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.