As governments from both developed and developing countries increasingly look to PPPs as a way to expand access to high-quality health services by leveraging capital, managerial capacity, and know-how from the private sector, the amount of projects entering procurement and progressing towards completion is steadily increasing.
The focus of most healthcare PPPs is currently sectors of specialist need, such as diagnostics, ancillary, emergency and inpatient care, with the model continuing to evolve and extend the focus on other sectors such as preventative, primary care, rehabilitation, skilled nursing and home care.
In the UK, it would be fair to say that the PFI model, which was used to finance large healthcare infrastructure projects through the 1990s and noughties, has left a somewhat controversial legacy. A number of these projects are at the coalface of the current issues around behaviours in PFI contract management, with relationships soured by years of claims and counterclaims from both sides of the public-private divide.
Despite this, there have been signs that new projects could yet emerge in the UK health sector, with King’s College Hospital NHS Foundation Trust carrying out soft market testing on plans for a seven-year framework contract for design, build and finance projects. However, while a contract notice was due in July 2023, nothing has so far emerged - although the hospital told Partnerships Bulletin in October that the plans are still going ahead.
Meanwhile, in October 2022, the East of England Ambulance Service NHS Trust released a prior information notice seeking views on a potential design, build and finance contract for new ambulance hub facilities at a number of sites across Cambridge and Ipswich. Progress on that scheme, too, has since gone quiet.
It must be remembered, too, that the Lift programme has continued to be a successful way of procuring and delivering well run primary care facilities. As many who have worked in that programme will testify, the benefit of the model has been to bring the public sector - in the shape of the agency, Community Health Partnerships (CHP) - into the tent as an organisation with a clear share in each project, meaning problems are usually sorted out in a collaborative way rather than turning into a blame game.
This more collaborative approach has been embraced elsewhere, and Canada has long been in favour of using the model - despite some setbacks of its own, such as the Centre Hospitalier de L’Universite de Montreal (CHUM) project that suffered delays and significant cost overruns for its developer, Laing O’Rourke.
A remarkable six healthcare projects have progressed through various stages of procurement in Canada in recent months, with the Bayers Lake Community Outpatient Centre Project, in Nova Scotia, and the Corner Brook Acute Care Hospital, in Newfoundland and Labrador, both opening their doors to new patients in November.
Elsewhere in Canada, the Ontario Centre for Addiction and Mental Health (CAMH) Phase 1D DBF closed the request for proposals stage in October, with a PCL-led consortium being named as sole-bidder on the project.
Also in Ontario, the Gilgan Family Queensway Health Centre P3 and the Ottawa Hospital – Civic Campus Redevelopment both progressed to the shortlist stage, while the CHEO Integrated Treatment Centre – 1Door4Care Project, reached financial close in September.
Elsewhere in the Americas, Peru has launched two new hospital projects in recent months, as the Luis Arias Schereiber Military Hospital and the Victor Ramos Guardia de Huaraz Hospital projects both received state backing, with tenders due to be released imminently for both.
Meanwhile, in the US, the Maury Regional Medical Center in Tennessee and engineering firm Bernhard recently agreed a 25-year Energy-as-a-Service partnership, which is being implemented to act as the catalyst for Maury’s $115m facility improvement plan to enhance patient care and experience.
This deal represents a potentially fertile area of growth for the P3 industry, with energy facilities ripe for investment. A number of projects have already been developed on university campus sites to take aging energy facilities out of the hands of the universities themselves, so that they concentrate on their core focuses of teaching and research. In return, institutions can get modern energy facilities to power their campuses, helping to cut carbon emissions as well as freeing up cash for other activities.
Now, this model is starting to be applied to hospitals, which can often have similarly sprawling campus sites and which need to update their energy provision. The P3 model provides a good opportunity to meet the energy and financial needs of hospitals, so we can expect to see more of these types of deals being developed in the coming years.
In Australia, the Government of New South Wales, in collaboration with the University of New South Wales (UNSW), has signed a deal with a Plenary-led consortium to deliver a Health Translation Hub. The partnership involves the Plenary Health consortium funding, developing and operating the 35,600sq m facility, with an initial 20-year commitment from UNSW to occupy 65% of the available space.
More than just another hospital, this hub will bring together educational and medical researchers along with industry partners and public health officials to become a centre of medical research. As areas such as life sciences become increasingly popular and driven by a mix of private actors, public policy and technological breakthroughs, developing health hubs such as this could become another avenue for PPP schemes to explore.
Also in Australia, the New Melton Hospital Project in Melbourne recently progressed to the shortlist stage, with a winner set to be selected early next year.
Emerging markets are also seeing new healthcare projects being implemented, with Kazakhstan’s Karaganda University Hospital PPP currently in procurement, and Uzbekistan’s Dialysis Centres project opening its doors to patients in August.
And Saudi Arabia - now spreading its PPP opportunities into ever wider sectors - is also getting in on the act. In May 2023, the country revealed that 131 local and international companies responded to its expressions of interest (EOI) for its 150-bed Medical Rehabilitation Project. In the same month, 139 firms responded to the EOI for the Long Term Care (LTC) and Skilled Nursing Homes (SNH) project.
And in June 2023, the Altakhassusi Alliance Medical Consortium (AAM) was selected as the preferred bidder for Saudi Arabia’s Radiology & Medical Imaging Services Project.
With the country planning to use PPP models to help deliver its Neom megacity initiative, healthcare PPPs of increasing size may well be on the horizon.
So, far from flatlining, the trend for using PPPs to deliver new hospitals and healthcare projects continues to be on an upwards trajectory, in developed and developing countries alike.