PPPHealth4All Persona – Julien Beaujolin, CEO and Founder, ECMP

We are pleased to welcome our next PPPHealth4All Persona –  Julien Beaujolin, the CEO and founder of ECMP, a healthcare operating firm providing solutions to bridge the healthcare delivery infrastructure gap in South East Asia. Since inception 5 years ago, he focused on partnership with public and private hospital to deliver cardiac Cath-labs, diagnostic imaging and soon oncology services across Indonesia. Julien has an exceptional drive and interest to improve healthcare delivery systems. He believes they should improve the well-being of the communities they serve by making services available, accessible, affordable, and of good quality. Before founding ECMP, Julien was managing director of a South-East Asian medical equipment distributor and started his career in asset management in Switzerland.
 
Main lesson from healthcare PPPs in South-East Asia
If there’s any lesson from this pandemic, it’s that we need much more robust and equitable health systems.
 
Improving the quality of care by making it affordable and accessible is a paradox our world faces. However, the challenge of funding healthcare and bringing high-quality healthcare at affordable prices could not be more acute than in emerging economies, particularly in Asia, home to more than 50% of the global population.
 
The Government will need to expand primary and secondary healthcare capacity and partner with private operators and investors for tertiary services. Private capital will contribute even more significantly to the expansion of care required to achieve universal healthcare coverage (UHC). It is essential to increase the efficiency of healthcare, meet the capital needs for new and upgraded infrastructure, and reduce the strain on public resources.
 
By working with Governments, private capital will contribute to more significant health systems goals. More involvement through public-private partnerships will significantly augment public sector efforts and strengthen the Government’s service delivery.
 
Key aspects from our experience of building a healthcare delivery platform in Indonesia:
 
  • To ensure a levelled playing field, the Government must, i) have the capacity to manage and supervise long-term contracts, ii) ensure and enforce clinical quality and performance standards.
  • Foreign clinician exchange must be facilitated to enable easier access to training capacity and best practice exchange.
  • The low trust between the public and private sectors have to be accounted for and addressed.
  • Compared to other SEA countries, patience is critical in Indonesia; things take time. Partly due to cultural reasons and also to a daunting regional and national bureaucracy.
  • By offering turnkey managed care solutions to hospitals, we eliminate a potential source of red tape which can come with big-ticket medical equipment’s.
  • Long term, 5-10-year tax incentives for all health PPP would drive more capital towards this asset class.
Access to permanent capital
To improve healthcare delivery and access to care, numerous capital-intensive and fast- growing healthcare businesses need financing beyond the average fund life to reach scale and its full potential. This leads to a mismatch between fund and asset lifespan as most vehicles are closed-end funds.
 
Given an average fund life of 6-8 years and an investment period of 3-4 years, the average holding period for investments is 3-5 years. However, certain assets, such as healthcare infrastructure, particularly where greenfield development is involved, require a long lead time (7+ years) before they reach a point in their lifecycle to be efficiently monetized.
 
A permanent capital vehicle scales access to long-term capital by providing a structure attractive to a broad universe of investors. It unlocks private financing for businesses allowing them time to reach scale.
 
Permanent capital strategies are not new. We can argue it’s one of the oldest strategies around. For decades, assets in families have often been concentrated in permanent vehicles such as family businesses, land holdings, trusts, etc. However, in today’s investment practice, which focuses on year-long performance periods as a benchmark, less attention is given to permanent capital strategies.
 
For ECMP to access a broader and deeper pool of capital and ease regulatory, compliance and structure concerns, we are working towards a listing Q1 2022.
 
SDGs and impact investors
As a healthcare operator, we seek to make a meaningful impact on society by improving access to affordable quality healthcare for underserved populations.
 
We believe that responsible investment and operations are critical to sustainable long-term value creation in Asia, and “doing well will only be possible by doing good” as they are not only compatible but mutually reinforcing.
 
Over our recent history, we have, for example, diagnosed and treated 21’000 at our 18 centres in partnerships with the public and private hospitals across Indonesia. Moreover, 95% of the patient are lower / middle income under UHC.
 

However, our experience and interactions with SDG funds were disappointing from an impact perspective. In our view, a majority of them are greenwashing. As with any other investors, the only metric analysed and considered were financial returns.

Financial performance is critical for the sustainability of any investment in the healthcare delivery space. However, patient capital is vital, especially with greenfield projects, as the road to profit and value creation is longer.
 
Value creation for hospital’s partnership
Collaboration and partnerships are essential in any business. In healthcare, they are critical as it’s impossible to succeed alone.
 
Value creation first comes from our team members who are dedicating themselves to provide the best environment of care for our patients and ensure the success of each of our hospital partnerships.
 
Secondly, value also comes from our third-party partners that support our center’s successful operation: consumables suppliers, equipment manufacturers, and technical services providers.
 
This ecosystem enables us to operate and deliver a qualitative and safe environment of care to our patients. Usually, if you provide the above, profit takes care of itself.
 
Healthcare delivery models
Across Asia, especially India, models that substantially lower the cost of healthcare without compromising clinical quality have emerged to satisfy significant unmet medical needs.
 
The principle behind those care models is to employ economies of scale and specialization to slash healthcare costs.
 
Several characteristics that drive access to care, improved quality, and efficiency have been identified:
 
 
These characteristics can help healthcare systems meet the needs of their populations more effectively and deliver significant improvement in the quality and affordability of care. The phenomenal future for healthcare delivery systems is that many models have been proven to make a difference. The challenge is to implement these strategies with capital and talent.
 
Executing investment in the healthcare delivery sector
In Asia, opportunities are about building businesses and driving young companies who need capital and expertise. As such, investors must get involved in operations and focus on adding value to be successful. In-depth industry expertise and experience are critical to achieving higher efficiency, promoting governance, and creating new business opportunities.
 
In Indonesia, ECMP has built a solid operational structure with healthcare expertise to support project management, technical maintenance, IT, sales & marketing, finance, human resources, and clinical services. Building our platform was a significant investment but key to creating value for our business.
 
With such oversight on operations, it reduces the risk for the company and our shareholders. In return, this level of transparency encourages good governance. Addressing risks and making a positive societal impact is good management practice and will deliver higher returns.
 
Ultimately, vision without execution is a hallucination.
 
