By .. Thibaut MOURGUES, Member Executive Committee, WAPPP and Managing Partner at 4IP Group....

 

In a time of emergency such as what we are all currently experiencing, many people tend to believe that Public Private Partnerships (PPPs) are not the most suitable tool to contribute to the fight against a pandemic. The reason is that PPPs in the meaning of the World Bank usually refer to infrastructure projects that require

years of planning, design and construction before providing any operational support. Could they be wrong? Could PPPs be effective also in time of crisis?

Actually not everybody agrees on the meaning of the term “PPPs”. It could also refer to all sorts of cooperation between public and private sector. NGOs can be swiftly mobilized at the local or international level for first aid intervention when the public sector is either overwhelmed or even non-existent in underdeveloped areas; private hospitals contribute to the care of the population (with the caveat that the poorest may be excluded on the ground of non-affordability); and of course, in a market economy, the private sector under public supervision is in charge of producing drugs and medical equipment, as well as participating in R&D either alone or in partnership with public institutions.

However, we believe that PPPs in the usual sense can also play a decisive role in fighting a pandemic. PPPs can be described as long-term contracts between public sector and private partner where the private partner contributes to the financing and the operation of the facilities while supporting a substantial burden of project risk. Whereas, it is certainly the responsibility of the public sector to imagine how this can be achieved and then proceed to planning and execution, the community of PPP professionals and academia has a role to play in bringing in their ideas and expertise.

The first step to well-thought planning requires to draw the lessons from the current crisis. I will mention three conclusions that make consensus:

  1. The risks of Pandemic have been constantly underestimated in development strategies both at international and country level. The damages in terms of human, financial and economic losses generated by the current crisis are far from being known, but we can already be sure that the consequences will be felt for many years ahead. However, a look back at recent history shows that recurrent incidents of this type have had an impact mostly at the regional level (Sars Covid 1, Ebola,…) but may easily extend to the global level (HiV, H1N1,…). The question that inevitably arises is whether we have not collectively focused too exclusively on risks such as climate change and simultaneously undervalued all other global risks that did not fit into this pattern. This is not to say that climate change risk should not be tackled but that biological risk (being both likely and high impact) should receive much more attention - and funding- than what it currently does.

 

  1. Mistakes committed in the design of health systems and the health policies result in a weakening of our capacity to address the pandemic. Most Governments have been taken by surprise (no strategic stocks of masks, lack of hospital beds) and are constrained to use for prolonged period of time traditional instruments such as quarantine that paralyze the whole countries and are difficult to implement above a few weeks. Although armies routinely train to act in a context of NBC (nuclear/biology/chemical) war, this has not extended to civil defense. Even PPPs may have played a role in the poor preparation: Turkish analysts (but is true of other countries as well) criticize the tendency of PPPs to favour the construction of extra-large facilities ill-suited to handle pandemic: high risk of contamination, including for staff, long distance from urban centers that complicate logistics, and centralized management of the crisis which is poorly adapted to a context requiring flexibility, speedy reaction and local initiative.

 

  • International coordination mechanisms have revealed their weaknesses while the pandemic knows no boarder. Specialized institutions such as WHO have been relatively slow to react and did not play the role demanded by the circumstances; regional organizations such as EU have been largely passive; national States showed short-sighted egoism (France and Germany declined to supply Italy with protection masks when the need was more urgent and the pandemic had not started yet in Paris and Berlin).

Building on these lessons, several areas could be explored. We start from the assumption that the advantages of PPP are as significant for health PPPs as in other and more traditional sectors: private sector can mobilize funding, show flexibility and taste for innovation, and withstand substantial risks. Despite these considerations, health PPPs have been relatively low to take off at global level, which would deserve a more detailed analysis including cultural, regulatory and other factors. Suffice to say that we believe that well designed health PPPs should be part of any healthcare policy.

In the short term, we recommend as emergency response to undertake PPP-like schemes:

  • Improvement in international cooperation with the sharing of resources and facilities both at public and private levels
  • Testing of drugs and therapies
  • Production of medical equipment
  • Mobilisation of hotels and other large structure to be transformed into emergency hospitals (which would be in practice be very similar to a traditional PPP except the short-term duration)

The long-term response should include:

  • Redesign of the health policy to be more geared toward pandemic risks
  • Improvement in the investment and operating climate
  • Massive investment into biotechnologies and research. PPPs are possible in this area as R&D can be financed by private companies and conducted partly or not in public laboratories and hospitals.
  • Building strong international cooperation and/or new organisations that may bring response both in terms of policy, human resources, facilities and equipment and facilitate global response to pandemics that spread all over the world.

In developing countries, in a context of low financial capacities, more emphasis on prevention and primary aid may appear as low hanging and more affordable fruits compared to building expensive hard infrastructure. An interesting example is the private system Babylone developed in UK and successfully implemented in Rwanda (under the name Babyl): this on-line system provides diagnostic and proposes therapy through sophisticated artificial intelligence which allows to by-pass the lack of medical staff. On the therapeutic front, regional cooperation should anticipate crisis situations, the optimum use of health facilities at regional level as well as the deployment of medical staff where needed. This could be facilitated by international agencies with substantial financial resources.

In developed countries where budget allocated to health are significantly higher, hard infrastructure should be tailored to the expected needs. As a minimum, emergency solutions should be prepared for deployment in advance of any pandemic; in a time with travel restrictions when hotels empty, the use of hotels facilities to be redeployed as field hospitals should be anticipated and prepared through PPPs rather than requisitions. It could mean that the construction of new hotels or the refurbishment of existing ones could anticipate the temporary medical use, with some of the additional cost born by the Government.

Health is heavily regulated a sector where many view with suspicion the intervention of the private sector. Governments should strive to canalize the energy and enthusiasm of the private sector toward public interest. Atmosphere of mutual mistrust shows its limitations in time of national emergency. The current background of national consensus on the opposite provides the opportunity of a change of mind: Governments should play a strategic role and build a playing-ground that make it easier for the private sector to bring its comparative advantages.

One thing is sure: health budgets, whether public or private will have to substantially increase especially in developed countries with ageing demographics. This is also an opportunity for growth, job creations, reduction of inequalities, and a significant step toward the SDGs 30 - whatever the circumstances.