1. SHOPS is funded by the U.S. Agency for International Development.
Abt Associates leads the project in collaboration with
Banyan Global
Jhpiego
Marie Stopes International
Monitor Group
O’Hanlon Health Consulting
Public Private Partnership as a Sustainability
Strategy
Dr. Nelson Gitonga
Private Sector Advisor, SHOPS Project
June 2013 Mombasa

2. Presentation Outline
• Sustainability approaches
• Overview of private sector
• Why engage the private sector?
• What is PPP? –Levels, Types, Mechanisms &
Objectives
• Examples of PPP’s
• Opportunities for RATN/ACA in PPP’s

3. 1. Sustainability Approaches in Health
Development
• Emphasize country-led and country-owned programs
• Alignment between country and development partner
strategies
• Investment in leadership, capacity building & systems
• Maximizing a client-centred approach through integration
of services and systems.
• Increased engagement and involvement of the private
sector - Commercial/NGO/FBO/CSO in improving
health systems and delivery
• Ensure strategic collaboration and coordination of all
key stakeholders
• Focus on results and mutual accountability
(USAID Kenya Guiding Principles in health programming).

4. Sustainability Approaches in Health
Development contd.
• Key determinants of sustainability.
• Local ownership and leadership
• Relevance and alignment first to national then regional and global
health context and priorities
• Mobilization of local resources and capacities
• Demonstration of results
• Funds and resources both local and international will
follow sustainable and innovative approaches.
• The new era of Sustainable Development Goals – SDG’s
(Ref: SAT presentation)
• Relative roles and links between trade and aid will
change (?More trade and less aid?)

5. 2. Who is the private sector?
• Non-state actors within the health sector.
• Private for profit entities
• Private not-for profit entities – NGO, FBO. CSO’s
• Non-state actors outside the health sector
• Businesses – ICT, telecommunication, financial services, mining,
agriculture etc
• Employer groups
• Education institutions and foundations

6. Who is the Private Sector in Health?
Providers and facilities exist in both FBO/NGO and for-profit sectors
– more commonly a solo practitioners (small scale providers)

7. Understanding of the Many Roles
of the Private Sector in Health

8. Myths about the Private Commercial Sector
in Africa !
• Myth #1: Health in Africa is financed primarily by the
public sector
• Myth#2: The private health sector only or mostly
benefits the wealthy
• Myth #3: The private health sector is insignificant in
Africa
• Information about the private sector is available in:
• Various research publications such as the Private Sector
Assessments (West, East and Southern Africa) (USAID, IFC/WB)
(SHOPS website –www.shopsproject.org)
• Health System Assessments (USAID HS 20/20)
• National Health Accounts series
• DHS series

9. 3. Why engage the private sector?
 Broad Rationale::
 A ‘whole sector approach’ is more effective and
efficient
 Promote local ownership and leadership
 Enhance relevance and alignment in programs
 Mobilize local resources and capacities to fill in funding
and capacity gaps
 Public health case
 Business case

10. Business Case for Health PPPs
 Attracts private capital investment and managerial
expertise (often to either supplement public resources or
release them for other public needs)
 Realizes long-term value-for-money through appropriate
risk transfer to the private sector over the life of the PPP
 Rationalizes the use of existing health resources and
infrastructure – public and private alike –effectiveness
and efficiency
 Reforms sectors through a reallocation of roles,
incentives, and accountability

11. Public Health Case for Health PPPs
 Improves access to key health services and products
 Leverages private sector resources – expertise and
infrastructure – to health
 Introduces innovations and new technologies into the
health sector
 Increase efficiencies in service delivery
 Promotes greater equity and helps ensure universal
coverage of health

12. Risks of Health PPPs
 Requires new and different capacity to ensure “value for
money”
 If not structured well, can pass the cost of H/PPP to
consumers
 Requires political and financial stability and support to
implement PPP/H
 Government still has responsibility for ensuring access
and quality of services and products
 Difficult to plan for all contingencies that may arise over
the life of a PPP/H

