Living our values. Innovative Private Sector Healthcare Financing and Delivery Models CARE DIGNITY PARTICIPATION TRUTH PASSION

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1 CARE DIGNITY PARTICIPATION TRUTH PASSION Innovative Private Sector Healthcare Financing and Delivery Models Jerry Vilakazi, Chairman, Netcare Limited, South Africa 30 September 2009

2 CARE DIGNITY PARTICIPATION TRUTH PASSION Presentation format Summary of Netcare s experience in PPP s Spectrum of risk and complexity United Kingdom PPP experience South African PPP experience Lesotho healthcare PPP 2

3 Summary of Netcare PPP/PPI experience Netcare United Kingdom Mobile cataract services Elective surgical hospitals Primary care Commuter Walk-In Centre (CWICs) Free Patient Choice Netcare South Africa Bronkhorstspruit Hospital Bloemfontein co-location PPP Port Alfred and Settlers PPP UCT Private Hospital 3

4 Public Private Initiatives by risk and complexity Increased risk 4 Increased investment/ complexity/duration

5 Bronkhorstspruit 1998 Nursing Paramedics Confed Cup (FIFA) Strikes Cholera N1H1 Walter Sisulu Smile for Life Sight for You Renal Dialysis Universitas Pelonomi Settlers Port Alfred Greater Manchester Surgical Stracathro Surgical Centre (Scotland) Mobile Clinics Lesotho Increased risk 5 Increased investment/ complexity/duration

6 UK PPP/PPI experience Waiting list initiatives

7 Background to NHS collaboration Providing clinical services to NHS since 2001 Pathfinder in early waiting list initiatives in ENT, orthopaedics and ophthalmology Currently operate - Ophthalmic Chain Treatment Centres - Community Walk In Centre in Leeds - Greater Manchester Surgical Centre - Stracathro Surgical Centre (Scotland) Netcare UK now a division of GHG after the acquisition of this largest private hospital group in the UK

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9 South African PPP experience

10 Free State Public Private Partnership (Co location model) Private Sector Upgrade Pelonomi Hospital (R20m) Renovate and operate 127 beds at Universitas Hospital for own use Renovate and operate 143 beds at Pelonomi Hospital for own use Maintain own use areas and return them back to the Department in the same good condition at the end of the concession period Share radiology, trauma and specialised theatres Pay Department a monthly rental and percentage of turnover Public Sector Grant private partner a hospital license Agree to service level and penalties Jointly market the PPP Use additional income to maintain the rest of the hospital, maintain and replace shared equipment Provide new Accident and Emergency Unit

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12 Population: 2 million (UN, 2008) GNI per capita: US$1 000 (World Bank, 2007) Capital: Maseru Life expectancy 43 years (men) 42 years (women)

13 Bronkhorstspruit 1998 Nursing Paramedics Confed Cup (FIFA) Strikes Cholera N1H1 Walter Sisulu Smile for Life Sight for You Renal Dialysis Universitas Pelonomi Settlers Port Alfred Greater Manchester Surgical Stracathro Surgical Centre (Scotland) Mobile Clinics Lesotho Increased risk Increased investment/ complexity/duration

14 Lesotho s PPIP Configuration design, build, operate and manage D10 Investments 10% Government Excel Health Services 20% PPP Agreement Lenders Direct Agreement Netcare Hospital Group 40% Tsepong Financing Agreement DBSA Afri nnai Health 20% Sub-contractor Agreement Construction Contract Clinical, soft FM & Equipment Contract Hard FM Contract Women Investment Company 10% RPP Lesotho Netcare Hospitals Netcare Hospitals Financed by the Development Bank of Southern Africa, grants from the World Bank and the Government of Lesotho

15 Outsourcing of approximately 80% of Lesotho health budgets Construction Design, build and construction 425bed hospital, 35 private beds and refurbish 3 off-site clinics Gateway clinic Full maintenance of hospitals and clinics Full operational management Manage all clinical and non-clinical services for 18 years Employ health professionals Train staff Clinical services 3 filter clinics (District Healthcare)

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18 390 bed public hospital 3 off-site primary care filter clinics 35 bed private facility Gateway clinic

19 This pioneering project provides a new and sustainable model for governments and the private sector to work together to provide improved health services for Lesotho, sub-saharan Africa and other regions. Laurence Carter, Director of Infrastructure Advisory Department - IFC

20 Thanks to the innovative PPP structure, operating costs for the new hospital are roughly equivalent to those at the existing facility. Patients will have access to greatly improved medical services and care, but pay the same minimal charge they currently do at any other public hospital in Lesotho. Mphu Ramatlapeng, Minister for Health and Social Welfare - Lesotho

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22 Thanks to the innovative PPP structure, operating costs for the new hospital are roughly equivalent to those at the existing facility. Patients will have access to greatly improved medical services and care, but pay the same minimal charge they currently do at any other public hospital in Lesotho. Mphu Ramatlapeng, Minister for Health and Social Welfare - Lesotho

23 Conclusions on all the projects - Contracts based on cost neutrality in terms of cost and quality and still meets investment hurdles - No reason why you can t build public hospitals to private sector standards - Access and outcome greatly enhanced - Local community empowerment and ownership (60%) - Provision of primary and tertiary services by private sector allows full responsibility and no cost shifting or transfer of clinical cases outside of model - Independent monitoring of quality and care

24 Thank You