Public Private Collaboration Workshop in Podgorica, Montenegro

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Public Private CollaborationWorkshop in
Podgorica, Montenegro

• Lessons from Practice
• Harald Maikisch, Sept. 17-18, 2007

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• Vorarlberger Krankenhaus-Betriebsgesellschaft

Landeskrankenhaus Feldkirch Landeskrankenhaus
Bregenz Landeskrankenhaus Rankweil Landeskrankenha
us Bludenz Landeskrankenhaus Hohenems
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Typical schedule line of a hospital
Source BAUER G. (2004/10) Austrian Hospital
Journal
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• Medizinprodukteaufbereitung Vorarlberg

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• Medizinprodukteaufbereitung Vorarlberg

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• Medizinprodukteaufbereitung Vorarlberg

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• Lessons from international experience
• CS 1 Shared Hospital Sterilization Services, A
• Abstract
• The study explains the foundation of a company to
  run a sterilization unit for 3 hospitals by a PPP
  model in Vorarlberg, Austria, during the year
  2003 - 2007. The public Vlbg. Krankenhaus-Betriebs
  gesellschaft m.b.H. (KHBG - the management
  company, which is the legal representative of the
  hospitals of the Land Vorarlberg) founded
  together with a private company (SteriLog
  Austria) a company (MPAV - Medizinprodukteaufberei
  tung Vorarlberg GmbH.), which now is responsible
  for the sterilization of the medical equipment
  for three hospitals (Landeskrankenhaus Feldkirch,
  Hohenems and Bludenz).
• The decision was made for a Greenfield project to
  be open for the future. It shows that a powerful
  partnership of the public with private
  organizations may help to improve the rendered
  services to the people of the country and at the
  same time achieve a more efficient structure and
  organization leading to a reduction of required
  funds.
• The unit was opened on 9th of February 2007 and
  is up an running.

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• Lessons from international experience
• CS 1 Shared Hospital Sterilization Services, A
• Project
• The supervisory board of the KHBG decided, not to
  build three sterilization units in three
  different hospitals, but to build one large unit
  as a Greenfield project. It was decided first to
  reorganize the workflows and the assemblage of
  the medical instruments, second to assign the
  operational work to a private partner and as step
  three to found a company together with a private
  partner by a PPP - model. Therefore a search for
  a private partner was made by a European three
  level tender. Because step one was very
  successful and the private partner proved to work
  excellent, step two (management contract) was
  cancelled. The supervisory board decided
  unanimously to switch directly to step three and
  to found a company together with the private
  partner (ownership 51 KHBG, 49 SteriLog
  Austria).
• The company Medizinprodukteaufbereitung
  Vorarlberg GmbH. MPAV (conditioning of
  medical products Vorarlberg) was founded on the
  7th December 2005.

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• Lessons from international experience
• CS 1 Shared Hospital Sterilization Services, A
• Dates and duration
• The process was started in December 2002
• In March 2003 the supervisory board (SB) gave its
  O.K. for the execution of the European tender
• The SB approbated in December 2003 the award of
  contract with the private partner
• 26th of January 2004 - official Kickoff
• March 2004 the SB decided to choose the
  Greenfield project
• End of September 2004 the SB decided to start the
  PPP
• December 2004 acceptance of company agreement for
  the PPP
• 2005 was mainly used for planning the new unit
• The new company was founded on the 7th December
  2005
• Start of construction 29th May 2006
• End of construction January 2007
• Opening ceremony 9th February 2007
• Validation February 2007
• Production start 26th February 2007

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• Lessons from international experience
• CS 1 Shared Hospital Sterilization Services, A
• Fiscal effects
• a) The KHBG does not have to provide funds for
  the modernization of the sterilization units in
  its hospitals by itself. The cumulated
  investments of the private company for the
  Greenfield project are 5,4 Mio. The investments
  for reconstruction of three different locations
  would have been a lot higher.
• b) The agreed payment per sterilization box is
  fixed at production costs. Additional external
  business volume could reduce the production costs
  per box by 26,7 within the next 8 years. This
  would be equal to a reduction of 1 Mio. every
  year.