Interview by Natalia Domanska

PPPHealth4All Persona – Dr. HM Goh, Executive Director, TAEL Partners

We are delighted and privileged to welcome our PPPHealth4All Persona, Dr. HM Goh, Executive Director of Singapore-based TAEL Partners private equity. With over 20 years of international experience in hospital management, transformational leadership, private equity and venture capital investments in Asia, Dr. Goh aspired to develop an ASEAN-focused healthcare platform integrating medical, pharma, medtech, and education sectors.
He is a true believer in the power of PPPs in healthcare and its most passionate advocate.

More and more developing countries have started to look at PPPs in healthcare, next in line after infrastructural projects like roads, ICT, or water treatment facilities. How can they ease the pain of the most critical stages of PPP healthcare projects?

Firstly they should look at a country’s regulatory framework (e.g. some countries already have some form of PPP law), and whether there was prior government experience, and track records of PPP in other sectors.

However, remember that healthcare PPPs are critical to have the so-called “software” part, a human aspect, that sets them apart from a typical infrastructure PPP which has a prominent component of “hardware” element.

We also need to be extremely mindful of a country’s political dynamics because PPP inherently will have quite significant political risks and exposure that impacts the project. Some projects are fast-tracked for political reasons such as election cycles or political tenure. Some projects were hijacked along the way or “adulterated” into a permutation of the original intent. And occasionally it might even look completely different compared to the projects’ initial designs. In some countries, government bureaucrats are rigid and inflexible and apparently too scared to make bold decisions and take accountability. And of course, there are always risks of corruption (e.g. cronyism, nepotism, “kick backs” etc.), market dynamics change, technological obsolescence and incumbent “vendor lock” situation.

Secondly, be selective about whether a project is suitable for implementation using a PPP format, special consideration must be given to its structure, and governance framework. We noticed many governments tend to over specify, overcapacity and over-build and this is further compounded by the tendency to enter into an addressable market too early. An example will be constructing an oversized hospital in an emerging catchment prematurely, resulting in low occupancy during the formative years of the project. 

Be cautious over projects that transcend into two political cycles, that usually will adversely affect the project implementation and payment timeline. 

Last but not least, a detailed, methodically and meticulously performed due diligence is critical. And a well designed market feasibility study and quality data points will mitigate those risks and challenges I described earlier.

How to use the tremendous potential of data to build a strong foundation for long-term partnerships?

Prior experience with PPP among stakeholders (i.e. project owners, users, consultants and advisors) is a critical success factor. References to case studies (data, reports, benchmarks, site visits) are extremely useful, as these are important lessons learned and knowledge base that can shorten the learning curve and minimise the project risks. 

Notable success case studies in ASEAN can be found in Singapore, Malaysia and Vietnam. Although the insights to these projects can be limited partly due to disclosure restrictions (e.g. Official Secrets regulations and NDA) but it can sometimes be available via conferences and scientific publications. Or PPP fraternities can have more informal candid dialogues via PPPHealth4All or other similar platforms where experience can be exchanged for the benefit of the industry.

It helps to “prime” the public stakeholders, get them prepared. But first, you need to enlist those project management savvy and committed ones into the project.  People tend to make project plans, budgets, scope of works that the project steering committee approves. It is not uncommon for us to see end-users and frontline clinical representatives were omitted from the committee – especially the nurses.

Different stakeholders will have different expectations, dynamics and implications due to the project. “What’s in it for me?” is probably the most important question to explore during the project stakeholder analysis exercise. This will guide us on how to realign all stakeholders towards a common set of project goals. And ensure that we will select, interact, engage and galvanize the right team right from the start.

Part of the gap analysis exercise. Be upfront about the need to “reconcile” the public and private corporations with respect to the organisational culture, processes, procedures and policies. You need an experienced project lead, well-prepared mentally, who reacts fast and resourcefully. At the same time, has transformational leadership qualities (i.e “change management”) and credibility to influence various stakeholders to embrace organisational change.

He/She must constantly re-strategise and manage the delicate balance between the two driving forces and frameworks namely corporate and clinical governance, championed by the Board of Director and Medical Board respectively.

The worst thing that can happen is allowing “identity crisis” to permeate into the project because of a conflict of corporate culture within public policy and private enterprise regulations. 

Can proper PR strategy, visibility, and marketing campaign help?
Definitely, strategic communication is an important strategy to manage expectations, aligning interest, galvanising stakeholders and communicating purposes and benefits of a socially impactful projects. However, this is increasingly becoming more challenging due to the democratization of media  and information. Fake news, leaks, misinformation are a threat to PPP projects if left unmanaged. Especially, like any large scale projects, there are bound to  have challenges and whether we can address it before it gets amplified and distorted in the social media.

How to put into practice opportunities for genuine PPP healthcare
partnerships opened up by COVID?

First of all, it is in everyone’s interest to mitigate the widespread impact of the pandemic.

We all have been going through a deep learning and very visceral experience. We can compare it to the postwar world and hope that we’ll reform and won’t forget what we learned. Post pandemic healthcare will reform and transform – geopolitics, management systems, hospital design and basically everything in how we operate healthcare operations. (i.e. infection control regulation, supply chain management, manpower, cost structures etc.)

COVID-19 catalyses PPPs and galvanises the spirit of collaboration where different stakeholders swiftly realign towards common goals. We look beyond our differences, policy constraints and come together and find ways to collaborate to fight against a “common enemy”. We have seen unprecedented speed of responses, especially in the deployment of capital and resources. In pandemic crisis mode, projects have accelerated into “operationalisation” without the traditional contracting nuances, unnecessary micromanaging, legal complexities and jargons and painful bureaucracy. PPPs have become very fluid and adaptive. And interestingly we also see an emergence of a new element that enhances the PPP model. PPP in COVID times is PPPP (4P) Public, Private, Philanthropy Partnership, enhancing the value of PPP with good will. Healthcare, being a social enterprise, is always PPPP. 

Interview by Natalia Domanska.

