Appendix 7.3: Guidebook on How to Develop a Public-Private Partnership in Hospital Management

101 Pages·2013·4.61 MB·English

Appendix 7iii

Knowledge Resources on PPP in Health:

Guidebook on How to Develop a PPP in Hospital Management

TA 7257-PHI: Public-Private Partnership in Health
Consultant’s Final Report
Knowledge Series on PPP in Health
Guidebook on PPP
for Hospital Management

Knowledge Series
on PPP in Health
Guidebook on PPP
for Hospital Management
Asian Development Bank
Mandaluyong City Philippines
November 2012
ASIAN DEVELOPMENT BANK
6 ADB Avenue, Mandaluyong City
1550 Metro Manila Philippines
ww.adb.org
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are those of the authors and not of the DBP, DOH, PhilHealth, ADB,
or the ADB TA 7257 PHI: PPP in Health.
Technical Writers
Mary Anne Velas-Suarin
Juan Ma. Pablo Nañagas
Merlinda Belicario
Jose Miguel de la Rosa
Perla Soleta
Hilton Lam

Editorial and Technical Support Team
Emiko Masaki, Jaime Galvez Tan, Wilfrido Atienza, Bayani Agabin,
and the Project Management Team of the Credit for Better Health Care Project
of the Development Bank of the Philippines.
Design and Layout
Jason Valenzuela and Rustum Casia
Photography
Jimmy Domingo

