Center for Health Market Innovations (CHMI)

Programs

Bloemfontein Hospitals Public Private Partnership

last updated Sep 27, 2011

Overview

Implementing organization: 
Netcare
Implementation Partner(s): 
Free State Department of Health
Legal Status: 
Private (for-profit)
Year Launched: 
2002/2003
Stage: 
Existing/expansion stage
Income Level of Target Population: 
Bottom 20%, 20-60% (lower to lower-middle)

Scale

Number of Facilities Operated/Networked: 
2
Summary: 

Netcare, one of South Africa's largest private hospital groups, and the Free State Department of Health signed in 2002 a 21-year concession agreement under which Netcare undertook to upgrade two public hospitals and rent space to establish private hospitals within those facilities. Through this agreement, Netcare utilizes spare capacity within the two Bloemfontein-based hospitals, effectively co-locating private facilities in a public healthcare venue.

Key program components: 

This arrangement has benefited the provincial government and the communities served by the two hospitals. Netcare made the capital outlays required to upgrade the two hospitals, including physical infrastructure, fittings, and equipment. In addition, Netcare pays monthly fees for the previously unused space: the government receives a monthly rental, and a percent of the private hospital's monthly revenue. In addition, Netcare pays for its share of operating costs such as water and electricity. Under the terms of the agreement, the fees received by the government are to be dedicated to maintenance of the hospitals.

The hospitals covered under the concession agreement are large academic hospitals with a total of 1000 beds--Universitas Hospital in Bloemfontein and Pelonomi Hospital in nearby Pelonomi township. The Netcare agreement has significantly improved health care access and quality for the Pelonomi community which previously had no private hospital and whose population falls in the bottom 20% income bracket.

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