Home' Future Building: The Australian Infrastructure Review : Volume 3 Number 1 Contents futurebuilding 59
Volume 3 Number 1
PPPs in good health
but we aren't there yet. We have to demonstrate to
people their value.'
Skinner says as many as 40 private sector
organisations have pitched ideas to offer services at
the Northern Beaches Hospital, including parking,
hotel services and security, as well as energy
'We have gone to market for market sounding and
we've found a number of interesting proposals for
the Northern Beaches hospital, including co-located
public and private facilities,' Skinner says.
'Northern Beaches will be an absolutely
fantastic hospital. It can be a role model for future
Skinner says the private sector's involvement
could expand further to include a 'hospitals in the
home' style model where private companies bring
services to patients, avoiding costly hospital stays.
'You will see more purchasing of services from
the private sector. The interest is very strong,' Skinner
Minister Skinner, an unabashed fan of Western
Australia's commitment to healthcare PPPs, says the
most important lesson to learn from Western Australia
is the importance of robust negotiations that get the
'Two years of strong discussion, where you make
sure all the parties are clear about their obligations,
to make sure it's fair and sustainable, [ensures that]
you get a much better blend in the long run for all
parties,' she says.
Russell-Weisz says the operator and the contract
manager need to have a proactive and interdependent
'The structure is not one that simply relies on
nancial contract management,' Russell-Weisz says.
'They need a signi cant interpersonal relationship
right down to the contract manager level.'
Joondalup has an extensive reporting auditing
dispute mechanism. The North Metropolitan Area
Health Service provides an annual notice outlining
service changes, which sets out the case mixes and
Pricing is set in part by comparing the cost of
services at similar benchmark hospitals. That list is
reviewed every few years.
As PwC's Locke explains: 'Healthcare PPP
arrangements rely on specialised expertise in both
the negotiation and management of contracts.'
As health PPPs continue to evolve from
infrastructure and facilities management services to
a broader range of services, new structures around
funding and contractual arrangements will be
inevitable, according to experts.
Lessons learned from Joondalup will be applied
to the Midland contract, Russell-Weisz says.
'We've learned from that and delivered a more
robust Midland contract,' he says.
Even so, government is ultimately responsible
should private operators fail. And PPPs do not
necessarily always make sense. Specialised pediatric
care, for example, may not t the model, Russell-
'It's not all plain sailing,' he says.
He dismisses claims, however, that private sector
PPPs pay doctors and nurses less than the public
service. Long waiting times can also be addressed in
operating contracts, Russell-Weisz says.
'PPPs are political. We have objections from
'Private operators can't be paying exquisitely less
than the state or else they wouldn't attract staff.
'If they don't deliver the service they don't get
paid; unlike a public hospital.'
It's those strong incentives that are at the heart
of any successful healthcare PPP, because greater
incentives lead to better outcomes for patients,
clinicians and taxpayers.
Health Campus façade
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