13. 4. What is PPP? Different Levels of Engagement
with the Private Sector
Engagement & dialogue between
the public and the private sectors to
share ideas and concerns, to build
trust, common vision
Public and private sector working
together to reform policies and
collaborate on health priorities
Public and private sectors partnering
to deliver health services and products
and/or address health system gaps
P1
Public private dialogue
P2
Public private interaction
P3
Public private partnership

14. Different Concepts for Health PPPs by “Tribe”
Gov’t establishes an on-going relationship to
work with private sector on health sector
issues of common interest
Gov’t establishes long-term contract for
services (may include use of public
assets)
Gov’t incentivizes private actors to invest
capital in delivery of health services and
products

15. Defining Public Private Partnership (P3
)
• PPP is a contractual arrangement between a
public sector entity (government agencies,
regulatory bodies and government-owned
health facilities) and a private sector entity
(entity with majority non-governmental
ownership).
• Through this agreement, the skills and assets
of each sector (public and private) are shared
in delivering a service or facility for the use of
the general public.
• In addition to the sharing of resources, each
party shares in the risks and rewards potential
in the delivery of the service and/or facility.

16. Fundamental Features of a PPP/H
Clear definition, allocation of and agreement on
 Desired outcomes
 Roles and responsibilities of the parties
 Sensible risk-sharing among the public and the private
sector partners
 Available resources
 Financial rewards to the private party commensurate with
the achievement of pre-specified outputs

17.  Rather than buying buildings, equipment and/or supplies,
PPPs are long-term contracts for gov’t to buy a bundled
services (facility, staff, supplies, equipment)
 PPP Involve annual payments over long-term after facility
commissioning
 Payment is tied to performance not inputs/milestones
 Private party is typically responsible for all or part of capital
financing
Health PPPs
How they differ from traditional public procurements

18. Resource Sharing
Contracts / MOUs
Design Build Operate
Leases and Concessions
Level of Private Sector Involvement
DegreeofComplexityforMOH
• Staff
• Medicines
• Supplies
• Help in equipment maintenance
• Resource sharing
• Services
• Management
• Facilities
• Medical equipment
• Maintenance
•
• Infrastructure
Most Common P3-level Arrangements /
Structures in Health Sector

19. PPPs Arrangements in Health
Clinical
Services
Non-Clinical
Support
Services
Clinical
Support
Services
Medicines
and
Equipment
HRH
Education and
Training
Facility/
Hospital
Management
Infrastructure
• ICT
• Maintenance
• Food
• Laundry
• Cleaning
• Billing
Primary Care
• MCH
• RH/FP
• HIV/AIDs
• TB/Malaria
Specialized
• Dialysis
• Radio-therapy
• Other
• Lab analysis
• Diagnostics
tests
• Ambulance
• Medical
equipment
maintenance
• Open donor
sponsored
training
• Joint labor &
education
planning
• Other?
Management of
• Specific area
(e.g. maternity
ward)
• Entire hospital
• Network of
clinics and/or
hospital
• Medical
equipment
• Medical
supplies
• Specific
medicines
• Local
manufacturing
• Detailed
design
• Building
construction
• Medical
equipment
• Capital
financing
Increase Access Improve Equity Decrease Costs Improve Efficiency
• Contract for
services
• Contract for
services
• Service Level
Agreements
• Vouchers
• MOUs
• Subsidized
inputs
• Staff sharing
• Contract for
services
• MOUs
• Subsidized
inputs
• Staff sharing
• Equipment
sharing
• MOU
• Contract for
services
• Capital
financing
• Management
Contracts
• Co-location
• Leasing
• Contract for
services
• Lease
contracts
• Capital
financing
• Build-Operate-
Transfer
ArrangementGoalActivityArea

