Public Private Partnership

Seminar of AVP Public-private partnerships are increasingly popular in the field of development cooperation and sustainable development. Although not an altogether new phenomenon, the popularity of public-private partnership in policy circle has grown steadily since 1990s. Historical examples include role of churches in social security and mercantilist’s era of infrastructural development.

The terms ‘public’ and ‘private’ can be confusing because there are several ways to define them. The “public sector’ is relatively easier to define. It includes organizations and institutions that are financed by state revenue and through government budgets. They include ministries and departments under national and provincial governments, district administration. Municipal authorities, local government bodies, Para-state corporate entities, autonomous or semi-autonomous bodies or corporations, law and order agen­cies, cooperative societies under state control, state universities and research organizations.

The terms ‘private sector’ is less easy to characterize. Private sector is defined as all organizations and individuals working outside the direct control of the state: these include both for-profit companies and individuals and not-for-profit private organizations. Broadly the private sector includes all non-state actors, some explicitly seeking profits and others operating on a non­profit basis. The former are conventionally called ‘private business’ or ‘private enterprise; the other are non-governmental organizations (NGOs) that include voluntary associations and charitable trusts. For-profit providers may include individual medical practitioners, diagnostic centers, ambulance providers, blood banks, and commercial contractors, institutional agencies such as polyclinics, nursing homes and hospitals of various capacities that provide different levels of services. They may be run under trust ownership or corporate ownership. They may he located in urban or rural areas.

There were general consensuses that in each sector, private and public could work in parallel to each other. They should “complement each other in serving the customer/beneficiaries” if they were to work together. The demand for health services is increasing as the population ages and the public sector does not have the capacity to deal with such a demand by itself. The private sector has had tremendous growth in the last couple of decades whose potential can be tapped in to meet the increasing demand. In some countries tools for enhancing and implementing PPP already exist. In some country’s health policy there are specific clauses which allow for the possibility to finance public health by the private sector.

• “PPP by definition is to be a win-win proposition for all the people involved”

• The “opportunity to ensure more effective high quality delivery is only going to be achieved if there is a close partnership between the public and private sectors.”

• “Partnerships will ensure quality assurance in health provision. The technology will be updated, while capacity building will not only concentrate on public providers, but the private formal and non-formal providers will benefit too.”

• “Creating alliances with the private sector (for profit, not for profit sector) can help us move forward in service delivery and certain types of health programming”

• “Strong frames of reference should exist: A national health policy, a contracting policy, a resource mobilization strategy”

The important role the private sector plays in health service delivery should be recognized and the further development of the private sector should be encouraged.

The private sector should be encouraged to work in the public field through technical and financial arrangements. They should also have real expertise in health. Often times the private sector assumes that because they use a private mechanism- its enough. But it’s not enough; they need to develop expertise to deliver health services. And in health this is a real challenge. Many organizations are private but they do not hire the appropriate expertise they need.

• Through direct financing, setting up of performing technical protocols, organizing in house training sessions…

• Must work internally for people to appreciate added value and the centrality of the private sector in achieving health goals

• In the private sector they need training and support but not as they do in the public sector like workshops and seminars all the time. All the modern approach of training that people are using should be promoted in the private sector.

There should be a clear distinction between the roles and responsibilities of the public and private sectors. Particularly in the area of health, its noted that “there is a huge ambivalence about dealing with the private sector” as it relates to roles and responsibilities. The main responsibility of the public sector should be in providing a favorable policy environment which promotes public-private partnerships.

• The private sector has an important role to play for profit and not for profit but not the same as the public sector.

• Through a clear distribution of the roles between the public sector (Ministry of Health ) and the private sector (especially at the community level).

• The private sector takes advantage of the public sector unless there are strong systems in place to guard against misuse.

Programmatic Challenges

There are institutional, operational, political and cultural obstacles which need to be overcome. For example, at the operational level there is an absence of a mechanism for the implementation of PPPs and at the cultural level there is a perception that health services are a medical concern and therefore communities are not involved in the implementation of such services. And at the political level, some politicians in the field perceive certain associations or NGOs (private sector) as rivals.