PPPHealth4All Persona – Celso Manangan, Senior PPP Advisor at PPPHealh4All

In our series of PPPHealth4All interviews with prominent PPP experts around the world we are proud to have today our senior PPP advisor, Celso Manangan, who is Asia regional representative for PPPHealth4All. He was formerly the project director of the UNECE-affiliated International Specialist Centre of Excellence for PPP in Health, Philippines. Long before, Celso was the director of the Special Concerns Department and Administration & Finance Department, Build-Operate and Transfer Center (BOTC), later renamed to Philippines’ PPP Center. He is a recipient of the European Commission’s Erasmus Mundus Scholarship Program and holds a postgraduate degree from the University of Trento, Italy.

Interestingly, you  have chosen to discuss Public-Private Partnership in Dialysis. Could you please explain why?

PPP Dialysis has been a significant project, where I worked in 2003, my stint working in the Philippines’ Build-Operate and Transfer (BOT) Center (now renamed PPP Center).  

The project concept was simple. The Philippines’ National Kidney and Transplant Institute (NKTI), a specialty hospital, established a partnership with a proponent/company with the necessary experience and capability to provide dialysis machines through a lease agreement. In addition, the company was responsible for maintaining the devices throughout the contract and for training the medical staff responsible for using the machines.

The project assumed that the increased efficiency of the machines would let more patients be treated, and therefore, more revenue will be generated. In addition, the hospital took off the table procurement of the devices.

It was the first successful PPP project in the health sector in the country, delivered by a professional team from the BOT Center and the NKTI. Other hospitals in the country had also replicated the project successfully. I am glad to know that other countries have also replicated such

What were the challenges that you experienced in developing this project in the Philippines?

Developing a PPP project in the health sector was a challenge for the following reasons:

  1. People perceive PPPs as wherein assets of the private sector are shared without risks and costs. It must be emphasized that governments must share the risks and provide their contributions for the project to be successful.
  2. Developing countries (like the Philippines) show that the private sector charges more regarding payment for their investments. Therefore, a significant challenge was the ability of the government to pay its obligations in such a PPP project. 
  3. Since this was our first PPP health project, we need to review and examine all relevant laws for the project to be implemented successfully. 

In our research, we found out that the implementation of the project was successful. What were the factors that contributed to its success? 

Let me share with you the findings of several organizations that reviewed and evaluated the project.

“Although relatively small in scale compared to some of the other projects considered, the NKTI Hemodialysis Project in the Philippines proved popular among the judges due to its more personable impact and its innovative procurement of equipment.” –  Emerging partnerships : top 40 public-private partnerships (PPPs) in emerging markets.

“The NKTI Hemodialysis Project offered improved service and top-quality hemodialysis with the acquisition of the latest available technology in dialysis treatment and expanded its services to more patients at the same time cost of treatment and less risk to the government.  And because of more machines and higher reliability of these machines, hemodialysis treatment was extended to more Filipinos.” – Infrastructure Public-Private Partnership Case Studies of APEC Member Economies 

“This was the first PPP in the health sector in the Philippines, and it was hugely successful.  Patients welcomed the improvement in the quality of their care. The NKTI project, as a pro-poor PPP, achieved this through generating more resources from a better quality of care, keeping costs down relative to the private alternatives, and widening access to top-quality care, even those who could not pay. The NKTI case demonstrated that the doctors chose the PPP, not because of ideological preference but simply because the PPP was the best and only way to give their patients a better quality of care.” – Ensuring Healthier Lives Through Public-Private Partnerships. Global Health and Diplomacy.

After receiving such high appreciation from the PPP community, do you have other plans promoting such initiatives and other PPP Health Projects?

For this project, I am encouraged to form a Working Group on People-first PPP in Dialysis.  The Working Group will address the following broad desirable outcomes on this topic about the UNECE Guiding Principles on People-first Public-Private Partnerships in support of the UN SDGs. The five People-first PPPs outcomes are designed to:

  • Increase access to essential services and lessen social inequality and injustice. It implies increasing access to [health], water and sanitation, energy, etc., focusing on projects that consider the socially and economically vulnerable needs and contribute to eliminating inequalities.
  • Enhance resilience and responsibility towards environmental sustainability. It implies developing resilient infrastructure and improving environmental sustainability by cutting greenhouse gas emissions and developing “circular” rather than linear projects.
  • Improve economic effectiveness and sustainability. It implies successfully delivering projects that achieve value for money and fiscal sustainability and are transformative, meaning they have a sustainable, measurable impact.
  • Promote replicability and the development of further projects. It implies that projects be replicable and scalable to be repeated and/or scaled up to have the transformational impact required by the 2030 Agenda for Sustainable Development. This criterion also needs to consider whether the local staff and the governments can receive the necessary training and knowledge to do similar projects.
  • Fully involve all stakeholders in the projects. Engaging all stakeholders directly involved in the PPP project or directly or indirectly affected in the short and/or long run and creating new means for integrating special groups who have played a limited role to date.

Lastly, I will be glad to receive feedback from our subscribers and readers of their interest in joining us in this Working Group towards attaining the SDGs through People-first PPPs. For any inquiries, please communicate with me through my email address: celso@ppphealth4all.de.

Thank you very much, Celso. We wish you success on your initiative and we hope to work with you on implementing people-first healthcare PPPs worldwide.

Thank you.

PPPHealth4All Persona – Sameer Pujari, Acting Head of the Unit, WHO

We are very happy and privileged to welcome our next PPPHealth4All Persona, Sameer Pujari, Acting Head of the Unit, the World Health Organization’s Department of Digital Health and Innovation.  He works extensively on Digital Health including mHealth, Big Data and AI providing support in over 40 countries.

Sameer has shared with us how WHO and the member states are working with the private sector and how AI can be deployed and successfully managed at the country level to improve healthcare system. Also we talked  about WHO and ITU initiative on Digital Health and mHealthGlobal Health Hub initiative and implementation of gender equality.

Special thanks to Violeta Isabel Pérez Nueno to make this interview happened.

Interview by Natalia Korchakova-Heeb

PPPHealth4All Persona – Erjon Murataj, Senior PPP Expert at PPPHealth4All

We continue our series of PPPHealth4All interviews with prominent PPP experts around the world. And today our senior PPP expert Erjon Murataj will share the insights for development of successful PPP healthcare projects and what problems could be faced. Dear Erjon, thanks for being with us today. Could you please introduce yourself?

