Wednesday, 8 October 2008

Problems with Private Public Partnerships: They Don't Save Money in Health Care, and They May Well Not Be Able to Renew Our Infrastructure

More Public Private Partnership woes: Martine M. Bellanger, economics professor at the French École des hatues études en santé publique, reports that European and North American experience shows that costs are higher in PPPs for health care than in publicly financed health services.

Governments have access to lower interest rates, she notes, adding that in the UK, where Margaret Thatcher’s government set up the first PPPs in 1992, the current government stopped plans for more in 2006. The fact that the profit motive is closely linked to any PPP also works against PPPs actually saving any money.

At the same time, the Quebec government announced that it will go ahead with a PPP to build an extension of highway 30 south west of Montreal. The project is supposed to cost $1.5 billion, or $43 million a year over 35 years. The same Le Devoir story that told of the agreement quoted government and consortium officials as saying the current financial turbulence shouldn’t affect the long term success of the project. Any further PPPs will be much harder to arranged, Pierre Lefebvre, the head of the PPP agency, admitted, however.

It remains to be seen how the credit crunch which is affecting banks and financial markets all over the world plays out in providing the renewal of infrastructure and the health system that we are going to need over the next decade. Setting up PPPs where the motivation is profit doesn’t seem to me to be a wise use of either our energy or of the money which the public sector will have available to invest in the fulfilling the needs of citizens.


Cliff said...

Check out this article by a former Health Secretary in Tony Blair's government describing how increased privatization did enormous damage to British health care.

Mary Soderstrom said...

Thanks for the link. Very interesting. It remains to be seen what the current economic turmoil will mean as we try to replace our aging infrastructure.