There is an absence of real political commitment, policy and framework for PPPs at the national level. The public sector needs to develop sound frameworks in which partnerships with the private sector (for-profit or non-profit) and NGOs can be enhanced. At this point, there seems to be a lack of clear operational frameworks in place which allow for PPP work. There also seems to be a lack of capacity, especially in the public sector to implement the necessary health policies. The private sector in some countries is also not strong enough to meet the increase in demand for health service delivery. A communication strategy should highlight the importance for developing such policies and frameworks.

Mechanisms must be developed where the two sectors jointly participate in the planning process of programs.

• Private sector should be fully involved including in the identification/ selection of the priorities and the evaluation of the final outcome

• Through a direct and concrete integration of the private sector within the health

Programs (design of the program, implementation, etc)

• The private sector itself also needs to be educated on ways of working with the government without undue influence from them. They should be part and parcel of the policy formulation team.”

• “Collaboration instruments to find ways to work with the private sector so it isn’t just a vendor or contractual relationship but really a joint planning and joint funding of activities.”

There is a lack of communication between the public and private sector. They need to listen to each other and to cope with one another’s different approaches. There are instances where the public and private sector will be working side by side with no communication as to what each one is doing and it seems that the individual is the one who loses out. For example, “the largest referral hospital has patients lying on the floor for lack of space, while the nearby largest private hospital  …will have empty beds.” The two sectors can really learn from each other.

“From the private sector- the management strategy which they use is more efficient and effective and is something ignored in the public sector. The issues of management, leadership and transparency are something to admire.” The public sector can set the priorities to achieve health goals. This is an area where a communication strategy can promote dialogue between the sectors.

Potential Misconceptions

There seem to be some misconceptions about PPP which need to be addressed in a communication strategy. And many times these misconceptions can lead to road blocks in PPP expansion as people are reluctant to engage in a fruitful dialogue. Some of the important misconceptions identified are on perceptions of the private sector. “There is a misconception in understanding the private sector. They feel it is a way of getting more money, getting better salaries. They do not see the real issue is not the salary but the effectiveness and using the best we have possible.”

Specifically, there is great fear of working with the for profit private sector. The concern seems to be that if partnerships were created between this and the public sector- it would lead to more corruption. The profit motive would lead to increased bribery and kickbacks. “Suspicion of the profit-making motive in health.”

Possible Messages

The health system needs to be considered in its entirety. Working with the public sector alone will not achieve much progress. By engaging the private sector, there will be optimizing use of limited resources. Specifically looking at how health problems in developing countries, there are needs to look at a multi-sectoral approach, and involving the private sector on some of these issues to focus on sustainability.”

The potential of the private sector can be harnessed to increase coverage and quality of health services- especially to the poor. Data from many countries show that many of the poorest go to the private sector for health services. “The benefit is higher coverage reaching the maximum number of people with a high quality of services.”

The public and private sector – each has its own comparative advantage. If both sectors were to work together – with the public sector providing a policy framework for the population and the private sector providing management and capacity, countries can come close to reaching the MDGs.

Implementing or expanding PPPs does not translate into increased health care costs. National economies and specifically health costs will improve with private sector partnerships.

The role of the public sector does not diminish in working with the private

sector. There is a misconception that the private sector will take over the responsibility of the public sector if PPPs were institutionalized.

Investing in the private sector is not necessarily at the expense of the poor or disenfranchised. By engaging the private sector, you have the potential to increase access to critically needed services and goods that otherwise would not be available. The private sector, through either its manufacturing or delivery capability are better positioned to deliver than the public sector, so its not at the expense of anyone and it’s a win-win situation.”

“What you get (health service) is more important than who delivers it.” The quality of health care service is more important than the source of its delivery. By partnering with the private sector you are increasing access to good quality care.

