Healthcare ppp in india the road ahead

Healthcare PPP in India:
The Road Ahead
The Associated Chambers of Commerce and Industry of India

Table of
ontents
1 Indian Healthcare Paradigm: Snapshot
1.1 Key Indicators
1.2 Indian Healthcare Sector: Current Challenges
2 The Concept of Public Private Partnerships
2.1 What is a Public Private Partnership (PPP) in Healthcare?
2.2 Principles of a PPP
2.3 How does a PPP work?
2.4 Funding
2.5 Types of PPP
2.6 PPP in Healthcare: Present Scenario in India
3 Infrastructure Development and
Capacity Building: Cases of PPP Models
3.1 108 Ambulance Service Project, Rajasthan
3.2 Rajiv Arogyasari Community Health Insurance Scheme (RAS), Andhra Pradesh
3.3 Operation and Management of Mobile Health Vans, Uttarakhand
3.4 Deen Dayal Chalit Aspatal Yojana, Madhya Pradesh
4 Regulatory Aspect of PPPs
4.1 Process for Projects costing greater than Rs. 100 crore but less than Rs. 250 crore
4.2 Guidelines for Projects costing less than Rs. 100 crore
5 PPP model in Karnataka Healthcare Industry
5.1 Karnataka Integrated Tele-medicine and Tele-Health Project
5.2 Rajiv Gandhi Super-specialty Hospital, Raichur
5.3 Yeshasvini Co-operative Farmers Health Care Scheme (YCFHS)
5.4 Management of Primary Health Centres (PHCs)
6 Opportunities
7 Issues in Implementing and Monitoring PPP Projects
8 The Road Ahead
1
22
15
5
23
17
1
15
5
24
18
7
26
9
28
19
4
22
16
5
25
19
8
27
11
29
21
Abbreviations

Figure 1-1: Government Expenditure on Health as a Percentage of Total Expenditure, 2012
Figure 1-2: Doctors/1,000 Population, 2013
Figure 1-3: Hospital Beds/1,000 Population, 2013
Figure 2-1: PPP Projects in India, as of March 31st, 2014
Figure 2-2: Healthcare PPP Projects India-Break up by State, as of March 31st, 2014
Figure 2-3: Healthcare PPP Projects India-Break up by Status, as of March 31st, 2014
Table 1-1: Healthcare Spending Per Capita (US$)
Table 1-2: Government Hospitals in India
Table 1-3: Government Hospital Beds in India
Table 2-1: Major Operational Healthcare PPP Projects in India, as of March 31st, 2014
Table 2-2: Major Upcoming Healthcare PPP Projects in India, as of March 31st, 2014
Table 4-1: Time Required for Steps under the Approval Procedure (Projects costing greater
than Rs.100 Crore but less than Rs. 250 Crore)
Table 4-2: Time Required for Steps under the Approval Procedure (Projects costing
less than Rs. 100 Crore)
List of Figures
List of Tables
4
Healthcare PPP in India The Road Ahead

India, since its independence, has taken significant leaps in socio-economic developments and strengthened its position as one of the largest economies in the world. However, despite the economic prowess of India growing consistently, still the country’s ranking is among the bottom five countries worldwide, in terms of public health spending, while accounting for nearly 21% of the global disease burden. A World Bank report published in 2010 estimates that India is annually losing over 6% of its Gross Domestic Product (GDP) over premature deaths and preventable illnesses. The Indian healthcare sector is still suffering on account of under-funding and poor governance, which have led to substantial inequities in basic healthcare provisions.
While India’s expenditure on healthcare has registered a marginal increase over the past few years, the government has plans to increase it to approximately 2.5% of the GDP in the 12th five year plan. India has invested less public money in health than most comparable countries. India’s overall health spending is close to 4% of its GDP, with the private sector being the major contributor. In most developed nations, public money outweighs private money by the ratio of three is to one (3:1); and in middle income countries, the proportion is typically split equally between public and private
expenditure.
Moreover, with mortality rates declining and average life expectancy increasing, India’s healthcare indicators have improved over the last decade. However, they still lag behind the global and regional
standards.
Healthcare Spending Per Capita: Over the past 5 years, the Indian healthcare expenditure has been increasing at a CAGR of over 7 %, which is a rate higher than that of the US. In the present scenario, the healthcare spending per capita in the US
is estimated to be around US$ 9,950, while for
China it is US$ 431. On the other hand, India lags way behind, being anticipated to be spending a meager sum of US$ 84. This low spending is a reflection on India’s negligence of its healthcare sector by not spending sufficiently for infrastructural development, while the country focuses on transforming to an IT-enabled nation.
INDIAN HEALTHCARE PARADIGM: SNAPSHOT
1.1 KEY INDICATORS
1.
5

RNCOS Business Consultancy Services
6 Healthcare PPP in India The Road Ahead
US 8,265 8,656 8,914 9,262 9,559 9,950 3.78%
China 196 227 284 330 373 431 17.0 7%
India 58.4 71.9 78.1 76.1 78.2 84.1 7.57%
2009 2010 2011 2012 2013 2014 CAGR
Government Expenditure on Health as a
Percentage of Total Expenditure: The India
government spent a trivial 4% of GDP on healthcare in
20121, wherein, the majority share of healthcare expenditure
is from the private sector. The government’s contribution in
India stands at approximately 33% of the total healthcare
expenditure which increased from 23.2% in 2002, while in
the US and China, the same stands at nearly 46% and 56%,
respectively. In the US, the share of government spending
has been continuously increasing, touching a mark from
43.9% in 2002, while China’s current level has risen from
35.8% in 2002. Since the government is not allocating suf-ficient
budget for healthcare infrastructural development,
consumers have to spend a significant amount from out of
their pockets.
Penetration of Physicians: The number of doc-tors
per 1,000 population stands at 3.31 in the US, and
1.53 in the case of China. The ratio in India stands at nearly
0.6 doctors per 1,000 population reflecting the plight of
patients who have to wait in long queues for getting medi-cal
consultation and treatment. India is lagging far behind
the WHO standard, which states a mandate of 1 doctor per
600 people. While all the three countries are likely to register
a modest increase in penetration, the situation is likely to
hover around the same dimension; so no remarkable change
will be marked in the near future.
Figure 1-1: Government Expenditure on Health
as a Percentage of Total Expenditure, 2012
Source: WHO
1Worldbank
Source: EIU
Source: EIU
Figure 1-2: Doctors/1,000 Population, 2013
Table 1-1: Healthcare Spending Per Capita (US$)
46.40%
56%
33.10%
US China India
3.31
1.53
0.59
US China India

Healthcare PPP in India The Road Ahead 7
Penetration of Hospital Beds: Another drawback
of the Indian healthcare sector is the shortage of beds. The
rate is below 1 (0.7) per 1,000 population. On the other
hand, the global picture is starkly ahead of India’s, as the
number of hospital beds per 1,000 people in the US and
China is 2.9 and 2.6, respectively. The figures depict that not
enough funds are allocated by the Indian government for
healthcare infrastructural development. India, along with the
US and China, is anticipated to witness this stagnancy in hos-pital
bed penetration over the next few years as well.
Hospital Network: Although the India government is
endeavouring to establish better healthcare facilities through
more hospitals, PHCs, CHCs, medical colleges, AYUSH, blood
banks, etc., the sector’s infrastructure continues to be over-burdened.
From the table below, the number of hospitals
in the rural areas is much more compared to that of urban
hospitals, but the bed capacity per hospital is an average of
10 beds. On the other hand, in case of urban hospitals, the
average bed capacity is 86 beds per hospital. The year 2012
marked a sudden surge in the number of rural hospitals. The
National Health Profile document elicited the fact that many
regions, like J&K and Uttarakhand have not reported devel-opments
in hospital infrastructure post 2008.
Figure 1-3: Hospital Beds/1,000 Population, 2013
Table 1-2: Government Hospitals in India
Table 1-3: Government Hospital Beds in India
*Figures are estimated for 2013
Source: EIU
Source: Directorate of Health Services, States/UT
Source: Directorate of Health Services, States/UT
2.9
2.6
0.7
US China India
2009 2010 2011 2012 CAGR
Urban 3,115 3,748 4,146 4,949 16.69%
Rural 6,281 6,975 7,347 18,967 44.54%
Total 11,613 12,760 11,993 23,916 27.23%
2009 2010 2011 2012 CAGR
Urban 3,69,351 3,99,195 6,18,664 4,25,721 4.85%
Rural 1,43,069 1,49,690 1,60,862 1,96,907 11.23%
Total 5,40,328 5,76,793 7,84,940 6,22,628 4.84%

