ISIOLO COUNTY’S PPP QUESTION

ISIOLO COUNTY’S PPP QUESTION

By Guled Haji,

Few days after the Isiolo County government announced a Public Private partnership arrangement with two private organizations, there appeared to be what looked like a tug of war between the Isiolo County Governor H.E. Dr Mohamed Kuti and the Senator who is also the deputy senate majority leader Hon Fatuma Dulo over the benefits and the legality of the arrangement. The announcement indicated the county government has entered into a contractual agreement by Public Private Partnership (PPP) arrangement for the health sector with two organizations. The report further mentioned that Population Service International and Philips Inc are the government designated organizations to provide these services. The Senator immediately raised a red flag countering the proposal and claimed due process was not followed. She questioned the legality of the PPP, threatening court action and written to the treasury, the health ministry and the Public Private Partnership Unit within the ministry of Finance. She cited lack of public participation and consultation as some of the reasons she opposed the arrangement. Governor Kuti said that the partnership will be effected if a bill is passed through the assembly and the contractual agreement concluded reiterating that this is a pilot scheme.  The senator is of the opinion that the already poor health services available will suffer a further blow from what she terms a ‘’privatization’’ of the Isiolo health sector.

Public participation is first of all an exercise conducted before a bill is passed by the assembly and the county government’s rational on this appears shady.

Besides what may appear as a political war between the Governor and the Senator, PPP arrangement is a practice in many countries and is worth looking at whether it will help or hurt the health of the people of Isiolo County. Health knows no borders and so does health care and its commendable that the county government wants to improve the ailing health sector of Isiolo. Isiolo health sector is in a cataclysmic condition and anything that is done to improve its status is welcome.

Whether PPP is a model that will bring about this improvement is what we would like to put under the microscope. We would like to look at not only the general PPP policy but the track record of the two private health providers the county is engaging as well.

What is PPP? PPP is a partnership between a government and a private entity to execute a certain function. It can be effected in various forms each with its strengths and weaknesses. It is mainly in two broad arrangements; Contracting-in where an individual is hired by a government on a temporary basis for services and Contracting-out, a model where the government pays an outside individual for a specific function. Contracting-Out which is the broader of the two has different levels which depends on the magnitude of autonomy given to the concerned contractor.

Level 1: The Government hands over the physical infrastructure, equipment, budget and personnel of a health unit to a private organization.

Level 2: The Government hands over the physical infrastructure, equipment and budget but gives the agency the option of selecting the personnel as per their terms and conditions but subject to Government norms.

Level 3: The Government hands over the physical infrastructure, equipment and budget but gives freedom to the agency to adopt their own service delivery models without following fixed prescribed pattern.

Level 4: The Government hands over the physical infrastructure, equipment and budget but gives freedom to the agency to recruit personnel, adopt their own service delivery models, freedom to expand types of services provided and freedom to introduce user fee and recover some proportion of cost.

Voucher System: A voucher is a document that can be exchanged for defined goods or services as a token of payment (tied-cash”). This consists of designing, developing and valuing health packages for various common ailments / conditions (like ANC package / STI package / Teen pregnancy package which can be bought by the people at specific intervals of time. These vouchers can then be redeemed for receiving a set of services (like 1-2 consultations, lab tests, procedures, counseling and drugs for the condition) from certified / accredited hospitals or clinics and are to be used within 2-3 months of buying the voucher. This means that the package can be bought, used as and when required and ensures privacy for the client. Regular monitoring is required for ensuring quality standards, training of providers and networking with the people to ensure that the proper use of vouchers.

The vouchers are redeemed to the clinics for the number utilized depending on the price for each package of service provided. Clinics that fail the quality standards of service and do not do well on patient satisfaction can be removed from the certified services.

Mobile Health Vans: This facility ensures that in isolated and rough terrain areas where there is meager transportation facilities the private agencies take up the initiative to provide mobile vans. These vans go to select villages and provide health services including Reproductive and Child Health (RCH) on fixed dates. The basic objective underlying this scheme was to prevent the problem of underutilization of services for want of proper modes of transport. While private sector resources were put to use to purchase vans, the government contributed to these services by deputing medical officers and medicines. This approach has significantly helped to improve access to quality services.

Insurance and Public-Private Partnerships: In one of the recently planned schemes, the government insures and pays health insurance premium for families below poverty line. These families in turn are insured against expenses on health and hospitalization, up to a certain amount. On similar principle, it is possible to develop sustainable health insurance schemes that are community based. In such schemes, the community members pay a minimum insurance premium per month and get insured against certain level of health expenditure. This protects them from sudden and unexpected expenditure on health. Such community based schemes also ensure that the local needs and expectations of the people are met, by preferentially reimbursing local trained healthcare providers.

Subsidies: Government provides funds to some private individuals for providing certain services.

Leasing or Rentals: Governments offers the use of it services and equipment to the private organization.

Privatization: The Government transfers the ownership of a public health facility to a private organization or group.

Without going into further details of the global practice of PPP, I would like us to generally look at whether what H.E. Dr Kuti’s government is proposing is right and will help us realize better and quality health services.

Firstly while PPPs may be more efficient and commercially less risky the realization of these benefits will depend on the public partner’s capacity to establish monitoring protocols that will ensure the contract delivers the target result. In our case this capacity is less that 1% and therefore the risks of resource waste is high. In most PPP arrangements, private financing is more costly than public borrowing. This means the county can ill afford this financing arrangement both in the short and long term.

