“Seeing a public hospital become a better place for treating the poor is the best part of my job”: Fiji brings Pacific Islands’ first health PPP

What springs to mind when you hear the word “Fiji”? Probably a tropical vacation destination. After all, the archipelago of 333 islands in the South Pacific is one of the top tourism destinations in the world. In fact, tourism remains Fiji’s fastest growing industry, making up 17 percent of the country’s GDP and bringing nearly 1 million visitors—as many as the country’s population—to the islands every year. Yet, in sectors like healthcare, although Fiji is better than in most Pacific islands, it lags way behind more developed countries.

As a doctor myself, I witnessed many challenges that needed to be overcome to attract investment that would improve Fiji’s healthcare sector, which was stymied by past political and economic instability. Subsequently, the lack of infrastructure and skilled health workers significantly reduced the quality of services, affecting both visitors and Fijians. While tourists travel to Fiji for leisure and business, residents have to travel out of Fiji to seek healthcare services—especially tertiary care such as heart surgery and cancer treatment.

Accessing specialty care in countries like Singapore, Australia, New Zealand, and India is costly for those Fijian citizens that can afford to pay for it—some by withdrawing from their pension or emergency funds from the Fiji National Provident Fund (FNPF)—but entirely cost prohibitive for the 28 percent of the population living below the national poverty line.

To turn this situation around, the Fiji government came to the International Finance Corporation (IFC) to help build the framework and structure a transaction to attract investment partners that could help through a public-private partnership (PPP).

Strengthening and expanding the health sector

As the lead transaction adviser, the IFC helps governments establish a solid regulatory foundation required for implementing PPPs. And thanks to strong political will, Fiji amended regulations to enable PPPs in record time.

Prior to IFC’s involvement, Fiji lacked local capacity and expertise to invest in a large health project. FNPF had the will but needed an investment partner to help manage risk and operating responsibility. Over 70 percent of public hospitals were less than half full due to infrastructure deficiencies and operational inefficiencies, including Lautoka Hospital—the second largest in the country. Lautoka is also the referral hospital for Fiji’s Western division with a population of 380,000. With 305 beds, and at over 75 years old, the hospital needed major redevelopment—in fact safety issues from outdated infrastructure caused a fire there in December 2017. The newly constructed Ba Hospital had 70 beds but lacked fittings and equipment to be fully functional.

There was also the lack of skilled health workers. Most immigrated to Australia and New Zealand for higher salaries and job satisfaction, newer infrastructure and equipment, better pharmaceuticals, and established tariff systems.

To attract the right investment partner for Fiji, IFC helped structure and tender the project, which is now the first health PPP in the Pacific Islands.  The 23-year concession was awarded to Healthcare Fiji Private Limited, a consortium formed between the FNPF and Aspen Medical Pty Ltd., a healthcare service provider headquartered in Australia. 

A game changer for healthcare and beyond

Under the PPP, the consortium will keep and retrain all current staff plus recruit more. It will also provide new and free services such as cardiac and cancer care to 240,000 Fijian citizens while offering services to other Pacific Islanders—transforming Fiji into a regional tertiary care hub. The project will create significant job opportunities—with the medical staff expected to be over 50 percent female—and build human resource capital by training staff and medical students on new equipment.

In addition to increasing quality control, clinical outcomes, and accountability, the project introduced an innovative tariff structure that hasn’t been used before in PPPs. The IFC team picked the Australian tariff and payment budgeting system as a model, simplifying and tailoring it to the Fiji context. The new pricing framework is commensurate with the services rendered and dynamic enough to maintain continuity of services for the next 23 years.

The project is just getting started and we’ll have to pay strict attention to real outcomes, in real time, in this sector that directly affects peoples’ lives so profoundly. But hopes and attention are high.

Seeing a public hospital become a better place for treating the poor is the best part of my job. But I also witness the impact beyond the healthcare sector: for instance, the country will be better positioned to attract investment in tourism and elder care. 

Encouraged by the PPP’s success, the government is also committed to attracting private investment and expertise in sectors such as housing and power that will help build PPP capacity and open new markets in Fiji going forward. Through the project, Fiji is also setting an example for other islands.
 

You can learn more about Fiji’s health PPP from the IFC’s PPP website.