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Upgrading hospital through PPPs in Eastern Cape province in South Africa: A case study

Upgrading hospital through PPPs in Eastern Cape province in South Africa: A case study. Iain Menzies The World Bank St. Petersburg- May 23, 2008. Overview. Introduction An Eastern Cape Health Perspective 5 Myths / Realities Health PPP’s in Eastern Cape Hospital Co-location Projects

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Upgrading hospital through PPPs in Eastern Cape province in South Africa: A case study

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  1. Upgrading hospital through PPPs in Eastern Cape province in South Africa: A case study Iain Menzies The World Bank St. Petersburg- May 23, 2008

  2. Overview • Introduction • An Eastern Cape Health Perspective • 5 Myths / Realities • Health PPP’s in Eastern Cape • Hospital Co-location Projects • Lessons Learned

  3. An Eastern Cape Health Perspective History Three administrations Lack of infrastructural maintenance Provincial inequity Access to health services Inadequate budget

  4. An Eastern Cape Health Perspective (Cont.) • Service Delivery Model • 92 Hospitals • 714 Clinics and Health Centers • 25 Districts • 3 Regions • 7 Programmes • 9 CSC’s

  5. Introduction • Strategic Plan • PPP • Staff recruitment and retention • PGDP • 2010 • Department of Public Works

  6. 5 Myths / Realities • PPPs are just another form of privatization • Private Sector is the winner, and the public the loser (services, costs/budget, inequities, institutional capacity, unsolicited bids, etc.) • Employees of the affected institutions will lose their jobs • Users of the services will no longer be able to afford them • No opportunities for local communities to participate in the economic spin-offs

  7. The model : Co-location PPP’s

  8. Structure of Co-location PPP • Private Party upgrades & maintains facility and provides non-core services; • Public sector serves public patients (doctors, nursing & pharmaceuticals) • Private party serves private patients in dedicated wards • Each party has own exclusive use areas (eg. Theatres) • Shared facilities for joint use (eg. Admissions) • Cross servicing for some services at agreed charge per use (eg. Maternity)

  9. What does Department need? • Upgrade existing hospital facilities to modern specifications; • Improved medical equipment; • On-going maintenance to keep to above at high standard; • Provision of certain non-core services; • Transfer of skills • All = IMPROVED HEALTH FACILITIES FOR ALL

  10. Non-core Services Required • Estate maintenance. • Ground and gardens. • Cleaning. • Patient catering. • Security. • Waste control. • Pest control. • Utilities management (rates and services). • Life-cycle asset management.

  11. Human Resource Impact • Only non-clinical posts are to be affected • Department position = no retrenchments • Unions informed and support PPP process • Looking for innovative solutions from partner

  12. What does Department offer? • Right to establish co-located private hospital facilities on premises • Unitary payment: • Fixed component; • Variable component; and • Profit share to Department

  13. Humansdorp District Hospital

  14. Background • Maintenance backlogs – competing needs • Population growth – more beds needed • Private patients traveling to P.E. for services • Tourist destinations of Jeffreys’ Bay – increased seasonal demands • Shortage of Medical professionals

  15. Goals • Improve hospital services for public patients by: • improving the condition and maintenance of buildings, grounds and equipment • improving the supply of water, electricity, gases • improving patient management and/or clinical care • Improving the hospital and info. Management syst’s • Provide private hospital services for private patients who are presently inconvenienced by having to go outside the district for care • Improve PHC services for HIV/AIDS and TB prevention and care..

  16. Goals (Cont.) Assumptions: • No differentiation between public and private patients when it came to clinical care. • No negative impact on public sector labour. • the hospital budget will increase or be maintained at necessary levels • revenue should be taken in kind where possible.

  17. Benefits to Stakeholder • for departments– PPPs must be an accessible, relevant, viable and beneficial service delivery option • for the users of services– PPPs must result in accessible, affordable and safe services that meet acceptable quality standards • for society– PPPs must promote goals such as social equity, economic empowerment, efficient utilisation of scarce resources, and protection of the environment • for private parties– PPPs must be sufficiently rewarding in relation to the investment required and the risks undertaken.

