Public Private Partnerships for Sustainable Healthcare in Emerging Economies like Ours

The second wave of COVID-19 was a harsh reality check for our country’s healthcare system. Starting from February 2021, we saw the loss of countless lives. This further compounded the social and economic devastation of several families. The sharp surge in cases saw people scrambling for ICU beds, critical medicine and urgent medical attention. From the time we gained our independence, this has been the greatest humanitarian crisis in our history.

A lot of gaps in the functioning of our healthcare system have been brought to the fore. Our government spends a mere 1.13% of the GDP on the healthcare system. Citizens bear almost 65% of the healthcare cost. This is a huge financial burden, and it pushes millions of people into financial ruin. Apart from the economic issues, access to proper healthcare facilities is also an issue.

About 75% of India’s healthcare infrastructure is found in urban areas. A KPMG report states that 74% of doctors practice in urban areas. This leaves about 73% of people in rural areas lacking even primary healthcare. In addition to this, we have a shortage of doctors. The WHO (World Health Organisation) recommends a doctor to patient ratio of 1:1000. We stand at 1:1445.

Is public-private partnership the way to go?

Public-private partnerships (PPP) already have worked in sectors like tourism, education, energy and more. Both the public and private sectors have their advantages and fallacies. A partnership between the two fills this gap.

7 reasons to forge public-private partnerships

The ways in which a PPP model help create a sustainable healthcare system for emerging economies:

1. Private sector expertise

Private sector players have a storied experience and management expertise that enables them to build and run successful organisations that are crucial in rehabilitating the healthcare infrastructure. Companies having global experience can bring their expertise and knowledge to emerging economies like ours to build and scale the existing infrastructure.

2. Financial assistance

Most companies today have a CSR budget. They can use this to create an investment engine that can help with the acquiring of new medical equipment and for the refurbishment of existing infrastructure. CSR should be looked at as an opportunity to build something that will have a lasting impact versus spending on something that has a short term impact. It is always good to support and work on the existing infrastructure to bring it up to speed as compared to starting a green field project.

3. Making healthcare affordable

PPPs function on the high volume, low margin model. Simply put, it means that they reduce the price of service, and aim to attract as many consumers as possible. This would offer quality sustainable healthcare to all at an inexpensive price. By doing this, they can deepen their reach to make healthcare accessible to a wider strata of population.

4. Technological advances

As a result of the huge competition in the private space, companies have achieved huge technological advances that the public sector hasn’t caught up to. A PPP helps bring in these advances to help make the sustainable healthcare system more efficient. A case in point would be the rise of telemedicine.

5. Policy making

Public sector actors are capable of making policy that makes the development of the healthcare infrastructure possible. No matter how efficient the groundwork is by the private sector, it will be snagged up in some bureaucracy. In order to navigate out of it successfully, the public sector takes up the charge to make suitable policy decisions.

6. Targeting areas of crucial need

The developments would amount to nothing if they weren’t happening in a place that needed it the most. This is where the government steps in. It has a dynamic database of the population as a result of the census and other activities. This is used to find and target areas where such reform is the most necessary.

7. Scalability

Although private players bring a lot of resources and experience to the table, they lack the ability to scale the reform project to a national level. The public sector can assist scaling the programme so that the benefits are not limited to a certain location.

In conclusion, a public private partnership is helpful, and it works because of the variety of things the players bring with them. The government can provide scale and large subsidies, the private sector can bring funds and their expertise to deliver things at a scale and on time.

This column appears in the January 2022 edition of our quarterly magazine. To grab your own copy, click here

Maanoj Shah is a Chartered Accountant, a People Champion with strong Business creation, strategy and scaling-up experience. Apart from co-founding Mission ICU, he has played a key role in many social initiatives like Khaana Chahiye (Volunteer management), Co founder Corona Champions (Covid awareness initiative) & Giftchange (A platform for changemakers).

Views of the author are personal and do not necessarily represent the website’s views.