Public-private partnerships (PPPs) may be the answer to boosting healthcare infrastructure and medical training to cope with the rising demand of aging populations in Southeast Asian countries.
Healthcare challenges such as inadequate training, shortage of healthcare professionals (HCPs) and infrastructure shortages are putting pressure on Southeast Asian countries to provide affordable, accessible and high-quality healthcare to its aging populations.
These challenges have been driven by the rising incidence of chronic diseases such as cardiovascular disease and cancer, which require long-term management and care.
Healthcare Infrastructure and Access
One of the pressing challenges in Southeast Asia is the lack of healthcare infrastructure, especially in rural and underserved areas. In Southeast Asia’s more prosperous countries, there are fewer than three hospital beds per 1,000 people, while many of the low-middle-income countries have less than one hospital bed per 1,000 people.
Public-private partnerships (PPPs) can play a pivotal role in improving healthcare infrastructure. By leveraging private-sector expertise, financing, and technology, governments can expand the capacity of their healthcare systems without bearing the full financial burden. PPPs can lead to faster project completion, higher quality facilities, and better resource management.
However, the history of PPPs in the region’s healthcare is one of mixed results. In the past two decades the Philippines has initiated dozens of public-private healthcare projects under the Public-Private Partnership Center framework, including the Modernization of the Philippine Orthopedic Center, the Vaccine Self-Sufficiency Project II, Upgrading and Modernization of 24 Department of Health (DOH) Retained Hospitals including Cancer Center Projects.
However, many of these projects have faced challenges, particularly of long-term sustainability. In the Philippines, public-private partnered projects which are fostered by international donors are often not self-sustaining, and non-government organizations (NGOs) and development agencies are often very dependent on these donors.
Additionally, the government does not play a pro-active role in these arrangements, so when international donors withdraw, they tend not to step in to ensure the projects’ continuity. With no donor and government support, public-private projects cease. Changes in government can have a negative impact on the continuity of partnerships, so any sort of government participation can appear piecemeal and lacking any overall framework or long-term strategy.
On the ground level, financial arrangements for public-private projects have often been too weak and loose, and not pegged to performance, despite PPP managers indicating that monitoring and evaluation is a routine activity. The lack of accountability contributes to a lack of efficiency in the allocation of resources.
Additionally, PPPs tend to be led by passionate volunteers and donors who approach projects in a haphazard way instead of professionals with relevant experience who institute protocols with which to operate and engage with various stakeholders, and ensure they are consistently implemented.
Despite such issues, public-private projects in the Philippines have generally had a positive effect, making possible projects which would have otherwise never got off the ground. Ultimately, the success of a public-private partnership in achieving its objectives and producing good outcomes depends on the presence of several factors, which include:
1. The regulatory environment, local policies and markets must be conducive for PPPs to grow and thrive.
2. The careful design of contractual agreements such that terms and conditions have been adapted to the services of interest, and unique local conditions and circumstances.
3. The support of a government partner who is consistent in monitoring and evaluating the processes and outcomes of the partnership.
Malaysia has had a better track record with PPPs mainly because the government has had a more coordinated approach, with well-defined goals and expectations. PPPs are one of the government’s key strategies to support sustainable growth of the private sector, with the establishment of the Public-Private Partnership Unit (Unit Kerjasama Awam Swasta – UKAS) in 2011 under the Prime Minister’s Department.
Such partnerships enable the organic integration of private and public healthcare systems through sharing of medical equipment and facilities. For example, there are private wings located inside public hospitals where patients are charged different rates to access public and private healthcare services, although essentially utilizing the same equipment and manpower. As 20% of private hospital beds are expected to be empty most of the time, public system patients are often placed in these beds.
Some Southeast Asian governments hope that by drawing on private sector funding and expertise they will be able to extend services to underserved areas more efficiently and improve healthcare access for all populations.
Enhancing Healthcare Affordability
Despite economic progress, patients' ability to afford healthcare remains a significant issue in Southeast Asia, where in most countries a substantial portion of healthcare expenditure is still paid out-of-pocket especially for middle- and low-income families. In countries such as Thailand, the Universal healthcare system (UHC) has been successful in providing patients with basic healthcare services and medications, but does not cover advanced therapies and services for the management of chronic conditions.
According to Dr Praneet Sajjachareonpong, Dermatologist at Bangkok’s Phyathai 2 Hospital in Thailand, “Although we have made strides in treating psoriasis thanks to the UHC, access to advanced therapies such as biologics remains limited for some patients especially for those with more severe forms of the disease. While we can obtain special approvals for patients who do not respond to other therapies to access biologics, the processes and paperwork that enable them to do so at subsidized rates can be time-consuming. Additionally, upon approval, this arrangement is only valid for six months, and thereafter the patient will either have to reapply for the special approval or continue paying for the drug at the regular price.”
