PPP Hospitals in Portugal

Transcription

PPP Hospitals in Portugal
from the
SNS Health Service Perspective
Mariana Abrantes de Sousa
PPP Days 2012 – UNECE, Geneva
21 - February - 2012
Agenda
PPP hospitals in the Portugal’s National
Health Service (SNS)
Hospital PPP Program, key dates and
events
Key options: Integrated versus
Infrastructure PPP contract models (with
or without clinical services)
Experiences, results, conclusions
http://ppplusofonia.blogspot.com
[email protected]
2
Agenda
events
3
Characteristics of SNS and the Health Sector
• SNS since 1979, direct provision of health services to
resident population of about 10 million users
• “Tendentially free” for users as per the Constitution
• As of 2004, 171 hospitals, of which 89 public, some
purpose built
• Mixed system
– SNS, conventions with non-SNS providers (about 10% hospital
services)
– Dual professional practice permittted,“funcionário público”staff
• Health spending/GDP above average and growing, high
public/total health spending
• SNS management in transition with transformation of public
hospitals from Public Administration into state-owned
companies, SA or EPE.
4
Source: OMS
Agenda
events
7
Main challenges
The SNS
The Government
Constraints
Constraints
o Old hospitals, some in historic buildings
o Maastricht Government deficit and
o SNS public hospital management
debt criteria (Maastricht)
problematic, inflexible, unresponsive
o Contain and reduce public spending,
o Little CAPEX procurement experience
especially for investment
within the SNS
o Public health spending growing
o Some experience shifting from pay-perfaster than total Government
input to pay-per-output with SA/EPE
spending
o Considerable experience with
Objectives
outsourcing to private providers
Rapid development of heath
Objectives
infrastructure without public
Consolidate health and quality gains, to
spending or public debt
levels at or above OECD averages
Cut annual public expense growth for
since 2000
budget sustainability
Increase coverage of services offered Overcome SNS project mangement
Increase efficiency at the hospital
and financing restrictions
level, affordability to users
8
Public entities envolved in PPP procurement
• Ministry of Health
–
–
–
–
Members of Government
SNS- ACSS central health system administration
SNS-ARS regional health administrations
Parcerias da Saúde, Health PPP Unit
Ad hoc unit reated within the MdS, but not integrated with
ACSS or other management units
• Each project procurement managed by a joint Health/Finance
Steering Committtee and joint Tender Boards responsible for
–
–
–
–
Preparation of tender
Bid evalution
Negotiations
Renegotiations
• “Visto” Court of Auditors (Tribunal de Contas) required for
contract effectiveness
• Contract management and payment responsibilities with the
regional ARS as the Public Partner
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Date
1995-Oct
2001-Sept
2001
2002-Aug
PPP Hospitals in Portugal - Key Events
New hospital Amadora-Sintra built by Govt, management contract
Creation of Parcerias da Saúde PPP unit, reporting to the Minister of Health
Announcement of first 5 PPP hospitals, with clinical services (Loures, Cascais, Braga,
VFXira, Sintra)
Legislation for PPP Health
2002
Announcement of second group of 5 PPP hospitals, with clinical services
2003
Launch of first Loures tender, cancelled in 2006
2005
Decision to limit to 4 integrated hospitals , and to move to infrastructure-only contracts
2002-7
Reorganization and consolidation of public hospital network, from SPA and SA to EPE to
gain efficiencies and economies of scale
2008-Nov
TdC visto on Cascais contract, refused earlier in July 2008
2008-Oct
SNS takes over management of Amadora-Sintra, transformed into Hospital, EPE
2008
Cascais signed, including clinical services
2009
Braga signed, including clinical services , Loures signed, including clinical services
2009-May
Cascais cancer medication dispute resolved by Arbitration Court
2010-Sept
VF Xira signed, 4th and last including clinical services