1.2 INDIAN HEALTHCARE SECTOR: CURRENT CHALLENGES
Patient Monitoring & Tracking: Although in the
recent past, several initiatives have been taken as pilot pro-jects
for patient tracking, there has never been an approach
for overall implementation. Many patients lose time and
money in case they misplace or lose their reports. Since such
reports are not stored in electronic format, their retrieval is
not possible. The lack of digitization has also marred the
possibility of patient monitoring and their movements across
various hospitals.
Poor patient monitoring & tracking
Low government spending on healthcare
Increasing disease burden
Less doctors & hospital beds per 1,000 population
ratio
Lack of awareness, accessibility & affordability in
Tier 2-3 cities/rural areas
Inadequate sanitation & hygiene conditions
Government’s Healthcare Spending: The India
government spends a frugal 2% of GDP on healthcare, and
contributes a modest 33% in total healthcare expenditure.
This meager funding leads to little infrastructure develop-ment,
thus hindering the growth of the overall healthcare
sector.
Disease Burden: India currently faces the dual burden of
communicable diseases and chronic Non-Communicable Dis-eases
(NCDs), such as Cardiovascular Disease (CVD), diabetes,
cancer and Chronic Obstructive Pulmonary Disease (COPD).
India has the second highest prevalence of diabetes in the
world, with over 61 million diabetic patients. By 2030, the
diabetic population is expected to exceed 100 million2. India
annually loses over 6% of its GDP due to premature deaths
and preventable illnesses3.
Awareness, Accessibility & Affordability in
Tier 2-3 Cities/Rural Areas: Nearly 72% of the coun-try’s
population live in rural areas where a good infrastructure
for healthcare delivery is certainly lacking5. For a population
of 1.21 billion, 26.1% is below the poverty line. Income level
varies from Rs. 781.00 in rural areas to Rs. 965.00 in urban
areas for Below Poverty Line (BPL)6. Moreover, the moderate
literacy rate in such areas creates a bubble of unawareness,
which in turn, invokes the indifference among people towards
vaccination, hygiene maintenance, healthy living habits, and
better treatment prospects. Such factors are overhauling the
country’s healthcare infrastructure that is on the verge of
collapse.
Sanitation & Hygiene: In Tier 3 cities and rural areas,
there is a lack of basic facilities due to which prevalence of
communicable diseases and water/vector borne diseases is
high. The improper waste management and lifestyle also cre-ate
sanitation issues, which further fuels many health related
problems. These problems are then poorly attended due to
inadequate healthcare facilities and monetary issues. All these
factors, therefore, contribute substantially in overburdening of
the healthcare system of the country.
Doctors & Hospital Beds per 1000 Popula-tion
ratio: The Indian healthcare system is underdevel-oped
and over pressurized. Its penetration of doctors and
hospital beds is merely 0.59 doctors/1,000 population and 0.7
hospital beds/1,000 population, respectively, both of which
are way behind the WHO standards4. Due to lack of basic
facilities, infrastructure, and trained paramedics, patients
undergo the agony of waiting in long queues outside govern-ment
hospitals/PHCs/dispensaries, and watching the illness
reach up to a stage that gets beyond any treatment.
HEALTHCARE SYSTEM CHALLENGES
2International Diabetes Federation (IDF)
3World Bank
4World Bank
5CensusIndia.gov
6Planning Commission

A Public Private Partnership in health-care
is defined as a legal arrange-ment
between a governmental
and a private sector entity with health
promotion as the aim of all health provid-ers.
The rationale behind the establishment
of a PPP is to utilize the expertise of each
partner and allocate risks, resources and
rewards accordingly. A partnership that
draws on the strengths of both the sectors
is expected to be the most successful ar-rangement.
2. THE CONCEPT OF PUBLIC
PRIVATE PARTNERSHIPS
A partnership
that draws on the
strengths of both
the sectors is ex-pected
to be the
most successful
arrangement.
2.1 WHAT IS A PUBLIC PRIVATE PARTNERSHIP (PPP)
IN HEALTHCARE?
2.2 PRINCIPLES OF A PPP
A PPP entails the participation of a number of competing players
and requires assistance from technical, financial as well
as legal experts.
Complexity
Coordination
Financing
Legal
Arrangement
Mutual Benefit
It maintains proactive and transparent communication between players to
ensure effective implementation.
It is partly or wholly funded by the private entity.
The acceptance of a PPP arrangement is obtained through signed contractual
agreements
The PPP enables the community to receive value for its money and the private
sector to obtain a fair return on its investment.

A PPP cannot be perpetual
in nature and must come to
a closure within a pre-deter-mined
time frame.
A PPP helps organizations attain their goals using
smaller investments.
Enables the private sector to expand its markets.
Public funding is supplemented through private
capital.
Its performance is benchmarked against a pre-defined
standard, so better quality and customer
satisfaction are obtained.
It allows capitalisation of both expertise and
strengths of the entity.
The cross transfer of skills and expertise fuels
innovation.
The long term nature of a PPP and the huge
number of parties involved result in increased
complexity of contracts as well as negotiations.
There is accumulation of debt much before any
profit is incurred.
Absence of concession to unsuccessful bidders
may lead to insecurity, reducing their numbers
and project competitiveness.
Possibility of inefficiency due to lack of competi-tion
as the developer gets to enjoy a monopoly.
Cultural difference between sectors may lead to
loss of confidence in each other.
There’s properly defined allo-cation
of resources, risks and
rewards between the private
and the public sector based
on their area(s) of expertise.
Fixed Duration Well Defined Allocation
The private entity is entitled
to perform linked cash flows/
penalties that are bench-marked
to specific standards
and are gauged by the public
entity or its representative.
Pre-defined Performance
Standards
Features of a PPP
Advantages of a PPP Disadvantages of a PPP

2.3 HOW DOES A PPP WORK?
PPP
Private Players/
Bidders
Public Sector
Entity
(Ensures competitiveness
and high standards)
Legal Agreement
Fund Raising
Resource Procurement
Project Implementation
Bidding
Winning Private
Player
Special Purpose
Vehicle
*Special Purpose Vehicle (SPV): Subsidiary of private entity protects the private sector investors
from risk of insolvency in case of project failure

2.4 FUNDING
Some of the ways in which funding for a PPP can be obtained
include:
Governmental Source: It is the most common mode
of financing a PPP and both the public sector entity as well
as the private sector entity contribute to the financing of the
project. The project is supported by the public sector in the
form of subsidies, grants, land and capital expenditures.
The government also provides for Viability Gap Funding
(VGF), a scheme that aims at supporting infrastructure pro-jects
that are economically justified but fall short of financial
viability. The total funding provided under the scheme does
not exceed 20% of the total project cost, provided that the
government or the rightful entity that owns the project pro-vides
additional grants out of its budget, but not exceeding a
further 20% of the Total Project Cost.
The VGF alloted under the scheme is in the form of a capital
grant. However, proposals for any other form are considered
by the empowered committee and sanctioned with the ap-proval
of the Finance Minister depending upon the case.
In order to avail the VGF scheme, an eligibility criteria de-scribed
below needs to be met:
• The project should be implemented, i.e. developed,
financed, constructed, maintained and operated for the
Project Term by a Private Sector Company to be selected
by the Government or a statutory entity through a pro-cess
of open competitive bidding.
• The project should provide services against payment of a
pre-determined tariff or user charge.
• The concerned Government/statutory entity should cer-tify,
with reasons:
• The tariff/user charge cannot be increased to eliminate or
reduce the viability gap of the PPP;
• The Project Term cannot be increased for reducing the
viability gap; and
• The capital costs are reasonable and based on the
standards and specifications normally applicable to such
projects and that the capital costs cannot be further
restricted for reducing the viability gap.
Private Agencies: Private players in the form of cor-porates
or consortiums may come together to aid the public
sector in providing services to the community. Some of the
ways in which this type of funding is possible include DBFOT
(Design, Build, Finance, Operate & Transfer) and DBFO (De-sign,
Build, Finance & Operate).
External Agencies: External agencies such as ADB
(Asian Development Bank), IFC (International Finance Corpo-ration)
and the World Bank can also act as sources for financ-ing
PPPs. Although initially, external agencies were looked
upon for technical help to the PPP processes, increasingly they
are also being looked for financial aid.
Annuity-based Financing: It is a form of debt or
an off-budget borrowing made by the government. In this
type of financing, the private player is assured of its returns
irrespective of their usage, as the private entity does not get
into a demand risk.

