A PPP Encore in Brazil: Two healthcare partnerships boost Bahia’s ability to care for citizens

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Image Sometimes, the most persuasive case for a PPP is the success of a past partnership in the same sector  . That’s been true in the State of Bahia, Brazil, following the Hospital do Suburbio project, which closed in 2010 with help from IFC’s PPP advisory services and has been providing people in one of the State’s poorest suburbs with access to high quality healthcare. Based on the success of the PPP in meeting state government goals for improving local health services, Bahia government officials approached IFC again to discuss a new initiative – a partnership to offer imaging and diagnostic services and facilities across the state  , including to rural communities.

Just as the Hospital do Suburbio emerged from great need, people in Bahia faced a shortage of high quality and complex imaging equipment and tests. Some of these were as basic as X-rays and mammography; others demanded state-of-the-art machines and services for CT Scans and MRI tests. This fed into the Bahia’s larger public health challenges, which included low bed turnovers and overcrowded hospitals.

The partnership with the private sector was created to solve this “package” of problems.  It was undertaken in partnership with the Brazilian Development Bank (BNDES) and the Inter-American Development Bank (IDB), which together manage the Brazil PSP Program fund, a project that fosters the development of infrastructure and services in Brazil in partnership with the private sector.

Relationships key to this PPP
The IFC team that worked on the Hospital do Suburbio PPP also developed this PPP for imaging diagnostics, and this was no coincidence: government officials approached us because of the strong relationships forged during that first project, during which time our team gained deep, broad knowledge of Brazil’s health sector. 

For this new PPP, past was prologue  .  Many of the officials on the government side played a role in the first PPP and therefore understood how to work together for the best outcome on an efficient timeline. This was helpful in several ways. For example, we understood the state’s health priorities and its most critical health issues, and we had insight into the internal institutional linkages.  This allowed us to create an integrated PPP, with elements that could work together across Bahia’s public health system.
Results that make a difference
The AFP consortium won the bid for the Imaging and Diagnostic PPP in Bahia. The winning proposal was composed by a yearly maximum government payment of $30 million. The consortium is composed by highly qualified companies: Phillips do Brasil (a medical equipment provider), Alliar (one of the largest diagnostic-medicine networks in Brazil with over 30 health facilities that offer patients image-based diagnostic exams in cities throughout Brazil) and FIDI (the largest diagnostic-medicine operator that provides services to SUS, the Brazilian public healthcare system). The bidding took place at Bovespa, the Brazilian stock exchange, reinforcing the Government’s commitment to a fair and transparent bidding process.

When the concession agreement was signed in February 2015 -- the first PPP with the scope of imaging and diagnostic services in Brazil – 45 new pieces of equipment became available for the people of Bahia and will be placed in imaging units in 12 hospitals across the state. This includes four new CT scan services and three new MRI services, along with one new diagnostic center. Because the 12 units will be connected to the diagnostic center, specialist medical staff can provide, via telemedicine, rapid diagnostic information to doctors back at the hospitals.

Overall, over $40 million in private investment in operating equipment and infrastructure was contributed, leading to improved access to high complexity tests for underserved areas in both the capital and the countryside. Quality and availability indicators guarantee higher efficiency, including the delivery of diagnostic reports in less than one hour for emergency patients. Though this was indeed a significant deal for the stakeholders involved in the transaction, the real winners are the Brazilian people, who gain services and resources for decades to come.


Tomas Anker

Investment Officer, IFC

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