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• Lessons from international experience
• CS 1 Shared Hospital Sterilization Services, A
• Lessons learnt
• A successful public-private-partnership requires
  professional, dedicated experts on both sides. By
  implementing clear rules to the private
  companies, a smooth and fast transition may be
  achieved. An early communication with political
  decision makers, managing staff an operational
  staff is very helpful.
• The skills (European tender, contracts, project
  a.s.o.) are very high and need time. It is
  necessary, to define the risks and to determine
  which partner has the responsibility for which
  risk. Within the contracts one of the most
  important things to do is to fix the tariffs and
  the calculation for future increase. You need to
  define the level of services in a service level
  agreement (SLA).
• To invent a PPP model is in general a project of
  change management. So it is very important to
  consider the usual requirements of change
  management (as example J.P. Kotter), especially
  to come up against the fears of staff. High
  skilled staff is very important, so it is
  necessary to take care for excellent training of
  the staff.
• It is necessary to take care for the logistics,
  because there is a high potential for savings by
  structuring the workflows.
• Each partner brings in his knowledge, expertise,
  money, experience, time or other resources.
  Especially a specialist in his business is better
  informed about new technologies, future
  developments a.s.o.

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• Lessons from international experience
• CS 1 Shared Hospital Sterilization Services, A
• Main results
• The advantages for the KHBG are
• - Savings on investment
• - Beneficiation of the budget
• - Faster and cheaper construction
• The advantages for the public hospitals are
• - Higher quality offered
• - Conformation to international standards
• - Additional income from additional contracts
• - Reduction of administrative work
• - Reduction of staff related administration
  (qualification, payments etc)
• The advantages for the staff are
• - Better working conditions
• - Better professional formation
• The advantages for the patients are
• - Better service quality due to validated chain
  of functions

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• Lessons from international experience
• CS 1 Shared Hospital Sterilization Services, A
• Risks
• The possible negative effects of privatization of
  a sterilization unit are mainly the usual PPP
  risks
• - Difficult contracts
• - Long time bonding
• - Partnership with a private partner
• - Acceptance of a PPP model by the staff
• The risks were avoided by
• - High quality tender
• - Contracts made by experts
• - Special clauses for disconnection with the
  partner if necessary
• - Involvement of the highly skilled medical staff
  in the
• privatization process from the beginning of the
  project

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• Lessons from international experience
• CS 2 Danish National e-Health Portal
• Abstract
• The National e-Health portal (sundhed.dk) is a
  public internet-based solution that collects and
  distributes healthcare Information among citizens
  and healthcare professionals in Denmark. The
  portal is a unique solution that brings the
  entire healthcare sector together on the
  Internet, and thus provides a comfort table
  setting for citizens and healthcare professionals
  to meet and efficiently exchange information.
• Patients, their families, and the healthcare
  providers are able to communicate and to get an
  overview of correct and updated healthcare
  information. The National e-Health Portal is an
  important supplement to the Electronic Patient
  Records (EPR).

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• Lessons from international experience
• CS 2 Danish National e-Health Portal
• Project
• This public-private cooperation (PPC) is a huge
  project. The initiative was launched by the
  Association of County Councils in Denmark, the
  Ministries of the Interior and Health, Greater
  Copenhagen Hospital Board, Copenhagen Municipal
  Authority, Frederiksberg Municipal Authority, and
  the Danish Pharmaceutical Association.
• The Danish public health portal Sundhed.dk is one
  of the major elements in the national Danish
  eGovernment and eHealth strategy. The ambition
  has been to create a common framework of entrance
  to Danish healthcare with the intention of
  co-ordinating healthcare service provision, in
  such a way that everyone has secure access to
  common information and services across a
  decentralised healthcare system.

