Build and Beyond: The (r)evolution of healthcare PPPs

Transcription

1 Build and Beyond: The (r)evolution of healthcare PPPs Health Research Institute December 2011

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3 Contents Heart of the matter 3 An in-depth discussion 5 5 The (r)evolution of healthcare PPPs 7 9 Today's drivers: PPPs in health infrastructure built a foundation for PPPs in clinical services The Players: How PPP players determine success 17 Case studies: How PPPs can improve the sustainability of health systems 19 What this means to your business Government Private sector Appendices About PwC Health Research Institute Build and Beyond: The (r)evolution of healthcare PPPs 1

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5 Heart of the matter discussions about various structures that ensure the best possible return for precious national resource: the health of its citizens. Build and Beyond: The (r)evolution of healthcare PPPs 3

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7 An in-depth discussion outcomes and performance. Healthcare infrastructure PPPs are more focused on better procurement and value for money. about how to create and maintain locally-based sustainable health induce private sector involvement. Competition and later reductions and improve quality. care to all populations. Build and Beyond: The (r)evolution of healthcare PPPs 5

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9 responsible for all clinical services. The (r)evolution of healthcare PPPs PPPs were not without criticism and some well-publicised failures in What is a PPP? The acronym creates semantic turmoil over what it means model is the PFI model in which the private sector is contracted to rebuild common characteristics are that the public sector contracts (usually on a ment Build and Beyond: The (r)evolution of healthcare PPPs 7

10 $4 billion in hospital PPP deals in Europe were hospital. revitalisation of PPPs. PPP model in 2003 to stretch beyond new construction and into

11 Sizing the trillion-dollar market for PPPs in healthcare Source: PricewaterhouseCoopers estimates. Projections calculated using 2010 US dollars, GDP forecasts from Build and Beyond: The (r)evolution of healthcare PPPs 9

12 25% Health spend as % of GDP, 2000, 2010, % 15% 10% 5% 0% Source: PwC Health Research Institute 200% % growth in GDP, health spending % 100% 50% 0% GDP growth Health spending growth Source: PwC Health Research Institute 10

13 economic and social environment: Today's drivers: PPPs in health infrastructure built a foundation for PPPs in clinical services Better Procurement: Shifting government's role from provider to regulator Build and Beyond: The (r)evolution of healthcare PPPs 11

14 healthcare in many nations stems from dissatisfaction with the attractions of PPPs is that they provide a way for the public Source: PwC Health Research Institute, HealthCast: The customisation of diagnosis, care and cure Access to Skills and Knowledge: Health PPPs require more than dealmakers many need other types of social infrastructure 12

15 points well in advance. often may have to pay more initially to entice private partners to enter the Example: When the UK decided to create a PPP for selected surgical procedures, it accepted that it had to pay private organisations more to spark their interest in competing with NHS providers. The idea was that competition would increase productivity and lower costs in the long run. It would also offer patients more Key risks for public and private partners as the scope expands addressed by both sides. Labour laws and unions may need to be more of brain drain. Example: model. The government opened a window of opportunity, however, with one PPP outside the government healthcare plan, said Andrea Kdolsky, MD, who oversaw the project when she was the country's Minister of Health. PPP players need to clearly articulate their motives and the Build and Beyond: The (r)evolution of healthcare PPPs 13

16 Example: In Australia, the Australian Council of Healthcare Standards. Example: Tongji University of Shanghai, Siemens Project Ventures and the German private hospital chain Asklepios have signed a PPP contract to construct Once the license is approved, the hospital is expected to open within two years. 4 4 Gesundheitsmagazin, Issue 01/2010, page

17 5 6 Evolving beyond Value for Money : New metrics needed to demonstrate the power of broader partnerships 5 6 Build and Beyond: The (r)evolution of healthcare PPPs 15

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19 the public and private sectors should establish a relationship for The Players: How PPP players determine success ed Performance Fl ibility Willi ss Incentive shows a few of the characteristics that public and private sector parties need to understand and embrace if they are to be successful. Build and Beyond: The (r)evolution of healthcare PPPs 17

20 need. The need is there must be a willingness incentives for each player. The fourth characteristic of a successful PPP is the ability of each player to perform to the required standard. Each player must be able to these issues revolve around the need for. Whilst PPPs clearly need between both the private and the public sector can help people to better

21 PPPs are not a model in themselves as much as an enabler of solutions. The system problems. Case studies: How PPPs can improve the sustainability of health systems schools. 7 patients to clinical structures or professional cultures. To illustrate how he Lessons learnt: 8 will be used as a hospital for at least 50 years and in no way can we ambition for this hub of research centres and laboratories has been 9 7 medicine and pharmacy of the 8 9 See the interview in Presentation of the New Karolinska Solna, Build and Beyond: The (r)evolution of healthcare PPPs 19