Public Private Partnership in Health: Myths and Way forward

Myths relating to Private Sector involvement in Health development

1. Health in Bangladesh is financed primarily by the public sector

2. The private health sector is mostly for the rich

3. The private health sector is insignificant in Bangladesh

Key issues faced by all Ministries of Health

  • Not enough resources in the public sector
  • Can not rely forever on development partners (donors) funds
  • Inadequate pooling in the private sector
  • Ineffective spending patterns

How the private health sector can help

  • Public / private partnership can help expand the pool of human resources
  • Private health sector can extend the reach of the public sector
  • Allows public sector to focus on those most in need
  • Private sector services and products require little support from donors and government budgets

Challenges in working together from the public and private sector perspective

Health sector is unusual

  • Health care as a public good vs profit maximization, thus it is highly politicized
  • Unique legislative and regulatory framework
  • Lack of reliable market information
  • Perceived high risk / low return
  • Barrier to entry may be high
  • Complexity of management
  • Critical role of the medical profession

Challenges to greater private sector participation

From the public sector perspective

  • Concerns about quality and how to control the private sector
  • Little dialogue and communication between the two sectors
  • Lack of trust between the public and private health sector
  • Suspicion of profit motive

Challenges in working with the private health sector

From the public sector perspective

  • The private health sector is highly fragmented and disorganized, creating a series of implementation challenges…….
  • Entry point to work with private sector is difficult
  • Activities with the private health sector are ad hoc, often not focused on priority issues
  • Little knowledge and information available on private sector (who, what, where)

Challenges to greater private sector participation

From the private sector perspective

  • Lack or no access to supportive infrastructure
  • Limited information sharing and restricted access to key information
  • Not invited to participate in strategic planning or policy reforms that affect the private sector

Challenges to greater private sector participation

From the private sector perspective

Infrastructure & Supplies

• Limited funding in low-income areas

• Inclination to use products or brands promoted by industry which may be more costly

• No access to preferential prices that are available only to public and NGO sectors

Motivation of the private sector

  • Private health sector providers need to earn a profit to stay in business
  • Are motivated by other factors common to public sector
    • Pride in skills and competency
    • Sense of professionalism
    • Desire to improve health of patients and community
    • Social mission
    • Strategic relations with local government
  • Public sector has more in common with private sector than you think

Public sector tools available to work with the private health sector

Financing

•Health insurance,

•Community based finance schemes

•Vouchers

•Tax exemptions

Regulation of private (& public sectors)

•Licensing

•Accreditation

•Certificate of need

Contracting

•Leasing

•Concessions

•Divestitures

Concluding thoughts

The private sector is already playing an important role in health care provision and this role will continue to expand significantly. Private sector is an untapped resource but there are many challenges. To harness the private sector will require changing roles, MOH leadership & help

……It is time to bring the private sector into the fold as partners to provide

Quality health services

The Case for Engaging NGOs in the HIV/AIDS Sector

Local NGOs around the world have demonstrated their capacity to mobilize communities and to act as intermediaries for a wide variety of population groups. NGO responses are increasingly recognized as critical in tackling the HIV/AIDS pandemic. NGOs are often far more efficient and effective at providing services than state agencies.

In responding to the HIV/AIDS pandemic, local NGOs bring a collection of experiences, technical capabilities, and connections that make them indispensable. NGOs often have a comparative advantage in responding to the complex and evolving landscape of HIV/AIDS. The strengths of local NGOs contribute significantly to their successes and the sustainability of their activities can be derived in one way or another from the close connection that the organizations have with the populations they serve.

Cultural competency and innovation: Most NGOs have a thorough understanding of local communities; they know the details of local constraints and issues and can effectively prioritize problems within their context. Local NGOs know how HIV/AIDS is understood and viewed in a particular community or sub-set of a community, and they can talk about it and initiate actions in ways that are understood by the community and deemed appropriate and acceptable.

Local NGOs often have a comparative advantage over governments, INGOs, and donors in their ability to inspire behavioral change, shape public discourse, and draw local attention to HIV/AIDS and the actions needed to combat it. By utilizing their comprehensive understanding of social, political, religious, and economic circumstances, local NGOs are often best prepared to identify new approaches and design new activities to locally resolve specific problems.

Linkages and knowledge networking: Local NGOs are uniquely positioned to initiate and establish close working relationships with other locally based groups in the public, private, and voluntary sectors. Partnerships and collaborations among different institutions allow local NGOs to focus on more specialized programmatic areas and enhance their ability to increase referrals to other NGO and governmental services. These partnerships also encourage networking, sharing best practices, and mentoring, thus encouraging more local ownership.