The type of a PPP chosen depends on the project’s objective,
its complexity and the extent of involvement of the private
entity. Each form is different in terms of allocation of re-sources
as well as risks and degree of responsibility between
the public and private sector entities.These can be classified as
follows:
2.5 TYPES OF PPP
The private sector is assigned the task of building, operating and eventually transferring the project to the public
sector. It is ensured that the private player attains the breaking point as the government purchases a pre-specified
amount of the project like in the case of Deendayal Chalit Aspatal Yojana in Madhya Pradesh.
This form involves the management of a part/whole of a public facility by the private sector. The private player is paid
a fixed fee by the awarding authority for performing specific tasks, and is independent of the tariff or risk involved.
Such contracts allow the entry of private sector skills into operations, design, delivery, labour and equipment procure-ment.
For example, the Rajiv Gandhi Gramin Mobile Medical Vahan in Rajasthan.
1. Build Operate Transfer (BOT)
2. Operation and Management
(Build, Own, Operate,
Transfer) For example, the
diagnostic centre at Kotdwar
in Uttarakhand is currently in
the bidding phase.
(Design, Build, Finance, Op-erate,
Transfer) For example,
the Medical College along
with its hospital in ‘Bolangir,’
Odisha is currently in the
bidding phase.
(Design, Build, Operate,
Transfer) For example,
Greenfield Super Specialty
Hospital in Bathinda, Pun-jab,
which is currently in the
construction phase.
BOOT DBFOT DBOT

The role of the public sector here shifts from being the service provider to a regulating authority for the quality and
cost of the service. The private sector is hired for construction, maintenance and management of the project. As op-posed
to BOT contracts, the concession beneficiary obtains revenues directly from the consumer.
The project is jointly owned and operated by the public and private sector entities that share costs, risks and rev-enues.
Most of the times, a joint venture is undertaken when the public sector seeks technical skills from a private
entity.
In this case, the private player is engaged in providing service and management of the infrastructure. The capital
investments are made by the public sector, however, the operational costs are borne by the private entity.
3. Concessions
5. Joint Venture
4. Lease

2.6 PPP IN HEALTHCARE: PRESENT SCENARIO IN INDIA
India is a nation of varying needs, where on one hand Tier 1
cities have the privilege of world class facilities, while on the
other, rural areas, housing almost 70% of the population,
have a hard time providing primary care facilities. Debt and
fiscal constraints are forcing governments to manage public
expenditure. As the public sector continues to face challenges
in financing and management, discussions around PPPs are
gaining momentum. However, the present share of PPPs in
the healthcare sector is very low, with only 114 projects,
against a total of 1,821 projects in other sectors, as of March
31st, 2014.
Total PPP Projects other than Healthcare
Karnataka
Maharashtra
Healthcare PPP Projects
Uttarakhand
Assam
Rajasthan
Tamil Nadu
Andhra Pradesh
Punjab
Madhya Pradesh
Orissa
93.7%
34%
6.3%
4%3%1%
1%
5%
6%
10%
14%
22%
Figure 2-1: PPP Projects in India, as of March 31st, 2014 Figure 2-2: Healthcare PPP Projects India-Break up by
State, as of March 31st, 2014
Source: Department of Economic Affairs,
Ministry of Finance, GOI
India has PPPs and related reforms evolving in many states,
with the state governments across the country promoting
them as a means for bridging the disparity in infrastructure
so as to meet the needs of their citizens. In the past one
year, states like Karnataka, Uttarakhand, Maharashtra and
Andhra Pradesh have adopted a number of PPP projects in
the healthcare department. Some of the projects introduced
in these regions include Yeshasvini Health Insurance Scheme,
Emergency Response Services, Development and Operation of
Radiology Diagnostic Centres and Rajiv Aarogyasri Community
Health Insurance Scheme respectively. In fact, the governments
of Uttarakhand and Himachal Pradesh have appointed RAHI
Care to install dialysis facilities at hospitals through a PPP model.
Maharashtra also hasn’t been far behind. Last year, the state
decided to address one such problem through a PPP model, as 22
government hospitals in Maharashtra will be provided with the
diagnostic services of the Mumbai-based Enso Healthcare Private
Limited. Similarly, another contract was bagged by the same firm
in Punjab. Chhattisgarh has started outsourcing its diagnostic
needs through a bonus and penalty PPP model. Other states such
as Karnataka, Rajasthan and Gujarat are expected to follow suit.

It can be observed that almost 40% of all the PPP projects
proposed till March 31st, 2014, are already in the operational
phase, indicative of the fact that PPP in Indian Healthcare is
still in a nascent stage compared to other countries. A large
number of projects are also in the bidding and construction
phase, i.e., 12% and 9% repectively, which once operational,
will add to the penetration of PPP in India.
Pipeline
Bidding
Operational
Construction
12%
9%
40%
39%
Figure 2-3: Healthcare PPP Projects India-Break up by
Status, as of March 31st, 2014
A look at the list of operational PPP projects in the health-care
domain in India reveals that currently, 44 projects are
functional across the country. Majority of these projects are
concentrated in the states of Karnataka, Uttarakhand, Andhra
Pradesh and Maharashtra. These projects include insurance
schemes, emergency response services such as mobile vans,
management of Community Health Centres etc, indicating
a majority of O&M type projects. The cost of these projects
range from Rs. 30 lakh to Rs. 900 crore.

Source: Department of Economic Affairs, Ministry of Finance, GOI
Table 2-1: Major Operational Healthcare PPP Projects in India, as of March 31st, 2014
S.No. Project State Cost (Rs. Crore) Type
1 Rajiv Arogyasari Community Health
Insurance Scheme
Andhra Pradesh 900.0 O&M
2 108 Ambulance Service Project Rajasthan 225.2 O&M
3 Rajiv Gandhi Mobile Medical Services Rajasthan 121.0 O&M
4 108 Emergency Response Services (ERS) Andhra Pradesh 99.0 PPP
5 Deen Dayal Chalit Aspatal Yojana Madhya Pradesh 67.0 BOT
6 104 Mobile Health Service (HMRI). Andhra Pradesh 50.0 O&M
7 111 Haemodialysis Machines under
Arogyasri Second Phase in Govt. Hospitals
Andhra Pradesh 45.0 BOOT
8 Call Centre Service (108) Assam 40.0 PPP
9 O&M of Mobile Health Vans Uarakhand 23.4 OM
10 Upgradaon of Diagnosc services at
Public Hospitals in Kurnool,
Visakhapatnam, Warangal Kakinada.
Andhra Pradesh 23.0 BOOT

Table 2-2: Major Upcoming Healthcare PPP Projects in India, as of March 31st, 2014
Source: Department of Economic Affairs, Ministry of Finance, GOI
S.No. Project State Cost (Rs.
Crore)
Type Status
1 Medical Hub at vill Tigaria
Badshah on 194.727 hect
Madhya
Pradesh
930.00 BOT Pipeline
2 Development of Medical College
at Nagaon Diphu
Assam 400.00 N.A. Pipeline
3 Indira Gandhi Government
Medical College (IGGMC)
Complex
Maharashtra 275.00 BOOT Bidding
4 Development, operaon and
maintenance of Punjab Instute
of Medical Sciences at Jalandhar
Punjab 250.00 BOT Construcon
5 Medical College in Almora Uarakhand 240.00 BOOT Pipeline
6 Medical College in Rudrapur Uarakhand 240.00 BOT Pipeline
7 Superspeciality Hospital at
Mohail
Punjab 200.00 DBOT Construcon
8 Superspeciality Hospital at
Bathinda
Punjab 200.00 DBOT Construcon
9 Superspeciality Hospital Assam 150.00 BOT Bidding
10 Development and Operaon of
Radiology Diagnosc Centres -
Cluster III (Vidarbha, 13 centres)
Maharashtra 129.00 BOT Pipeline
There are 70 upcoming PPP projects also, most of which are in
the pipeline. These projects include development of hospitals,
development of radiology diagnostic centers and emergency
medical services. A drastic shift in terms of the type of projects
can be noticed, as most of the projects are variations of the
BOT type rather than OM. This indicates that India is now
relying more on the private sector, by handing over the devel-opment
process, rather than the management of projects to
private entities.

