Opinion: How public-private partnerships can unlock billions for health financing

How can public-private partnerships unlock billions for health financing? Photo by: Pixabay

By 2050, the world’s population is expected to rise to over 9 billion, with 2 billion people above the age of 60. Governments have agreed on a very ambitious set of Sustainable Development Goals to address the challenges inherent in population growth of this magnitude.  

Recent estimates by the World Health Organization published in The Lancet state that reaching SDG 3 — which addresses healthy lives and well-being — would require new investments increasing over time from an initial $134 billion annually to $371 billion by 2030 in order to address the health challenges for 67 low- and middle-income countries.  

To put this number in perspective: About the magnitude of this amount, the total global development aid across all sectors reached an all-time peak of $142.6 billion in 2016, an increase of 8.9 percent from 2015 after adjusting for exchange rates and inflation.

Practical steps to make PPPs work for Africa health systems

African health ministers met with the private sector in Dakar for the 2017 Africa Health Business Symposium to discuss how to lay the groundwork for successful public-private partnerships in the health sector.

It is clear that no single government, civil society, or the private sector can foot this bill. New mindsets, technologies, models for collaboration, financing, and delivery approaches are needed to ensure all people receive the care that they need. The good news is that we have already seen a few projects successfully tackling challenges of similar magnitude.  

We immunized 640 million children and prevented more than 9 million deaths in the process in the past 17 years. How?

By 2000, global efforts for vaccinations had begun to plateau. To address that, a new business model was introduced in order to accelerate the access to lifesaving vaccines in the countries that need them the most. This was the birth of Gavi, the Vaccine Alliance which took place at the World Economic Forum Annual meeting in Davos in 2000. Gavi’s model is to pool demand from the world’s poorest countries, sending a clear signal to manufacturers of a large and viable market for vaccines. Predictable, long-term donor support, together with country co-financing, provides security for countries to adopt vaccine programmes. It also makes it possible for manufacturers to make new investments in production capacity. As a country’s income grows, its co-financing payments gradually increase to reduce the donor reliance and sustainably cover the full cost of vaccines. Manufacturers are better able to plan their production and supply the right vaccines at more affordable prices.  

We saved 22 million lives from the deadliest infectious diseases AIDS, malaria and tuberculosis in just 15 years. How?

A new financing and partnership model was developed based on the principle that all those involved in the response to the diseases should be part of the decision-making process.

Governments, civil society, communities affected by the diseases, technical partners, the private sector, faith-based organizations, and other funders must partner in the response which must be implemented by the countries themselves. Country ownership means that people determine their own solutions to fighting these three diseases, and take full responsibility for them. Each country tailors its response to the political, cultural, and epidemiological context. Ongoing financing depends upon performance and proven results, carefully monitored and verified by external parties called Local Fund Agents. This is how the Global Fund to Fight Aids, TB and Malaria operates: It is a financing institution, providing support to countries without implementing programs on the ground. Its 10-year anniversary was celebrated at the Annual Meeting of the World Economic Forum in Davos, when a new round of funding of $750 million was announced by the Bill & Melinda Gates Foundation.

We can avoid the annual global cost of a severe pandemic which could reach as high as $570 billion, or 0.7% of global income. How?  

Ebola and now Zika demonstrate the persistent risks to countries which do not possess adequate capacities to prepare and respond to emerging pandemic threats. Ebola alone affected 28,639 people and caused 11,316 deaths, leading to a $2.2 billion in GDP lost in Guinea, Liberia, and Sierra Leone, threatening not only macroeconomic stability but also food security, human capital development, and private sector growth. How can the world prepare for the next pandemic?

The Coalition for Epidemic Preparedness Innovations is preparing us for that. CEPI wants to galvanize the development of new vaccines against diseases we know could cause the next devastating epidemic by creating an innovative partnership between public, private, philanthropic, and civil organizations to tackle the barriers to epidemic vaccine development, advancing safe, effective, and affordable vaccines to contain outbreaks at the earliest possible stage. The focus is on two main objectives: Advancing at least four vaccine candidates against two to three priority pathogens to proof-of-concept in five years, to enable clinical efficacy testing in the initial stages of a potential outbreak; and building technical and institutional platforms to accelerate research and development response to known or unknown pathogen emergencies. CEPI is also exploring how to support multivalent Ebola vaccine R&D and facilitate regulatory preparedness and stockpiling.

We can help emerging economies gain access to life-saving health care innovation. How?

Most of the innovative technologies and health care delivery approaches today are very expensive for emerging economies. For example, access to health care professionals: Nigeria has roughly 14 percent of the number of doctors per capita of Organisation for Economic Co-operation and Development countries. To catch up, it would need approximately 12 times as many doctors by 2030, requiring — under current training models — about $51 billion or 10 times current annual Nigerian public health spending. Thus, new models and approaches have to be adopted.

One such approach is innovative financing provided through risk pooling, social impact bonds or equity investments, and deployed via health insurance, loans, extended payment terms or leasing structures such as managed equipment services, or MES. In Africa, the Kenyan government is providing citizens with access to improved medical services including the latest medical technologies, training and skills development across 98 Ministry of Health hospitals through an MES with GE Healthcare for over $450 million. This convenes implementation partners, lenders, risk insurers, and advisory services in a new approach for risk and reward sharing and credit underwriting, for a big ticket health care modernization.

Another approach is based on innovative delivery systems. In Andhra Pradesh, India, the Health Management and Research Institute developed a program for pregnant women in remote areas to consult obstetricians and gynaecologists in Hyderabad through an internet-based video system accompanied by community health workers. Initial results indicate that the system has helped raise the rate of safe hospital or clinic deliveries by 50 percent.

Building on the experiences with public-private partnerships, we might yet be able to find the billions our world’s global health goals require.

Read more Devex coverage on public-private partnerships.

The views in this opinion piece do not necessarily reflect Devex's editorial views.

About the authors

  • Arnaud Bernaert

    Prior to joining the World Economic Forum as head of global health and healthcare industries and system initiative, Arnaud Bernaert was senior vice president at Royal Philips in charge of global strategy, business development, and mergers and acquisitions for Philips Healthcare, the $13 billion in sales unit of Royal Philips based in Boston.
  • Dessislava Dimitrova

    Dessislava Dimitrova is the lead for Health Systems and Healthcare Joint Ventures at the World Economic Forum, and served as deputy minister of health in Bulgaria.