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• Lessons from international experience
• CS 2 Danish National e-Health Portal
• Dates and duration
• Project Start February 2003
• Phase I (Information Portal)
• 9 month till December 2003
• Phase II (Collaboration Portal)
• 15 month till July 2004
• Phase III (Application Portal)
• 24 month till March 2005

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• Lessons from international experience
• CS 2 Danish National e-Health Portal
• Fiscal effects
• Some of the greatest savings are
• The average savings per message are 2,30. These
  messages are discharge letters, lab- results,
  prescriptions, referrals and reimbursements.
• Among 50 minutes per day in medical practices,
  because the electronic processes have optimized
  the workflow.
• Reduction of 66 of all telephone calls in
  hospitals.
• On a high level, this means 60 Mio. Euro per
  year!

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• Lessons from international experience
• CS 2 Danish National e-Health Portal
• Lessons learnt
• As part of the Danish eGovernment and eHealth
  strategy, Sundhed.dk is a major step in making
  healthcare information more accessible for Danish
  citizens and health professionals. The project
  has set the ambitious goal to gather information
  from a highly decentralised public healthcare
  system and create a single entry-point for
  citizens offering a broad spectrum of health and
  healthcare information. This ambition has become
  reality.
• The portal is not limited to a simple
  information provider but it also grants users the
  opportunity to perform sophisticated health
  transactions from the comfort of their home. It
  incorporates in its functions digital signatures,
  which ensure the security of transactions.
• Sundhed.dk is an example of a service whose
  operation became possible by the presence of
  existing infrastructures that were in fact
  health-specific.
• To build an all-purpose health portal for a
  decentralised healthcare system like the Danish
  one takes some effort. Sundhed.dk has tried to
  put as many services as possible online and
  became the main portal for Danish health.

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• Lessons from international experience
• CS 2 Danish National e-Health Portal
• Main results
• Moving away from paper-based prescriptions from
  the general practitioner (GP), 81 of
  prescriptions today are sent electronically
  directly to the pharmacy. The solution is based
  on the full integration of electronic
  communications with the GPs electronic
  healthcare record and the pharmacy systems.
• Functions available for healthcare
  professionals
• - Access to data stored in electronic patient
  records (1,25 Mio.!)
• - Access to laboratory test results
• - Access to editing own practice declaration
  (GPs)
• - Personalisation (own profile and customised
  information)
• - Visit data and access to confidential phone
  numbers
• - Profile areas practice information
• - Regional clinical guides, consensus reports and
  reference
• programmes
• - National clinical guides
• - Access to job vacancy board for the healthcare
  sector

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• Lessons from international experience
• CS 2 Danish National e-Health Portal
• Risks
• Acceptance
• Many different groups are involved
• Funding
• Huge investment
• Practicability
• High technical skill of project

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• Lessons from international experience
• CS 3 Privatization of Dialysis Care in Romania
• Abstract
• The study explains the privatization of dialysis
  centers in the Republic of Romania during the
  year 2003 - 2005. Together with the International
  Finance Corporation (IFC), a subsidiary of the
  World Bank, the Government in Romania enacted a
  health care reform which will be realized in
  various steps.
• It shows that a powerful partnership of the
  public with private organizations may help to
  improve the rendered services to the people of
  the country and at the same time achieve a more
  efficient structure and organization leading to a
  reduction of required funds.

