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 ontents1 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 Build ing: 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, 2012Figure 1-2: Doctors/1,000 Population, 2013Figure 1-3: Hospital Beds/1,000 Population, 2013Figure 2-1: PPP Projects in India, as of March 31st, 2014Figure 2-2: Healthcare PPP Projects India-Break up by State, as of March 31st, 2014Figure 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 IndiaTable 1-3: Government Hospital Beds in IndiaTable 2-1: Major Operational Healthcare PPP Projects in India, as of March 31st, 2014Table 2-2: Major Upcoming Healthcare PPP Projects in India, as of March 31st, 2014Table 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 strength-ened its position as one of the largest economies in the world. However, despite the economic prowess of India growing consistently, still the country’s rank-ing is among the bottom five countries worldwide, in terms of public health spending, while account-ing 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 regis-tered a marginal increase over the past few years, the government has plans to increase it to ap-proximately 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 indica-tors 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 sce-nario, 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 reflec-tion on India’s negligence of its healthcare sector by not spending sufficiently for infrastructural develop-ment, while the country focuses on transforming to an IT-enabled nation.

INDIAN HEALTHCARE PARADIGM: SNAPSHOT

1.1 KEY INDICATORS

1.

5Healthcare PPP in India The Road Ahead

RNCOSBusiness Consul tancy Serv ices


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



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

LegalArrangement

Mutual Benefit

It maintains proactive and transparent communication between players toensure effective implementation.

It is partly or wholly funded by the private entity.

The acceptance of a PPP arrangement is obtained through signed contractualagreements

The PPP enables the community to receive value for its money and the privatesector 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 AgreementFund 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 HealthInsurance 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 U�arakhand 23.4 O&M

10 Upgrada�on of Diagnos�c 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, opera�on and maintenance of Punjab Ins�tute of Medical Sciences at Jalandhar

Punjab 250.00 BOT Construc�on

5 Medical College in Almora U�arakhand 240.00 BOOT Pipeline

6 Medical College in Rudrapur U�arakhand 240.00 BOT Pipeline

7 Superspeciality Hospital at Mohail

Punjab 200.00 DBOT Construc�on

8 Superspeciality Hospital atBathinda

Punjab 200.00 DBOT Construc�on

9 Superspeciality Hospital Assam 150.00 BOT Bidding

10 Development and Opera�on of Radiology Diagnos�c 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 O&M. 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: O&M

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: O&M

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: O&M

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. Ac�on Time Taken1 Comments of Planning Commission, Three weeks from the

�me of circula�on of the SFC memo by the Administra�ve Ministry or any other Ministry/Depart ment on the documents circulated by the Administra�ve Ministry

Three weeks from the �me of circula�on of the SFC memo by the Administra�ve Ministry

2 Appraisal of proposal by SFC Five weeks from the �me of circula�on of the SFC memo by the Administra�ve Ministry

3 Clearance by the Commi�ee within Seven weeks from the �me of circula�on of the of Secretary, DEA and Secretary of SFC memo by the Administra�ve Ministry Administra�ve Ministry/Secretary, DORTH on file

Seven weeks from the �me of circula�on of the SFC memo by the Administra�ve Ministry

4 Approval by the Competent Authority Nine weeks from the �me of circula�on of the SFC memo by the Administra�ve Ministry



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. Ac�on Time Taken1 Comments of Planning Commission, Four weeks from the �me

of circula�on of the Department of Expenditure or any SFC/EFC memo by the Administra�ve Ministry, other Ministry/Department on the documents circulated by theAdministra�ve Ministry

Four weeks from the �me of circula�on of the SFC/EFC memo by the Administra�ve Ministry

2 Appraisal of proposal by SFC/EFC Six weeks from the �me of circula�on of the SFC/EFC memo by theAdministra�ve Ministry

3 Approval by Competent Authority Eight weeks from the �me of circula�on of the SFC/EFC memo by the Administra�ve 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: O&M

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: O&M

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 OrganizationPHC: Primary Health CentreCHC: Community Health CentreAYUSH: Department of Ayurveda, Yoga and Naturopathy, Unani, Siddha and HomoeopathyHICT: Health Information and Communication TechnologyICT: Information and Communication TechnologyIT: Information TechnologyNCD: Non-Communicable DiseasesCOPD: Chronic Obstructive Pulmonary DiseaseCVD: Cardiovascular DiseaseBPL: Below Poverty LineSPV: Special Purpose VehicleVGF: Viability Gap FundingBOT: Build, Operate, TransferBOOT: Build, Operate, Own, TransferDBOT: Design Build Operate TransferDBFO: Design, Build, Finance, OperateDBFOT: Design, Build, Finance, Operate, TransferADB: Asian Development BankIFC: International Finance CorporationGOI: Government of IndiaRSBY: Rashtriya Swasthya Bima Yojna GPS: Global Positioning SystemGIS: Geographic Information SystemERC: Emergency Response CentreRAS: Rajiv Arogyasari Community Health Insurance SchemeTIFAC: Technology for Information Forecasting Assessment CounselingMHV: Mobile Health VansMMU: Mobile Medical UnitECG: ElectrocardiogramIUCD: Intra Uterine Contraceptive DeviceRTI: Reproductive Tract InfectionSTI: Sexually Transmitted InfectionPNC: Post Natal CareANM: Auxiliary Nurse MidwivesNRHM: National Rural Health MissionEFC: Expenditure Finance CommitteeSFC: Standing Finance CommitteeRFP: Request for ProposalPPPAC: PPP Appraisal CommitteeCCU: Coronary Care UnitISRO: Indian Space Research OrganizationKITTH: Karnataka Integrated Tele-medicine and Tele-Health ProjectOPEC: Organization of Petroleum Exporting CountriesYCFHS: Yeshasvini Co-operative Farmers Health Care SchemeUHID: Universal Healthcare IdentifierMSP: Management Support Service ProviderMRI: Magnetic Resonance ImagingIDPAD: Indian Council of Social Science Research

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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.


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Noida, Uttar PradeshIndia - 201301

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Healthcare ppp in india the road ahead

Healthcare

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