Concept: Reduction of vulnerability of citizens through the
promotion of ambulance services during emergencies.
The provision of pre hospital care to ensure that lives are not
lost due to avoidable circumstances encouraged the announce-ment
of the 108 Ambulance Scheme in the State Budget of
2008-2009. The project was announced under the National Ru-ral
Health Mission by the Ministry of Health and Family Welfare
to be run in PPP mode.
The project was launched in September 2008 with Emergency
and Management Research Institute, Hyderabad as the service
provider. The private provider managed the services of 164
ambulances from September 2008 to June 2010. The manage-ment
of services was then transferred to Ziqitza Healthcare Ltd,
Mumbai for the management of 464 ambulances from July
2010 to May 2013. Afterwards, through an e-tender, Emer-gency
and Management Research Institute, Hyderabad was
again selected for the management of 603 ambulances and the
contract is valid for two years starting from June 2013.
Any individual looking out for help can dial 108 and the call
is attended by specially trained communications officers. All
the calls are retreated to a centralized call center managed by
the service provider and situated within the State Institute of
Health and Family Welfare at Jhanlanga Dungri in Jaipur. The
specially trained officer after understanding the nature of the
emergency connects the caller to the dispatch officer. The disp-tach
officer then contacts the nearest ambulance and guides
it to the site of mishap. The ambulance reports to the site of
emergency and rushes to the closest hospital within 20 minutes
for urban areas and 40 minutes for rural areas, providing care
on the way. The Emergency Response Center (ERC) is supported
by technology including latest telephonic switch with computer
telephonic integration, integrated with automatic vehicle loca-tion
and tracking system, GIS and GPS to locate the ambulance
and hospital which is nearest to the victim.
As of now, a total of 649 GPS enabled ambulances are cover-ing
34 districts and 249 blocks in the state, handling medical,
police and fire emergencies.
The service works on the principle of Sense, Reach and Care
which is complimented with GPS tracking system, state of the
art equipment and an efficiently trained team to act in situa-tions
of accidents, heart attacks, pregnancies and paralysis.
• The project started off with 101 ambulances in September 2008, a number which has grown to 649 in the past 6 years.
• The total emergency cases addressed by the service have increased from 42,343 cases in 2008-2009 to 56,970 cases in
2013-14.
• Out of these, the total number of medical emergencies dealt has grown from 34,406 to 54,599 in the past six years.
3. INFRASTRUCTURE DEVELOPMENT AND CAPACITY
BUILDING: CASES OF PPP MODELS
3.1 108 AMBULANCE SERVICE PROJECT, RAJASTHAN
Launch Year: 2008
Progress7:
PPP Type: OM
Private Players Involved: Emergency and Management Research Institute, Hyderabad; Ziqitza
Healthcare Ltd, Mumbai
Public Player Involved: Ministry of Health and Family Welfare, Governement of Rajasthan
7National Rural Health Mission, Rajasthan

Concept: Improvement of access to medical care of diseases
involving hospitalization through a network of health care pro-viders
for poor families.
The scheme was started as a flagship initiative to provide quality
healthcare for all the poor in the state of Andhra Pradesh by pro-viding
cashless servcies for identified diseases through a network
of government and private service providers. In order to promote
the effective implementation of the project, an Aarogyasri Health
Care Trust under the chairmanship of the Chief Minister was set
up by the Government of Andhra Pradesh.
The pilot phase of the project was started in 2007 in backward
districts of Mahboobnagar, Anantapur and Srikakulam. Even-tually,
in 2008 the project was extended in a phased manner
to cover the 1.92 crore BPL families of Andhra Pradesh. The
benefeciaries for the scheme are identified through white cards
(PDS Card for BPL families) which contain socio-economic data,
biometrics and photographs. The financial entitlements of the
beneficiaries includes coverage of Rs. 1.5 lakh per family per
annum for services alongwith a buffer of Rs. 0.5 lakh. The total
coverage limit can be availed by one member or collectiviely by
two or more members of the family.
The project which started with a list of 163 treatments has been
extended to 942 procedures spanning 31 specialities including
Heart, Cancer, Neuro-surgery, Renal procedures, Burns and Poly-trauma
cases. The scheme also provides cashless services for one
year which includes consultations, tests and treatments for 125
follow up therapies. For registration under the scheme, a patient
is supposed to approach one of the three ’first point of contact’,
which include Aarogyamithra counter at PHC, Health Camps
organised by PHCs and NWHs (Network Hospital). A BPL benefi-ciary
can go to any hospital to avail the procedures covered un-der
the scheme without making any expenses. The individual can
also avail of diagnostic services under the same scheme even if
eventually he/she does not end up undertaking treatment for the
same. Hospitals are also required to conduct free health camps
taking healthcare to the doorstep of the patient. All the Primary
Health Centres (PHCs), which are the first contact point, network
and district hospitals, are provided with help desks manned by
Aarogya Mithras to facilitate illiterate patients.
The empanelment process for the hospitals is done through an
onine platform. The hospitals that meet certain requirements in
terms of services offered, infratsructure, manpower and equip-ments
are selected and are known as network hospitals. Some of
the empanelled hospitals include 7 Star Super Speciality Hospital,
Aayush Nri Lepl Healthcare Pvt Ltd, Amritha Trinethra Multi Spe-ciality
Hospital and Amrutha Heart Hospital.
3.2 RAJIV AROGYASARI COMMUNITY HEALTH INSURANCE SCHEME (RAS),
ANDHRA PRADESH
Launch Year: 2007
PPP Type: OM
Private Players Involved: Network of private and governemnt hospitals
Public Player Involved: Government of Andhra Pradesh
• The insurance claims paid through the scheme grew from Rs. 110.3 crore in 2008 to Rs. 749 crore in 2012.
• The project which covered 25.27 lakh BPL families in its first phase in 2008, covered 45.8 lakh BPL families in the fifth phase in
2012.
• The government hospitals empanelled under the scheme performed 2,616 surgeries in the first phase of the project in 2008, a
number which has grown to 11,378 in the fifth phase in 2012.
• Similarly,the corporate hospitals empanelled under the scheme performed 13,757 surgeries in the first phase of the project in
2008, a number which has grown to 32,443 in the fifth phase in 2012.
• The expenditure under the scheme has grown around 10 folds starting with Rs. 113.25 crore in 2008 to Rs. 1,188.31 crore in
2012.
Progress8:
8Aarogyasari Health Care Trust

Concept: The Government of Uttarakhand initiated a pilot
project in October 2002 with TIFAC (Technology for Information
Forecasting Assessment Counselling) and Birla Institute to oper-ate
Mobile Health Vans in six districts - Champawat, Nainital,
Almora, Bageshwar, Pithoragarh and Chamoli from 2002 to
2008. Based on the success and learning from this project, the
Government of Uttarakhand decided to replicate and roll out
Mobile Health Vans in all the 13 districts in 2009.
An aid from a World Bank funding scheme helped procure thir-teen
Mobile Health Vans (MHVs) fitted with equipments such as
an automatic X-ray film processor, an ultrasound machine, semi
automatic analyzer, centrifuge and 3 channel electrocardiogram
(ECG). The MHVs were handed over to the private partners Rajb-hara
and Jain video for operation and management through PPP
mode for a period of five years.
The health services provided through the van include RTI and
STI diagnosis, IUCD insertion, general physician consultation,
immunization, obstetric and gynecological examination, antena-tal
and postnatal care (PNC), blood and urine tests, X-ray, ECG,
ultrasound and immunization.
The van also maintains a pre-approved list of drugs and medi-cines.
Clients of the van are provided with medication for three
to five days and further requirement of medicines is met through
visits to the health centre for a follow up. In addition, the van
staff offer awareness generation activities in collaboration with
auxiliary nurse midwives (ANMs), accredited social health activists
(ASHAs) as well as other community workers, and refer patients
to fixed health facilities as needed.
3.3 OPERATION AND MANAGEMENT OF MOBILE HEALTH VANS,
UTTARAKHAND
Launch Year: 2009
PPP Type: OM
Private Players Involved: Rajbhara Medicare; Jain Video
Public Player Involved: Government of Uttarakhand
• The project is running successfully in all the districts of Uttarakhand and the number of patients availing the services of MHV (X-ray,
ultrasound ECG, and pathology) has been increasing in the state.
• Rajbhara Medicare, the private player selected for providing MHV servcies in 2 districts served 48, 920 patients and set up 828
camps between April 2009 and February 2011.
• Similarly, Jain Video, another private player who was selected to provide services in 11 districts served 3,56,273 patients and set
up 4492 camps between April 2009 and February 2011.
Progress9:
9Uttarakhand PPP Cell

