Some of the much-hyped public-private-partnerships (PPP) in the health sector have come under flaks due to lack of effective governance mechanisms for accountability, non-transparency and to a large extent failure to reach the goals, and the Planning Commission has suggested a more strategic approach and 'practical mechanism'.
While acknowledging the scope and prospects of the PPPs against the backdrop of the inadequate infrastructure in the public sector vis-à-vis highly unregulated private sector, task force by the Planning Commission observed that the private participants of the PPPs ended losers in the long term.
"The case studies bring to fore genuine concerns summarized in terms of absence of representation of the beneficiary in the process, lack of effective governance mechanisms for accountability, non transparent mechanisms, lack of appropriate monitoring and governance systems and institutionalized management structures to handle the task,'' a report on PPPs in the health sector noted.
"The Government should look at the long-term value in a partnership. Selection of the right partner becomes imperative for the government to achieve tangible outputs and create the 'best value'. A partner's experience in the specific area of partnership being considered is an important factor in identifying the right partner. By aligning the stakeholders' interests and the Government could endeavor better value creation,'' the report said.
The panel also wanted the Government to adopt a more strategic approach by stepping back from the day to day management of public enterprises, and instead focusing on the drivers of long term value, setting targets and encouraging alliances and partnerships with the private sector.
The Government should introduce greater transparency. Greater openness about the financial performance and service delivery of public enterprises will be a useful discipline on managers within those organizations. Focusing on a few strategic targets will be a start. The Government could introduce greater shareholder expertise by ensuring an appropriate mix of skills and experience among the partners to help carry out the health objectives more efficiently, according to the recommendations.
"However, if PPPs are genuinely going to deliver better quality services, it is vital that they are designed with the focus on outputs and performance. The private sector partner or partners need to be clear about what is expected from them and the implications if they fail to deliver. The Government must recognize that it has a continuing role in the public service element of essential services. In some cases, this may mean retaining some elements of service delivery in the public sector. Therefore it becomes critical to decide on retaining the control over certain services, rather than contracting them,'' it said while calling for a good mechanism to monitor the partnerships.
The reported noted that the private health sector in India grew markedly and was providing 58 per cent of the hospitals, 29 per cent of the beds in the hospitals and 81 per cent of the doctors. The private providers in treatment of illness are 78 per cent in the rural areas and 81 per cent in the urban areas. About 77 per cent of OPD cases in rural areas and 80 per cent in urban areas are being serviced by the private sector in the country. At same time, it was also found that outpatient services were 20-54 per cent higher and inpatient services 107-740 per cent higher compared to the public sector.
"Contracting is the predominant model for public private partnerships in India. Some partnerships are simple contracts (like laundry, diet, cleaning etc) others are more complex involving many stakeholders with their respective responsibilities. It is seen that in most partnerships, the State Health Department is the principal partner with rare stakeholder consultation. In most cases it signs contracts with very few cases of Hospital Management Societies signing the contracts in a decentralized manner," the report said.
The task force suggested services, disease control and surveillance, diagnostics and medicines, infrastructure, health manpower, behavior change communication, capacity building including training and systems development and managerial service and auxiliary activities of the health sector among the potentials areas of PPPs.
"In the initial phase caution should be exercised against expanding into too many sectors. Government funding should not exceed an overall cap of 15 per cent of the budget allocation. Super specialty care is not the goal. The intention is to provide basic health care to all citizens of this country so that they do not face distress and duress in meeting health care needs," it cautioned.