Secondly, health is an essential, basic need that least benefits from privatization. Counties or by extension governments usually have poor capacity to monitor such partnerships and therefore the arrangement ends up looking more like a complete privatization of a service. In developed countries like the UK, the National Health Service, the darling of the people of that country and hitherto an excellent provider of free universal health at the point of use has suffered huge losses through debt by the PPP arrangement and the organizations the then Labour government of Tony Blair has partnered with to privately provide health services. The NHS is now a shadow of its former self after debt, redundancies and retrenchment of essential health staff was undertaken by the private entities the government engaged.

We have not had an opportunity to look at the details of what the County governor signed with the private providers but PPP all over the world has left in its wake a trail of suffering for the poor even in developed countries. The UK, which is usually cited as the originator of this scheme, the National Health Service (NHS) has suffered hugely. End service users began experiencing delayed services such as appointment for surgeries, reduced free consultation time and fewer nurses and General Practitioners (GP) and in some extreme instances closures of some hospitals in the name of cost cutting after budgetary cuts and rise in debt occasioned by the PPP program.

In our case Isiolo County is more than 4300 times poorer than a developed country like UK and it will be inconceivable that a policy that has left a considerable qualitative and quantitative reduction of services in a much developed country will succeed in Isiolo County. Isiolo county does not have the infrastructural capability to undertake such a policy and the county government has no capacity to monitor such mega contractual undertaking. The only end result will be privatization of the health sector in Isiolo which will unfortunately introduce huge sufferings and dwindling of services that are already dire.  PPP policy to succeed in a county where the poverty level is dangerously high will require a complete overhaul of the whole County’s budget. Health is an essential basic need and the people of Isiolo can ill-afford a privatized health service. Privatizing health services will encourage self-medication and return to sometimes very harmful traditional medical practices. It will also contribute to spread of

communicable diseases such as tuberculosis as people avoid hospital visits due to what will quickly become expensive to afford.

Isiolo with an overall budget of 4.37 billion shillings already spends over 64% on recurrent expenditure and it will take a miracle to turn this around for a PPP to function let alone succeed.

The equity question

The private sector’s profit maximization motive will eventually come in the way of the poorer sections of the society from availing services that should otherwise be publicly available for free. The purchasing power of the poor in NFD and indeed the country as a whole is very low. 71% of Isiolo County’s population live below the poverty line. Below the poverty line is a measure used to gauge extreme poverty, persons who live on 200 shillings a day. For the poor it is already a daunting undertaking to put food on the table and commercializing health, an essential necessity will spell further doom for them.

A better Model

Dr Kuti is a medical doctor by profession and understands or ought to understand health management, needs and provision better than many other governments. Instead of the expensive overseas trips his county administration made to overseas countries, he could learn better and cheaper from his neighbouring Makueni County led by the constitutional lawyer Prof Kivutha Kibwana. Makueni County has initiated a free universal healthcare policy to all its residents. Prof Kibwana has done this within the constraints of his county’s budget. Residents of Makueni will pay just shillings 500 annually.

Instead of Dr Kuti travelling expensively to such countries like the USA with former officials of the previous administration, to learn about health service provision, he could with the smallest of budgets look to Makueni for help. The USA is not the best of quality health care providers to its citizens. More than 50 million of its citizens have no access to quality health care and its Medicare and Medicaid programs have been criticized by many health economists across world. It is therefore the last place a government will look to learn to provide quality health care services. This trip caused taxpayers millions of shillings that could instead be used to improve the already dwindling and failing health sector in the county.

Dr Kuti’s administration has initially appointed Dr Abdi Greek, a medical doctor himself with experience of working with some of the best public health service providers around the world. This was commendable and applauded at the time. Unfortunately, word reaching me indicate that the Deputy governor asked to be replaced. This was not celebrated as residents were looking forward to Dr Greek using his knowledge and experience as a medical doctor to turn around the ailing health sector. We may not know what necessitated this change. As both the Governor and his Deputy are medical doctors by profession, the success or failure of Dr Kuti’s administration will be appraised by how this sector fairs.

The Proposed Providers

One of the organizations proposed as a PP Partner is Population Service International (PSI), a registered non-profit organization working in over 60 countries according to its website. It is not clear whether it works as a private service provider in any of these countries but GiveWell, a charity evaluator says in its most recent evaluation of PSI that “The evidence we have seen does not clearly show that PSI has the impact it intends”. This signifies that PSI has no evidence based efficacy in its public-private partnership programs. It would have been that PSI provides capacity building services and training to the health staff that it will provide funds for as it’s a publicly funded organization. This could better help the county address its health provision challenges without resorting to its already small budget for health that is mainly spent on recurrent expenditure. PSI spreads birth control knowledge and services. This means they are agents of population control which Isiolo does not need. PSI may put more emphasis on population control measures than providing the medical services that is required. This will mean the prescription of contraceptives and other measures. It is known most contraceptives are carcinogenic agents. It means we may witness cancer epidemic in the near future occasioned by the increased use of contraceptives and other birth control methods. PSI was taken to court by the then Governor of New York in 1977 for violating the enforced Education Laws in New York  at the time for advertising and selling contraceptives to people under 16 years of age. This is not the organization we want to provide health services for our women and people.

Philips Inc is the other organization that the county government is intending to engage. We could not find enough information on Philips to appraise its service record but it is a private health provider that works in many countries. Health and private particularly in a poor third world county is an oxymoron.

Privatizing health services is a damaging social policy. The prices of health, water and essential food items cannot be left at the mercy of the market forces.