  18. Why PPP? A Public Private Partnership (PPP) was seen as providing the opportunity to revitalise, & upgrade the district hospital, generate revenue from the private sector via shared services and create additional beds within the district.

  19. Procurement process • Advertised in 1999 for Expressions of Interest ( 3 responses received) • TA’s appointed with Equity funding • Pre- regulation 16 • ECDOH project officer appointed in October 2002. • Concession agreement signed in June 2003. • Site handed – over July 2003

  20. Project outputs • Rehabilitation/Upgrading of existing public sector facilities including all electrical and mechanical items, building and services and decorative finishes : – 60 to 80 beds. 20 Maternity(16), 20 surgical(16), 24 Medical(20) and 16 Paediatrics(8). • Build two new theatres, one each for each of the parties who will be responsible for equipping and managing their own theatre • upgrade and reconfigure the Casualty / Outpatients Department for the public sector

  21. Outputs specified • Construction of a 33 bed private facility on the public sector property – incl. 3 High-care beds. • The Department and Private Party will have exclusive use areas, comprising the male, female, paediatric and maternity wards for the public sector and a new 33-bed facility for the private sector: • the Department will provide birthing facilities to Private Party patients (including ante-natal, delivery and, if required , nursery accommodation for the babies) as well as serve private patients in the paediatric ward;

  22. Obligations • The parties will jointly manage the administration facilities and catering services for the benefit of both parties • Private party will be responsible for the facilities management for the Concession Period, including all: • maintenance & repairs, • security, • gardening, • cleaning & domestic and • waste removal;

  23. REHABILITATION, UPGRADING & CONSTRUCTION • Central block • Building of a second theatre. • New CSSD • Laboratory. • New radiology department. • New casualty/OPD section • New Private Pharmacy and Dispensary

  24. REHABILITATION, UPGRADING & CONSTRUCTION (Cont.) • West wing (surgical and maternity wards). • Upgrading and renovations. • Expanding maternity section with 8 beds. • Upgraded reception area.

  25. REHABILITATION, UPGRADING & CONSTRUCTION (Cont.) • East wing (medical and paediatric wards) • Upgrading and renovations • Renovations to kitchen • Private ward (Isivivana hospital) • Thirty bed private wing with a 3 bed high care unit.

  26. REHABILITATION, UPGRADING & CONSTRUCTION (Cont.) Other areas • New roads, parking areas and gas bank. • Renovations and upgrading of different out buildings to accommodate a laundry sorting area, refuge area, workshop, medical waste holding area, general stores and ring road. • New pharmacy and ARV clinic outside the PPP (ECDOH funds).

  27. Terms of Concession Agreement • Period • 20 yrs plus construction period • Maintain for period and hand back • Share in profits • Agreement was signed on June 2003

  28. Lessons learned • Project Management • Responsibility for the project cannot be abdicated – Dedicated Project champion • Dedicated Functional team with team leaders • Must project manage the TA’s and assist/facilitate data collection • Project Officer must have project management skills and advanced influencing/negotiation skills

  29. Lessons (Cont.) • Project Management (Cont.) • Project mix must be methodical and painstakingly precise • Ensure that everyone in the room has the same understanding – repetition and reinforcement • Functional teams must have detailed brief and progress must be followed up – must meet regularly • Project definition must be clear

  30. Lessons learned (Cont.) • Buy-in • Must ensure political and top management buy-in • Must mainstream PPP to ensure adequate funding to deal with pressures • Must ensure that labor is brought on board at an appropriate time

  31. Lessons (Cont.) • Communication • Regular communication on progress • PPP’s driven from the Head Office SCM Units – set-up a PPP unit with strong financial and contract management competencies • Local Project Manager / Hospital Manager • JMC • EMC • Good relationships during negotiations and beyond

  32. Lessons (Cont.) • Policy • Non-core services vs clinical services • Policy imperatives – District hospitals L1 services • Procurement phase – feasibility processes • Land • Heritage • Ownership

  33. PPPs in Health Sector THANK YOU !!! Iain Menzies The World Bank Imenzies@worldbank.org

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