20. Health PPP Process
MOH Mgmt
PPP Unit
MOH Mgmt
PPP Unit
PPP Unit
MOH/Dept Finance
MOF
PPP Unit
MOH/Dept Finance
MOF
Structure a Health PPP
Market it to the private sector
Prepare PPP arrangement
Conduct offer process
Structure a Health PPP
Market it to the private sector
Prepare PPP arrangement
Conduct offer process
Phase 1: Analysis and
Prioritization
Conduct feasibility/ sustainability study
Review legal/policy framework
Assess MOH institutional capacity
Identify MOH PPP Team
Diagnose health sector needs
Agree on health priorities and system gaps
Develop a PPP Strategy for Health
Diagnose health sector needs
Agree on health priorities and system gaps
Develop a PPP Strategy for Health
Phase 2: Preparation
Phase 3: Design and
Award
Phase 4: Implementation
and Evaluation
Put financing in place
Initiate PPP activities
Regularly monitor progress
Close PPP and Evaluate
Share lessons learned from PPP/H
PPP Unit
Outside Expertise
PPP Unit
Outside Expertise
PPP Unit
MOH/Dept Finance
MOF
Outside Expertise
PPP Unit
MOH/Dept Finance
MOF
Outside Expertise
StakeholderConsultation
PrivateSectorConsumers
StakeholderConsultation
PrivateSectorConsumers

21. Set PPP priorities
Establish selection criteria
Approve PPPs
Create regulatory/ legal
framework and structure
Set PPP priorities
Establish selection criteria
Approve PPPs
Create regulatory/ legal
framework and structure
Stakeholder Roles in
the Health PPP Process
Roles and
Responsibilities
Government
Agree on common goal for
PPPs
Express interest to
participate
Provide company data to
assist in due diligence
Implement PPPs
Agree on common goal for
PPPs
Express interest to
participate
Provide company data to
assist in due diligence
Implement PPPs
Private Sector
Participate in design of
PPP’s
Communicate health needs
and priorities
Adopt positive Health
seeking behavior
Provide feedback on quality
of services
Participate in design of
PPP’s
Communicate health needs
and priorities
Adopt positive Health
seeking behavior
Provide feedback on quality
of services
Consumers
Assist Gvt to establish PPP
reforms and enabling
environment
Provide unbiased evaluations
on PPP options
Facilitate cooperation
Assist Gvt to establish PPP
reforms and enabling
environment
Provide unbiased evaluations
on PPP options
Facilitate cooperation
Outside Expert

22. Factors Contributing to Successful Health PPPs
 Clear definition of desired outcomes and each partners’
roles and responsibilities
 Structured, regular and open stakeholder consultation
 Clear sector strategy and roadmap creating certainty in
the health sector
 Clear government commitment and designated
champions demonstrating credibility

23. Designing Pro-Poor Health PPPs
PPP Arrangements Incentives
Resource Sharing •Link inputs to services delivered to low income groups
MOUs
Service Contracts
(SLAs)
Management
Contracts
•Link MOU/contract activities to agreed upon goals (e.g.
increase access, remove financial barriers to poor)
•Link payments to performance indicators (quality,
access, saving to subsidize poor)
•Create additional incentives for services targeting poor in
remote areas
Lease
Concessions
Co-location
•Offer incentives to provide services to low income
groups within catchment area – difficult to extend leasing
to remote locations
•Offer concession in exchange for assured quality,
convenience and affordable pricing for low income
consumers
•Create additional incentives to operate in remote areas
B-O-T •Build facilities in underserved areas and for target
population groups

24. 5. PPP Examples:
P1
Policy Dialogue: Kenya Example
PPP Health Kenya
 Signed a Letter of Intent outlining rules of engagement
 Functions as Board of Directors advocating for H/PPPs
 Established a road map of key areas to be addressed
through policy reform
 Participates actively in policy forums, strategic planning etc.