Responsiveness and flexibility: Based on their size, operating structure, and connection to the communities they serve, most local NGOs are in a better position than government bureaucracies to respond quickly to identified needs and opportunities at the community level. These characteristics also allow NGOs to respond flexibly to the complex and rapidly evolving pandemic, make mid-course adjustments as necessary, and tailor existing programs to local realities. For these reasons, local NGOs are able to rapidly scale up community programming and quickly and efficiently engage their communities to address HIV/AIDS-related advocacy issues.

Community mobilization: Many NGOs use their strong connections with beneficiary populations to garner community investments for interventions being undertaken. NGOs are among the strongest supporters and practitioners of methodologies that encourage local participation. Local NGOs have demonstrated their effectiveness in using participatory tools such as community mapping, focus groups, and participatory evaluation.

Accountability and commitment: Many of the NGOs involved in HIV/AIDS programs employ individuals who have been personally affected by the pandemic. Their commitment to making a difference is apparent in their passion and degree of involvement. Leaders of local NGOs have often worked in the health sector in their communities. These dynamic leaders can easily gain the respect and trust of both beneficiaries and local health care and other support service providers. These leaders may also assist in the reduction of the stigma surrounding HIV/AIDS by:

  • Involving people living with HIV/AIDS in stigma research and program design and evaluation;
  • Empowering communities to address stigma through awareness of accurate and updated information about HIV/AIDS and accompanying stigma;
  • Integrating and/or mainstreaming HIV prevention, care, treatment, and support activities into existing programs and facilities whenever possible;
  • Promoting legal and policy environments that keep stigma and discrimination in check;
  • Developing more practical tools for understanding and addressing the stigma;
  • Creating an environment that promotes stigma reduction within healthcare facilities, i.e., one that includes training, sensitization, and performance standards

Cost effectiveness: Local NGOs are often embedded within local communities and economies in such a way that they can provide services and assistance at a fraction of the cost that would be needed if the private sector or government entities were to implement the same programs. Activities targeted at individuals and families are often efficiently implemented by linking complementary services at different levels with each organization carrying out actions from their own sites.

Challenges to NGO Engagement

Most of the identified weaknesses and criticisms revolve around aspects of institutional capacity and limited scale impact. However, these criticisms often fail to recognize the broader infrastructure problems inherent in many developing countries that inhibit the growth and capability of the NGO sector. While many of the critiques of local NGOs are valid, it is not always sufficiently recognized that the most effective way to increase capacity is through practice. In planning for assistance, it is helpful to recognize the limitations and weaknesses that NGOs often struggle with. The key to becoming a more effective organization is to be able to identify their own weaknesses.

Technical capacity: The burden of providing effective HIV/AIDS services, particularly to marginalized groups, often falls on NGOs that may or may not have sufficient resources, experience, and tools to address the vast needs in their communities in a way that would be considered adequate from a public health perspective.

The myriad of skills expected from local NGOs is daunting and an area of increasing concern particularly in the complex situation of responding to the HIV/AIDS pandemic in resource-constrained settings. NGOs are expected to provide professional, community-based services in conjunction with professional monitoring, evaluation, and reporting. All of this is expected with scarce resources, inadequate access to technical assistance or standards, and little to no government guidance or support.

Replication or scale-up becomes a significant problem because it is difficult for NGOs to obtain sufficient infrastructure and staff to expand. Many local NGOs suffer from “brain drain” as trained professionals are hired away from their home communities by NGOs paying higher salaries. As a result, attracting and sustaining fully qualified and trained staff is yet another challenge.

Enabling environment: Many developing country governments have looked suspiciously upon civil society and NGOs as dissident political forces rather than complementary partners in development planning and implementation. While this is changing in many parts of the world, unfavorable legal, regulatory, and tax constraints continue to exist in many countries. Implementation of the necessary reforms may be extremely difficult in situations where government institutions and NGOs are competing for scarce assistance resources, there are genuine philosophical or programmatic differences, or a difference of opinion about the need for urgency.