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• Lessons from international experience
• CS 3 Privatization of Dialysis Care in Romania
• Project
• The trend of increasing dialysis patients forced
  the Government of Romania to find new ways of
  financing the required services and to bring the
  service level up to European standards. It was
  decided to follow the spirit of the ongoing
  health care reform which aims at buying
  integrated services. Finally the decision was
  taken to privatize eight dialysis centers. The
  target centers needed to be reequipped in order
  to continue to provide dialysis treatment to the
  patients at the European quality and service
  standards levels. The National Health Insurance
  Fund (NHIF) contracts dedicate 20 million Euros
  per year as expenses for those privatized
  services. The funds are paid directly to the
  providers of the integrated dialysis services,
  thus free of charge to the patients. The awarded
  companies are obliged to construct a new facility
  within eighteen months reequipping the centers
  with state-of-the-art dialysis facilities and
  providing training to the personnel. Furthermore
  the companies have to guarantee the employment of
  the personnel.

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• Lessons from international experience
• CS 3 Privatization of Dialysis Care in Romania
• Dates and duration
• The project lasted from 2003 (start of the health
  care reform) to Nov. 2004 (finalization of the
  privatization by means of a tender). The tender
  specification and bidder qualification process
  lasted from beginning of 2004 to mid 2004. So
  this was a very fast processing of a PPP.

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• Lessons from international experience
• CS 3 Privatization of Dialysis Care in Romania
• Fiscal effects
• a) The National health insurance fund does not
  have to provide funds for the modernization of
  the dialysis facilities in its hospitals by
  itself. The cumulated investments of the private
  companies are 12,4 Mio. The investments are
  realized within 18 months after awarding of the
  contracts.
• b) The additional investments required within the
  next 5 10 years in order to provide dialysis
  treatment to the growing patient number are
  estimated to reach 5 10 Mio. Again those
  funds are not provided by the NHIF but by the
  private companies.
• c) The agreed payment per one treatment of
  dialysis was fixed at 110 being 20 less than
  the amount paid to the public hospitals. The
  annual savings at the current number of
  treatments are 4 Mio. Considering that within
  the next 5 10 years the prevalence rate will
  reach EU levels ( 500 patients / 1 Mio.
  inhabitants) the savings double to 8 Mio. per
  annum.

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• Lessons from international experience
• CS 3 Privatization of Dialysis Care in Romania
• Lessons learnt
• The major positive lesson is that a successful
  public-private-partnership requires professional,
  dedicated experts on both sides, the public and
  private sector. By implementing effective laws
  that provide clear rules to the private
  companies, a smooth and fast transition may be
  achieved for both sides. A well-designed
  privatization process is attractive to both the
  public and the private sector as it allows
  realizing the advantages outlined above (win-win
  situation).

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• Lessons from international experience
• CS 3 Privatization of Dialysis Care in Romania
• Main results
• The dialysis facilities are reequipped with
  state-of-the-art equipment. The personnel are
  trained. Thus the provided service is on EU
  level. The treatment capacities for dialysis
  patients are increased.
• The government achieved both a better service to
  the public and a considerable reduction in budged
  funds.
• The advantages for the staff are
• - Better working conditions
• - Possibly higher salaries
• - Better professional formation
• The advantages for the patients are
• - Better service quality
• The advantages for private companies are
• - establish long-term business plans

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• Lessons from international experience
• CS 3 Privatization of Dialysis Care in Romania
• Risks
• The possible negative effects of privatization
  may have been only for centers outside the
  hospital environment (externalized centers)
• - The reduction of the quality of nephrologists
  assistance
• - The emergence of tension between the
  externalized centers and the ones within the
  hospital building when referring patients for
  dialysis treatments
• - The improper use of the skilled medical staff
  and the loss of positions as heads of departments
• The risks were avoided by
• - implementing independent nephrologists
  departments in certain cities
• - making compulsory a pre-contract of the
  departments with the private
• providers for the attendance of patients
• - Special clauses related to the medical staff
  (assurance of employment,
• training programs etc).
• - Involvement of the highly skilled medical staff
  in the privatization process by imposing
  conditions to the bidders

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• Lessons from international experience
• CS 4 PPP Psychosomatic Centre Austria
• Abstract
• In Lower Austria for an emergency hospital on the
  verge of being closed down a perspective pointing
  the way ahead by a strategic re-orientation and
  by means of a public-private partnership was
  opened up. The Psychosomatic Centre Waldviertel
  (PSCW) will be opened on 1st July 2006. This new
  unit will ensure the psychosomatic (holistic)
  treatment of patients from Lower Austria and the
  neighbor provinces. The new construction will
  need investments of approximately 14,5 Mio.
  This model is completely new to Austria. There
  are similar solutions in Germany. With this
  approach the goal is to bring in that know-how
  into Austria and to adapt it to Austrian needs
  and terms.