2010-2012
New hospital in operation Cascais (Feb 2010), Braga (May 2011), Loures (Feb 2012)
2011
IMF/EU/ECB troika - Assisted Adjustment Program, new PPPs suspended
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PPP Hospital Program Portugal
Public
Partner
ASR-LVT
ARS-N
Project
Cascais
Clinical
Services
yes
Tender
Sept-2004
PSC
€ million
Bidders
Bid NPV
€million
HPP/Teixeira Duarte
375
Financial close Feb-2009, in
construction, operating
1,186 as at Jan-2006
existing hospital since Sept2009
José de Mello
Saude/Somague
795
409 as at Jan-2005
Current Phase
Financial cose Fev-2008,
operating old hospital since
Jan-2009,operaional since
Fev-2010
Braga
yes
Jan-05
ARS-LVT
Vila Franca de
Xira
yes
Dec-2005
590 as at Jan-2007
Signed Aug-2010
José de Mello
Saúde/Somague/
Edifer
495
ARS-LVT
Loures
yes
Feb-2007
745 as at Jan-2008
Financial close Dec-2009,
operating since Feb-2012
Espirito Santo
Saúde/Mota Engil
578
AR´S-LVT
Lisboa Oriental
Todos os Santos
infra
April-2008
375 as at Jan-2008
Suspended
Salveo, Somague,
Teixeira Duarte
598, 612, 659
Suspended
Salveo, NPS, AlGharb, Teixeira
Duarte, Somague,
AS Algarve Saude
-
ART-S
Algarve
infra
ART-N
Gaia
infra
Angra, Terceira,
Azores
infra
RAA
May 2008
266 as Jan-2008
Suspendende
Oct-2008
Signed Aug-2009
Mota-Engil
Somague
-
The latest ppp hospital projects include only the infrastructure and ancillary services, with the SNS remaining responsible for clinical services.
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Agenda
events
12
The options
SNS to build and finance, and later to pay for services
operated by the private sector (Amadora-Sintra)
SNS to build, finance, pay and operate (Sta Maria da
Feira)
Hospital PPP integrated with clinical services, private
sector to design, build, finance, operate, SNS to pay
(Cascais, Braga, Loures, VF Xira)
Hospital PPP infrastructure, private sector to design,
build and finance, SNS to operate and pay (Algarve,
Terceira, Lisboa Oriental)
Increasing outsourcing to private providers
“convencionados”, through SIGIC surgical waiting list
13
The choice
•
•
•
•
•
PPP off-budget
Unique PPP model,
including clinical
services, to minimize
interfaces, optimize
efficiencies
Large, ambitious program
for critical mass, no pilot
Compensate low levels
of experience in SNS
with a Health PPP unit
and consultants
Use of PSC
• Good number of bids,
domestic bidders
• Crowded deal pipeline
• Delays, mostly in bid
evaluation and final
negotiation, average 3.5
year from launch to
signature
• Banks required corporate
guarantees for clinical
risk, limited market
14
Risk allocation depends largely
on political will…
• Fitch, 2003: The
Portuguese
govenment’s current
plan to privatise
clinical services, a
feat that has not been
attempted in other
European countries”
• Fitch, 2003: “In Spain and
Portugal, the concept fo
financial (re)equilibrium
gives confort with regard
to the possiblity of
Government intervention,
but this concept does not
exist in other countries”
http://www.developmentfund
s.org/pubs/Fitch%20PPPUK.pdf
15
The re-assessment
• 2004-2006
–
–
–
–
Long procurement delays
Impasse in bid evaluations
Complex specifications
Bidders limited to sponsors
with local clinical
experience
– Banks unwilling to take
clinical risk
• clinical performance,
• demand demographics
• price and regulatory
risks
– Bank ceilings on taking
sponsor corporate risk
• Since 2007
– Clinical services excluded (2005-2008)
– Specifications simplified
– Tender panel to include ARS, as “contract
manager” and payer
– Approval of final engineering designs
postponed to after signature
…. Responses to GFC finacial crisis
– Temporary sharing interest rate risk
not permitted
– Front loading debt, mini perm,
reimbursement, maturities
– Reliance on single bank funding
CGD, plus EIB
– Refinancing clause with gains for
Public Partner
• New PPPs suspended in 2011
16
Contractual structure - with clinical services
Scope
The frst wave PPPs include the provision of infrastructural as well as clinical services.