Competing priorities: International NGOs inherently have greater access to resources than most national and local organizations and this access can give them the luxury of becoming strategically focused and donor-specific. Local and national NGOs on the other hand must often hop from project to project, frequently with different objectives and approaches, to keep the revenue flowing. This can limit their ability to focus and concentrate on becoming institutions of excellence in a particular service delivery area. The structures and values of NGOs can come to mirror those of the donor, and NGOs can face pressure from a donor to conduct a project in a manner that would compromise an NGO’s principles.

Representation: One result of the substantial increase in the amount of interest, attention, and resources being devoted to NGOs in the HIV/AIDS arena is that NGOs are being created without all of the traits and characteristics that give these institutions their comparative advantage.

Many NGOs become more akin to consulting firms than civil society organizations. These organizations may be composed of very smart and capable

Individuals, but they are often pursuing their own income-generation and diversification strategies rather than more altruistic objectives like community empowerment and development.

Stigma: Receiving increased donor funding may give the NGO and community more visibility and, in some cases, increased stigmatization particularly for those NGOs that serve marginalized populations, such as sex workers, men who have sex with men, and injecting drug users. Increased stigma may lead people living with HIV/AIDS to become severely demoralized and depressed.

Lessons in Effective Partnerships

Elicit input from stakeholders: Solicitation documents or program planning strategies that come out of an analysis of the operating environment and the input of stakeholders result in effective programs. Stakeholders provide valuable input into the criteria for partner selection in a particular context. Clear expectations and priorities articulated by donors in solicitations and planning meetings help organizations determine if this is the right opportunity for them and sets up the ground rules for a mutually beneficial relationship.

Make sure that partnerships are flexible

The most fundamental constraint to effective partnership is the intrinsically hierarchical nature of the donor-NGO relationship and the one-way flow of money from donor to local NGO to community.

Donors have requirements that include standard proposal procedures, report formats, duration, expectation of time-bound results, and a number of others. On top of these, the NGO has its own established structures, procedures, and requirements. It is imperative that donors recognize the strains that local NGOs face and the difficulties they have in becoming learning organizations while, at the same time, trying to make ends meet. Room must be made to accommodate a previously established local NGO structure and procedures within donor reporting requirements.

Create relationships of trust: Competing priorities must be accommodated in a relationship in which both donors and NGOs expect mutual trust, respect, flexibility, transparency, and responsiveness to poor communities. Donors must display trust in local partner organizations to effectively plan interventions and target beneficiaries in their own communities. The ability and willingness of a donor to partner with a local NGO as a colleague and peer providing advice and assistance in managing funding is much more effective than simply “funding” the local NGO.

Enhance self-awareness: In learning more about the characteristics of a particular NGO, a donor can help the NGO to learn about itself and how it can grow as an organization. Through a participatory approach, donors can help NGOs assess their needs and provide resources, technical assistance, and support to increase the ability of NGOs to provide effective and efficient services.

Donors should seek information from local NGOs regarding their missions, prior experiences, program maturity, technical expertise, absorptive capacity, financial capacity, internal organizational environment, and how they fit within the larger HIV/AIDS landscape of NGOs and the government.

Overcoming Challenges to NGO Engagement

Encourage multi-year and diversification of funding: Donors should recognize that NGOs vary. Diversifying funding among different types of NGOs and funding levels may increase their effectiveness at reaching their goals. Donors should allow and encourage local NGOs to diversify their sources of support to encourage the project’s future sustainability. Donors should also consider multi-year grants that are based on need rather than on funding cycles. Additionally, donors need to be aware that their funding may increase unrealistic expectations of local NGO staff, beneficiaries, and the community.

Short-term financing, in particular, places an undue burden on local NGOs to achieve unrealistic goals within a limited time frame and prevents local NGOs from investing in long-term planning.

Encourage NGOs to fully assess primary and secondary effects of increased funding: Successful engagement by local NGOs happens when local NGOs willingly align their goals and missions with donor funding. NGOs need to recognize the positive and potentially negative consequences that increased funding will bring. They need to make a conscious decision to move to the next level. Once engaged with an INGO, local NGOs need to capitalize on the opportunity and use the increased funding and visibility to leverage additional funding and advocate for themselves and those they serve.

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One thought on “Public Private Partnership

  1. Mahfuzur Rahman says:

    Private Public Partnership can be a big revolution for the country.