The price of certainty: Benefits and costs of public-private partnerships for healthcare infrastructure and related services

Although the use of public–private partnerships is endorsed by agencies at the national and supranational levels, there is little guidance for decision-makers on what good outcomes look like and the circumstances in which such outcomes are likely to occur. Enhanced understanding of these issues can improve the governance of large-scale contracting in the health sector. Drawing on a narrative review of the available theoretical and empirical research, this paper evaluates: (1) the benefits that public–private partnerships generate compared to alternative mechanisms of delivery; (2) their additional costs; and (3) the endogenous and exogenous factors that influence these outcomes. The evidence shows that public–private partnerships hold promise for decision-makers who prioritise cost- and time-certainty. However, public–private partnerships are also associated with additional costs – notably transaction and financing costs. The key decision that policymakers and managers need to make about their use of the public–private partnership model is, therefore, how much extra they are prepared to pay to achieve predictable cost, quality and service outcomes. How much they will have to pay is a function of a set of contextual variables which are readily amenable to policy action.
Source: Health Services Management Research - Category: Health Management Authors: Tags: Evidence synthesis/review Source Type: research