My name is Erjon Murataj. I have more than 10 years of experience in developing the Public Private Partnerships from public side. I have worked in Albania PPP Unit and also in Ministry of Finance of Albania, where I have been involved in preparation of various Public Private Partnership projects. My education includes a Master Degree in Business Law from the Tirana Business University. Currently I reside in Spain.

What PPP healthcare projects were developed in Albania?

Not many, but in 2013, the Albanian government pledged to implement universal healthcare coverage and has since undertaken a series of steps toward implementation of this model. Since January 2016, roughly 600,000 uninsured Albanians benefit annually from free family doctor visits and reimbursable drugs, and close to one million Albanians aged between 35-70 years old, both insured and uninsured, are entitled to benefit from free medical check-ups provided under a PPP contract.

Also in February 2015, the Ministry of Health asked IFC to assist in designing a public-private partnership (PPP) with a qualified healthcare company to provide modern public laboratory services with international standards across 18 university and regional hospitals. After a competitive bidding process, the Consortium of Labopharma (Albania) and Exalab (France) was awarded a 10-year contract, with PPP agreements signed in April 2019.

Healthcare PPPs are different from other PPPs and often certain difficulties in preparation and implementation of healthcare PPPs. Why are the problems in your views and what could be potential grounds for PPP healthcare projects failures?

There are many issues that impact PPP healthcare projects. While some of them are obvious, the others are often disregarded. There are some key elements that needs to be addressed in the right way. Those elements are important for PPP project in any sector, but my focus today will be on healthcare PPP projects. Based on my experience as PPP public official with more than 20 years of experience, I could share what is important from my point of view and what I could derive from my past and current experience.

  1. Failure to proper assess the needs

When formulating an initial idea of the PPP project, it is important to understand what kind of problem the project is solving and with what means. After shaping the initial idea, further in-depth analysis and needs assessment have to be carried out. The following questions should be asked: what the project stands for? What is the problem to be solved or the needs to be fulfilled? Who are benefiting from this project? It is a brainstorming stage and various ideas and assumptions should be brought under discussion. When we will get all the answers for the questions, all the concerns addressed and all the opportunities realized, we will get a solid project idea. A lot of projects fail to address the real needs of the country, sector and stakeholders. This is I would say a fundamental flaw.

  1. Deficient planning

After evaluating the real needs, it is time for plan and shape the project. At this stage, project specifics gets shaped. Deficient planning is the second main factor why the PPP healthcare projects often fail. There are many issues that might lead to deficient planning:

  • Different perception issues (social, cultural, economic, environmental, religious… etc.). causing different expectations and conflicts in a certain socio-economic context

  • Problems at Design-Build stage. Design-Build issues refer to the implementation of the project and mostly with the project requirements (functionality idea and main requirements). Bad design or problems during the construction affect the whole project life-cycle.

  • Costs issues. The healthcare projects in general are expensive (due to the equipment and their lifetime), this is why the planning of the real costs is very hard.

  • Lack of proper market sounding. Market sounding is a process that involves many steps and various market players – without checking market readiness, it is impossible to launch a successful project.

  1. Failure in procurement

Another important factor is the transparent procurement – the process of awarding the private partner that will build (operate, finance) the PPP project. Many countries have very strict procurement procedures. In my view, the procurement process and procedures should be also transparent, which is not always the case, especially in developing countries.

It is also important to properly formulate the main criteria for implementing the project. Criteria that describe the functionality of the project should be “pass or fail”. Sometimes the choice of awarding criteria is designed in the way that prevent selecting the best bidder and this would hamper a fair competition.

  1. Insufficient contract management and monitoring

After the contract has been signed, it is crucial to start monitoring the contract implementation. Many governmental entities neglect contract management and monitoring and rely on the goodwill of the private partner. The importance of this phase is vital. The public partner could collect important data and lessons to be used for improvement of this project and also for developing the new ones. Monitoring of the healthcare PPPs is orientated to the high quality medical services to be delivered through the project.

  1. Failure in getting a right advice

Many governments spend millions on mega healthcare PPP projects, and do not have the money for advisers or fail in approaching the right ones. It could be a serious drawback if the public entities do not allocate funds for advisory services. The advisers must be engaged from the beginning and they do not need to be the most expensive ones. Although hiring an adviser is not very simple and especially when they are not local based. Nowadays this process is getting more simple through the implementation of the digital solutions and information technologies. PPPHealth4All could play a vital role here in helping to identify suitable consultants. I see a great service offering from PPPHealth4All platform, which offers a lot of support for governments and PPP Units on different matters. The best offer, in my view, are the consultations on the demand with “best in the class” experts. These consultations allow to reduce time and costs for preparation of PPP projects but also to increase quality.

How to support public officials during the process of preparation of PPP healthcare projects?

PPP healthcare projects are critically needed, especially during these difficult time of global pandemic. The governments need help in developing and implementing PPP healthcare projects. It is great to have such a platform that could serve as one-stop shop for preparation of healthcare PPPs and where public officials could receive a necessary support when required.

Dear Erjon, thanks a lot for sharing your views and for your valuable insights. Thanks for joining us today.

Thank you.

Interview by Natalia Korchakova-Heeb

PPPHealth4All Persona – Ann M. Casanova, International Global Health Consultant

We continue interviewing experts in PPPs and global health. And today on the occasion of Women’s International Day, we are talking with Ann M. Casanova. Ann is an independent consultant based in the US with more than 20 years of experience in international development in Latin America, Africa, and Asia. She worked for 6 years in global health for International Finance Corporation (IFC), which is the private sector lending arm of the World Bank, authoring over 20 publications on a range of topics including PPPs. Thank you, Ann, for being with us today.

Thank you very much for inviting me, Natalia, I’m very excited to be here with you and your audience as we celebrate International Women’s Day together and as we discuss some interesting PPPs. Yes, I have written extensively about the ‘secret sauce’ of what makes private hospitals and clinics successful. And I’m looking forward to discussing those with you and your audience. 

What made this project successful?