Public
Sector
Payment
Clinical
Contract
10 years
ShareShareholders
holders
Debt
Clinical
SPV
for the design, construction and maintenance of
the hospital building and fixed equipment.
Payment
Infra
30 years
Banks
Banks
Banks
It has a thirty-year contract and is responsible
Inter SPV
contract
Infra
SPV
Banks
Banks
Debt
Equity
Equity
Maintenance
Subcontractor
Subcontractors
Clinical SPV
Construction
Subcontractor
ShareShareholders
holders
The Clinical SPV has a ten-year contract and is
responsible for clinical services, ancillary
services and medical equipment acquisition and
replacement. Smaller investment needs and
difficulties defining clinical specifications led to a
shorter contract duration.
• Cleaning
• Catering
• Laundry
• Sterilization
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(…)
A contract between the two SPVs ensures coordination and both groups are
joint and severally liable to the grantor.
Contractual structure-Infrastructure
The second wave PPPs include only the infrastructural services, keeping the clinical services in public
responsibility.
Scope
Infrastructural SPV
Public
Sector
Payment
Infra
Contract 30
years
and maintenance of the building and fixed equipment.
Banks
Banks
Debt
ShareShareholders
holders
18
Infra
SPV
The soft facilities services have a 7 year duration.
Equity
7 years
Subcontractors
• Cleaning
• Catering
• Laundry
• Security
• Waste
• Sterilization
As in the previous case, the Infrastructural SPV has a thirtyyear contract and is responsible for the design, construction
30 years
Maintenance
Subcontractor
Energy and other
utilities
Construction
Subcontractor
Car parking
management
Commercial
activities
Hospital PPP in Portugal
Payment mechanisms
•
Clinical Services (first wave)
– Clinical activity
•
•
•
•
Impatient, unit price
Consultations, unit price
Emergencies, unit price, no ceiling
Outpatient, unit price
• Infrastructure and
support services
(second wave)
– Emergency services, availability
– Medications adjustment with
benchmarkikng
– Adjustments, deductions based on
performance indicators
–
–
–
•
Prices adjusted for inflation
Annual production limits by type, patients outside
the area, or private (non-SNS)
Third party revenues (insurance), shared with
grantor SNS-ARS
Infrastructure (first wave)
– Availabilty payments
–
• Debt service
• Component adjusted by inflation
Deductions for performance, service failures
capped at 10% of annual payment
– Availabilty payments,
inflation adjusted
– Ancillary
services,
adjusted by
occupancy and
inflation
– Deductions for
Availability failures, up
to 100% of annual
payments
19
Agenda
events
20
Clinical risk, the creditors,
and the financial markets
Banks never accepted clinical risks, required sponsor guarantees
Clinical risk taken by sponsor, in the form of corporate guarantees,
under existing credit limits of local and international banks
Inclusion of clinical services exhausted the field of potential bidders,
reduced competition
Market capacity to absorb clinical risk exhausted very quickly 20032005
NPV of payments at final bid, discounted at 6,08%, were consistently
but moderately below PSC
Cascais (Oct-2008) -7,8%
Braga (Feb-2009), -33%
Loures (June-2009), -20-3%
Vila Franca de Xira (July-2009) – 23%
The initial bids for the Oriental Lisboa hospital (April-2009), came in
significantly above the PSC, +50-75%, primarily due to the higher
financing costs, now suspended
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PPP Hospitals Portugal
Actual procurement
outcomes
• No pilot, but re-assessment led
to major shift in risk allocation
strategy
• Evolution of risk allocation to
international bank practice
• 5-6 groups entered sector in
order to present as bidders
• Long delays exposed projects to
more market risks, interest rate,
underwriting risk
• Concept of financial reequilibrium opens door to
renegotiations
Results
•
•
•
•
Government contraints and
objectives
– Compliance with Maastricht
criteria for Government deficit
of 3% of GDP and Government
debt of 60% of GDP
Four integrated hospital PPP
contracts signed, one infra hospital
in Azores
Great reliance on CGD local
Government bank and EIB
