Ppp in Hospital Management - PowerPoint

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					              Ministry of Health
             and Social Welfare


Public Private Partnership for replacing the national
                  referral hospital

              Dr Mphu K Ramatlapeng
                  Dr. Mphu and Social Welfare
        Minister of HealthK. Ramatlapeng
                         Lesotho
             Ministry of Health & Social Welfare
                   3rd October2007
                         July 7, 2007
                             Background
•   As part of the Health Sector Reforms, the referral system in the health
    sector needed to be greatly improved to meet the clinical needs of the
    country
•   The current national referral hospital QEIII could no longer fulfill this
    function satisfactorily because of its derelict infrastructure
•   In 2002 Boston University, as part of the reforms agenda, was tasked by the
    MOHSW to critically look at QEII Hospital and come up with
    recommendations as to the way forward
•   The Boston University report Economic Study of the Referral Health
    Services in Lesotho: The Future of QEII Hospital recommended the
    construction of a new hospital at a new site as the only option that would
    make economic sense.
•   The New Referral Hospital would provide a higher level of service and
    quality
•   The benefits of the hospital would be felt throughout the health sector due
    to in country high quality of specialist care thus reducing the referrals to
    neighboring South Africa, and training of health workers and
•   A Public Private Partnership was the preferred route to the provision of the
    new referral hospital

                                                                          Slide 2
               How did we get here?


 Urgent need for replacement of existing hospital, Queen II

    Existing service unsatisfactory due to dilapidated building, over 50years old

    - Less expensive to replace than repair
    - Clinical service offered is of poor quality for an apex hospital

 Public Private Partnership option taken by GOL in 2005

   -The PPP partner will design, build, fully maintain and operate the new public
   hospital and 3 urban Filter Clinics for Government under an 18 year contract

    -The PPP allows Government to shift operating risks of the hospital project
    to the PPP Partner

   - PPP partner will bring operational experience in hospital       management
 IFC main advisor on this PPP

                                                                              Slide 3
                                   Hospital PPP
              Private                                          Ministry of Health
             Operator                PPP Agreement




                              $           New
                                        Hospital      $

•   Detailed designs                                 • Sector Policies and Strategy
•   Capital financing
                                                     • Service Package
•   Construction
                                                     • Reimbursement for all clinical and
•   Medical supplies & equipment
                                                       non-clinical services
•   Clinical services
                                                     • Performance monitoring
•   Maintenance
•   Non-clinical services                            • Joint Services Committee
•   Staffing and Training


                                                                                  Slide 4
           Why the PPP Model for Lesotho?
• Increased need for better services as expressed by both the
  public and government

• Private Sector can deliver the results Government and the
  public are seeking

 Government is increasingly focusing on accountability and
  results

    Government intends the New Hospital PPP Project to provide -
    -Modern approaches to health management, clinical procedures,
    medical equipment
    -Training for the health sector
    -Predictable expenditure – to stay within Government’s Unitary
    Payment

                                                              Slide 5
             Guiding Principles for the Project

•   The New Public Hospital serves two equally important functions:
       Training resource for health sector
       High quality services for all Basotho

   Balance what is needed with what is affordable:
       Use current operating budget as a baseline

   Maintenance of buildings and equipment
       Suitability, durability, ease of maintenance and minimum life-time cost
       for the building and equipment

   Maximum value for money spent on this project




                                                                            Slide 6
                      What is the Project?

   Project Requirements:
    Higher volume of patients and meet GoL affordability

   Site & Building:
    ~150,000 hectare site at a new site ; 29,000m 2 building, designed for future
    expansion

  Project Cost:
   M438m/$62.5m (M550m/$78.5m incl VAT) for design, construction & fully
   equipped for operation
Description:
   GoL will contract through a competitive, transparent process with a PPP
   Partner for an 18 year contract of full Design-Build-Finance-Operate

Capacity:
390 bed modern apex hospital for the country


                                                                                    Slide 7
     What is included in the New Hospital PPP?
Unitary Payment by GOL in exchange for the PPP Partner providing following –
1. Initial services
- Design, construction and partial financing of the new hospital
-Refurbishment and re-equipping of three filter clinics, initial staff training
2. Operational Services at the filter clinics and new hospital include:
      - Non-clinical services
      - Clinical Support Services
      - Clinical Services
      - Private Patients
              The Operator will integrate public and private clinical services (amenities being only
              difference)
3. Managing Referrals and adds-ons for full Oncology unit and other services
- The PPP Partner will assist Government in managing the effectiveness and cost of referrals to South
       Africa especially oncology.




                                                                                                   Slide 8
 What is included in the New Hospital PPP? (cont)

2. Operational Services at the filter clinics and new hospital include:

- Non-clinical services

- Clinical Support Services

- Clinical Services

- Private Patients
            The Operator will integrate public and private clinical services (amenities being only difference)

3. Managing Referrals and adds-ons for full Oncology unit and other services

- The PPP Partner will assist Government in managing the effectiveness and cost of referrals to South Africa
especially oncology.




                                                                                                        Slide 9
                     Current Project Funding

Sources of Funds
•Private sector (banks, investors, project company)
          Providing 20% of capital costs
•Multilateral
          Global Partnership for Output-Based Aid (GPOBA)
          Grant of M43.75m /$6.25m, payable over first five years of project, to
          augment the Unitary Payment. Administered by World Bank
          Partial Risk Guarantee (PRG) has been requested from the World
          Bank by Government – this provides the operator with partial coverage
          (at their expense) should Government fail to make the unitary payment
•Donors
           IFC and Donor trust funds have supported technical consultants

•Government
       Providing 80% of capital costs, saving large debt service costs and
       significantly improving project risk profile


                                                                         Slide 10
             Current budget for QEII Hospital


•   The budget for QEII hospital in 2007/08 was137 million Maloti
    This included the Filter Clinics

•   This budget has been tripled over the past 3 years but with no
    commensurate increase of service levels. In fact services are decreasing

•   Government is spending as much to operate QEII today as it will spend for
    the new hospital which will have a higher level of service and quality




                                                                         Slide 11
          How to Avoid the Same Problems in a New
                         Building?
•   Overcrowding with patients needing lower level care
     - Emphasize primary care and routine outpatient services at the filter clinics
     - Fully functioning filter clinics
     - Triage – patient management on entry at clinics and hospital
     - Strong referral policy

•   Equipment and Supplies
     - Servicing, supply and maintenance contracts

   Human Resources / Staffing
     Staff complaints to be addressed include
      – lack of supplies, equipment, and training
      - low salaries
     - PPP Partner is contractually required to have full staffing
     - Partner prepared to provide better working conditions




                                                                                      Slide 12
  How will the New Hospital Affect the Health
                   Sector?

 Higher level of medical services at New Hospital
 Greater access to services – more patients can be
  seen
 Better referral resource for district hospitals
 New Hospital will serve as a training resource for the
  health sector
 Fewer referrals expected to South Africa over time
 Fits in Government’s affordability envelope



                                                   Slide 13
                           Other Concerns
 Cost of public services will remain the same – cost to public patients
  does not increase
 Government is not reducing the Ministry’s budget to pay for the new
  hospital
 WB to provide support to Government to develop capacity for contract
  management

 Other benefits to Basotho from the project include Local Economic
  Empowerment (LEE)

 Recruitment should minimize disruption to staffing in the district
  hospitals and elsewhere

 Existing staff at Queen II will be offered the choice of transferring to
  other Government facilities and transferring to the private operator

                                                                        Slide 14
The National Scale-up Plan for ART services in
                   Lesotho
 Thank you for your attention !




                                          Slide 15

				
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