That’s a great question. So what made this project successful? it solved many problems for the state of Bahia, the state hospital did not have access to imaging. So the patients who got care, were getting highly invasive surgeries. And that increased the health risk, and it was also costlier to the public health system. Those that were getting surgeries had longer recovery times. So, for instance, a patient that needed a simple gallbladder removal surgery, the recovery time would take 35 days to turn over the bed, and that was having a domino effect on other patients that were waiting for that hospital bed. But with this PPP, it was reduced to five days. So the result is accelerating bed turnover, and more patients had access to care. Now for the patients that were still waiting for care, it was a very stressful time because they had to endure long delays to get a diagnosis. There’s one woman that I spoke with who waited a year and a half to get a biopsy to detect if she had breast cancer. That’s an extremely long period of time. And for some patients, that translates into a death sentence. So this was a big problem. And the PPP was a game changer. And I’m happy to report that at the end, it was beneficial.

In 2015, the state of Bahia established a statewide PPP and a company called Alliar and its consortium won the tender. Alliar is one of the top 10 diagnostic imaging companies in Brazil. It operates a network in 43 cities and in 10 states in Brazil. And they won the contract to build, operate and staff new diagnostic imaging centers in 11 hospitals in the state of Bahia. So why outsource? Well, Alliar brought a depth of expertise that was scarce in Baia. They are a large scale network that brings inefficiencies. So, for instance, Alliar was able to acquire expensive equipment at lower cost. So, for instance, one MRI machine at that time would cost about $1.5 million, but Alliar had established a contract with Siemens given their size and their needs for 60 MRI machines over the period of three years, and that volume allowed them to secure preferential pricing. And Alliar also had addressed skill shortages for highly specialized radiologists that were lacking in the market. And they established a solution using telemedicine where they centralized command centers and staffed those with top radiologists. And this meant that a patient living in the Amazon could have a top radiologist living in Sao Paulo interpret their images. So this increased the quality of care. And it also meant that patients were getting results much quicker in the space of two days.

Ann, to whom would you attribute the success (IFC, government, private partner) or it was a teamwork?

That’s a great question. So to whom do I attribute the success? It was definitely teamwork, all of the players played an important role. The government recognized that it needed a different strategy and that a PPP was the solution. IFC provided advisory services to the state of Bahia just structure the PPP and in 2012, IFC also provided a $50 million in financing for earlier to grow its network. And of course, Alliar is working in partnership with the government and the hospitals to provide a rapid solution. 

What are the lessons learnt for other regions/jurisdictions?  

What are the lessons learnt for other jurisdictions? Another great question. Definitely PPPs work. They solve problems for the government. And in this case Alliar was able to deploy a solution with greater speed to market, it improved the quality of care that resulted in better health outcomes and while reducing the cost to the state. So it was able to generate a more robust package with just one simple tender and it accelerated access within its first year of the PPP Alliar had conducted 183,000 exams, and when fully implemented, it will serve about 6 million patients over the course of 11 years. So PPPs are a win-win for all but especially for the patients and Adeni, who was one of the first patients to benefit from the PPP, said: ‘I got my life back!’

There’s a very interesting example of public private cooperation. Georgia had a problem, the country of Georgia had a problem. For 70 years, the health care system was funded and delivered through the state. But after the collapse of the Soviet Union in 1991, investment in health plummeted, and along with it, the quality of care. So for decades, patients were leaving the country to get good care. Now, fast forward to 2013 patients were really struggling, people were spending 1/3 of their income on health care, and some were even forgoing health care altogether. And that led to a political outcry. So one political party promised basic universal, basic universal health coverage, and they won the presidential election, so they had to deliver quickly. The problem was that Georgia had a limited tax base, had a very small population with about 3.7 million people, high levels of unemployment, and 25% of the population lived below the poverty line. So Georgia did not have the resources to become a provider itself. And the private sector had already been investing in infrastructure upgrades. So the government decided on a public private collaboration, the government decided it would not be a provider rather, it would take on the role of a policymaker, regulator and a payer, and it would reimburse the private sector to deliver treatments to patients for private facilities. So in Georgia, universal health coverage is funded by the government, but it’s 85% delivered by the private.

So Georgia is an example of good partners working well together. The model of cooperation aligns the strengths and the incentives of both sides. And it brings benefits. The benefits to the government are fiscal agility. And this is seeing through an asset light model that shifts the private sector, it shifts to the private sector, high capex investments. So for instance, one company, Georgia Healthcare Group, invested $300 million to transform the infrastructure. That was kept off the government’s books. Second benefit to the government is speed to market. Georgia Healthcare Group turned around and built 50 hospitals in 2-3 years. And thirdly, they improve the quality of care. They introduced western standards and established protocols and procedures, and invested in training medical staff. Now, the private sector also has benefits as well. It saw rapid growth, because now it has a reliable source of patient volumes. It’s able to scale and generate efficiencies, because large scale providers can deliver better quality at lower cost. And fourthly, it had a reliable payment source, the government of Georgia pays on a timely basis, which is roughly about 4,5 months. And this is really critical, because we’re seeing examples in other countries where providers are not paid on a timely basis. And this causes significant cash flows for private sector providers, and it sours the relationship. But this is working well in Georgia. So Georgia is a very interesting model of cooperation.

How PPPHealth44All could contribute to improvement of global health?

So thank you, Natalia. I guess I’d love to give some wishes to PPPHealth4All. So as the world embraces universal health coverage, PPPs will take on greater importance. Governments are realizing that they cannot do it alone, and they don’t have to. The private sector can deliver more services, they can accelerate speed to market and they can provide good quality at lower cost. Now one critical area for the future will be training on how to structure PPPs effectively. So I applaud your important work in bringing greater visibility to this.

As we are celebrating Womens’ International Day- what kind of message you would share with peers-women professionals?

Yes. Finally, on the occasion of International Women’s Day, I’d love to share some gender wishes with the audience. There’s a strong business case for having more women in healthcare leadership. There are numerous studies from McKinsey, from the Peterson Institute, from the ILO, they’re multiple. And they all conclude that there is a strong correlation between the number of women in decision making roles. So women on boards, women in executive committees and women in senior management, and profit increases, these companies are seeing profit increases of between 5-20%. And in Africa, there are some companies that are reporting profit increases of 30%. So having more women at the top improves the bottom line and it also contributes to GDP growth. There are other benefits, there’s increased innovation, there’s better decision making, and there’s the ability to gauge consumer needs. But the problem is that in health care women, although they make up 75% of the healthcare workforce, few have really reached the top. So here organizational policies matter. Women need mentoring, they need sponsorships, and women need business skills. So I invite CEOs and government officials, both men and women to create a workplace culture that embraces women and gender balance, because women pay dividends.

