Public Private Partnership in Health Care - Economics and Health Management

Public Private Partnership in Health Care

The development of mechanisms for interaction between the state and business is defined as a priority in the work of the US Government until 2018. In the field of healthcare modernization, it provides for public-private partnerships (hereinafter - PPPs) and other forms of private capital attraction for the development of the infrastructure of the sector > K

Under public-private interaction in the health sector is understood as mutually beneficial cooperation between public authorities, local governments (as a public partner), private and non-profit organizations (as private partners) public-legal entities in the field of health by attracting private resources for the creation, reconstruction, management, maintenance of health infrastructure or provision of services.

The main mechanisms of public-private interaction in health care are:

• Concession;

• transactions to attract investment in public health infrastructure objects;

• Lease of state property with the assignment to the lessee of obligations to conduct current and capital repairs of the leased property;

• Leasing;

• participation of private medical organizations in the implementation of the program of state guarantees of free medical care to citizens;

• deductible;

• outsourcing;

• the creation of commercial organizations.

According to experts, the most promising form of public-private interaction in health care is the transfer of state objects (real estate) to a private partner for concession for the purposes of construction, repair, equipping of medical institutions, and subsequently - the provision of paid medical services for a certain term in order to achieve a payback of investments made by a private partner and receive a profit (simultaneously with the provision of the same services on a free basis).

But the point, PPP is one of the ways of outsourcing government functions. Outsourcing is understood here as making auxiliary and part of the main business processes beyond the borders of the state medical organization. In this case, the state sets goals to improve the quality of public goods and services with unchanged state budget expenditures or reduce budget expenditures while maintaining the current level of quality. Medical services in connection with their social significance, of course, relate to public services, those services whose quality and form of provision is guaranteed by the state. Thus, PPP is a legally fixed form for a certain period of interaction between the state and private organizations in relation to state and municipal property objects, as well as services rendered by state and municipal bodies, institutions and enterprises for the implementation of socially significant economic projects.


Let's list the principles of such interaction:

• legality, socio-economic effect and efficiency;

• the reasonableness of government decisions taken by public authorities;

• mutual benefit;

• pooling resources to achieve a specific result;

• Distribution of responsibilities and risks between public and private partners;

• maintaining the profile of health facilities, volumes, types and conditions of free medical care provided to the population, as well as its accessibility and quality;

• monitoring and control over the implementation of public-private partnership projects.

If these principles are observed, an agreement is concluded between the state and the commercial organization on the object of infrastructure or public service. It is planned to co-finance joint projects in certain shares by the state and private companies, risk sharing between participants and a fixed term of PPP.

PPP is developed in the UK, other countries of Western Europe and the United States. In the UK, PPP in health care accounts for 12% of all sectoral projects.

Under public-private partnerships, public spending on projects is 10-15% lower than the total costs that society would bear, financing projects only from government sources. This is explained by the fact that business is more rapid, free in decision-making, can optimize costs and achieve, for example, reducing the construction time of an object that is being built on a mutually beneficial basis. The benefits of a commercial organization are as follows: it receives state-guaranteed income and the market, and also reduces the risks of competition. Benefits of the state are, first of all, saving budgetary funds in the implementation of socially significant health projects, access to high-tech technologies and intellectual resources, and improving the quality of public services. The disadvantage of PPPs is that the state can not solely dispose of objects under joint management. Private companies also bear the risks of losing ownership in case of changing economic priorities of the state.

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