Public-Private Partnerships (PPPs) are a suitable option for increasing private contribution to improving health care in Latin America and the Caribbean. Three notable cases implemented in Spain and Uruguay demonstrate this.
(*) This article is based on original research by Dr. Paloma Alonso.
Latin America and the Caribbean have made significant strides in achieving the Sustainable Development Goal (SDG) of ensuring healthy lives and promoting well-being for all, known as SDG 3. However, there are still significant gaps in terms of access to and quality of health services in the region, and increasing demand for those services is anticipated, given the emergencies created by the appearance of new diseases and factors such as an aging population.
If we focus on growth in the aging population, we see that this results in a higher incidence of chronic disease, such as the fact that one out of every ten Latin Americans suffers from diabetes, as well as a need for increased spending to meet the needs of these new patients. In this challenging environment, new technologies in the health sector open the door to innovative solutions, with the private sector acting as the primary generator and implementer of those solutions.
We can look to Spain as a reference on how this can be done. Starting in 2000, PPPs in Spain began an accelerated improvement process in the Iberian Peninsula that facilitated contributions to the development of schools, prisons, and health facilities together with courts, police departments, and other entities. A document that compiled this pioneering experience was published in 2009 by the IDB. Its title is La experiencia española en concesiones y APPs: Hospitales, infraestructura social y otros equipamientos de uso público y municipal and is available here.
Nearly a decade later, in November 2018, IDB Invest and the Spanish government agreed on a program to boost investment in infrastructure for Latin America and the Caribbean, channeling US$10 million through the Spanish General Cooperation Fund. At this point, there are abundant cases summarizing the contributions made by the Spanish experience to the world and to our region in particular. Of these, considering the health sector, we can select three exemplary cases:
1. PPP contract between Siemens Healthcare and the Servicio Murciano de Salud (SMS) for the overall supply of biomedical equipment to two new public hospitals in the Murcia region of Spain.
This PPP includes providing equipment to two hospitals, maintaining the equipment, providing user training during the life of the contract, updating and renewing applications, inputs needed, and replacement. Three aspects that supported the success of the project were: (i) the inclusion of equipment quality and availability indicators in the success indicators as a way to incentivize appropriate responses to needs during the life of the contract; (ii) ongoing training for staff using the equipment, both onsite and through e-learning; and (iii) the supplier’s creation of a technical supervision office, with a single contact person responsible for the execution, monitoring, and evaluation of the project as a whole.
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2. Partnership between the Asociación Española de Socorros Mutuos (AESM) and Sistemas Genómicos (SG) for the development of predictive medicine.
This is a long-term strategic alliance between an industrial partner (SG, from Spain) and an Uruguayan private nonprofit, clinical care partner (AESM) to develop the first platform for clinical analysis and interpretation of whole-genome sequencing data in Uruguay. Three aspects that supported the success of the program were: (i) SG’s ability to develop a project “tailor-made” for the needs of AESM, that included not only the supply of kits but also knowledge transfer, support, ongoing remote advisory service, and the incorporation of state-of-the-art technology; (ii) inclusion of the ability to develop joint RDI projects and access to knowledge networks; and (iii) training for professionals, including through the training-the-trainers model that allowed professionals to be available for the incorporation of innovative technologies.
To be noted is the added value that originated with this partnership and that allows AESM to be at the vanguard of Individualized Predictive Medicine in Uruguay.
3. Concession agreement for clinical laboratory services in six public hospitals in Madrid, between the Servicio Madrileño de Salud and the concessionaire, BR Salud.
This partnership was a pioneering administrative concession to provide clinical laboratory services to six new hospitals. To provide the clinical laboratory services, the concessionaire installed a central laboratory at the largest hospital (Infanta Sofía) and five satellite or peripheral laboratories in the other hospitals, connected to a network through information systems.
Three aspects that supported the success of the project were: (i) the creation of an integrated clinical laboratory network, allowing the centralization and processing of a large number of tests, using automated techniques that create economies of scale; (ii) consulting and clinical management support for services, helping to promote the rational use of clinical laboratory tests; and (iii) a per capita payment system, encouraging the creation of protocols and clinical evaluation of requests for analytical tests, reducing variability in medical practice.
The process of providing care gained a two-fold benefit, first through the information and knowledge generated (with quality and timely availability for clinical decision-making) and secondly, a commitment to encouraging the appropriate use and efficient management of clinical indication and health technologies, improving referrals and establishing effective clinical protocols, which led to a cost savings of 48%.
However, considering the potential benefits of PPPs, it is important to note that there are various factors that contribute to the success of these schemes, including an appropriate legislative and regulatory environment, as well as the public sector’s ability to identify, design, structure, issue tenders for, and manage contracts of this kind. Additional factors are private sector capacity and fiscal space to address possible contingencies and related provisions, political will and, of course, the backing of the citizens.
DOWNLOAD FREE REPORT. If you want to know more about how to include private participation in the acquisition of technologies to close the health gap in Latin America and the Caribbean, read our report “Public-Private Partnerships + Health Care” (IDB Invest, 2019) here.
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