Thank you, Ann for the interesting insights you have shared with us today.

Thank you for inviting me today. I enjoyed our conversation. And I hope to inspire others, to use PPPs to increase access to affordable quality health care around the world. Have a great day.

Celebrating Women-Professionals in PPP Healthcare Sector

Celebrate with PPPHealth4All International Women’s Day and remarkable women-professionals working in healthcare PPP sector. We are proud of you and we admire you!

Dr Rosemary Kumwenda, member of PPPHealth4All Advisory Board
Our theme: “Achieving an equal future in a COVID-19 world”-let us celebrate huge global efforts led by inspirational women and girls who continuously seek ways of shaping a more equitable future for us all to recovery greener and fairer from the COVID-19 pandemic. We can close the gender gaps including the digital divide for women and girls to fully and effectively participate and lead in of all areas of life to drive Sustainable development for all.

Sacira Coric, Director – Infrastructure Strategy, Delivery, Financing, Turner & Townsend LLP

“Every girl and every woman has the potential to make this world a better place.  To realise the potential we must dream bold, work hard and use excellence to fight inequality and injustice.  We must each leave legacy behind us to inspire young girls to take our place and achieve more than we have.” 

Dr Rosemary Kumwenda
Karine Bachongy
Audrey Mwala
Sacira Coric
Veronica Vecchi
Violeta Isabel Pérez Nueno
Monica A. Altamirano, PhD
Rosemary Ong
Beatrice Florence Ikilai
Dennis Rosete
Helena De Flaviis

PPPHealth4All Persona – Ziad Alexandre Hayek, President, WAPPP

Welcome to the series of PPPHealth4All  interviews with prominent PPP experts around the world. And today we have a pleasure and privilege of speaking with the President of the World association of PPP Units and PPP professionals, dear friend and the highly respected colleague Ziad Alexandre Hayek. Welcome Ziad! I would like to invite you to say a couple of words about yourself.

Thank you very much for this warm welcome. My name is Ziad Hayek. I am an investment banker by background. I worked in investment banking for many years in New York and London, and then I came to Lebanon to work for several Prime Ministers.  I was Secretary General of the High Council for Privatization and PPP for the Lebanese Republic and worked with 4 Prime Ministers. I have resigned in March 2019, after running for the presidency of the World Bank, which I didn’t get. However, I have been very privileged to be part of a team that, in the meantime, has found the WAPPP and seen it grow.  It has been a fantastic experience for me, for everybody that has been involved with the WAPPP so far.

Could you please elaborate what is the World Association of PPP Units and PPP Professionals? This is a very fast growing organization, and what is your “secret sauce” that makes it so successful ?

I think it’s the collaborative spirit. The WAPPP is a non-profit association based in Geneva, Switzerland. We came together a group of experts and  you, Natalia, were there from the very beginning, and we form this Association. We are not looking for making profit , the WAPPP does not do business – so it doesn’t compete with any of its members. Therefore, it is truly the “secret sauce” is that we are to work together in a collaborative way. We’re helping each other. We’re helping build a network of PPP professionals all over the world. I always say “You get out of the WAPPP as much as you put into it “, because really it is a matter of engaging with the network which, at the end, helps everybody improve their career whether they are looking for a job in PPP projects, whether they are consultants looking for consulting work, whether it is a PPP unit looking for consultants or investors, whether investors looking for projects – could be financial, could be strategic investors.  

The WAPPP is a hub for everybody involved in to come together and to improve their career prospects, improve their ability to execute the projects and at the same time do good for the world, we have SDGs in our DNA because we are very obsessed in trying to make sure that the SDG.17
is implemented and is implemented in the right way to help people. We advocate for PPP not to be seen as a tool for procurement, but a tool for development.

Could you please mention how many chapters in the WAPPP at the moment?

The WAPPP has many chapters. The way we are organized is  following: we have a Steering Committee, that is a group of heads of the various chapters. We have regional chapters and that we have North America, Latin America Europe, Africa, CIS countries, South Asia/Asia Pacific. We have six regional chapters today. We have four sectorial chapters: chapters for health care, airports, ports and water. And we are hoping to grow that we’re looking for leaders that would join us to lead chapters, sectorial chapters in other sectors. We have some thematic chapters. The most active one, for example, are the thematic chapter for young PPP professionals. This is a chapter that brings together PPP professionals, who are of 35 years or younger and this effort in mentoring them in growing their technical abilities. Engaging with younger professionals is very important to us. We have another chapter, which is “Women in PPPs”. We have a chapter on “People-First PPPs” and this has to do with using the People-first PPPs principles,  as best practices involving sustainability, involving ESG, involving the other measures of good governance and good practices.

Since PPPHealth4All is a platform that facilitates healthcare PPPs, could you please say how the WAPPP is engaged in healthcare PPPs and about its healthcare chapter.

Well, if we are looking at PPP as a tool for development.  It means starting to move away from regarding PPP only as a way to finance heavy infrastructure and looking to PPP to finance soft infrastructure in education in health care in improving people’s lives. And so the concept of having a chapter for healthcare within WAPPP is very essential. It is at the very center of WAPPP’s interests and activities. and in this chapter we are we have been very lucky to partner with PPPHealth4All and we will talk more about this later on. This collaboration has already given fruits to a number of webinars that have been conducted for the for various chapters of the WAPPP, including a webinar coming up March 10th  focused on health care and being organized by our Asia Pacific Chapter and Health Chapter  in collaboration with the UNESCAP. 

We are very proud to have forage this relationship with the UNESCAP and we are looking forward to grow it.  And, of course, we already have had the history of working with the UNECE. We have other strategic partners in the WAPPP,  who have helped us develop our organization. They have helped with providing many benefits to our members. I cite, for example, a partnership with APMG for the CP3P programme, which is very important PPP certification for all professionals in this field.

I just want to re-iterate your message about forthcoming seminar on 10th of Mach 2021, which is a very impressive  in terms of line-up of speakers from the Asian Development Bank,  from PPP Center of the Philippines. We have very interesting speakers coming from the private sector as well. It is also a very good example of cooperation between the WAPPP Chapters:  regional chapter of Asia and Health chapter, which I happened to be chairing. So I am wearing two hats today.

