Healthcare and Economic Growth in Africa: Public-Private Partnerships

Ian MatthewsNews

This article, the third in a series delving into the findings of the Healthcare and Economic Growth in Africa (HEGA) report, offers insight into the opportunities for public-private partnerships (PPPs) in African healthcare. Previous articles in the series focused on digital health in Africa and innovative financing techniques for bridging the health financing gap.

Why PPPs?

The financing gap for healthcare in Africa is well-established, estimated conservatively at US$66 billion per year. The central question is not whether the private sector has a role to play (in many countries in Africa the majority of healthcare services are already delivered by the private sector), it is rather how to put private sector skills to best use and direct their investment interests to meet public health priorities and goals.

Private funding and private capital hold great potential for growth. The opportunity is such that public–private synergies are vital to the development of the healthcare industry in Africa. New business models and partnerships applicable to Africa must be designed to meet the specific requirements of the continent.

During the keynote address of the Africa Business: Health Forum (AB:HF) 2019, Halima Aliko-Dangote, Trustee of Aliko Dangote Foundation, stated:

Governments from both developed and developing countries are increasingly looking at public-private partnerships (PPPs) as a way to expand access to higher quality health services by leveraging capital, managerial capacity, and know-how from the private sector… it is clear that PPPs can play an important role in mobilizing additional forms of financing and closing the infrastructure gap. We need to look at innovative ways to mobilize private investment and how to embed the SDG targets into PPP projects and operations.

Private Sector Involvement in Health

The most common area of engagement for the PPPs analyzed in the HEGA report was service delivery (38%). PPPs in service delivery have evolved over time from being focused on access to treatment and medicine to more ’ecosystem’-driven partnerships that have shown successful impact at the primary-care level of service delivery.

In addition, the private sector engages at various stages of the health value chain, which includes research and development, manufacturing and supply, and wholesale and retail distribution of new health technologies, medicines, vaccines, diagnostics and medical devices, as well as health insurance and medical education.

While the definition of the private sector might differ depending on the source, the HEGA report adopts a broad definition that includes the formal for-profit sector (such as private hospital groups, general medical practitioners, and pharmacies, as well as private health insurance), NGOs, faith-based organizations, social enterprises, charitable philanthropic organizations, and a host of individual private providers, such as general practitioners and consultants, in the formal and informal for-profit sectors.

Health PPPs in Africa – Gaps & Opportunities

Health PPPs have great value for financing and implementing product development, which is generally too expensive and resource-intensive for a country to undertake on its own. As an example, the U.S. President’s Emergency Program for AIDS Relief (PEPFAR) has relied on innovative private sector partnerships for everything from supply chain management to laboratory strengthening to HIV prevention among youth. Such PPPs have shown tremendous impact and success.

Reviewing current and past African PPPs can help elucidate opportunities for novel partnerships. For instance, a majority of the 178 PPP cases considered in the analysis of the HEGA report intervene in communicable diseases. Only 6% of the cases focus on non-communicable diseases (NCDs). This indicates the need to align and target countries such as Ghana and Senegal which are now experiencing an increasing burden of NCDs. For instance, NCDs constitute 36% and 37% respectively of the total disease burden in these nations, even though a significant portion of the currently established PPPs focus on communicable disease interventions.

Furthermore, there is an unequal distribution of PPP cases across Africa. The HEGA report suggests that this unequal distribution, on a country-by-country basis, is driven by the level and potential of economic growth, economic diversification (an indicator of economic resilience), easy availability of infrastructure, and governance.

During the AB:HF, where the HEGA report was launched, Vera Songwe, Executive Secretary, ECA, commented:

The [HEGA] report will tell you that more than half of the [PPPs] in health are concentrated in 10 countries on the continent; yet we are a continent of over 50 countries. So, we need more private sector involvement across our continent. The report will show you the areas in which the private sector can do well and do good business. What we are doing as the Economic Commission for Africa (ECA), is ensuring that we can work with our partners, both in the private sector and in the public sector to define what those spaces are.