Public-private partnerships can provide governments with an opportunity to reduce the cost of healthcare services while maintaining quality. These collaborations often lead to the co-development of affordable treatment options, price regulation, and subsidies for life-saving medications.
Axios International is an example of the private sector supporting healthcare ecosystems in Southeast Asia by helping patients access innovative therapies for chronic conditions such as cancer and rare disease.
Dr Joseph Saba, Chief Executive Officer (CEO) of Axios International says, “We work directly with each patient to devise a flexible instalment plan, based on his or her condition and needs, where the patient pays a portion of the cost based on what they can afford, while the rest is covered by third-party organizations such as insurance and pharmaceutical companies, charities, and NGOs.”
Fostering Innovation and Technology
One of the biggest obstacles to improving healthcare in Southeast Asia is the adoption of advanced medical technologies. Limited resources, infrastructure gaps, and inadequate training prevent the wide-scale implementation of innovative technologies such as artificial intelligence (AI), telemedicine, and robotics in healthcare systems.
Public-private partnerships (PPPs) provide a mechanism for governments to bring cutting-edge technology into their healthcare systems. The private sector, particularly in industries such as healthcare IT and biotechnology, can provide the innovation, infrastructure and technical expertise needed to transform how healthcare is delivered. Governments, on the other hand, can create regulatory environments conducive to the adoption of technology and digitalization.
In the Philippines, the Bill & Melinda Gates Foundation supports the Strategic Purchasing for Primary Health Care (SP4PHC) project which aims to improve the way governments purchase primary health care services, with a focus on family planning and maternal, newborn, and child health.
The project provides technical assistance to national and local governments to strengthen healthcare purchasing policies and practices in support of the implementation of the Universal Health Care (UHC) Law enacted in 2019 to demonstrate applicability, incubate innovative ideas, and generate evidence. Under the UHC Law, local governments at the city and regional levels can build mixed networks supported or provided by public and private providers that can deliver primary, secondary, and even tertiary services.
Workforce Training and Capacity Building
Many Southeast Asian nations such as Vietnam and Indonesia suffer from a low doctor-to-patient ratio, and a general shortage of other skilled healthcare professionals (HCPs). There are also challenges in training, with HCPs unable to access modern training programs, particularly for cutting-edge medical techniques and technology.
PPPs can play an important role by supporting workforce training initiatives and providing funding for healthcare education to help build healthcare capacity. PPP collaborations with medical institutions, technology providers, and international health organizations, and governments can help to supply healthcare workers with more and better ongoing training and education opportunities.
In the past PPPs were mainly used in the energy, telecommunication and transport sectors in Thailand, but in recent years, the Thai government has been more open to healthcare PPP projects to develop tech, biopharma, and infrastructure projects.
To improve the PPP investment framework, the Thai government introduced a new Public-Private Partnership Act in 2019 (the “PPP Act”), which replaced the 2013 PPP Act. The new Thai PPP legislation focuses on a wider range of strategic sectors and infrastructure, which is determined to be critical for the future socio-economic development of Thailand.
For example, in Thailand, the government has partnered multinational companies such as GE Healthcare, hospitals, and educational institutions to provide training programs that equip local healthcare professionals with skills in radiology, diagnostics, and imaging. Such cross-sector collaboration ensures that HCPs are better equipped to manage both routine and complex medical cases, ultimately improving the overall quality of care in the region.
The Thailand Board of Investment (BOI) also offers a wide range of healthcare investment promotion incentives including for medical robots. The BOI has three classifications for medical robotics which cover manufacture of automation equipment with engineering design, assembling of robots or automation equipment and parts, and manufacture of high-risk or high-technology medical devices.
Apart from BOI, many public and private organizations have been working closely together to drive medical innovation. The Ministry of Science and Technology, Ministry of Public Health and Ministry of Education have jointly set up a committee with a key responsibility to promote medical and health-related innovations using grants, PPPs and other methods. As well as research and development projects, BOI has also partnered in human resources training projects to train personnel to use new technologies.
Conclusion
PPPs offer a unique pathway for addressing key challenges, including expanding healthcare infrastructure, enhancing affordability, managing NCDs, and fostering innovation. Through these partnerships, governments can tap into private-sector resources, expertise, and technology to create more efficient and equitable healthcare systems, improving the quality of life for millions across the region.
As healthcare demand continues to rise, the role of PPPs will become even more critical in shaping a future where healthcare is accessible, affordable, and of high quality for all Southeast Asians.
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