Concept: Mobile medical units were launched in the state
of Madhya Pradesh in 1988 under the “Jeewan Jyoti Yojana”
program which was operated by the government. These units
were equipped with oxygen cylinders, minor operation theatre,
water facilitiy, generators and invertors. When the scheme was
restructured according to NRHM guidelines and reintroduced in
2006 as “Deen Dayal Chalit Aspatal Yojana”, it was decided that
private partners would be engaged to provide services in order to
address issues of managerial constraints and high costs.
Through decentralized bidding process each District Health So-ciety
issued invitation to bid for the blocks within the particular
district. Jagran solutions, one of the 11 providers selected, was
entrusted with 14 blocks in 3 districts of of Dhar, Badwani and
Betul from July 2007 to April 2011. The player used Tata 407 to
serve as MMUs, which was equipped with GPS, montiored by the
state government and basic clinical equipment for primary care.
The unit is managed by a staff of 4 individuals, a doctor, nurse,
pharmacist, and a driver. The average number of patients served
per day by a unit is around 92. The program was executed in
a phased manner in which 92 mobile units, 1 for each tribal
block are currently operational for 26 days in a month. Each unit
is stationed at the location for 8 hours a day. The block Medi-cal
Officer is informed of the schedule who further informs the
panchayats and the anganwadi workers. The mobile units cover
the village markets and villages providing curative, preventive
and promotive services including maternal and child health care
services such as post natal care, treatment of manourishment,
immunization, family planning, tuberculosis screening, health ed-ucation,
blood tests alongwith drug dispensing and referrals. The
project served 2979 pregnant women in the year 2008-2009.
3.4 DEEN DAYAL CHALIT ASPATAL YOJANA, MADHYA PRADESH
Launch Year: 2006
PPP Type: BOT
Private Players Involved: Jagran Solutions and 11 more service providers
Public Player Involved: Government of Madhya Pradesh

A system for the approval or appraisal of projects to be undertaken through the Public
Private Partnership mode has been laid out by the Central Government. The procedure
applies to all the projects for which the cost exceeds Rs. 100 crore. In case of PPP
projects involving a lower capital, detailed instructions are issued by the Department
of Expenditure. These projects do not require approval of the PPP Appraisal Commit-tee
and are cleared by the Expenditure Finance Committee (EFC)/ Standing Finance
Committee (SFC) as applicable.
4. REGULATORY ASPECT OF PPPs2
4.1 PROCESS FOR PROJECTS COSTING GREATER
THAN RS. 100 CRORE BUT LESS THAN
RS. 250 CRORE
Project involving
capital lower than
Rs. 100 crore do not
require approval of
the PPP Appraisal
Committee and are
cleared by the Ex-penditure
Finance
Committee (EFC)/
Standing Finance
Committee (SFC) as
applicable.
A Committee comprising of Secretary of Department of Economic Affairs and Sec-retary
of the Ministry/Department sponsoring the project is set up for the approval
of PPP projects in all sectors, with cost greater than Rs. 100 crore but less than Rs.
250 crore.
1. Initially the projects are appraised by the Standing Finance Committee (SFC)
which is comprised of the Secretary of the Administrative Ministry as the Chairman;
Financial Adviser; Joint Secretary of the concerned Division; and Representative of
the Department of Legal Affairs. If required, a representative from the Planning
Commission and any other Ministry/Department are also included. SFC will either
recommend the proposal for approval to the Committee or request the Administra-tive
Ministry to make necessary changes for further consideration of the SFC.
2. The sponsoring Ministry then identifies the projects to be taken up through PPPs
and undertakes the preparation of project agreements and feasibility studies with
assistance from financial, technical and legal experts. The documents prepared
include the various agreements to be entered into with the Concessionaire detailing
the terms of the concession and the rights and obligations of the various parties.
The invitation to submit financial bids, known as the RFP (Request for Proposals),
includes a copy of all the agreements that are proposed to be entered into with the
successful bidder.
3. The Administrative Ministry post the formulation of the draft RFP seeks the clear-ance
of the SFC. The proposal for seeking clearance of SFC is circulated among all
members of SFC in a specific format along with copies of all draft project agree-ments
and the Project Report within one week of receipt. The Planning Commission
will then appraise the project proposal and forward the formers Appraisal Note to
the Administrative Ministry. Any other Ministry/Department involved also forwards
written comments to the Administrative Ministry.
10The Secretariat for the Committee on Infrastructure, Planning Commission,
Government of India

4. The SFC takes a view on the Appraisal Note and on the comments of different ministries, along with the response
from the Administrative Ministry followed with either recommending the proposal for approval by the Committee or
requesting the Administrative Ministry to make necessary changes for further consideration of the SFC.
5. Once cleared by the SFC, the project is put up for approval by the Committee. The Committee may either recom-mend
the proposal for approval of the competent authority or request the Administrative Ministry to make necessary
changes for further consideration of the Committee.
6. Once cleared by the Committee, the project is put up before the Competent Authority for approval. Financial bids
are invited after approval of the competent authority has been obtained. The competent authority for each project is
the same as applicable for normal investment proposals costing more than Rs. 100 crore. However, pending approval
of the Competent Authority, financial bids could be invited after the approval/clearance by the Committee.
Table 4-1: Time Required for Steps under the Approval Procedure (Projects costing
greater than Rs. 100 Crore but less than Rs. 250 Crore)
Source: The Secretariat for the Committee on Infrastructure, Planning Commission, Government of India
S.No. Acon Time Taken
1 Comments of P lanning C ommission, Three weeks from t he
me of c irculaon of t he S FC m emo by t he A dministrave
Ministry or any other Ministry/Department on the documents
circulated by the Administrave Ministry
Three weeks from the me of
circulaon of the SFC memo by the
Administrave Ministry
2 Appraisal of proposal by SFC Five weeks from the me of
3 Clearance by t he C ommiee within S even w eeks f rom the
me of c irculaon of the of Secretary, DEA and Secretary of
SFC m emo by t he A dministrave M inistry Administrave
Ministry/Secretary, DORTH on file
Seven weeks from the me of
4 Approval by the Competent Authority Nine weeks from the me of