We are very lucky to have you Natalia in that role. Absolutely. Thank you so much.

You mentioned the UNECE and actually we met in Geneva under the umbrella of UNECE meetings, but we become friends in China when attending the Third Forum on Public Private Partnerships.  What is the role of international financial organizations and international organizations in general in promoting public-private partnerships?

The international organizations have, I think, a crucial role because PPP is very prone to being mismanaged. It is a very delicate type of type of structure that involves public sector institutions private sector companies. It involves financing banks, sometimes international financial institutions. And bringing all these entities together and making sure that they all perform in the right way for any specific project is really requires having a lot of expertise. So, the aspect of sharing information, sharing experience, creating awareness are all roles that international organizations are very well positioned to play and the WAPPP, I would should say, is one such organization and it goes beyond that.  Because fighting corruption in the tendering of PPP projects and in their management providing forums for exchanging and not only information about best practices, but also sharing how being finding ways to influence, decision making so let me give an example politicians typically all over the world want their PPP projects to be done very quickly and they don’t want to go through the whole process of project design and best practices making projects qualify for ESG financing or taking the time to consult with all stakeholders, taking the time to study the environmental and social impacts and all of that. They typically don’t want to you know deal with lengthy procedures that are usually found in PPP laws, so they don’t want to apply laws or enact them.

I have had an experience for example in Lebanon where I was lobbying for the PPP law for 10 years which was very difficult, because government after government did not want to pass it. And then I was fortunate that we had the opportunity of having Lawrence Carter who was at the IFC at the time and Clive Harris who was also involved there, and they were visiting Lebanon.  I organized a meeting with our parliamentarians and that was very important in getting  them to change their opinion and vote to enact the law. They saw  and they understood that this is an international best practice and this is not something that the local PPP Unit was trying to do in order to gain some advantage.

This is what we do together with some colleagues of mine today, this is what I like doing the most and what we do the most.  It’s not about PPP training for PPP professionals or people in PPP Units, as much as it is advocacy work with parliamentarians with Ministers and governments. We are usually asked by the PPP Units to come and help to educate the political decision makers on proper PPP policy and proper PPP approaches which is really crucial for the success of the PPP Units and their projects and their pipeline.

I think from what you just said we could conclude that PPP advocacy is also an integral part of the process and is a very important part. And you, probably,  is be one of the best experts in this field.

Where do you see the synergies between the WAPPP and PPPHealth4All, as we have just signed a Memorandum of Cooperation?

PPPHealt4All is a hub for expertise, it is a hub for knowledge in the healthcare sector, especially in relation to PPPs.  We need people with a lot of experience, so they can help then PPP Units and help governments with best practices in healthcare PPPs. So that’s what the PPPHealt4All l provides. PPPHealth4All is a knowledge partner. The WAPPP is a network partner and provides the ability to take that to the global level to engage. Players in involving PPP public and private all over the world and attract them to PPPHealt4All. So, it’s a fantastic relationship where both parties benefit.

Absolutely. I think it’s all about collaborative approach – the more we do together the bigger is “domino effect” and we’re also could learn from each other. We have different chapters in the WAPPP and there are also good lessons learned also not only regionally-wise, but also sector wise and as it is a great learning to know what is happening in the other sectors as well. PPPHealt4All is a knowledge partner for the WAPPP and the WAPP is our network partner.

My sincere congratulations on the WAPPP’s success. How many PPP Units have joined recently?

Oh, we had eight Units in the past two weeks.

That’s impressive. Thank you so much for this wonderful interview and for being with after day. This is very much appreciated.

And as I had of health chapter in the World Association of PPPP Unions and PPP professionals and the Founder of PPPHealth4All, I see a lot of potential for collaboration and am happy it’s already happening. But there is so much yet to be done to achieve Sustainable Development Goals by 20030 and Universal Health Coverage. It’s so unfair that we are leaving in 201st century and still millions of people have no access to the healthcare. Public private partnerships could be very instrumental to close infrastructure gap to bring innovations and financing.  So let’s make a difference together. Thank you again and till next time.

Interview by Natalia Korchakova-Heeb

PPPHealth4All Persona – Dr. Hela Ben Mesmia, Ministry of Health, Tunisia

Dear Dr. Ben Mesmia, could you please introduce yourself?

My name is Hela Ben Mesmia and my current position is the President of the Management Unit for the societal dialogue for health system reform in the Ministry of Health of Tunisia.  When I joined the Ministry of Health in Tunisia in 2015, I worked in various departments leading the projects in the fields of public health, strategic planning, health policy, quality, patient safety. I have a long track of experience in working with all type of stakeholders: governmental departments, international partners, civil society, academia and unions.

Prior to that, I worked on clinical research, HIV management in various humanitarian settings with NGO “Doctors without borders”. I have PhD in Public Health from the University of Sousse, Tunisia and degree of PharmD specialized in public health from University of Monastir, Faculty of Pharmacy (Faculté de pharmacie de Monastir)

What is the commitment of the Tunisian government to achieve the Universal Health Coverage (UHC)?

Tunisia is a country in the Maghreb region of North Africa with a population of 11 million people. Our government was traditionally centralized and autocratic but it committed to work in a collaborative and participatory manner following 2011 revolution. The WHO is working closely with the Ministry of Health of Tunisia to re-orient the health sector towards primary health care, taking into accounts the needs of vulnerable population, and improving both quality of care and efficiency of the health system. This effort has also led to the establishment of ‘dialogue sociétal’  – public dialogue in health sector – a large-scale consultation to better capture population’s views, needs and expectations. With the second phase launched in 2017, a key expected output is the development of a new national health strategy towards 2030 and the Universal Health Coverage (UHC).

How you present this initiative to stakeholders and organized stakeholder engagement?

The process of the Public Dialogue for health system reform is a process that was launched in a post-revolutionary context in 2012. It is an inclusive process and constitute a large platform for a multidisciplinary participation. Its aim is to elaborate health policies, strategies and plans within a participatory approach. It has been an opportunity to share and exchange between various actors: communities, civil society, health professionals, and government. The Societal Dialogue process created many participatory spaces: Citizen’s Meetings on Health, Open Mic sessions, focus groups, Citizen’s jury, National Health Conference.

