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Thursday, September 23rd, 2021

Introduction of PPP mechanisms in health sector to create conditions for infrastructure development

by March 14, 2017 Market

“It is very important to attract private investment in the health system. Since health care is a branch that constantly requires investment,” Y. Birtanov said.

Thus, in spite of the active construction of health facilities and the yearly increase in budget revenues to the industry, the infrastructure deficit in the health sector of the Republic of Kazakhstan remains high. More than 60% of health organizations are located in premises with a service life of more than 30 years from the time of commissioning, about half of them are housed in non-typical buildings, many health organizations are not provided with the necessary equipment. This, according to the minister, leads to irrational use of funds for the exploitation of outdated buildings, hospital management costs, low rates of introduction of modern technologies, which ultimately affects the quality of services provided.

The need to develop infrastructure and attract modern technology in the medical industry will require significant budgetary costs. In this situation, PPP will be the main tool for attracting the necessary financial resources.

The Ministry of Health together with mayor’s offices compiled a list of facilities offered to private investors for construction, privatization and trust management. There are two directions for investors. As part of the first, a private investor builds health facilities at his own expense, reimburses his costs on the basis of a long-term contract and receives income associated with activities during the life of the facility. Within the framework of the second direction, the Ministry of Health proposes to take over the existing, but low-efficiency state facilities, in order to reduce the investment load, based on the quality criteria of the activities of these organizations. Local executive bodies are actively working in both directions. 9 objects in different regions have already been transferred to management.

“We believe that the private sector has the opportunity to invest in capital repairs, re-equipment, purchase of sanitary transport and a higher motivation for work because today’s funding is based on the final result. In the future, the compulsory social health insurance system will also be clearly evaluated based on the final result,” Minister said.

An agreement with the Asian Development Bank (ADB) on the preparation of 4 pilot PPP projects in the field of out-patient care was signed. ADB has already allocated over 200 thousand dollars to prepare pilot projects in 2016. The bank is ready to allocate more than 500 thousand dollars for this sphere in 2017.

Source: The Prime Minister of Kazakhstan