Health Policy February 18, 2019
Building the right healthcare infrastructure

By News - World Healthcare Journal

Planning to ensure the right facilities for populations, in the right places is vital, say Roger Widdowson, Ravi Suri and Dr Anna van Pouke

Health systems in Asia, Africa, Latin America and the Middle East are gearing up for unprecedented expansion in access to healthcare. Governments here and elsewhere around the world are examining how private sector partners can contribute investment and skill to help them achieve it.

One of the attractions of Public Private Partnerships (“PPP”s) is accessing latest “lean” approaches to healthcare service delivery, leveraging current technology and care pathways. This has meant that we have already seen a move away from the traditional hospital construction into much more layered and differentiated infrastructure that ranges from:

  • Complex intervention centres, concentrated around ‘hot floors’ where 24/7 acute and complex care takes place; where logistics are focused on optimised patient flows and high levels of efficiency; increasingly, the complex intervention centres will function as a digital signal posts supporting care delivery in the community and at home. Optimisation of this digital model means that expensive infrastructure can be kept to a minimum.
  • Community Public Health centres where primary care and less acute and complex specialist care are combined, services are focused on population segments and groups with similar clinical need. These facilities can form an integrated network around the complex intervention centre and services can be fine-tuned to the special needs of these populations.

  • Care at home: with newer technologies, more and more care will be delivered at home. This does not only mean less need for expensive infrastructure but also means that digital technology and AI can deliver continuous monitoring of the patient population. Over time, this will improve care and outcomes.

  • Lastly, the core of the healthcare infrastructure moves from bricks to clicks. Based both on digital care delivery at home or close to home and on the increased use of data and analytics, and artificial intelligence, care delivery will move from treatment and curation to continuous monitoring, prevention, early detection and early intervention.

“Globally, the need for infrastructure investment is forecast to reach $94tn by 2040”

– Ravi Suri, KPMG


Funding and operating healthcare infrastructure

KPMG research last year into the Global PPP market for healthcare highlighted that many countries are expecting to rely heavily on private sector involvement as they work towards the UN Sustainable Development Goal of healthcare access for everyone by 2030. The attraction for governments is achieving maximum benefit for limited public capital. Populations get higher quality healthcare at the same or lower cost, and the private sector players generate sustainable returns in new and rapidly growing markets. This is a “triple” win.

The scale of infrastructure investment is enormous. Globally, the need for infrastructure investment is forecast to reach $94tn by 2040.

PPP, or some form of Private Sector Participation, offers capital and expertise, but the models widely used in the West over the last 20 years may not be appropriate for middle-income countries where much of the infrastructure development is required and markets are less mature.

“We have already seen a move away from the traditional hospital construction into much more layered and differentiated infrastructure”

– Dr Anna van Poucke, KPMG

PPPs involve an exchange of risk and responsibility in return for financial reward. A suitable legal framework is a basic requirement for PPPs, covering the use of PPP and also the contracting for services under PPPs. The development of a robust business case, which is capable of use by multiple stakeholders across government and the investor and operator communities, is also essential.

In many countries health data is limited, but it’s possible to model demand based on data from basic local population data combined with demand and case mix data from other countries. This, with an appropriate framework for paying for healthcare, are key components we use for a feasibility study for each project. This is the precursor to a business case which will be relied on by governments, investors and operators.

There are now multiple sources of development funding, and both domestic and international construction companies with credentials in health infrastructure. There are also many long term healthcare infrastructure owners and funders for operating assets, which have a lower risk profile than a development project so a cheaper cost of capital, so more creative funding structures than those historically used are possible.


The critical success factors for PPPs

  1. Government must provide the strategy and vision for the health system. Clarity of objectives enables clarity of requirements for potential PPP partners.

  2. Be obsessed with detail and allow sufficient time for needs assessment, planning, bidding and checking. Value-for-money analysis and planning for different scenarios to a “base case” are important as operator contracts are long term and things change.

  3. Tendering and robust procurement are vital to ensure value for money. The best outcomes require proactive and regular engagement between investors, operators, construction partners, advisors and government to ensure clarity of what the request is, and what sort of solution could work.

  4. Develop PPP expertise within government that can advise on suitability of projects, establishing appropriate legal framework, assist with procurement and engaging with stakeholders

  5. Ensure that data and assumptions used for planning and VFM are reliable – not just through a healthcare lens but also the more holistic impact on the local economy, employment and environment.


“Good risk mitigation for projects, funding from export credit agencies at attractive rates and long tenors would make the value for money calculation look favourable for PPP projects in the healthcare space" 

– Roger Widdowson, KPMG


Designing, procuring, tendering, contracting and operating PPP projects is complex. When complete they also need integrating into the wider healthcare infrastructure.

“Good risk mitigation for projects, funding from export credit agencies at attractive rates and long tenors would make the value for money calculation look favourable for PPP projects in the healthcare space" 


E: roger.widdowson@kpmg.co.uk | T: +44 7768 826114


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