Healthcare: The dark side of public-private partnerships

This week the World Bank Group is hosting UHC Financing Forum in Washington, DC.

Back home, doctors are holding conferences to discuss healthcare financing towards universal health coverage.

And the two meetings couldn’t be more timely. However, there is a recurring reference to public-private partnerships as the magic wand.

We have now become accustom to the new buzz word in healthcare: PPPs. Public-Private Partnerships are not new.

More often, it is the answer thrown around to the question about infrastructural and healthcare financing.

FINANCIAL PLANNING
In simple terms the public-private partnership should be termed for what they really are.

They largely lack the public component and are more often profit-driven large-scale businesses between private sector and governments.

Indeed the UK, which has long experimented PPPs call them PFIs - Private Financing Initiatives - as the word PPPs was found inappropriate due to the lack of shared goals.

Firstly, the trouble with PPPs is that no law regulates the framework and there is no policy around how these partnerships should be structured.

Thus PPPs have become a way for politicians to green light their promises to the electorate without proper financial planning but more scaring without public participation and questioning on the feasibility, sustainability and the long-term fiscal costs to the taxpayers.

CORRUPTION

Secondly, in healthcare, PPPs are conduits for corruption or awarding tenders to companies that are aligned to politicians.

The case for PPPs has been built by the World Bank, the G20 and the UN as a means to finance the Sustainable Development Goals.

Partnerships even became a Sustainable Development Goal in their own right as number 17. But are these partnerships as effective as were envisioned? 

The manner in which they were fronted and the interests from developed economies meant it was a way to promote international trade and penetration of developing nations for western conglomerates and multinationals.

The evidence from research in emerging markets paint a picture of PPPs as vehicles for commodifying essential public services and channelling the taxes to private companies.

MEDICAL EQUIPMENT

The negative consequences and inadequacies of PPPs are often discovered late after the impact fails to be seen or the not documented cost implications come to bare.

In Kenya, the Managed Equipment Services (MES) keeps being mentioned in many private meetings around universal healthcare as a proven effective means of financing huge projects.

However, the MES will remain Kenya’s white elephant never quite discussed.

Each of the 47 counties pay an equal share of annual premium in leased equipment yet they never got the same package of equipment.

Additionally, in most counties equipment are not in use because health personnel were not employed as part of the MES project.

In the long run, the whole project will cost twice as much if the equipment were to be bought, installed and more health staff employed and trained to use the equipment.

Some hospitals even lack water supply or adequate space for the radiology or dialysis facilities.

GOALS

The end result is that the MES will cost the taxpayer an estimated Sh52 billion in seven years without significant outcomes realised. 

The MES isn’t a partnership. It is a smart business driven by equipment vendors in which the government provided them with a perfect platform to supply.

There is no shared value or a shared goal as pertains healthcare system.

A comprehensive needs assessment was not conducted and an urgent impact assessment is needed to ascertain the significance and sustainability of the project. 

In Lesotho, a private vendor constructed a national hospital on behalf of the country as part of PPPs initiative.

Few years later, Lesotho had consumed nearly three quarter of the health ministry budget and the private vendor had made a return on investment of up to 25 per cent without a change in patient outcomes, health indicators and or efficiency improvement noted in the hospital.

POLITICAL WILL
President Uhuru Kenyatta has identified universal healthcare as one of his ‘Big Four’ second term agenda.

Political commitment for healthcare is a very powerful drive in transforming healthcare systems.

Ironically, high-level policy-making discussions around financing for the UHC agenda have taken the familiar pattern of PPPs.

Ideally, UHC requires a system-wide health sector transformational approach for which PPPs are fundamentally not suited.

COMMITMENT
PPPs require an environment of ethics, accountability and proper governance to be effective.

Until healthcare identity is that of a shared value and a shared goal centred on improving health outcomes and strengthening the health system, PPPs remain ineffective and too costly in the long run.

No where in the developed or emerging markets have PPPs been proven effective as a financing model for public goods such as water provision or healthcare.

The buzz word in UHC financing remains PPPs — a ‘rent-seeker’s dream’ to commodify people’s access to services. 

Dr Ouma Oluga is the Secretary General of Kenya Medical Practitioners Pharmacists & Dentists’ Union (KMPDU)