Case study: ‘Radical’ solution rescues crumbling health services


As the Papua New Guinea Government prepares to negotiate the terms of a deal with Australia to improve health services, one solution may lie in the small African nation of Lesotho, which has successfully partnered with the private sector, reports Kevin McQuillan.

Queen Mamohato Memorial Hospital_web

Queen Mamohato Memorial Hospital in Lesotho

By 2002, Lesotho’s health services and its only national referral hospital, the Queen Elizabeth II in the capital, Maseru, was collapsing and needed replacing.

The government was battling the world’s third highest HIV/AIDS prevalence rate, a life expectancy of just 45 years, and a health care system where demand consistently outstripped the state’s ability to provide health care services.

The government commissioned Boston University to recommend ways to improve health delivery. A public–private partnership (PPP) was one of its main recommendations.

Health consultant Neelam Sekhri Feachem

Health consultant Neelam Sekhri Feachem

According to health consultant Neelam Sekhri Feachem, Health Minister Dr. Mphu K Ramatlapeng was open to considering a PPP for the health sector:

‘He was expecting … that he might get 25% more volume and much better quality from the private sector, but when the bids came in, he really got much more than that.’

In 2009, an 18-year PPP agreement was brokered between the Lesotho government and Tsepong, a consortium of South African hospital group Netcare and local private sector partners in Lesotho, to establish a healthcare service.

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Political will

Feachem says having ‘a strong political will to get the project off the ground, to stick with it for several years, and to respond and withstand the opposition from many, many different forces’ was a key ingredient to its success.

The deal provided a 425-bed referral hospital (390 bed public, 35 private) and three satellite clinics. These filter clinics began operating in May 2010, and the new Queen Mamohato hospital in late 2011.

The hospital serves 20,000 inpatients and 310,000 outpatients each year. The US$120 million project was funded by a coalition of public and commercial financiers from multiple partners, including the Development Bank of Southern Africa, private equity firms and the Government of Lesotho.

Medical successes

Few doubt the move has been successful.

‘I could bore you with a lot of statistics, but I think two of the most important things are that in the first year of operation, the maternal mortality has been less than half what it was under the old hospital, even though they are treating much more complex cases,’ says Feachem.

‘And also, for the first time in the history of the country, they have a neonatal intensive care unit, so that babies who were originally dying or being sent to South Africa for very expensive care, are now living and they’re being treated locally.’

She says Netcare’s experience was invaluable.

‘It requires really new skills, new capacities, and the willingness to learn these, and some investment by the government for training and skill development.’

‘They’ve run hospitals and clinics and large facilities in South Africa and the UK for a long time, so they really know what they’re doing, and they’ve brought in a lot of their policies and practices and clinical protocols, and been able to adapt them to the unique environment of Lesotho.

‘Training has been a huge part of their focus,’ she said.

‘They were required by the contract to put aside 1% of their payment from the government for training, but actually they’ve spent quite a bit more than that.

Different mindset

The hospital is owned by the government and is required to provide care to the public.

‘The patient pays no more out of pocket at the time of service than they did in the old facility.’

Feachem warns moving to a hands-off model is radical and it requires a different mindset among health bureaucrats.

‘It requires going from being a provider of care to actually being a purchaser of care and being a steward of the whole healthcare system.

‘It requires really new skills, new capacities, and the willingness to learn these, and some investment by the government for training and skill development.’

Kevin McQuillan is Editor at Business Advantage PNG.