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.
- 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.
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.
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.
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.
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.
Interview by Natalia Korchakova-Heeb