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19.01.2014

ACIG Group of Companies acts as an operator of the roundtable "Viable Healthcare: Development Tools for Public-Private Partnership"

On January 17, 2014, Day 3 of the Gaidar Forum, the expert roundtable "Viable Healthcare: Development Tools for Public-Private Partnership" took place within the framework of the interactive discussion platform "Viable Healthcare".

The key topics of the discussion were:

  • existing barriers to public-private partnership in the Russian healthcare system;
  • Russian and international experience in public-private partnership in healthcare system;
  • ways for developing and increasing effectiveness of public-private partnership in the Russian healthcare system;
  • breakthrough ideas and projects which can be scaled up.

The event was opened by Veronika Skvortsova, Minister of Health of the Russian Federation. In her report, the Minister dwelled upon the current work of the Ministry on the sphere of PPP in healthcare, in particular upon the special council on Public-Private Partnership, which is to address the long-term and short-term tasks in this sector. Veronika Skvortsova also remarked that such projects will be of high priority in healthcare reforming. "There have been noticeable changes in public PPPs in Russia over the last few years. At present, healthcare development programs for all constituent entities of the Russian Federation are undergoing the approval process at the Ministry. Each region’s standard healthcare development program includes the PPP subprogram. If in 2013, over 40 regions have been implementing the PPP programs, in 2014 this quantity rolled over to 59 regions," said the Minister of Health of the Russian Federation. "We are glad to have similar additional possibilities if they are characterized by not only enhanced comfort and special conditions of medical treatment, but the quality as well and if they work in compliance with government agreements and the systems general tariffs which allow the patients not to pay the balance within the framework of the state guarantee program," emphasized Veronika Skvortsova.

In his speech, Sergei Belyakov, Deputy Minister of Economic Development of the Russian Federation, remarked on underfunding of the social sector. "Demand for quality and quantity of services is significantly higher than the existing capacities. It raises the issue of creating tools for attracting the private capital," he emphasized. In addition, the speaker talked about the development of the federal law on public-private partnership in the healthcare sector. "In parallel, we have initiated amendments on concession agreements in the existing legislation. And the amendments, which we have had agreed upon and introduced to the government by now, include the possibility of the life cycle contract implementation," said Sergey Belyakov.

The moderator of the roundtable Igor Lanskoy, Advisor to the Minister of Health of the Russian Federation, yielded the floor to over participants of the event. The leading Russian and world experts, as well as representatives of commercial companies, presented their reports: Vladimir Nazarov, Director of the Federal State Budgetary Institution "Research Financial Institute", Christopher Davis, Professor of Economics Department at the Oxford University and Head of the Laboratory of Healthcare Reform Economics of the Institute for Social Analysis and Forecasting at the RANEPA, Naira Adamian, Managing Director Russia & CIS at Janssen Pharmaceutical Companies of Johnson & Johnson, Petra Laux, Special Envoy of the CEO and Global Head of Government Relations at Novartis AG, Dmitry Khalilov, Partner, Life Science: Biotechnology, Pharmaceutical, Medical Technology Leader for Russia and CIS at EY, Lidia Antonova, First Deputy Chairperson of the Moscow Region Government, Aleksandr Utkin, General Director at Cotton Way, Mikhail Yugai, Senior Lecturer of the Department of Health Care Management and Economics at the Higher School of Economics, Aleksandr Abdin, Managing Partner at Euromed Group.

The report of Vladimir Nazarov was dedicated to sharing risks among the participants of PPP agreements. "The main rule of sharing risks is to transfer the risks to the partner able to manage them more efficiently," the expert remarked. He also cited studies showing exactly what risk zones the representatives of government and private business intended to undertake. "In respect of regulated prices and tariffs, the majority of survey participants believe that the risks must be undertaken by the government," said Vladimir Nazarov, adding that today "the Ministry of Health is making steps to make the tariff and the method to determine long-term." In addition, he stressed the need for standardization and typological classification of the PPP projects, securing volumes and regulations within the framework of individual projects, as well as introduction fees for access to the infrastructure.

Dmitry Khalilov made a review of the efficiency of resource use by the medical institutions; in particular, he described the experience of a medical institution with profitable performance after three years since its launch, managed privately. "The market of commercial medical services is attractive both for Russian and foreign investors. It is possible to compete with public agencies in terms of covering the costs based on the new list," said Dmitry Khalilov.

The report presented by Naira Adamian was dedicated to the projects of Johnson & Johnson with public segment in management medical aid delivery system, in particular, dedicated to such medical problems as Hepatitis C, cancer, drug addictions and mental disorders. "Public-private partnership means primarily mutual investments, which allow increasing the availability of services, new treatment methods for patients within the framework of the free healthcare," commented the expert.

Christopher Davis dwelled upon international practice of PPP. "The UK has developed 140 projects and the joint result of the successful implementation totaled 12 billion founds. At present, the healthcare sector has the highest potential," remarked the speaker. According to the speaker, the key elements of the sector management are government control, clear goal specification by the government, attraction of private sector expertise and training of specialists, unbiased distribution of risks, transparency and clarity, information awareness and support of the population.

Petra Laux examined opportunities for improving health of the population within the PPP programs. She called ageing of the population and chronic diseases among the new challenges of our time. "What does it need to make these partnerships successful? It is very important to identify common priorities from the health care policy, to develop an effective government framework with explicit roles and responsibilities. This was just explained including the decision-making rights and forced to assign adequate financial and human resources," stressed Petra Laux.

Mikhail Yugai spoke on the implementation of PPP projects in small agglomerations, in particular on management of the network of laboratories in the city of Oktyabrsky of the Republic of Bashkiria. "In the closing balance, the costs are reduced by 10% per year, and the productivity is increasing," said the expert, concluding that "it is necessary to develop the algorithms of interaction between two parties using such simple examples." Lidia Antonova, First Deputy Chairperson of the Moscow Region Government, spoke on the reconstruction of several medical institutions.

Aleksandr Utkin dedicated his speech to the particulars of the project implementation in the Republic of Tatarstan by Cotton Way. Speaking on the implementation of the PPP mechanism in Russia in general, the expert remarked, "Business is not ready, it is necessary to wait for the arrival of the major Western players, while they are in need of the highly proficient institutions."

In his turn, Aleksandr Abdin made ​​a proposal reflecting the existence of profit in the compulsory medical insurance tariff structure. "What is the meaning of the private company’s participation in compulsory medical insurance if there is no profit?" emphasized the expert.

Concluding the meeting, the Minister of Health of the Russian Federation thanked the participants for their informative and useful reports. "I do not want us to show the contrast between the quality of healthcare in private and public sectors. Today, huge efforts are directed to establishing a universal quality bar," said Veronika Skvortsova. "We need to develop medicine, innovative technologies and invest money in these sectors," concluded the speaker.

The Russian Presidential Academy of National Economy and Public Administration is organizer of the interactive discussion platform "Viable Healthcare". EY, Janssen and Novartis are the platform’s partners. ACIG Group of Companies is its operator.