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Ideas & Debate

PPPs is the way to go in funding healthcare gaps

PPPs
PPPs are initiatives that establish a contract between a public agency and a private entity. FILE PHOTO | NMG 

There has been a lot of interest and commentary in the media on the Kenyatta National Hospital Public Private Partnership (PPP) Project. In my opinion, the ongoing discussions on the KNH PPP Project and Public-Private Partnerships (PPPs) in general, are healthy because they bring to the fore conversations around the role of PPPs in bridging the gap in our development needs.

Through such dialogues, we shall as Kenyans, be able to overcome our differences in opinion, find common ground and set direction together on the role PPPs should play in our country’s development agenda.

PPPs are increasingly gaining traction in Africa. According to Healthcare and Economic Growth in Africa,” a joint publication of the United Nations Economic Commission for Africa (UNECA), GBCHealth and the Aliko Dangote Foundation, African governments are turning to the private sector to improve quality and deliver value for money, build infrastructure, provide staff and training, raise quality, improve productivity, undertake social marketing, and enhance procurement.

The report notes that over half (51 per cent) of the PPP cases in health are concentrated in 10 countries in Africa, namely, Cameroon, Ethiopia, Ghana, Kenya, Mozambique, Nigeria, Senegal, South Africa, Tanzania and Uganda.

Although Kenya is identified as one of the PPP frontrunner countries in Africa by the above publication, the country would do better in its PPP endeavours if more Kenyans supported government’s efforts on public private partnerships.

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Kenya has a monumental task to deliver on its policy promise of Universal Healthcare Coverage (UHC) by 2022. Kenya is grappling with rising healthcare costs and increased demand for healthcare services in the face of ongoing budget constraints. According to a 2014 World Bank report on healthcare in Kenya, only 20 per cent of Kenya’s over 40 million citizens have access to medical insurance. The National Hospital Insurance Fund (NHIF), Kenya’s national insurer, has only one in eight Kenyans registered as members. Kenya’s UHC goals are also constrained by inadequate equipment and inadequate water and power services across the country. The demand for basic and specialised healthcare services also outstrips supply.

Kenya currently has 3,494 beds at Level 6 hospitals and a further 6,704 beds at Level 5 facilities, making up only 15 per cent of the required bed capacity in the country. To compound matters further, most public health facilities across the country lack the capacity to treat certain ailments and often must refer patients to other facilities after diagnosis.

Kenya’s population is on a steady increase and is estimated to reach 60 million by the year 2025, with the percentage of individuals above the age of 45 years growing significantly in the coming years. This age group is especially susceptible to ailments and as such the demand for healthcare support services will rise going forward.

Kenya has already seen a substantial rise in non-communicable diseases (NCDs) such as heart disease, cancer and renal ailments. This is despite a significant number of the mortality cases still relating to infectious diseases such as Malaria, diarrhoea and HIV /Aids related complications. In the face of ongoing budget constraints, Kenya must engage with the private sector to address the shortfalls in healthcare funding while ensuring expanded access to quality healthcare.

PPPs offer an opportunity for the country to attract enhanced private sector participation in financing, building and operating infrastructure services and facilities. And the country’s healthcare infrastructure requirements can benefit from this new approach.

To anchor the new approach in law, the government enacted the PPP Act in 2013 and established the Public Private Partnerships Unit at the National Treasury to offer technical support to Government Agencies intending to actualise their projects through PPP arrangements.

The Unit which has been in operation since 2013 has a pipeline of over 70 projects that seek to tap private sector finance and expertise to provide better facilities and services ranging from roads, ports, energy generation and distribution, and student and police housing, saving the government huge sums of capital that have since been redirected to other development priority areas.

Of these projects, construction has started on one, five are at the stage of signing, three are under negotiation and four are at the procurement stage.

But what is a PPP arrangement? In simple terms, PPPs are initiatives that establish a contract between a public agency and a private entity (for- profit or not-for-profit) for the provision of services, facilities or equipment.

A PPP exists when members of the public sector such as state agencies, join with private sector actors, for example: service providers and financiers in pursuit of common goals. In equal partnerships, all the partners bring resources to the table, contribute to the development and implementation of the project, and benefit from its results.

An important distinction, however, must be made between PPPs and privatisation. PPPs are not privatization! Privatising means selling to the private sector.

The writer is Principal public communications officer, Public Private Partnerships Unit, National Treasury.

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