PPP for Strengthening the Public Healthcare System

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PPP for Strengthening the Public Healthcare System


Many had expected Nepal’s public healthcare system to collapse as the first wave of Covid-19 landed in the country. Mindful of the shortcomings of the health sector, the government clamped a strict lockdown on March 24, 2020 after detecting the second case of coronavirus disease. The lockdown that stretched for four months forced closure of almost everything from factories and offices to the transport sector. This caused colossal damage to the economy with growth rate shrinking two percent in the last fiscal year. But strict restrictions in mobility, perhaps, played a crucial role in containing the spread of coronavirus disease, preventing the public healthcare system from falling apart.

As the economy started opening up, the second wave of the pandemic gripped the country. Initially Nepal had hoped to breeze through the turbulence as during the first wave, and tried to keep the economy open. But soon Nepal’s worst nightmare came true. The entire country ran out of hospital beds and ventilators; oxygen cylinders were in short supply; patients had to share beds; critical medicine and health equipment were unavailable or sold at inflated prices; and doctors and nurses were under pressure like never before. There was no option other than locking down the country again.

The second wave of Covid-19 took the real stress test of Nepal’s public healthcare system. And the country failed miserably. The chaotic scenes of Covid-19 patients trying to get beds and treatment in hospitals and body bags being carried away by army personnel were heartbreaking. Covid-19 related deaths which stood at less than 3,300 in the end of April when the second round of lockdown began have reached close to 9,000, even though the rate has slowed down lately. But since the virus has reached rural areas, unlike during the first wave, where healthcare systems are very weak, it is not known how many people have gotten infected and died in those places.

“The country’s health sector has always faced a situation like this during every crisis,” says Dr Chakra Raj Pandey, medical director of Grande International Hospital. “The system in terms of both healthcare infrastructure and human resources is very weak. Our healthcare system needs a big overhaul.”

It is not that these weaknesses were not known to policymakers, people in the bureaucracy, and healthcare professionals before the Covid-19 pandemic hit. But the sluggishness to address the issues has caused the crisis to worsen. Nepal has designated 284 hospitals across the country to provide treatment to Covid-19 patients. But only 122 of these hospitals have ventilators and ICUs, according to the Ministry of Health and Population. These hospitals altogether have 1,647 ICU beds, 1,163 ventilators and 8,417 high-dependency unit beds.

The government has increased the health sector budget noticeably over the last couple of years--from Rs 37.8 billion in fiscal year 2014/15 to Rs 90.69 billion in FY2020/21 and then to a whopping Rs 122.7 billion for the upcoming fiscal year 2021/22. This indicates that efficient management of the public healthcare system is the biggest issue here rather than financial resources. The country now needs to use the available financial resources to create a healthcare system that can absorb shocks, like Covid-19 pandemic, to some extent without letting the economy bear too much of the brunt.

To bridge the gaps in infrastructure and management of the healthcare system, public-private-partnership (PPP) model in investment and operation of healthcare institutions could be widely rolled out throughout the country under which the government would provide land and other support, while the private sector would deliver quality healthcare services at reasonable costs.

The concept of PPP in the healthcare sector is not new in Nepal, according to Radhesh Pant, former CEO of the Investment Board, Nepal (IBN). “This concept first came into discourse in the late 1970s. But anything significant in implementing it has not taken place,” says Pant.

Dr Pandey also says that an effective public healthcare system requires the collaborative effort of a network of people and organisations in the public and private sectors, as well as an alignment of policies and practices of governmental public health agencies at national, provincial and local levels.

Rajendra Kumar Singh, executive director of Norvic International Hospital, says that running hospitals under the PPP model can make the operation of public healthcare institutions more efficient and systematic. “It also encourages private investment in healthcare sector as funding in PPP modality is thought to be safe and secure,” he says, adding, “However, the main thing lies in implementation.”

Experts say that the government has a crucial role to play in this regard. According to Dr Pandey, availability of public land at affordable rates to build hospitals, and concessions in taxes on imports and purchase of construction materials and medical equipment can foster investment opportunities in the sector. Pant says that policymakers must provide the political and financial support needed to build strong and effective public health agencies, so all levels of government must play their roles accordingly to strengthen the public healthcare system.

Getting healthcare services in private hospitals and nursing homes for ordinary Nepalis remains a costly affair, whereas people do not have much trust in public healthcare system. Experts say that the PPP model can be important in terms of delivering quality healthcare services at affordable costs to ordinary people.  For this, Pant suggests the government to mobilise a team to study the costs. “The team based on their findings can coordinate with the operators of private hospitals to come up with the right set of prices to provide healthcare services,” says Pant.

According to Pant, PPP-based projects should work on achieving minimal profits in the first five years by covering their costs and then gradually increasing the profit bracket in the next 15 years. “This will allow the projects to be sustainable in the long run, offering quality healthcare service at affordable prices to people of all income level,” he adds.

All countries need healthcare workers in high numbers to face a situation like the Covid-19 pandemic. But in a country like Nepal where there are only 3.15 healthcare personnel, including doctors, nurses and midwives, per 1,000 persons, the coronavirus outbreaks of last year and this year have wreaked havoc on the already weak public healthcare system. According to Dr Pandey, promoting the PPP model can help overcome the shortage of medical and other professionals in the healthcare sector and make them ready to deal with any sort of medical crisis and respond efficiently to emergency situations. This ultimately will help to decentralise healthcare institutions and services, according to Pant.

While PPP in the public health sector offers several benefits to a country like Nepal with a weak healthcare system, its success will depend on several factors. According to Sushil Pokhrel, a public health expert, ownership of the health institutions is one of the major factors. ‘The ownership of the health institutions based on PPP model needs to be shared in the right way for the longevity and sustainability of the projects,” he opines.

Pokhrel is of the view that the government should have a 70 percent stake while the private sector should only have 30 percent ownership of such projects. “Even the 30 percent stake shouldn't be owned by a single group and rather be divided so that it's not run by a single company to serve their interests,” he says, adding, “Political appointment of directors, and medical and management staff could pose another challenge for such institutions to succeed.”

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