25. P1
Policy Dialogue: Other African examples
Ghana
Private Health Sector Alliance in Ghana (PHSAG) set up with wide
membership of private sector organizations
Recently formed to organize private sector voice
Meets regularly
Starting to form direct relationship with public sector
With MOH help, starting to attend policy and planning meetings
Tanzania
PPP-Technical Work Group set up as part of a larger donor coordination
board. Focuses primarily on coordinating health programs between the
sectors and donors.
Have conducted a Private Sector Assessment similar to Kenya
Have requested TA to establish a policy forum like PPP-Health Kenya to
elevate the PPP-TWG to a sector-wide forum

26. P2
Interaction and Coordination:
Kenya Example
Public sector, private sector and donors in
Kenya are partnering to achieve the following:
 Develop laws, policies and plans that recognize private sector
contribution and define private sector roles:
• Position paper on the implication of the constitution on the health sector
• Kenya Health Policy Framework
• General Health Law and Acts
• A healthcare financing strategy
• NHSSP III
 MOU with private universities on training health workers
 MOU with FBO hospitals for provision of staff and
commodities

27. P2
Interaction and Coordination:
Other African Examples
Uganda
Kakira Sugar Works and MoH are collaborating to expand HIV/AIDS
prevention services including male circumcision and workplace prevention
program at Kakira Sugar clinic. MOH provides training, equipment and IEC
Namibia
Government and the Namibia Business Coalition on AIDS (NABCOA)
collaborated in Global Fund Round, with MoHSS and MoE secunding staff to
private sector implementers
Tanzania
MoHSW and the private sector association APHFTA worked together to revise
the Health Sector Policy in 2007 recognizing the private health sector as well
as the PPP act in 2010 setting the foundations for PPPs in health

28. P3
PPP: Kenya Examples
Existing Partnerships
East Africa Latex Manufacturing: the company and GoK signed an MoU
whereby the company will produce condoms and other rubber products and the
government will be a major buyer
Gold Star Network Social Franchise: MoH/NASCOP donates HIV/STI
commodities, facilitates training, and oversees guidelines and standards; Gold
Star Network/FHI360 certifies and accredits franchise providers
Reproductive Health Social Franchise Networks: Tunza and AMUA (PSI
Kenya and Marie Stopes Kenya respectively) franchise providers and offer RH
commodities and services at subsidized rates, while DRH/MOH donates
commodities, facilitates training, oversees guidelines and standards
OBA Project: PWC distributes vouchers funded by GoK and KfW to the poorest
families to access safe motherhood and family planning services from certified
public, private for-profit, and private not-for-profit service providers

29. P3
PPPs: Other African Examples
Namibia
Rosh Pinah PPP: Mining company and MoHSS entered an agreement
giving public patients access to mine-operated medical facilities and
diagnostics equipment that is not available at the nurse-staffed public
clinic
Tanzania
Service Agreements: MOH contracts with private and FBO/NGO
providers to deliver primary health care services
Zambia
HIV Program: To lower cost of private sector HIV/AIDS treatment, Trust
Hospital entered into agreement with NGO to get subsidized ARVs. Trust
Hospital convinced private insurance to include HIV/AIDS treatment and
care as benefit package

30. 6. PPP Opportunities for RATN (ACA)
In view of RATN/ACA’s new
strategic direction, where do you
see opportunities for the network
in the PPP model?
•Capacity building of national and
regional health authorities
•Capacity building of private sector to
engage and implement PPP’s
•Participation in selected PPP’s as an
implementer/service provider
•Adopt PPP as a cross cutting issue in
all strategies

31. SHOPS is funded by the U.S. Agency for International Development.
Abt Associates leads the project in collaboration with
Banyan Global
Jhpiego
Marie Stopes International
Monitor Group
O’Hanlon Health Consulting
Dr. Nelson Gitonga
Private Sector Policy Advisor, SHOPS Project
www.shopsproject.org