4.2 GUIDELINES FOR PROJECTS COSTING LESS THAN RS. 100 CRORE
The Department of Economic Affairs has issued Guidelines for formulation, appraisal and approval of PPP projects
with capital costs of Rs. 100 crore.
1. Projects, costing up to Rs. 5 crore, are appraised by the Administrative Ministry. Projects costing above Rs. 5 crore
but less than Rs. 25 crore are appraised by the Standing Finance Committee (SFC). The forum for appraisal of projects
costing Rs. 25 crore and above but less than Rs. 100 crore is the Expenditure Finance Committee (EFC) chaired by the
Secretary of the Administrative Ministry.
2. The sponsoring Ministry identifies the projects to be taken up through PPPs and undertakes preparation of feasibil-ity
studies, project agreements, etc. with the assistance of legal, financial and technical experts as necessary.
3. The Administrative Ministry circulates the details of the project and the terms of the concession agreement to the
appraising agencies and comments received are incorporated into the proposal for consideration by SFC/EFC. In case
of projects which involve more than one Ministry, participation of such ministries is sought.
4. The documents that need to be prepared include the various agreements to be entered into with the concession-aire
detailing the terms of the concession and the rights and obligations of the various parties. The invitation to sub-mit
financial bids, known as the RFP (Request for Proposals, includes a copy of all the agreements that are proposed
to be entered into with the successful bidder.
5. After formulating the draft RFP, the Administrative Ministry seeks clearance of the SFC/EFC before inviting the
financial bids. The proposal for seeking clearance of SFC/EFC is circulated among all the members of the SFC/EFC in a
specific format with copies of all draft project agreements and the Project Report.
6. The Planning Commission then appraises the project proposal and forwards its Appraisal Note to the Administra-tive
Ministry. Any other Ministry/Department involved also forwards written comments to the Administrative Ministry.
The SFC/EFC takes a view on the Appraisal Note and on the comments of different Ministries, along with the response
from the Administrative Ministry. It then either recommends the proposal for approval of the Competent Authority or
requests the Administrative Ministry to make necessary changes for further consideration of SFC/EFC. Once cleared by
the SFC/EFC, the project is put up to the Competent Authority for approval.
S.No. Acon Time Taken
1 Comments of Planning Commission, Four weeks from the me
of circulaon of the Department of Expenditure or any
SFC/EFC memo by the Administrave Ministry, other
Ministry/Department on the documents circulated by the
Four weeks from the me of
circulaon of the SFC/EFC memo by
the Administrave Ministry
2 Appraisal of proposal by SFC/EFC Six weeks from the me of circulaon
of the SFC/EFC memo by the
3 Approval by Competent Authority Eight weeks from the me of
circulaon of the SFC/EFC memo by
the Administrave Ministry
Table 4-2: Time Required for Steps under the Approval Procedure
(Projects costing less than Rs. 100 Crore)
Source: The Secretariat for the Committee on Infrastructure, Planning Commission, Government of India

5. PPP MODEL IN KARNATAKA HEALTHCARE
INDUSTRY
5.1 KARNATAKA INTEGRATED TELE-MEDICINE AND TELE-HEALTH
PROJECT
Concept: In April 2002, the Government of Karnataka, the
Narayana Hrudayalaya Hospital in Bangalore and the Indian
Space Research Organization (ISRO) initiated an experimental
Tele-medicine project called ‘Karnataka Integrated Tele-medicine
and Tele-Health Project’ (KITTHH).
The Coronary Care Unit at Chamrajanagar district hospital was
linked to the Narayana Hrudayalaya Hospital in Bangalore though
telemedicine technologies to facilitate investigation by specialists
after ordinary doctors have examined the patients. If a patient
requires an operation, he/she is referred to the main hospital in
Bangalore; otherwise, is admitted to a CCU for consultation and
treatment. The project provides access to areas that are under-served
or un-served. It has improved access to specialty care and
reduced both time and cost for rural and semi-urban patients. It
has also helped improve the quality of health care through timely
diagnosis and treatment of patients. The most important aspect
of the project is the digital convergence of medical records,
charts, x-rays, histopathology slides and medical procedures
(including laboratory tests) conducted on patients.
In every financial quarter of the year the government pays in ad-vance
for the treatment of patients below the poverty line. The
amount is retained as a subsidy if it is not utilized and is used for
the renovation of the facility. A study conducted by an independ-ent
agency on one thousand patients in the Chamarajanagar
district hospital in Karnataka has revealed that there was a cost
saving of 81% for patients due to the project.
Launch Year: 2002
PPP Type: Joint Venture
Private Players Involved: Narayana Hrudayalaya Hospital
Public Player Involved: Department of Health and Family Welfare, Government of Karnataka
• More than 1,00,000 people have benefited from tele-consultations and treatments using the network.
• Impact study conducted on 1,000 patients revealed that they saved 81% of the cost.
• The patients have a high opinion of the tele-medicine service of the CCU and have expressed high levels of satisfaction.
Progress11:
11IDPAD (Indian Council of Social Science Research) Case Study

Concept: The Rajiv Gandhi Super-specialty Hospital in Raichur,
Karnataka is a joint venture of the Government of Karnataka and
the Apollo Hospitals Group, with financial support from OPEC
(Organization of Petroleum Exporting Countries). The basic rea-son
for establishing the partnership was to give super-specialty
health care at low cost to the people Below Poverty Line. The
Government of Karnataka provided the land, hospital building
and staff quarters as well as roads, power, water and infrastruc-ture.
Apollo provided fully qualified, experienced and competent medi-cal
facilities for operating the hospital. Apollo was responsible
for all medical, legal and statutory requirements. Apollo was also
responsible for all charges (water, telephone, electricity, power,
sewage and sanitation) and penal recovery charges in case of
default in payment within the prescribed periods. Apollo is also
responsible for maintenance of the hospital premises and build-ings,
and maintains a separate account for funds generated by
the hospital from fees for registration, tests and medical charges.
This account is audited by a Chartered Accountant engaged by
Apollo with approval of the Governing Council. Likewise, Apollo
maintains separate monthly accounts for all materials used by
patients below the poverty line (including diagnostic services),
which are submitted to the Deputy Commissioner of Raichur for
reimbursement. Accountability and responsibility for outsourcing
the support services remain with Apollo.
From the fourth year, the hospital managed to earn 30% of the
net profit. When no net profit occurred, the government paid
a service charge (of no more than 3% of gross billing) to the
Apollo Hospital.
However, with the contract between Apollo and the Karnataka
government expiring, the hospital closed its doors on June 1,
2012, as the government showed no interest either to renew
the contract or to take over the management. The government
is also making plans to convert it into a postgraduate teaching
hospital attached to Raichur Institute of Medical Sciences (RIMS),
which would mean that it will no longer be a super-specialty
hospital. The hospital also suffers a scarcity of specialist and
super-specialist doctors.
5.2 RAJIV GANDHI SUPER-SPECIALTY HOSPITAL, RAICHUR
Launch Year: 2001
PPP Type: Joint Venture
Private Player Involved: Apollo Hospitals Group
Public Player Involved: Department of Health and Family Welfare, Government of Karnataka

Concept: The scheme was initiated in 2002 by Narayana Hru-dayalaya
Super Specialty Heart Hospital in Bangalore and Depart-ment
of Co-operatives of the Government of Karnataka. Eligible
individuals include those farmers that have been members of a
cooperative society for atleast a year.
It was implemented through 476 recognized network hospi-tals
to provide cost effective healthcare facilities to cooperative
farmers of Karnataka and their families who contribute a small
amount of money every year. It is one of the largest self funded
healthcare schemes in India which offers 823 surgical procedures
at low cost to the cooperative farmers. The scheme is imple-mented
as cashless hospitalization arranged by Management
Support Service Provider (MSP). The network hospital examines
the UHID of the patient, enrollment fee paid by him and allows
the beneficiary to undergo preliminary diagnosis and tests. If
surgical intervention is required, the patient is admitted to the
hospital, and pre authorization request along with proof of
documents is sent to the Support Service Provider. The request
is approved by the specialists of the MSP within 24 hours if
conditions are satisfied. The network hospital then provides cash-less
treatment and surgery to the beneficiary. Claims are settled
within 45 days by discharging bills and treatment summary along
with patient signature to the MSP.
The surgery package includes consumables during hospital stay,
cost of operation theatre, anesthesia, surgeon’s fee, profes-sional
charge, consultant fee, nursing fee, and general ward bed
charge.
5.3 YESHASVINI CO-OPERATIVE FARMERS HEALTH CARE SCHEME (YCFHS)
Launch Year: 2002
PPP Type: OM
Private Player Involved: Narayana Hrudayalaya Super Specialty Hospital and Network hospitals
Public Player Involved: Department of Co-operatives, Government of Karnataka
• By the end of the first year, almost 9,000 surgeries were performed worth Rs. 10.5 crore.
• The total premium paid by 1.6 million subscribers was Rs. 14.4 crore.
• Hence, the scheme generated a surplus of Rs. 1.86 crore that was carried forward for the operations of the second year.
• Free outpatient treatments at hospitals totaled 35,814.
• In the second year, 15211 surgeries were performed and 50,171 people benefited from outpatient services, which were valued
at Rs. 18.4 crore.
Progress12:
12IDPAD Case Study