We consulted 1199 citizens, 65 associations, 1557 health workers and 207 experts/volunteers and established 130 Steering Committees representing various stakeholder groups.

What is the current situation with healthcare PPP projects in Tunisia?

In the National Health policy 2030 developed within the phase 2 of the societal dialogue the health system consider the health system as a one piece that include both public and private sectors. The complementarity and collaboration between the public and private sectors to achieve public health objectives is crucial. The Ministry of health must ensure a better-regulated private sector to be aligned with public health missions.

In fact, the health system’s responses to the needs of citizens of different regions are optimized through the organization of a functional network of interregional health clusters taking into account the public and private sectors. Besides, both private and public providers of family and local health are responsible for coordinating the care process.

Investments in public-private partnerships (PPPs) have not started yet, as the last legal obstacle has only just been lifted by the Transversal Law on investments in June 2019.

In Tunisia, PPPs are governed by a number of legislative texts. In November 2013, two decrees (Decree N° 2013-4630 and 2013-4631), creating a concessions monitoring unit and providing more detailed guidance on the preparation and roll-out of concession procurement procedures, brought greater clarity and transparency to the overall regime of Concession Law No. 2008-23. The Decrees govern procurement of all PPP concession projects in Tunisia, except where there is a sector specific law and there is no special law in the health sector.

The institutional framework for concessions and PPPs in Tunisia is currently laid out under the November 2013 Decree on Concessions (n° 2013-4631 of 18 November). The main body mandated to coordinate, provide advice on and monitor PPPs and concessions is the Unité de suivi des concessions (or concessions tracking unit, USC). Established under the Prime Minister’s Office (PMO). The USC is responsible for providing support to public entities throughout the procurement process, including the preparation of guidelines and model specifications, capacity building, and encouraging concession projects in Tunisia’s regions.

It is important to note that the concessions and PPP regime in Tunisia is separate from the public procurement regime (régime des marchés publics), which is governed by the 2014 Decree on Public Procurement (n° 2014-1039 of 13 March 2014). Accordingly, public procurement that does not involve concessions or PPPs is managed by a separate set of institutions.

Where do you see PPPHealth4All platform could be instrumental in achieving UHC in Tunisia?

It is difficult to achieve UHC without proper investments in the healthcare infrastructure, medical services and equipment.  Healthcare PPPs could be instrumental in helping us to achieve UHC in Tunisia and PPPHealth4All could assist in sharing best practices and assist in preparation of sustainable and people-centered healthcare PPPs.

This participation on a large scale is linked to the willingness of the actors to join a project of change to participate in the establishment of an efficient and equitable health system within a consensus. This will is the basis of the commitment and the ownership.

However, this commitment has not been well maintained over time. This is the cause of the constraints mainly related to the political stability. But the motivation of a core group of experts established since the first phase of the Societal Dialogue and which continue to this day was very crucial to the sustainability of this process.

PPPHealth4All Persona – Jacek Liput, Head of Public Procurement and PPP at Gawroński & Partners Law Firm

Askar

Dear Jacek, could you please introduce yourself?

My name is Jacek Liput and I am Head of Public Procurement and PPP at Gawroński & Partners law firm (Poland). I have many years of experience in government contracting, including public procurement regulations and PPPs. I have been involved in a number of PPP projects, including private partner selection procedures, particularly in the infrastructure, the healthcare sector and the education sector.

What is the current situation with PPP projects in the healthcare sector in Poland?

Data published by the Ministry of Development Funds and Regional Policy suggest that PPP projects in the Polish healthcare sector are still not very popular. Only 4 healthcare-related PPP contracts were concluded between 2009 and 2019, the total value of which is PLN 207 million (approx. EUR 46 million). These numbers are relatively low comparing to other sectors, such as transport, infrastructure, energy efficiency, sports and tourism and – only recently – waste management. Despite the above, I think that there is great potential for PPPs in the Polish healthcare sector. PPPs are increasingly seen to improve the healthcare system, in particular in terms of its performance, efficiency and quality. PPPs may also contribute to bringing new, advanced medical technologies into use. In my opinion a properly structured PPP project in the healthcare sector can be attractive for both the public party and the private partner.

What obstacles in your view blocks the implementation of PPP model in healthcare sector in Poland?

There are various legal and practical challenges for a successful PPP project and these equally apply to the healthcare sector. They relate, for instance, to appropriate allocation of risks between the public authority and the private partner, as well as ensuring stable and long-term financing for the project.

In terms of the Polish healthcare PPPs it is particularly important to take into account the existing legal framework for the financing of the healthcare services from public funds. As a rule, contracts with the Polish National Health Fund regarding such financing cannot be concluded for indefinite periods of time. Standard periods of the financing contracts are relatively short, while PPP contracts are normally concluded for longer periods, even as long as e.g. 30 years. This may cause risks for the private partner and these risks must be properly addressed at the selection phase.

Another challenge is that starting from the year 2021 we will have entirely new public procurement law in Poland. Polish public procurement law has recently been entirely redrafted to focus on efficiency of public-private cooperation rather than formalities. However, both contracting authorities and private partners will have to adapt to the new reality. A significant number of private partners are selected in public procurement procedures, so I am pretty sure that this change will have significant impact for the PPP market.

What is the best-known example of healthcare PPP projects in Poland?

A landmark example of the Polish PPPs and actually the first large-scale multimillion PPP in the sector is the Hospital in Żywiec project. The contract award procedure in this project ended in 2011 with the selection of InterHealth Canada as the private partner. The private partner was mandated to build an entirely new hospital and manage it for the period of 30 years, including the provision of healthcare services. I have been involved in this project at the time of my engagement with my previous law firm, advising financing banks inter alia on the PPP regulations and their practical implications.

The hospital in Żywiec has recently been opened to public, despite the Covid-19 pandemic. The success of this project will hopefully attract more interest in the PPPs in the sector and translate into a steadily growing number of PPP contracts in the years to come.

What is in your view the added-value of PPPHealth4All and how it could help in preparation of sustainable healthcare PPPs?

PPPHealth4All can certainly be helpful for all stakeholders on the PPP market by providing access to best practices, peer-to-peer support and specialized training. All these are very valuable, as know-how and experience are crucial for a PPP project to be successful.

Interview by Natalia Korchakova-Heeb