Niti Aayog frames PPP guidelines for district hospitals

The central government laid down guidelines for facilitating the entry of private sector in the healthcare space at the district-level, through the Public Private Partnership (PPP) models on Wednesday.

Public think-tank Niti Aayog, along with technical assistance from the World Bank, has charted out guidelines for PPP that states can choose to opt for, as health is a state subject.

Different models

Four PPP models—Management of Contract, Purchasing of Services, Build, Operate and Transfer Model or a Co-location Model—have been proposed.

In the Management of Contract model, the state government will bring in a private partner for a period of 10-15 years of investing in equipping the government facility, hiring human resources and managing the facility, while government will reimburse the private partner. In the Purchasing of Services model, the state government will identify medical and surgical procedures that a private partner, whom they empanel, will carry out and the government will pay or co-pay the costs. This will be for a period of one to three years.

In the Build, Operate and Transfer Model, the private partner will have the vacant land offered by the government for thirty years or more and will finance the project. The government will allow patients to be charged by the private facility, termed as ‘User Fee’. The Co-location model will involve government allowing a private partner to set-up a separate facility through private investment within an existing government hospital premise for a duration of 15 years with a renewal option and it will allow the private facility to charge patients.

The decision to create Model Concessionaire agreements (MCA) for PPP in health sector was taken in March 2016 by Prime Minister Narendra Modi. The centre of the MCAs are the district hospitals and the focus is on preventing, diagnosing and treating Non-Communicable Diseases (NCDs) like heart and lung diseases and cancer in Tier II and III cities.

“Despite concerted efforts at the national and state levels over the last few years in establishing the Non-Communicable Diseases (NCD) service delivery network, the system continues to remain constrained with several systemic issues. Constrained fiscal space within states to allocate increased resources for healthcare including NCDs, large infrastructure gaps especially in rural areas and significant gaps in human resources at the level of specialists are some key challenges,” said Dr Vinod Paul, Member (Health), Niti Aayog.

Access to services

The dearth of CT scan and MRI services has already lead to a boom of PPP projects for making radiology services available in government-run hospitals at subsidised rates. For example, Wipro GE Healthcare Pvt. Ltd. already runs 200 centres across the country in government hospitals. The question however is if a poor person can afford to pay subsidised rates for his/her scans.

“To charge a user fee or not is up to the state. For example, in Assam, under the free diagnosis programme poor persons are not charged any fee for diagnosis. We run 28 centres in Assam,” Rajat Ghai, Business Head, Government and PPP, Wipro GE Healthcare Pvt. Ltd. told BusinessLine.

Kerala which is ahead of other states when it comes to healthcare delivery, has started Cath Labs in select block-level hospitals, where Wipro GE Healthcare Pvt. Ltd is the equipment provider. “Kerala has not opted for PPP. Theirs is a direct procurement model, where they procure equipment from us and run it with the government manpower. Each state has their individual preferences,” said Ghai.

In hospitals that does not have CT scan or other advanced diagnostic services like the Bilaspur district hospital of Chattisgarh,patients flock to private centres for their tests.

With the advent of PPP, screenings like pap smear, mammography, biopsy may be available at district hospital levels. CT scan facilities of minimum 16 slice machine, endoscopy, coronary angiography, sonography and surgical treatments like tumour removal, laparoscopy, coronary angioplasty and so on may be available, state the guidelines.