PHM-Exch> Hospital Public Private Partnerships Undermine Healthcare

[Claudio Schuftan]

From: Jomo <jomoks at yahoo.com>

*Hospital PPPs Undermine Healthcare*

*Jomo Kwame Sundaram, Anis Chowdhury*

SYDNEY & KUALA LUMPUR, Jan 22 (IPS)  - Despite all the evidence to the
contrary, and substantial opposition from community groups, public-private
partnerships (PPPs) are still being promoted to deliver sustainable
development.

Public-private hospital partnerships are supposed to ensure that the
private sector will offer much needed efficiency in healthcare provision.

However, any government considering healthcare PPPs should be aware of the
Australian experience, especially after what has happened with the Northern
Beaches Hospital, a PPP between the New South Wales government and
Healthscope.

The A$600m facility was officially opened with much fanfare on 19 November
2018. With a A$2.2 billion 20-year contract, it was billed as the flagship
project for the NSW government to hand over to the private sector delivery
of a wide range of public services from prisons to technical education to
health.

Profits before patients
The chief executive officer resigned two days after the official opening
amidst claims of critical shortages of staff, medicines and supplies since
it opened to its first patients on 30 October. Anaesthetists at the
hospital have threatened to stop performing elective surgery until critical
problems are addressed, leading to a crisis atmosphere.

The government and hospital authority describe the staffing and supply
shortages as ‘hiccups' and ‘teething problems'. But these are not trivial,
often involving life and death issues. In one particular case, a new
mother's life was put in danger after undergoing a caesarean section at the
hospital. Her attending doctors and nurses had to frantically try to source
blood and equipment to operate safely. Thankfully, that episode did not end
in any tragedies.

The Sydney Morning Herald has reported on complaints that the hospital has
been forced to cancel elective surgery perhaps due to lack of staff. The
facility suffers from a lack of basic supplies including syringes,
intravenous lines, medical swabs, saline bags, needles, wash cloths,
rubbing alcohol and maternity pads. It also reported inadequate nursing
staff and a large number of locum nurses.

The Australian doctors' union has warned the head of NSW Health that junior
medical officers were required to do ‘unsafe work hours'. For instance, one
intern was assigned 60 patients while junior medical officers were expected
to work up to six hours of overtime daily, usually unpaid. One doctor
reported working 110 hours in a week.

Costing taxpayers more
This latest healthcare PPP is also costing taxpayers more than what the
government announced before. For example, before the 2015 state election,
the former health minister said that the hospital would cost only A$1
billion. However, the true cost to taxpayers was A$2.14 billion.

This is not the only instance of healthcare PPPs going wrong. In the early
1990s, the NSW government opened the privately-operated Port Macquarie Base
Hospital. The authorities announced savings by ignoring additional
administrative and legal costs; it ended up costing about A$6 million more
than a public hospital of an equivalent size. The Auditor-General's report
concluded, "The government is, in effect, paying for the hospital twice and
giving it away".

Yet, the ‘teething problems' had not gone away 13 years after it was
privatised by the Conservative Government. Before its 20-year contract
period ended, the Labour Government felt compelled to buy back the hospital
for A$80 million.

Similarly, after years of losses, the South Australian government was
forced to buy back a privately run hospital opened by Healthscope in 1995
at a cost of A$17.5 million to the taxpayer. The Victorian government
bought back Latrobe Regional Hospital, opened in 1998 under a similar
agreement, two years later, after suffering A$8.9 million worth of losses.
Years later, the Victorian government announced plans to buy back Mildura
Base Hospital, the last remaining privately run hospital in the state.

Private operators not more efficient
Despite these spectacular failures, governments do not seem to learn from
past mistakes, instead continuing with more PPPs. Therefore, a dogmatic
belief that the market will provide healthcare more efficiently must be
behind the push for these partnerships.

The Australian Productivity Commission's 2009 report found that, on
average, the efficiency of public and private hospitals is similar
nationwide. Public hospitals in NSW and Victoria were more efficient than
their private counterparts by more than 3% and 4% respectively despite
operating far more in rural areas (generally much more costly), and their
high-cost responsibility to provide accident and emergency services.

More recently, the independent McKell Institute reported similar findings,
and noted a disconcerting trend of private operators only picking the most
profitable services to run, leaving the public sector with the more costly,
less profitable and onerous work. This allows private operators to capture
more profits while leaving the government, and taxpayers, with more risks
and costs.

Health rights undermined
Health is a right, and society (and therefore government) has a
responsibility to ensure that everyone has access to health services. But
with PPPs, the state becomes health service purchaser, instead of provider.
Under PPPs, private operators, previously earning patient fees and health
insurance payments, can profitably earn public funds meant to finance
patient services.

Profit-seeking is ‘distorting' patient-health service provider relations.
As noted by the New England Journal of Medicine, "Our main objection to
investor-owned care is not that it wastes taxpayers' money, nor even that
it causes modest decrements in quality. The most serious problem with such
care is that it embodies a new value system that severs the communal roots
and Samaritan traditions of hospitals, makes doctors and nurses the
instruments of investors, and views patients as commodities.''

Anis Chowdhury, Adjunct Professor at Western Sydney University & University
of New South Wales (Australia), held senior United Nations positions in New
York and Bangkok.
Jomo Kwame Sundaram, a former economics professor, was Assistant
Director-General for Economic and Social Development, Food and Agriculture
Organization, and received the Wassily Leontief Prize for Advancing the
Frontiers of Economic Thought in 2007.

***
-

Visit this story at
http://ipsnews.net/2019/01/hospital-ppps-undermine-healthcare
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