Opportunity Areas for the Private Sector in Healthcare in Africa

Access to quality healthcare at affordable rates is an urgent challenge in Africa. The private sector can innovate to create self-sustaining solutions to deliver quality healthcare in Africa. Active participation by companies, both non-profit and for-profit businesses, is critical to achieving the health-related SDGs.

Apart from the opportunities for businesses to engage directly in health service delivery in many countries, companies can focus on their core competencies when contributing to improving health outcomes in Africa in a number of ways. Private investors are spurring innovations in telemedicine, delivery, operating room procedures, workforce training and the generation of new revenue streams.

The HEGA report found that other than service delivery and health financing, the other areas of private sector engagement in health remain relatively under-represented and probably under-invested because of their more recent nature. Although evidence remains weak in these ‘newer’ areas, such models of private sector engagement in the supply-side of healthcare service delivery offer significant opportunities for effectiveness and their impact should be explored further.

Laboratories and Diagnostics

One such example is laboratories and diagnostics. A World Bank report evaluating the economic and health impact of investing in laboratories in Eastern Africa concluded that strengthening laboratory capacity improves diagnostic capabilities and reduces the incidence of misdiagnosis. This contributes to better alignment of treatment options for patients which, in turn, lead to enhanced economic outcomes, reducing worker absenteeism and increasing labor productivity.

PPPs play an important role in supporting the implementation of strategic plans for strengthening national laboratory systems. For example, PEPFAR and BD (Becton, Dickinson and Company) led one such PPP with funding of US$18 million between 2007 and 2012 to strengthen national laboratory systems in eight African countries severely impacted by HIV/AIDS and TB. As a result, there have already been improvements in the diagnosis of multidrug-resistant TB, patient management, and treatment outcomes through strengthening of technical skills, developing guidelines and planning referral networks. In Uganda for instance, the PPP trained 120 laboratory workers on antiretroviral therapy and improved quality management services in laboratories that serve almost 100,000 people. This PPP has demonstrated a measurable, scalable, evidence-based model to multiply the individual strengths of the public and private sectors.

A PPP between the Abbott Fund and the Government of Tanzania launched in 2001 helped to modernize facilities, train staff, improve hospital and patient management, and expand capacity for HIV/AIDS testing and treatment at over 90 hospitals and rural health clinics across the country. To date, the Abbott Fund has invested more than US$50 million in the initiative, in addition to providing the technical expertise of Abbott employee volunteers to address a range of critical health areas. The PPP has strengthened public health systems and fostered improved health outcomes.

Laboratories and diagnostics are just one example area where PPPs have had an impact. Others areas discussed in the HEGA report include pharmaceuticals and the supply chain; skills development, research and capacity-building; health insurance; and digital health and innovations.

Future of PPPs

Increasingly, governments are turning to the private sector to improve quality and deliver value for money, build infrastructure, provide staff and training, raise quality, improve productivity, undertake social marketing, and enhance procurement. Indeed, there is no health system that is entirely public or private.

PPPs are effective models for development in part because of their ability to expand reach and multiply impact. But with expansion comes the need to harness such private sector investments and market reach to complement national goals. In this endeavor, the private sector needs to work to complement government efforts to attain the SDGs, including the health SDG3 targets, at country and regional levels.

 

This piece is extracted from “Healthcare and Economic Growth in Africa”, a joint publication of UNECA, GBCHealth and Aliko Dangote Foundation. The report was launched in February 2019 at the Africa Business: Health Forum in Addis Ababa, and provided the basis for much of the event discussion. It was here that private sector champions and their public sector counterparts gathered to chart a profitable course for turning the maxim – health is wealth – into practical, realistic results. Nearly 350 delegates attended the forum, convened by GBCHealth, United Nations Economic Commission for Africa (UNECA) and Aliko Dangote Foundation. We will continue to take a deep dive into this report over the coming months through GBCHealth’s News & Opportunities newsletter and webinars, focusing on topics such as the link between healthcare and economic growth.

Ian MatthewsHealthcare and Economic Growth in Africa: Public-Private Partnerships