Friday, March 11, 2011

The Essentials of Public-Private Partnerships

So. Public-private partnerships. They're everywhere. Everyone is talking about them. But what are they exactly? There is no real consensus.

(Aside to English majors: Yes, my introduction is not subtle. I'm still working on this writing thing. But hey, at least I used an aside to admit that fact. Do I get points for that?)

If you wanted to be a minimalist (or a tautologist), you could say that public-private partnerships are partnerships between public and private sector entities. But then you'd have to define the term "public sector", which, as it stands, can include actors ranging from local governments to NGOs to academic institutions (which are usually private for-profit organizations, as my checking account is painfully aware). And the "private sector" certainly includes the large, multinational corporations we're used to thinking of in this context (pharmaceutical companies like Merck and Novartis, mobile technology companies like Siemens and Ericsson, financial institutions like KPMG and Pricewaterhouse Coopers), and on and on. But it can also include private individuals who offer health care separately from the government. For example, it's likely your own doctor is a member of the private sector, even if you live in a developing country. (Of the children who receive medical treatment in low-income countries, most are seen by a private physician.)


It should be obvious at this point that the private sector has what you call "reach" in low-income countries. How many times has an aid worker wandered into a remote village in Africa, only to be offered a Coke? And a side note to whatever record label owns the music of the Jonas Brothers: Good job on getting those guys all the way to Bangladesh. Seriously, respect.

So how does this relate to public health? If you're a company looking to sell your product in a low-income country, you have to first invest in the infrastructure. This means developing distribution networks--maybe you will have to learn the hard way which truck is best for the sloppy terrain during the rainy season. It also means overcoming cultural and language barriers (Coca-Cola's marketing campaign in China is an excellent example), as well as logistical problems like heat (melting chocolate), humidity (soggy biscuits), and iffy electricity (poor lighting, electrocution hazards, and so forth). Many of these problems are the same problems that public health workers face when working in low-income countries, only they apply to providing adequate healthcare for women and children (cultural barriers), education about health behaviors (language barriers), maintaining cold chains for vaccines (a classic logistical nightmare), and so on. And improving infrastructure isn't the only way that the private sector works for public health. If a company's main product is health-related, like Uniject, LifeStraw or Plumpy'Nut, working towards better public health is unavoidable. Additionally, financial institutions can aid economic development (and by extension, access to good-quality health care) by encouraging investors to consider investment opportunities in low-income countries. KPMG already does this for the Millennium Cities Initative. So it seems that the goals of public and private sector entities are more closely aligned than is obvious at first glance.

Ultimately, though, the end-game of private sector actors is to make money. This isn't pessimism, it's just a fact--the only way a business can exist and thrive is by making a profit. If it is not profitable, it will ultimately fail. In fact, it's irresponsible for a business to act against this basic principle of turning a profit. And this is the point that bothers so many people in the world of public health: What happens when the interests of public health and the private sector diverge?

This is perhaps best explained by Nestlé’s marketing of infant formula to women in low-income countries. In the 1960s up until the 1980s, Nestlé marketed infant formula to women with the message that it was better than breast milk (it is not). Since early and exclusive breastfeeding is a crucial part of newborn health, it is believed that such marketing was at least partially responsible for high infant mortality and malnutrition rates in these areas. The example of Nestlé shows a very clear conflict of interest between the public and private sector, but there are more subtle situations. For example, suppose a telecommunications company provides its services to a hospital system. The entire patient list is entered into an electronic database, doctors can share e-records and lab results quickly, and billing becomes much easier. But it's also in the telecommunications company's best interest to increase prices once its competitors are gone. In one scenario, health care providers could end up paying more than they can afford--at the cost of other services--to use the system upon which they are now reliant. Public sector actors are painfully aware of this possibility, so some take a pretty hard stance against the idea of partnering with the private sector. One journal article refers to the entire construct of the public-private partnership as a "neoliberal Trojan horse".

So the private sector has the power--and the prerogative--to make money, even if that sacrifices public health (after all, that's not the mission of the private sector). It stands to reason, then, that in order to enter into a partnership where both the private and the public sector have equal power and equal footing, the public sector has to have some pretty major backup. For example, some of the most successful global public-private partnerships started out under the auspices of the World Health Organization, or with the support of the UN and national governments. GAVI (the Global Alliance for Vaccines and Immunization) is one of them; the Global Fund for AIDS, TB and Malaria is another. There's no denying that GAVI and Global Fund are ground-breaking, innovative and effective organizations. And since the 1990s, scores--perhaps hundreds--of actors have taken their cues from GAVI and GF, forming partnerships across sectors.


A "partnership" is often described as two different actors working towards the same goal. In the case of global public-private partnerships, the goal is not always the same: the private sector's goal is to make money, and the public sector's goal is to protect individuals. But both actors need the same thing in the short term: stable infrastructure, a healthy population (physically and economically), and a receptive environment. And luckily, both public and private sector actors face the same risks should they fail: a waste of money, time and resources. Therefore, those who are uneasy about public-private partnerships for public health should look towards strong accountability measures, especially extensive monitoring and evaluation. These measures will keep businesses in check and ensure that they are fulfilling the terms of the partnership; they will also add pressure to public sector actors to ensure that their actions are worthwhile, cost-effective and within a certain budget. (They have the added benefit of giving actors hard evidence that the partnership is working.) Without such measures, partnerships are doomed to fail--just as private and public actors are doomed to fail on their own without them. As Atul Gawande so succinctly says, if you want to be better, you should count things.

I'll just end with this stray observation. In the course of reading articles for this post, I came across the same unfortunate typo again and again. So the PSA for this post is: the real essential of public-private partnerships is the 'l' in the word "public".

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