Hospital concessions in Chile: where we are and where we are heading

Medwave. 2014 Nov 25;14(10):e6039. doi: 10.5867/medwave.2014.10.6039.
[Article in English, Spanish]

Abstract

Context: Public-private partnerships began under President Ricardo Lagos, driven by the need to provide roads and other hard facilities. Over time, they expanded into social concessions such as prisons and hospitals. During the Bachelet administration, the construction of two mid-sized hospitals of Santiago was tendered with private finance initiative. During the government of Sebastián Piñera, three more hospitals were tendered.

Critical analysis: This article critically examines the grounds on which social concessions have been introduced in different parts of the world. I argue that the there are two main rationales underlying the position of those favorable to concession arrangements: pragmatic reasons and ideological-utopian reasons. I refute the arguments related to closing the infrastructure gap, effect on public debt, transfer of risk to the private sector, greater efficiency of the private sector, freeing-up of public funds and quality of health care.

Conclusions: Review of the international literature does not yield evidence in favor of hospital concessions consistent with the principles and drivers that promote them. Quite the contrary, when the “Value for Money” methodology has been used, concessions have proven to decrease the overall capacity of the health system and to negatively affect quality of health care. I also note that there is a potential impact on intergenerational equity with projects that span for long periods, as is the case of hospital concessions. I conclude that, since there is no evidence base grounded on sound technical principles in favor of this policy, the real underlying reasons to promote private financing of public health infrastructure are ideological, and functional to market interests but not to collective preferences.

Contexto: La política de concesiones comenzó en Chile durante el gobierno de Ricardo Lagos, orientada exclusivamente a concesiones duras (carreteras). Con el tiempo, se amplió a las concesiones sociales como cárceles y hospitales. Durante el primer gobierno de Michelle Bachelet se licitó, por modalidad de concesión, la construcción de dos hospitales de tamaño mediano de Santiago. Durante el gobierno de Sebastián Piñera se licitaron otros tres hospitales más.

Análisis crítico: Este artículo analiza críticamente los fundamentos por los cuales se han introducido políticas de concesiones blandas en diferentes partes del mundo. Señalo que los argumentos aducidos obedecen a dos grandes orientaciones: razones pragmáticas y razones ideológico-utópicas. Refuto las supuestas justificaciones relacionadas con cierre de brecha, efecto sobre deuda fiscal, traspaso de riesgo a privados, mayor eficiencia de los privados, liberación de fondos y mejor calidad de salud.

Conclusiones: La revisión de la literatura internacional no arroja evidencia a favor de las concesiones hospitalarias en los supuestos argumentales utilizados para impulsarlas. Por el contrario, cuando se ha aplicado la metodología Value for Money, se observa una disminución de capacidad del sistema sanitario y empeoramiento de la calidad de la prestación. En el artículo indico que existe un potencial impacto en la equidad intergeneracional con proyectos que se extienden por plazos prolongados propios de las concesiones en salud. Concluyo que, dado que no hay una base de evidencia fundamentada en la técnica a favor de esta política, las verdaderas razones para concesionar son de tipo ideológico y funcional a los intereses de mercado y no del interés general.

Keywords: concessions; healthcare infrastructure; hospital-building programs; hospitals; private finance initiative; procurement; public bidding; public sector comparator; public-private partnerships; value for money.

MeSH terms

  • Chile
  • Delivery of Health Care / economics
  • Delivery of Health Care / organization & administration
  • Economics, Hospital / trends
  • Financing, Organized / trends*
  • Hospitals / trends*
  • Humans
  • Public-Private Sector Partnerships / economics
  • Public-Private Sector Partnerships / trends*