Public- private partnerships (PPP)

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Failure stories


Reema Nagarajan, Poor record of PPPs in healthcare raises concerns, Aug 4, 2017: The Times of India

Public- private partnerships (PPPs) are being promoted as a necessity to improve people's access to healthcare services but concerns over the poor record of PPPs in healthcare persist. Even the two main private parties who were part of Niti Aayog consultations for PPP in healthcare, the Confederation of Indian Industries (CII) and the private healthcare players' federation called NATHEALTH, were hard-pressed to give examples of successful PPPs in healthcare .

While several models of PPP have been tried since early 2000, there is no dearth of stories of disasters in healthcare PPPs. One of the most well-known PPP is that between a large corporate hospital in South Delhi and Delhi government where the government gave 15 acres of land free of cost and also invested over Rs 23 crore with the understanding that 33% of the beds would be free. When the Delhi government took the hospital to court for not providing free treatment, it was argued that the agreement was only for "free beds" and not for "free treatment". The case drags on in court. The fiasco was put down to poor drafting and proponents of PPPs say that if drafted well, agreements could work. However, the fact that the World Bank ranks India 172 out of 190 countries on enforcing contracts, inspires little confidence in the government's ability to draw up water-tight contracts that would ensure that the public would not get a raw deal in these PPPs.

PPP advocates defend the difficulty in finding examples of successful PPPs in healthcare by saying that there are so many different models in healthcare which are broadly termed PPPs that it was difficult to pin down what exactly was being referred to by the term PPP. The various kinds of models could include medical contracts, franchising, joint ventures, voucher or service purchase coupon, social health insurance, health co-operatives and subsidies. Government consultations have been mostly with the corporate groups in healthcare. The National Commission of Macro Economics in Health estimated in 2005 that owner-operated health facilities, like polyclinics and nursing homes constitute over 85% of India's private health sector. Yet, this dominant segment appears to be absent in the consultations on accessibility to healthcare.

Anjan Bose, secretary general of NATHEALTH, a federation of corporate hospitals, medical technology companies and other private healthcare players when contacted said that his organisation had no reports or case studies of successful PPPs in healthcare though some NATHEALTH members did count their own PPPs as successful ones. "It is difficult to measure the success of healthcare PPPs. But ask yourself why there was a need for PPPs at all. Obviously, the government is unable to make the required investment in healthcare delivery. It talks about investing 2.5% of GDP in health, but that has been a moving target for more than a decade. So, it needs PPP and has to make it work through robust agreements with well-defined outcomes and strong regulation," explained Bose. Also, rather than an entirely private set up, won't the government have better possibility of control over a PPP?" he asked. CII too was not able to share any examples of successful PPPs in healthcare though the Niti Aayog document on engaging the private sector for treating cancer and cardiac and respiratory diseases mentions that four regional workshops were organised by the CII on the subject.

Niti Aaayog's document states that as the government's premier 'think-tank', it was mandated to provide the Centre and states with "strategic and technical advice on evidence-based policy making" in various sectors including health. While there are many examples of PPP working in infrastructure projects like highways, there seems to be a dearth of evidence of successful healthcare PPPs.

"We have to deal with a highly corrupt private healthcare sector looking to maximise profits and trying to get the most out of the PPP and a government that behaves like a demanding and suspicious husband in the partnership, making impractical demands but with no real management structures," remarked a health ministry official.

See also

Healthcare: India

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