Home' Future Building: The Australian Infrastructure Review : Volume 3 Number 1 Contents 58 futurebuilding Volume 3 Number 1
PPPs in good health
'I want skin in the game. Once you put an operator
in after the fact, you've lost signi cant advantage.
'It's primarily a service delivery focus, not an
Western Australia has continued to explore
innovative ways to involve the private sector in
delivery of major health projects.
The $1.76 billion Fiona Stanley Hospital in Perth's
southern metropolitan area, while not a PPP, will see
30 service lines of non-clinical services delivered by
private operator Serco when it opens in 2014.
'We have a number of models that the Eastern
States could look at,' Russell-Weisz says.
The case for the eastern states to sit up and pay
attention is pretty clear-cut.
Total health spending in Australia has ballooned
as a proportion of gross domestic product to roughly
9.4 per cent during the year ending June 2010 -- just
less than the OECD average of about 9.9 per cent,
according to a report from the Australian Institute of
Health and Welfare. A decade ago, it was less than
eight per cent of GDP.
A recent report by PwC found that healthcare
spending across OECD countries is expected to climb
to more than 14 per cent of GDP by 2020.
With an ageing population and escalating
healthcare costs placing strain on already tight
budgets, governments are increasingly engaging
the private sector to help deliver their operating
In May, New South Wales said its healthcare
spending would rise 5.4 per cent to a record $18.6
billion, which included just $1.16 billion in capital
works. An ageing population, rising equipment costs
and escalating labour costs are the main factors
behind the increases.
New South Wales Health Minister Jillian Skinner
says she's con dent that the private sector has a
bigger role to play in delivering healthcare. The non-
government sector is committed to providing better
patient care and driving value for money, she says.
'Private sector involvement can help enormously
with the early development of a hospital. It can
provide additional services that may not be available
or affordable if relying on the public purse,' she says.
'These industries have a genuine desire to do right
on the part of their patients.'
Even so, politicians will need to work hard to
communicate the importance to the public, she says.
'If we can demonstrate that the models we come
up with will help us get better results, then we'll get
New South Wales, which is building the new
Royal North Shore Hospital as a PPP, has indicated
that it will also deliver the new Northern Beaches
Hospital as a PPP.
'With a very tight budget,' Minister Skinner
explains, 'and an obligation to meet increasing
demand within a budget that cannot grow as much
as some would like, we need to be looking at new
models of care that involve the not-for-pro t and the
While noting the success of full-service PPPs in
Western Australia, Skinner said New South Wales is
unlikely to pursue a similar full-service model.
'There is an element of needing to be conscious
of industrial issues here, where there really aren't the
experiences that people can look to,' Skinner says.
'It's working well for Western Australia because
they are in a different stage than we are. I don't think
it's going to happen in the near future,' the Minister
'Western Australia has a longer history of private
sector involvement. It'll happen here, I have no doubt,
A recent report by PwC found
that healthcare spending across
OECD countries is expected to
climb to more than 14 per cent of
GDP by 2020
TOP RIGHT: Joondalup
Links Archive December 2011 Volume 3 Number 2 Navigation Previous Page Next Page