(Braga and Azores hospitals)
Cascais dispute over paying for
cancer medications in arbitration in
year 1
22
Clinical Services Pro and Cons
Integrated model
with clinical services
•
•
•
•
•
•
•
•
Transfer significant risks, such as
cost overruns and delays
Partners able to manage risks more
efficiently
More innovation and efficiency gains
expected, with synergies and whole-life
costing
Lower interface risks, infra/clinical,
Higher political sensivity
Contract management periodic, lower
conflict
Coincident with transformation of SNS
hospitais into SA and EPE
Ability to benchmark performance
(RSM 2010)
Infrastructure model
• Higher interface risks
• Lower political
sensitivity and risks
• Higher cost overruns
• Contract management
with daily interface
requires daily
cooperation between
landlord and hospital
staff, friction
23
Clinical services: to include or
not to include in the PPP
External Evaluation Report
(Barros, Simões, July 2009)
• Include in PPP routine
undifferentiated clinical
services, easier to contract
and benchmark
• Keep more differentiated
services in the public
sector, given difficulty in
establishing contractual
arrangements, incentivies
and monitoring indicators
Abrantes 2010:
• Key interface is with primary care
physician, not between infrastructure
provider and hospital staff
• Key criteria
– Budget sustainabilty and SNS-wide
efficiencies
– Risk appetite and pricing by
international sponsors, creditors
=> Exclude clinical services from
hospital PPP, unless managed
in integrated manner with the
primary care physician (médico
de familia) as doorkeeper (HMO
or Alzira model )
24
The health care sector is different
• Suppliers, service providers, strongly influence demand
• Taxpayer, as third-party payer, has great need for control
in dinamic situation
• Demand for health services growing with ageing
• Multiple interfaces
– Primary care versus specialists, MCDT, meds, hospitals,
continuing care
– Provider versus third-party payer
– Infrastructure versus clinical services is not the critical interface
• Budget sustainability will become the key constraint and
will depend as much on contract management as on
contract design, favoring simpler, transaparent contracts
25
Conclusions
•
•
•
•
•
Recomendations
No real substitute for public sector
contract managment capacity, training,
capacity building and rotations are
essential
Managing indirect public investment
through a 10-30 year PPP contract is
much more complex than managing
direct public investment 3-5 year
contract
Great attention to market risk capacity
and pricing in determining risk
allocation
Ongoing monitoring and evaluation key
to maintaing Value for Money in the
face or renegotiations and rebalancings
Value for money must include
concept of budget sustainability,
renegotiations and equilibrium for the
public partner, as well as the private
partner
•
•
•
•
•
•
•
Plan for public sector capacity building,
guidance, guidelines, reviews
Simplifty specifications, standardization of
documents and procurement procedures
Adjust to changing market conditions,
manage project pipeline to avoid crowding
and accumulation of external debt
Find alternative, even if temporary,
sources of financing to overcome funding
gaps and overly tight conditions
LT PPP funding vehicle to take over
operating project loans
Keep PPPs the exception, not the rule,
as a form of financing public
investment and public services, below
25% of relevant public investment
Include PPP contract obligations in
public investment expenditure and
public debt
26
Ageing Europe faces twin time bombs:
coming to a budget near you
Growing
pension
liabilites
Growing
pensioner
health care
liabilities
27
PPP Lusofonia
Come
visit
Portugal!
*BYOHI
Mariana Abrantes de Sousa
Independent Financial
Consultant
and PPP Specialist
PPP Lusofonia
Algés, PORTUGAL
tel. (351) 214 194 151
(* Please Bring Your Own Health Insurance )
Obrigada
http://ppplusofonia.blogspot.com Mariana Abrantes de Sousa [email protected]
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PPP Hospitals in Portugal

Transcription

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