Concept: The Karuna Trust was awarded the management
of PHCs of Gumballi in 1996, where 90% of the total cost is
covered by the Government and the rest 10% by the Trust. Local
members of the Parliament, members of the Taluk Panchayat,
Gram Panchayat and Zila Panchayat also supported the transfer
of the PHC to the Trust which was already doing medical work
among Soliga tribals in Gumballi.
All personnel deployed at the PHC are employees of the Karuna
Trust and have been appointed in accordance with the staff-ing
norms of the State Department of Health for PHCs and
sub-centres. Charges for water, electricity and costs of the staff
employed by the agency are reimbursed by the government up
to an extent. In order to improve access to health services, the
Karuna Trust in collaboration with the Government of Karnataka
and National Insurance Company also launched a Community
Health Insurance Scheme. The scheme is completely subsidized
for the below poverty line Scheduled Tribe and Scheduled Caste
population and partially subsidized for BPL non SC/ST people.
Health workers make use of door to door surveys to identify
poor patients, raise awareness and collect premiums.
The Trust has been managing 30 PHCs across 23 districts of Kar-nataka
out of which 2 PHCs are in partnership with other NGOs.
Comprehensive Primary Health Care with innovative initiatives of
integrating vision centres, mainstreaming traditional medicine,
community mental health, telemedicine, emergency medical ser-vices,
management of communication disorders, mobile dental
care along with enabling 24x7 services with the staff headquar-tered
at PHCs are the key differentiators in the health services
offered by Karuna Trust.
5.4 MANAGEMENT OF PRIMARY HEALTH CENTRES (PHCS)
Launch Year: 1996
PPP Type: OM
Private Player Involved: Karuna Trust
Public Player Involved: Government of Karnataka
• Observing the successful way in which the organization has been able to turn poorly equipped and low performing PHCs into
model health centres, other State Governments have approached Karuna Trust to start similar PPP initiatives in their respective
States.
• The number of PHCs in Karnataka has increased from 16 in 2005-2006 to 30 in 2012-2013. Similarly, the number of registrations
in these PHCs has increased from 7,827 to 12,370.
• Early Ante Natal Check up registration (women who have registered in the PHC within first trimester of pregnancy) has grown
from 53% in 2005-2006 to 81% in 2012-2013.
• Institutional deliveries (deliveries conducted at public or private institution/ facility) have grown from 58% to 98% in 8 years.
• Infant Mortality Rate, IMR (number of deaths of infants per 1,000 live births under one year of age) has fallen to almost half,
from 22 to 11 in 8 years.
• Maternal Mortality Rate, MMR (number of female deaths per 100,000 live births from any cause related to or aggravated by
pregnancy or its management) has decreased from 119 to 40.
Progress13:
13IDPAD Case Study

6. OPPORTUNITIES
Public private partnerships help in dealing with the problem of poor health services
delivery by increasing resource mobilization. Apart from this, partnerships result in
numerous benefits such as, reduced cost of care, reduction in service duplication,
redirection of public resources to other areas, improvement in quality of services,
integration of best practices, improved regulation, accountability and targeted delivery
of services to the poor.
• Inculcation of Information and Communication Technology (ICT): The
adoption of Telemedicine and other modern ICT technologies as one of the
most effective means of providing healthcare services to rural areas is also
an emerging area. States like Orissa are already making use of modern ICT
platforms in association with the private sector to provide healthcare services
in 51,000 villages across the state. Bihar too, has followed suit as it prepares
to link primary health centres with sadar hospitals and medical colleges. The
project aims to connect 87 PHCs, 22 hospitals and three health hubs (Patna
Medical College and Hospital, Nalanda Medical College and Hospital, and
Indira Gandhi Institute of Cardiology).
• Diagnostic Services: Upgradation of diagnostic services across the country is
also a pressing need. In fact, the first moves have already been made with the
London headquartered Enso Group tying up with state governments of Maha-rashtra
and Punjab to upgrade facilities in a total of 43 civil hospitals in the two
states, with an investment worth Rs. 150 crore. Enso and Wipro GE Healthcare
will install CT scanners, magnetic resonance imaging (MRI) machines, radiogra-phy
systems, colour Doppler’s and analog x-ray units within a year in hospitals.
The project will cover over 3 crore individuals and offer diagnostic services at
cheap rates.
Apart from the above mentioned areas, benefits to stakeholders also include:
• Benefits to the public entity:
PPPs enable improved operation and enhanced efficiency of public services by
accessing private sector innovation, technology and processes.
In certain cases, it also provides an alternate source of funding for infrastruc-ture
and services.
As partnerships have become more complex, the benefits have also become
more diverse and include elements such as publicity, influence and prestige.
Partnerships help build legitimacy as they allow the private sector to work
with respected organizations.
Research work that can be used in the future for product development.
Enhancement of brand image and name recognition.
• Benefits to the private entity:

Since PPP is an amalgamation of two sectors with wide cultural differences and lack of sufficient common objectives, the projects
tend to face a variety of challenges and hurdles. Some of these are:
• Lack of trust, adaptation and consensus at the administrative level, which hinders the decision making process.
• Absence of independent regulators and lack of strong regulatory environment.
• PPPs posses the potential to enhance access to healthcare, still the belief that PPPs lead to inflation through commercialization
of healthcare is an important issue that needs to be addressed.
• Inconsistencies in measurement of performance indicators due to lack of set standards for service quality.
• Constraints associated with budget and delay in payments from the public sector affect the projects leading to disruption of
services.
• Lack of proper mechanism for identification of beneficiaries.
7. ISSUES IN IMPLEMENTING AND MONITORING PPP
PROJECTS

8. THE ROAD AHEAD
According to the Ministry of Finance, 114
PPP healthcare projects have been approved
as of March 31st , 2014 in India.
The objectives for these projects cover a
wide spectrum of applications, spanning
health insurance schemes, systems for
urgent delivery of healthcare services, instal-lation
of healthcare equipment in hospitals,
upgradation of diagnostic services and
development of healthcare facilities.
The government has also been taking initia-tives
to promote private investment into
healthcare. It has been addressing issues
constraining participation of private players
and has also drafted a national PPP policy
and promoted the formation of the Public
Private Partnership Approval Committee
(PPPAC) in order to streamline the projects.
In such a scenario, immense domestic as
well as foreign interests are expected from
private players for improving Healthcare in
India.
As we can see from the map, states such as
Karnataka, Uttarakhand, Maharashtra and
Andhra Pradesh have adopted a number of healthcare PPP projects. Although PPPs have penetrated most of the Southern
India, several states in the Northern India, apart from Uttarakhand and Punjab, are yet to adopt PPPs. States such as Ut-tar
Pradesh, Bihar and Jharkhand, where rural areas account for a major chunk of the population, the access to affordable
healthcare is low. These states need to focus on increasing PPP activity in their respective healthcare sectors.
As the population of India continues to grow, significant rise in the demand for healthcare products and services is expected.
At such a stage, participation of the private sector, which brings along with itself resources and technical expertise, is inevita-ble.
Therefore, in order to meet the rising needs of the country, both the sectors will have to work in close collaboration,
sharing responsibilities, resources, risks as well as benefits at every step of the project.