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• Lessons from international experience
• CS 4 PPP Psychosomatic Centre Austria
• Project
• The PSCW is operated by a project company
  composed of the hospital association Waldviertel
  (share 51), of ROMED (share 39 ) and VAMED
  (share 10 ) in the form of a public-private-part
  nership (PPP) model.
• Legal entity of the Psychosomatic Centre is the
  hospital association Waldviertel. The management
  is taken on by the project company. Within the
  framework of the project company, ROMED will be
  responsible for the operation, VAMED for
  planning, building and, optionally, for the
  facility management, and the hospital association
  Waldviertel will be responsible for the provision
  of the infrastructure.
• The Psychosomatic Centre Waldviertel offers
  capacity for 100 patients architecture and
  furnishing convey the character of a hotel.

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• Lessons from international experience
• CS 4 PPP Psychosomatic Centre Austria
• Dates and duration

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• Lessons from international experience
• CS 4 PPP Psychosomatic Centre Austria
• Fiscal effects
• The treatment of the causes of illness shortens
  the patients time of suffering and leads to a
  relief of the cost units up to an amount of
  several millions of euros.
• Cost advantage as against conventional hospital
  treatment
• - Daily rate hospital approximately 440,--
• - Daily rate psychosomatics approximately
  250,--
• - Therefore cost advantage approximately 12
• In this model there is not more argumentation for
  cost effectiveness. There is still a need for
  scientific studies to proof the evidence of this
  general assumption.

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• Lessons from international experience
• CS 4 PPP Psychosomatic Centre Austria
• Lessons learnt
• From the sum of the order, 47 percent remain
  directly within the region, further 33 percent in
  the environs, i.e. 80 percent will remain in the
  Land of Lower Austria.
• It is necessary that the quality of the
  psychosomatic treatment is ensured by
  comprehensive quality assurance programs such as
  examination, securing and improvement of patient
  care and clinical supply.
• In this model the medical and economic relevance
  is being confirmed by an inter-university
  advisory board composed of high-ranking
  personalities active in the health system. It
  showed, that this was important for the
  politicians and the public as kind of a
  guarantee for the decisions.
• The inter-university advisory board is to
  develop quality standards for psychosomatic
  treatment and, later on, check their observance.
  So in the future this board will be very
  important for quality assurance.

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• Lessons from international experience
• CS 4 PPP Psychosomatic Centre Austria
• Main results
• Advantages of psychosomatic treatment
• Wide-ranging studies identified statistically
  significant reductions in
• - days of hospital treatment
• - outpatient consultations
• - drug consumption
• The nationwide integration of psychosomatic
  medicine leads to improvements in many different
  areas.

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• Lessons from international experience
• CS 4 PPP Psychosomatic Centre Austria
• Risks
• There is a far-reaching assumption of risks by
  VAMED, ROMED and consortium of banks. VAMED bore
  the technical risk of building and operating and
  is responsible for logistics and technical
  management.

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If you want to get more information http//ww
w.khbg.atContactProk. Dipl.KH-BW. Harald
Maikisch, MSc, MAS Vorarlberger
Krankenhaus-Betriebsgesellschaft
m.b.H.Carinagasse 41A 6800 FeldkirchTel. 43/
5522/303/5007Fax. [phone]e-mail h
arald.maikisch_at_khbg.atMany thanks for your
attention!