22 Better integration of primary and secondary care services 1999-present Lessons learnt: hospital admissions present Replacement hospital and clinical services public hospital staff to employment by a private operator. Lessons learnt: Governments must remain responsible for the quality of care as citizens associate healthcare services with public services. 20

23 Applying and maintaining new technologies 2002 to present Lessons learnt: 10 Lessons learnt: the contract. 10 Build and Beyond: The (r)evolution of healthcare PPPs 21

24 Spurring competition and consumer choices 2003 Present Lessons learnt: Performance metrics evolved with the ISTC contracts to raise the level of improvements for both the private and 22

25 Proton therapy centres 2007 to present Precision treatment and research of tumours With an upfront cost of $125 million and up over the course of the contract. 13 Europe Italy Germany France Pac-Asia Korea China Build and Beyond: The (r)evolution of healthcare PPPs 23

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27 Government tailor solutions What this means to your business Invest in skills and resources broader partnerships. second one with a private insurance healthcare company that is responsible and Korea, Oct. 9, Build and Beyond: The (r)evolution of healthcare PPPs 25

28 Think like an entrepreneur demand from patients towards hotel standard on the other private partner is often more attuned to consumer preferences. To overcome doubters and alleviate the fear of privatisation of transparent and accessible to the population. Demonstrate political will commitment. Know what you want still in their infancy. 26

29 Private sector Reassess what information is proprietary and what should that it is possible to deliver the same service quality at lower cost. public support for PPPs. Our research found that other than This can lead to misinformation or distortion of the limited will increase access and quality for patients. Share the risk according to competencies Accept fair margins 16 Understand Investors an infrastructure fund that has successfully invested in many 16 Build and Beyond: The (r)evolution of healthcare PPPs 27

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31 How partnerships in health are working around the world private control Germany 17 The German privatisation wave 18 Several local authorities see privatisation as the only way In Source: PwC Health Research Institute Further public hospitals followed that wave Build and Beyond: The (r)evolution of healthcare PPPs 29

32 20% 18% 16% 14% 12% 10% 8% 6% 4% 2% 0% Actual Forecast Elderly dependency ratio in 2030: 32 Source: PwC Health Research Institute Canada also responsible for the maintenance and renewal of the facilities and in Elderly dependency ratio in 2030: 37 Source: PwC Health Research Institute 30

33 Latin America: A land of opportunity Brazil A second Brazilian hospital PPP in Belo Elderly dependency ratio in 2030: 19 Source: PwC Health Research Institute Elderly dependency ratio in 2030: 53 Source: PwC Health Research Institute Build and Beyond: The (r)evolution of healthcare PPPs 31

34 considerations often dominate and this is also true of certain countries in acquisition and transfer and the development and retention of related IP They also offer potentially attractive opportunities to investors and operators 32

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37 Appendices Build and Beyond: The (r)evolution of healthcare PPPs 35

38 estimated trend line to match the actual data. arithmetic is as follows: China and Russia had distinct downward trends in the share of GDP(t) = Real GDP in year t have witnessed in the OECD over past decades. Russia is already well-developed and has had a sophisticated healthcare a reasonable compromise. WHO for a similar period for most countries. PwC developed of GDP for each year by a smoothed version of GDP for the same R-squared statistic. to 10 years of data points. to attain the 2020 level in 12 years. based on the accepted principle that healthcare is a superior with GDP. the past. 36

39 with a number of limitations in mind: they are based totally on trends. Forecasts would be based on a more sophisticated model that estimates healthcare of the countries other than past data and GDP forecasts. the past. account year to year variations in the share that could be Aging plays limited role in health care cost trends, Bradley C. Strunk and Paul B. Build and Beyond: The (r)evolution of healthcare PPPs 37

40 About PwC Health Research Institute and advisory services to build public trust and enhance value for practical advice. sectors in the health continuum. PwC Health Research Institute Economics Research Analyst +44 (0) Principal (retired) Director Research Analyst Research Analyst

41 PPP Team for PwC Healthcare Leads David Levy Principal and Global Health Leader Carlos Pereira Almeida Daniel Farrell Partner Germany Paul da Rita Global Healthcare PPP Leader +44 (0) Brazil Paulo Dalfabbro (0) India South Africa in.pwc.com (11) Leads by territory Australia Sweden Austria Switzerland Christian Elsener Thomas Goldmann Simon Leary Taiwan Husnu Dincsoy Canada Philippines Build and Beyond: The (r)evolution of healthcare PPPs 39

42 Americas Peter Raymond Europe Tony Poulter Asia Australia Canada Richard Abadie China Latin America Central & Eastern Europe Tibor Almassy Francisco Ibanez Germany Africa South Africa Russia Spain Charles Lloyd Alaa El Soueni Sweden 40

43 Visit us pwc.com/us/healthindustries pwc.com/us/hri pwc.com/healthreform Follow us on twitter.com/pwchealth Build and Beyond: The (r)evolution of healthcare PPPs 41

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