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Analysis

Public-Private Partnerships During the COVID-19 Pandemic

By Miriam Bello | Thu, 08/26/2021 - 11:20

Collaborative responses to face the COVID-19 pandemic have been the only way to reduce the impact of the worst sanitary crisis of the era. Still, industry experts think it is necessary to strengthen the programs already in place to drive healthcare forward. “We need to move to a simpler, more efficient health system, where the private sector plays a relevant role in improving access for everyone,” said Patrick Devlyn, President of the Health Commission of CCE.

Public-Private Partnerships (PPPs) have been a common and effective mechanism to address service provision in Mexico. These joint programs between Mexico’s public and private health sectors have been key to address testing, spread containment, reduce hospitalization, maintain supply chains active and advance the approval and packing of vaccines to combat the virus. PPPs are a multisectoral tool that predates the pandemic, used to tackle many of Mexico’s largest projects, such as Metro’s Line 12. PPPs are known to be more transparent contracts, as their information is publicly shared and updated.

Mexico has different PPP schemes, including:

  • Concessions

The private sector builds and operates the project. Generally, the investment is recovered through the fees paid by users. This scheme is used mainly for roads, ports and airports.

  • Financed public works

The private developer invests in a project and once it is constructed, the public entity pays back the total investment. This is generally used in the electrical sector.

  • Joint ventures

Particular risk-sharing schemes mainly for the hydrocarbon sector.

  • Public-private partnership contracts

Long-term contracts through which the private developer provides, partially or totally, infrastructure for the provision of public services. The public sector pays a monetary compensation to the developer for these services. This scheme is mainly used for hospitals, road maintenance, penitentiary centers and hydraulic infrastructure.

Active PPPs in Mexico

Mexico’s healthcare projects are driven by public-private partnerships contracts. All active projects are hospitals, which involve design, construction, equipment, operation and maintenance. To date, Mexico has eight operational PPP contracts in the health sector:

  1. Bajio Hospital
  2. Ciudad Victoria Hospital
  3. Ixtapaluca Hospital
  4. General Zone Hospital in Bahia de Banderas, Nayarit
  5. General Hospital on Tapachula, Chiapas
  6. Hospital in Merida, Yucatan
  7. General Hospital in the Mexico City South Regional Municipality (Tlahuac)
  8. General Hospital in Tepic, Nayarit

These types of contracts require a monthly performance report from the developer based on specific indicators for each of the services it provides, which enhances transparency and accountability for both parties involved.

There are other types of PPPs in the Mexican healthcare market established under different schemes. One is the construction of a new vaccine plant by Sanofi. Fernando Sampaio, Country Lead and General Manager of Sanofi Mexico and Sanofi Pasteur, shared with MBN that this plant, which began construction in 2018, will be the first in Latin America to produce the tetravalent vaccine against influenza, which will become part of the state by 2032. “This plant will allow the vaccine to be entirely produced in Mexico and exported to Latin America starting in 2024. This plant will be owned by the Mexican government from 2032.”

Prior to the pandemic, experts like Raúl Jacobo, Health Manager of CHG-Meridian Mexico, shared with MBN that “beyond just focusing on infrastructure, PPPs have great potential for the provision of certain procedures in the public sector, which would greatly help public hospitals and patients.” These type of collaborations gained relevance during the COVID-19 sanitary crisis.

“Mexico’s Hospital Consortium (CMH) established a partnership with the government to support patient care during the pandemic,” explained to MBN Javier Potes, Director General of CMH. After analyzing the capacity of the private sector to collaborate with the public sector, CMH and the Private Hospital Mexican Association (AMHP) realized that private hospitals had wider capacity as already programmed surgeries were being postponed due to fear of contagion. “This allowed us to negotiate with the government and to collaborate by offering our services to treat non-COVID-19 patients coming from public institutions.”

Through the initiative formally called Todos Juntos Contra el COVID-19 (All Together Against COVID-19) the beneficiaries of the National Public or Social Health System (made up of INSABI, IMSS, ISSSTE, SEDENA, SEMAR and PEMEX) were referred by their health institutions to private hospitals and clinics participating in the agreement, depending on the patient burden of public health institutions. This initiative is, according to the comments of Héctor Valle, Executive President of FunSalud to MBN, “the most relevant example of public-private partnerships for hospitals.”

FunSalud is another backer of PPPs in the health sector. During the pandemic, FunSalud and the federal government created the Juntos por la Salud (Together for Health) initiative based on the collaboration between them, the BBVA Foundation, TecSalud and the UNAM School of Medicine, which included more than 580 companies. Juntos por la Salud was created to protect the medical staff at the frontline of the pandemic, to expand access to ventilators and to support the national manufacturing of medical supplies during the first months of COVID-19 in 2020. The initiative managed to increase the installed ventilator capacity in the country by 85 percent and made a million and a half pieces of protective equipment available to health workers. It also distributed supplies, drinking water, food and lodging services for 619 hospital workers throughout the country.

Juntos por la Salud also led to the development of a Mexican ventilator. The INCMNSZ, together with engineers from FEMSA and Metalsa, designed and manufactured the Mexican ventilator VSZ-20-2 in 10 weeks. According to an official release from the federal government, these devices not only strengthen national capacity but have also begun to be donated to different countries, particularly in the Caribbean, in line with the Mexican commitment to solidarity, international cooperation for development and promotion of universal access to medical supplies.

Mexico has other less-structured partnership schemes between the public and private sector with great potential to propel the effectiveness of the national health system. One example is the One Novartis program that the company has with IMSS to enable this institution with digital tools, such as telemedicine equipment, to properly reach patients. This was especially difficult during the worst of the pandemic when it was difficult to arrange presential visits to the doctor’s office. On an MBN interview with Fernando Cruz, Country President and Head of Corporate Affairs and Communication at Novartis Group Mexico, he shared that through this alliance, the company is offering a telemedicine platform called Consultorio Móvil, which enables doctors to host remote consultations with patients without mobility complications or COVID-19 contagion risks.

Growing the Impact of PPPs

Infrastructure, technologies and human resources from the public and private sectors are required to close the access gap to quality healthcare services, Devlyn said in an interview with MBN. For Potes, structure and human resources to provide healthcare are the most immediate gaps to address. In terms on infrastructure, he proposes the continuity of the Todos Juntos Contra el COVID-19 program, so patients with social security can access private hospitals allied with the government, paying for services at the same prices established by the public sector. “Before COVID-19, the private sector would have around 40 percent bed availability, which could perfectly be used to treat patients from the public sector at those referenced prices.” Potes explained that under the right collaboration framework, the private sector could start investing in infrastructure to treat government beneficiaries, focusing on service provision rather than the building itself, as in regular PPPs. Within this model, the private sector would charge for its services instead of renting the building. “This is a much more effective way to secure patient access in both sectors,” said Potes.

A study on healthcare guidelines and policies during the COVID-19 pandemic in Mexico by Manuel Urbina-Fuentes found that while some historic collaborations were established during these troubling times, “the nature of the response by healthcare institutions duplicated efforts that could have been conducted homogeneously at an even earlier stage.” The study states that intersectoral and inter-state governance and collaboration should be readily available for a crisis. It also exposed Mexico’s problems regarding data collection, which present a barrier to determine epidemiological changes and the country’s response to such events. “The use of universal guidelines and policies across all institutions might simplify the job of those working on the frontline providing care.” The report also recommends the use of technology for the safe, effective and efficient delivery of services to the entire population.

Miriam Bello Miriam Bello Journalist and Industry Analyst