Acknowledgements
We would like to express profound thanks to the following individuals
for their invaluable support and commitment:
Representative Emmanuel Pacquiao (Sarangani), Governor Paul Daza (Northern Samar), Governor Miguel
Rene Dominguez (Sarangani), and Governor Luis Raymund Villafuerte Jr. (Camarines Sur)
Antonio Esguerra, Lenin Tagabucba, Phillip San Jose, and Concepcion Natividad.
This Guidebook was developed through the ADB TA 7257 PHI: Public-Private Partnership in Health, which is
executed by the Development Bank of the Philippines, with support from the Department of Health and the
Philippine Health Insurance Corporation. Opinions expressed in this publication do not necessarily represent
those of the ADB, DBP, DOH, PhilHealth, or the ADB TA 7257 PHI: PPP in Health with the exception of
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nies or of certain products does not imply that they are endorsed or recommended by the ADB or its partners
in preference over other companies/products of similar nature. Likewise, any part of this publication does not
constitute investment or commercial advice. ADB, DBP, DOH, PhilHealth, and the ADB TA 7257 PHI: PPP
in Health make no representations or recommendations for any PPP modality or enterprise and following
the insights shared in this Guidebook does not guarantee commercial success of any venture. Cases or
opinions given in this Guidebook should not be taken as a promise or guarantee as to the occurrence of any
future event. Some sources cited may be informal documents that are not readily available. Articles may be
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ADB and/or the technical writer/s. This is an evolving document that may continuously be enhanced based
on new lessons and experiences. Therefore, insights, comments, and suggestions that may help in making
this document more useful and practical are welcome. Feedback may be sent through [email protected].
Table of Contents
Acronyms and Abbreviations ................................................................................................................................................ vii
Glossary .................................................................................................................................................................................... ix
Introduction ............................................................................................................................................................................ 1
Program Overview .....................................................................................................................................................................3
I. Why this Guidebook? .......................................................................................................................................................... 5
II. Reading Guide ..................................................................................................................................................................... 7
III. Developing a PPP in hospital management (Summary/Overview) ...................................................................... 9
IV. The Steps in Developing a PPP in hospital management .................................................................................11
Step 1: Determination of needs and review of the hospital services in the area ..................................................13
Step 2: Identification of stakeholders and their roles .....................................................................................................17
Step 3: Development of an implementation plan for the PPP ................................................................................... 23
Step 4: Development of a marketing/promotion plan ............................................................................................. 25
Step 5: Conduct of procurement ......................................................................................................................................... 29
Step 6: Implementation of the PPP ....................................................................................................................................... 33
References ................................................................................................................................................................................. 39
ANNEXES
Annex A. DOH AO 2012-0004 (for PPP in Health) ............................................................................................ 43
Annex B. A Simplified Tool in Determining Need for a PPP ....................................................................................... 49
Annex C. Notes on Conducting Market Study/Research ............................................................................................. 55
Annex D. Notes on the Development of a Feasibility Study ....................................................................................... 59
Annex E. Developing a Business Plan: List of Tasks ..................................................................................................... 61
Annex F. Directory of Health and PPP-Focused Organizations .................................................................................. 63
Annex G. Notes on Social Marketing ................................................................................................................................ 67
Annex H. Key Activities During the Bidding Process .................................................................................................... 71
Annex I. Other Procurement Documents ........................................................................................................................ 75
Annex J. Sample Contract Template on PPP in hospital management ..................................................................... 77
Annex K. Sample Monitoring and Evaluation Form .................................................................................................... 79
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Guidebook on PPP for Hospital Management
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Guidebook on PPP for Hospital Management
Acronyms and Abbreviations
ADB Asian Development Bank
AO administrative order
APP approved procurement plan
BAC bids and awards committee
BIR Bureau of Internal Revenue
BOT build-operate-transfer
CDA Cooperatives Development Authority
COA Commission on Audit
DBM Department of Budget and Management
DBP Development Bank of the Philippines
DILG Department of Interior and Local Government
DOH Department of Health
DTI Department of Trade and Industry
EIRR economic rate of return
EOI expression of interest
FDA Food and Drug Administration
FIRR financial rate of return
FS feasibility study
IPC Intellectual Property Code
IRR implementing rules and regulations
JVA joint venture agreement
KM Knowledge Management
LGU Local Government Unit
MDG Millennium Development Goals
NEDA National Economic and Development Authority
PHIC Philippine Health Insurance Corporation
PIPH Provincial Investment Plan for Health
PNDF Philippine National Drug Formulary
PPP public-private partnership
PPPH public-private partnership for health
PR purchase request
SEC Securities and Exchange Commission
SM Social Marketing
SMEC Snowy Mountain Engineering Corporation
TOR terms of reference
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Guidebook on PPP for Hospital Management
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Knowledge Series on PPP in Health
Guidebook on PPP for Hospital Management
Glossary
Build-Operate-Transfer (BOT) – In the Philippines, the BOT Law (RA 6957) (July 1990) and its amendments (May
1995) provide the legal framework for PPP. The original BOT Law specified a set of processes to ensure that
the government and the private proponent meet their obligations. However, the risk was with the private
sector, and the government entity had assured returns (fixed fee, percentage, or both). The amended BOT Law
provided a reasonable security package, clarified government support and incentives, liberalized the regulatory
framework, pro and allowed private sector proponents to directly submit solicited and unsolicited proposals
for infrastructure projects, provided a clear framework for structuring BOT contracts, and clarified the approval
process.
There are several variations in the BOT scheme, namely:
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Joint ventures (JVs) involve sharing of profits, losses, and risks and are either corporatized (i.e., a JV stock corpora-
tion is formed) or covered by an executive JV agreement and PPP institutional arrangements. In a JV, the govern-
ment agency contributes physical assets (e.g., building, land, hospital, facilities) and is a minority shareholder, but
retains significant control over the use of the property. The government’s share generates income or dividends,
and the agency may benefit from better market conditions in the future. Performance standards are established
and monitored.
Modalities/Other Modalities. PPPs may take the form of different modalities (such as a joint venture, which is
explained above). A PPP in hospital management, may therefore, adopt different modalities although the
assumptions in this Guidebook are based on a straightforward contracting scheme/arrangement, meaning, a
government organization forging a partnership with a private sector entity through a hospital management
contract. However, in any type or modality of a PPP in hospital management, due diligence must be exercised in
ensuring that both the clinical and administrative aspects of hospital management are clearly understood by all
parties concerned. Both the clinical and administrative aspects may be covered by the PPP arrangement or the
clinical or administrative aspect only. In both cases, the government entity must ensure that if it opts to enter
into a PPP arrangement, it is doing so with a clear understanding of what its roles are, the risks involved, the
requirements of the arrangement, the extent of control that it is willing to share with its private sector partner,
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Guidebook on PPP for Hospital Management