Insufficient financing, allegations of mismanagement, poor infrastructure and an inability to attract and retain human capital within public healthcare have resulted in the government encouraging partnerships between the public and private sector to address these obstacles and bring about positive change.

While public-private partnerships (PPPs) are not a complete solution to the problems facing public healthcare, the benefits of PPPs are far-reaching and have the potential to bridge numerous gaps in healthcare delivery. Collaboration between private and public sectors encourages greater levels of efficiency and quality, increases availability to expertise and investments into infrastructure and medical technology as well as presenting the opportunity to improve staff performance.

PPPs can take various forms, but essentially there are two types of partnerships. The first entails a private company performing an institutional or municipal function and the second involves a private party acquiring the use of state or municipal property for its own commercial purposes.

While these two structures provide the basis for PPPs, various hybrid forms of contractual agreements between the sectors have emerged to meet specific healthcare service delivery needs.

The opportunities for engagement and investment in PPPs have taken on a number of forms to date. Examples include private companies offering facilities management services to public sector hospitals, as is the case at the Western Cape Rehabilitation Centre and Lentegeur Hospital.

In other cases, private companies or consortiums have assumed responsibility for the designing, financing, construction and operation of public facilities for a fixed period of time before transferring operational responsibilities back to the public sector. Inkosi Albert Luthuli Hospital in KwaZulu-Natal, Humansdorp District Hospital and Port Elizabeth Hospital in the Eastern Cape are examples of this model.

Netcare, one of the three major hospital groups in the private healthcare industry, provides another example of PPPs by delivering skills training to public sector staff, an example of which was Netcare’s development and pre-hospital skills training of Free State Provincial Emergency Medical Services personnel.

The rental of facilities in government institutions and academic hospitals is another PPP model that allows for the delivery of private care and the opportunity for academics and specialists to work in both the public and private sector, encouraging skills retention in the public sector.

Currently, private participants in public healthcare have recognised the potential and necessity for investment within the various framework already under way.

The actual construction of hospitals and clinics is one area of investment that has been specifically identified to revitalise healthcare delivery in the public sector.

Partnering with the private sector can make a significant impact on the ability to deliver and maintain infrastructure on a large scale and leverage private-sector skills and resources in the healthcare delivery process.

Other benefits of the private sector partnering with the public healthcare sector include the reduced financial, operational and technical risk for the institution in question, fast and cost-effective execution of projects, and freeing up scarce public funds to be put toward improving overall healthcare delivery.

PPPs in healthcare can promote black economic empowerment adoption, encouraging black equity ownership and black skills development over the duration of the projects.

A flagship PPP hospital project initiated in 2009 was the Chris Hani Baragwanath Hospital. The project involves the reconstruction, revitalisation and upgrading of facilities at the largest acute-care hospital in the world.

The objective of the partnership is essentially to improve medical service delivery in the district by refocusing Chris Hani Baragwanath Hospital as a specialist centre referral hospital, providing mainly level-three and some level-two medical services.

At the same time, the restructuring of the hospital will include the revitalising and upgrade of satellite district hospitals to handle the high volume of level-one and level-two medical care.

The capacity of Chris Hani Baragwanath Hospital will be reduced from 2 800 to 1 200 beds, with primary-care beds being redistributed to planned district hospitals. The redistribution of beds will make healthcare accessible to remote or under-serviced areas where primary-care delivery is most needed.

The benefits for Chris Hani Baragwanath will be that the quality of care will be more focused and improved, and cost-effectiveness in the healthcare delivery system will be improved.

The government continues to drive healthcare PPPs to reform medical care in preparation for the institution of the National Healthcare Insurance (NHI) scheme said to commence in 2012.

The NHI model will be based on need rather than the ability to pay, with a focus on the needs of communities. The initial rollout will focus on areas with little to no access to quality healthcare.

There are five key healthcare PPP projects under way in South Africa, of which Chris Hani Baragwanath is the largest – with the aim to increase capacity, modernise medical services and improve facilities.

The other PPP projects are the Nelson Mandela Academic Hospital, Limpopo Academic Hospital, Dr George Makari Hospital and King Edward VIII Hospital.

The benefits of PPPs in healthcare do not only include the quality of care and speed of healthcare delivery within the public sector. The private healthcare sector can benefit from access to a wider patient base and the potential to generate additional revenue – ensuring positive change and transformation in healthcare, whether in private or public medical institutions.

The potential for investment in medical PPPs runs into the millions and provides an opportunity for private companies to advance economically while contributing to necessary social change in the country.

While South Africa’s workforce and social dynamics face crippling consequences because of the prevalence of HIV/Aids, tuberculosis and high infant mortality, an improvement in healthcare service delivery is key to ensuring the longevity of the economy and the country as a whole.

PPPs offer one solution to building a healthy South Africa that can sustain itself well into the future.

Taryn Springhall