month, at 65 per cent, healthcare is the top reason for overnight domestic travel in the country as a whopping 80 per cent of secondary and tertiary care beds are located in urban areas and there is a need for nine lakh beds in the next 10 years.

The Herculean task of providing health cover to the entire country will certainly need more than public hospitals only. As Ayushman Bharat opens the doors to private medical care providers and encourages them to serve the people in smaller cities, the healthcare industry increasingly realises the challenges that lie in the modalities — developing and managing the facilities and attracting and retaining talent being the main areas of concern.

A Public-Private Partnership (PPP) model helps to address many of the challenges faced by private healthcare providers who want to set up new facilities — land acquisition, finance, and permits to name a few. With Government support, many of these issues ease out.

However, that may not be enough to make operations a win-win for all. The crux lies in managing finances and optimum use of resources — the cost-per-bed of setting up a private hospital in a metropolitan city can go as high as a whopping Rs 1.30 crore.

Relocating a reputed specialist from a big city to a Tier-2 or Tier-3 city is another financial and operational challenge. Retaining his/her interest is another. Since most of the smaller cities have a miniscule pool of medical institutions, the staff that can be sourced locally may be less than adequate. Filling vacancies puts an additional cost burden, a major cause of concern for private medical services  providers.

Recently, the Municipal Corporation of Greater Mumbai (MCGM) introduced two PPP models — private funding and public services, and private funding-private services with public monitoring.

In April 2018, the Government of Haryana announced its intention to establish a 500-bed multi-speciality hospital in Gurugram under the PPP mode to provide treatment at a minimal cost. The new hospital will have advanced facilities such as electroencephalography (EEG), cochlear laboratory, dialysis centre, ventilators, advanced Operation Theaters, and CT scan unit, among others, addressing the enormous unmet need for specialised healthcare at an affordable price in a metropolitan city area. It shows that increasingly, State Governments are realising that the best way to deal with these concerns is by enabling a PPP mode where the Government and the private operator act as collaborators.

There is no national framework right now that guides the State Governments on how to engage private players in healthcare. Besides, health is a State subject and there is a lack of clarity on institutional arrangements to implement and manage PPP projects. Implementing the idea of impact bonds, as per the United Nations Development Programme (UNDP), may provide a solution. Impact bonds are PPPs that allow private impact investors to provide upfront capital for public projects that can deliver social and environmental outcomes. For a successful project, the investors are repaid by the Government through social impact bonds or an aid agency or other philanthropic funders through development impact bonds. For a PPP project approved to operate independently, the Government must keep an eye on things, as any such project without monitoring may fail to gain the trust of the people. The fact that the Government is watching reassures them.

It is heartening to see that the contribution of private players in healthcare has become dependable. Realising the importance of the role of private partners in the wellness sector, the National Health Policy of 2017 emphasises it can help achieve India’s aim of universal health coverage. The Government intends to attract care from private facilities and clinics strategically to improve access and affordability of quality healthcare and PPP can help the country take a major step towards achieving that goal.

(The writer is chairman of a digital healthcare platform)

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