ABBREVIATIONS
GDP: Gross Domestic Product
WHO: World Health Organization
PHC: Primary Health Centre
CHC: Community Health Centre
AYUSH: Department of Ayurveda, Yoga and Naturopathy, Unani, Siddha and Homoeopathy
HICT: Health Information and Communication Technology
ICT: Information and Communication Technology
IT: Information Technology
NCD: Non-Communicable Diseases
COPD: Chronic Obstructive Pulmonary Disease
CVD: Cardiovascular Disease
BPL: Below Poverty Line
SPV: Special Purpose Vehicle
VGF: Viability Gap Funding
BOT: Build, Operate, Transfer
BOOT: Build, Operate, Own, Transfer
DBOT: Design Build Operate Transfer
DBFO: Design, Build, Finance, Operate
DBFOT: Design, Build, Finance, Operate, Transfer
ADB: Asian Development Bank
IFC: International Finance Corporation
GOI: Government of India
RSBY: Rashtriya Swasthya Bima Yojna
GPS: Global Positioning System
GIS: Geographic Information System
ERC: Emergency Response Centre
RAS: Rajiv Arogyasari Community Health Insurance Scheme
TIFAC: Technology for Information Forecasting Assessment Counseling
MHV: Mobile Health Vans
MMU: Mobile Medical Unit
ECG: Electrocardiogram
IUCD: Intra Uterine Contraceptive Device
RTI: Reproductive Tract Infection
STI: Sexually Transmitted Infection
PNC: Post Natal Care
ANM: Auxiliary Nurse Midwives
NRHM: National Rural Health Mission
EFC: Expenditure Finance Committee
SFC: Standing Finance Committee
RFP: Request for Proposal
PPPAC: PPP Appraisal Committee
CCU: Coronary Care Unit
ISRO: Indian Space Research Organization
KITTH: Karnataka Integrated Tele-medicine and Tele-Health Project
OPEC: Organization of Petroleum Exporting Countries
YCFHS: Yeshasvini Co-operative Farmers Health Care Scheme
UHID: Universal Healthcare Identifier
MSP: Management Support Service Provider
MRI: Magnetic Resonance Imaging
IDPAD: Indian Council of Social Science Research

About ASSOCHAM
THE KNOW
LEDGE ARCHITECT OF CORPORATE INDIAEvoluon of Value CreatorASSOCHAM iniated its endeavour of value creaon for Indian industry in 1920. Having in its fold more than 400 Chambers and Trade Associaons, and serving more than 4,00,000members from all over India. It has witnessed upswings as well as upheavals of Indian Economy, and contributed significantly by playing a catalyc role in shaping up the Trade, Commerce and Industrial environment of the country. Today, ASSOCHAM has emerged as the fountainhead of Knowledge for Indian industry, which is all set to redefine the dynamics of growth and development in the technology driven cyber age of ‘Knowledge Based Economy’. ASSOCHAM is seen as a forceful, proacve, forward looking instuon equipping itself to meet the aspiraons of corporate India in the new world of business. ASSOCHAM is working towards creang a conducive environment of India business to compete globally. ASSOCHAM derives its strength from its Promoter Chambers and other Industry/Regional Chambers/Associaons spread all over the country. VISIONEmpower Indian enterprise by inculcang knowledge that will be the catalyst of growth in the barrier lesstechnology driven global market and help them upscale, align and emerge as formidable player in respecve business segments. MISSIONAs a representave organ of Corporate India, ASSOCHAM arculates the genuine, legimateneeds and interests of its members. Its mission is to impact the policy and legislave environment so as to foster balanced economic, industrial and social development. We believe educaon, IT, BT, Health, Corporate Social responsibility and environment to be the crical success factors. MEMBERS –OUR STRENGTHASSOCHAM represents the interests of more than 4,00,000 direct and indirect members across the country. Through its heterogeneous membership, ASSOCHAM combines the entrepreneurial spirit and business acumen of owners with management skills and experse of professionals to set itself apart as a Chamber with a difference. Currently, ASSOCHAM has more than 100 Naonal Councils covering the enre gamut of economic acvies in India. It has been especially acknowledged as a significant voice of Indian industry in the field of Corporate Social Responsibility, Environment Safety, HR Labour Affairs, Corporate Governance, Informaon Technology, Biotechnology, Telecom, Banking Finance, CompanyLaw, Corporate Finance, Economic and Internaonal Affairs, Mergers Acquisions, Tourism, Civil Aviaon, Infrastructure, Energy Power, Educaon, Legal Reforms, Real Estate and Rural Development, Competency Building Skill Development to menon a few. INSIGHT INTO ‘NEW BUSINESS MODELS’ASSOCHAM has been a significant contributory factor in the emergence of new-age Indian Corporate, characterized by a new mindset and global ambion for dominang the internaonal business. The Chamber has addressed itself to the key areas like India as Investment Desnaon, Achieving Internaonal Compeveness, Promong Internaonal Trade, Corporate Strategies for Enhancing Stakeholders Value, Government Policies in sustaining India’s Development, Infrastructure Development for enhancing India’s Compeveness, Building Indian MNCs, Role of Financial Sector the Catalyst for India’s Transformaon. ASSOCHAM derives its strengths from the following Promoter Chambers: Bombay Chamber of Commerce Industry, Mumbai; Cochin Chambers of Commerce Industry, Cochin: Indian Merchant’s Chamber, Mumbai; The Madras Chamber of Commerce and Industry, Chennai; PHD Chamber of Commerce and Industry, New Delhi and has over 4 Lakh Direct / Indirect members. Together, we can make a significant difference to the burden that our naon carries and bring in a bright, new tomorrow for our naon.
34

ASSOCHAM Addresses
5, Sardar Patel Marg, Chanakyapuri, New Delhi - 110 021
Phone: +91-11-46550555 (Hunting Line) • Fax: +91-11-23017008, 23017009
E-mail: assocham@nic.in • Website: www.assocham.org
ASSOCHAM Southern Regional Office
D-13, D-14, D Block, Brigade MM,
1st Floor, 7th Block, Jayanagar,
K R Road, Bangalore-560070
Phone: 080-40943251-53
Fax: 080-41256629
Email:events@assocham.com
events.south@assocham.com,
director.south@assocham.com
ASSOCHAM Eastern Regional Office
BB-113, Rajdanga Main Road,
Kolkata-700107
Tel: 91-33-4005 3845/41
HP: 91-98300 52478
Fax: 91-33-4000 1149
E-mail: Debmalya.banerjee@assocham.com
AUSTRALIA
Chief Representative
ASSOCHAM Australia Chapter
Suite 4, 168A Burwood Road
Burwood | NSW | 2134 | Australia
Tel: +61 (0) 421 590 791
Email: yateen@assochamaustralia.org
Website: www.assochamaustralia.org
UAE
ASSOCHAM – Middle East
India Trade Exhibition Centre
M.E. IBPC-SHARJAH
IBPC-SHARJAH
P.O. Box 66301, SHARJAH
Tel: 00-97150-6268801
Fax: 00-9716-5304403
JAPAN
ASSOCHAM Japan Chapter
Colors of India Center
1-39-3 Ojima Koto-Ku,
Tokyo 136-0072
Japan
Email: international@assocham.com
tceindo@hotmail.com
USA
ASSOCHAM – USA Chapter
55 EAST 77th Street
Suite No 509
New York 10162
LONDON
ASSOCHAM – Europe Chapter
1Queen Anne’s Gate, London,SW1E6LB
Tel: 0044 2077991688
Email: vijay@singhaniauk.com
ASSOCHAM Western Regional Office
608, 6th Floor, SAKAR III
Opposite Old High Court, Income Tax
Ahmedabad-380 014 (Gujarat)
Tel: +91-79-2754 1728/ 29,
Fax: +91-79-30006352
E-mail: assocham.ahd1@assocham.com
assocham.ahd2@assocham.com
ASSOCHAM Regional Office Ranchi
503/D, Mandir Marg-C,
Ashok Nagar,
Ranchi-834 002
Phone: 09835040255
E-mail: Head.RORanchi@assocham.com
35

About RNCOS
Strategic Consulting
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Customers, Geography / Demogra-phy)
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• Business Setup Support / Strategies and
Planning for Start-ups
• Phone Consultations/ Expert Recruitment
for Industry Insights
• Lead Generation
• Setting up of Dealer Distributor Network
• Set up a representative office in any par-ticular
geography.
• Capturing and increasing market shares
• Identifying potential clients
• Competitive Intelligence Services
• Location Consulting Service
• Report Writing Services
• Region / Country Analysis
• Sector / Industry Briefings
• Technology Reports
• White Papers
Business Consulting Services firm offering a broad spectrum of Management Consulting and Business facilitation services including but not
limited to Financial Business Assessment, Market Entry / Expansion Strategies, Market and Industry
Research, Identification Selection of Business Partners, Feasibility and Facility Location Studies etc.
Since our inception in 2002, we have been offering research solutions to distinguished clientele’ across multi geographies and industry
verticals. We help our clients in achieving sustainable performance and better growth prospects by weeding out their obsolete business
process with well laid strategies by working in close co-ordination with them.

E mail: shushmul@rncos.com
Website: www.rncos.com
Phone: +91 120 4224700 /01 / 02/ 03
Address: B 129, Sector 6,
Noida, Uttar Pradesh
India - 201301
For more information
Contact
SHUSHMUL MAHESHWARI
CEO

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Healthcare ppp in india the road ahead

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