Public-Private Partnerships for Health Services: Construction, Protection and Rehabilitation of Critical Healthcare Infrastructure in Europe

The Chapter places health sector Public-Private Partnerships (PPPs) in their wider historical context, and shows the market size over time; Europe has seen the majority of projects. We define the principal purpose of PPP as raising fresh capital on behalf of the state and introducing commercial project development capacities; all to create scalable, replicable and sustainable business models. There are two useful spectrums to consider: public to private, and “bundling” of activities to achieve risk management. We use four archetypal models to delineate bundling, with the more advanced models incorporating clinical services including outside of the hospital. Evidence in the literature is that are delivered and perform reasonably well but not noticeably better than state projects, with some dangers of locking in one of the parties, and inflexibility, particularly for the minimum-scope (buildings only) model. Payment systems vary, with “capitation” offering some benefits over others. Looking at hospital economics from first principles confirms that the infrastructure alone offers little cost leverage, and the major gains are in outsourcing clinical services. The politics of PPPs are difficult, and not getting easier. Since the global financial crisis, there have been difficulties in financing projects, either by the banks or by bonds.