PPP: Game-changer In Indian Healthcare
Public Private Partnership (PPP) will be the next growth catalyst for the healthcare industry in India. The public-private partnership model is a truly inclusive model that draws maximum mileage and benefits for the Government and the masses. The Government is able to fast-pace the development in various segments for the benefit of the consumers, while deploying the capital, professionalism and efficiency of the private sector.
The recent case in point is the Government’s plan to lease out 25 airports under the PPP model to enhance tourism and air transport in India. Similar successes can be achieved in healthcare as well.
In its truest sense, the PPP model started in India 25 years back in 1997 with Jawahar Lal Nehru Port (JLNP), followed by various other ports. The term PPP was coined in 2011. As on 31st March 2021, India had 125 Central Government projects with a total cost of Rs 1,72,314 crores. If we include the completed projects, the number goes up to 333 with a total project cost of around 458,000 crores, with a maximum of 257 being in the Road infrastructure sector.
The biggest PPP project is the 17000 crores e-way project awarded to Adani Enterprises by the UP Government in 2021. Other marquee initiatives and projects include – Redevelopment of Airports, Railway Stations, Passenger Train operations, Eco-tourism facilities, Redevelopment of the JLN Stadium, Ropeway-based public transportation system, Medical Education, Multimodal Logistic Parks, amongst others.
The PPP model has significantly impacted various industries in India – Infrastructure, Aviation, Telecom, Energy, Education, Urban Development, Tourism, Defence, and many more. India will replicate this PPP success in healthcare as well. We have to pave the way for incremental growth in the future, and Public Private Partnership has the potential to be a significant game-changer. However, the broad blueprint remains the same, and we have to figure out the minor nuances and tweak them to fit the healthcare industry's needs effortlessly.
The PPP model has numerous benefits. It can provide the much-needed funds and resources for the speedy implementation of the strategies and create best-in-class healthcare facilities that benefit the masses. It can make a sustainable long-term model while resolving issues and pain points faster. The expertise of running successful organisations brought in through the PPP model will be crucial for revamping medical facilities.
It's a popular misnomer that private sector involvement increases the cost for the public – look at how the charges in aviation and telecom have come down in the last 10-20 years. With effective management, healthcare costs will decrease over time. And more importantly, the quality and credibility of services will increase multiple times. The private sector healthcare facilities are synonymous with effectiveness, efficiency, higher quality of service, infrastructure and patient care, especially those under the NABH / NABL empanelment. The various panels like insurance companies, Ayushman, CGHS, etc., which act as the best funnel for seeking patients, have effectively kept the prices from spiralling while simultaneously providing profitability for the service providers.
The PPP model also catalyses the availability of Specialist doctors through shared resources, thereby further increasing efficiencies. The PPP model can catalyse healthcare Inclusion and accessibility for the masses.
India already has various instances of PPP successes in the healthcare industry. For example, the private sector accounts for over 58 per cent of the hospitals and 81 per cent of the doctors – thus, the success of the Indian Healthcare sector is primarily based on the PPP model.
The 'Malaria Elimination by 2030' and the 'TB eradication programmes' owe a significant part of their success to the inclusion and participation of the private sector. This has been a major success also from the Government's perspective and how they have effectively collaborated and tapped the private sector's strength for a pan-India initiative with major rural population touchpoints.
We currently have about 30 insurance companies providing reliable health insurance plans. Twenty-five years back, these were just a handful. The medical coverage offered by the insurance companies has ensured that people are no longer shying away from expensive medical procedures, and the shock of the cost is absorbed over a more extended period.
Private healthcare infrastructure – hospitals and diagnostics have grown multi-fold in the last 20 years. These hospitals cater to secondary and tertiary healthcare requirements very professionally – where the quality of service is much higher.
In 2021, India received a committed investment of 7.7 billion dollars in healthcare alone. This roughly translates into INR sixty-three thousand crores – spread across 25 projects. This was the most significant commitment in South Asia with an increase of around 50 per cent, whereas the remaining countries registering a drop during the same period.
So, what is the scope of PPP healthcare projects in India? There is a massive Urban-Rural divide when it comes to healthcare in India. The Urban areas have 75 per cent of the healthcare infrastructure, while they only cater to 27 per cent of the Indian population. This is certainly an area with massive scope for the PPP model.
The doctor-patient ratio in these areas will also be impacted and improved, using telemedicine and artificial intelligence (AI) based mobile clinics or shared resources models. The private sector has taken up very few public health centres (PHCs) except in mining townships. There are nearly 100 backward districts – where socio-economic and infrastructure development is required. Industrial Houses could partner with district administration in adopting one district each.
The pharmaceutical industry may manufacture cheaper drugs for the masses and donate medicines for HIV-AIDS, viral Hepatitis, Malaria, TB and other chronic diseases. Organisations like the NGO LoCost should be encouraged for their pioneering work in making quality essential medicines available at reduced costs by eliminating the margins shared with prescribers, distributors and intermediaries and related marketing costs.
There are over 5300 healthcare startups in India – and thus, the environment is quite vibrant. BIRAC (Biotechnology Industry Research Assistance Council) has several significant initiatives for promoting such startups. This is an excellent initiative from the government side to rope in the private sector to enhance the overall healthcare of Indian citizens.
India's performance in healthcare has been simply outstanding. Achievements like -
Pharmacy to the World, 3rd largest medicine manufacturer by volume, the largest producer of vaccines worldwide, 7th in the Medical Value Tourism, 4th in the Medical Devices market in Asia – all points to India's dominant role in global healthcare. India, in many ways, is the health driver for the entire world, all driven through the public-private partnership route.
The PPP model is a symbiotic relationship – each partner in the value chain gives something and gets something in return – for any such model to work, it has to create a win-win situation for all stakeholders. Therefore, we must understand the ground realities, we must define the rules of the game, trust must be earned, and efficient implementation must be affected – for the Public-Private-Partnership system to work.
Jatin Mahajan
Jatin Mahajan is a highly-reputed healthcare industry influencer. He holds various roles in industry bodies – CII, ASSOCHAM, Association of Diagnostics Manufacturers of India (ADMI), Global MedTech Advocacy and Advisory Forum (GMAAF), Association of Indian Medical Devices Industry (AIMED), and the Delhi Management Association. He is also the managing director of J Mitra & Company.
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