Manises PPP Sydney Nov 2010 Index 1 PPP Overview in Spain 2 What - PowerPoint PPT Presentation

Manises PPP Sydney Nov 2010

Index 1 PPP Overview in Spain 2 What is Manises 3 Manises Key Management Model 4 In Short 5 Discussion 2

1. PPP Overview in Spain 3

Sanitas: who we are 100% owned by BUPA (since 1989) More than 50 years of operations in Spain Integrated Healthcare Group: • PMI: number two operator in Spain • Hospital Group: Integrated network of 60 centres (Hospitals, Multispecialty and dental) • Care Homes: number two operator in Spain Also operating in other Health services like Wellbeing, aesthetics.. 4

Spanish National Health System 100% financed out of general tax Governance is decentralized through local healthcare management organisations in each of the 17 Regions Universal healthcare free of charge Benefits include: • Primary healthcare • Specialised healthcare, including outpatient and inpatient care • 60% of the price of prescription drugs (some have full coverage) Gatekeeper model 5

Private Participation in the Public Health System Health System Insurer Provider Private Public Private Public Contracts Muface •Designs NHS Mugeju Construction Financing & Isfas PFI Infrastructure Operations Collaborating •NHS carries out the clinical entities services (BBVA, SCH, •Payment Fee CAM) Health care • PFI & Clinical PPP payment Provision + • Capitative infraestucture payment 6

Evolution Public – Private Colaboration Model + Intermediate Care + Primary Care + Specialized Medical Care + High Tech + Services Construction No clinical Equipment Maintenance Baix de Majadahonda Burgos Valdemoro Elche Manises Llobregat S. Sebastian de Torrejon Alzira los Reyes 7

PPP – Why for NHS Control health Allows making care costs by important transferring risk to investments in a more efficient infrastructures private provider and defer its payments Flexibility & Innovation Capacity Easy check of Generate the quality savings for the standards regions 8

PPP – Why for Sanitas Participation in an emerging Strenghten our market in Spain, healthcare where our market position competitors (Adeslas, Asisa..) are Help to counter the impact that Attractive any possible financial returns improvement of expected, non the NHS would cyclical incomes have on the PMI & flows business 9

2. What is Manises 10

Valencia Health System: Our customer In the Valencia Community there are 23 health departments, 5 of them are working as PPP The Manises Department is functionally dependent on the local health government We are part of the NHS 11

Our Health Department Riba-Roja Turia Manises • We cover an area of 20 (17.266) El Carmen 3.319 (19.952) Cheste Xiperets 6.867 villages (8.320) • We give assistance through: Riba-Roja Chiva Logorilla Turia (17.266) Quart de Buñol (10.857) (1.421) Poblet 10.709 Alborache Calicanto • 20 Primary Health Aldaia Manises (23.973) Che Logorilla (57) (19.952) (812) (25.171) ste (1.421) Centres El Carmen Yatova Chiva (10.857) Pecheriza Quart de Poblet (8.3 Barrio del 3.319 Calicanto (57) Aldaia (23.973) (1.713) (266) 20) Xiperets 6.867 Pecheriza (266) Cristo 6.749 (25.171) • 2 Specialised Health Godelleta Barrio del Cristo 6.749 (2.582) Godelleta Centres (2.582) Turis Buñol Macastre 10.709 (5.474) Alborache (812) (938) • We give medical assistance to nearly 200.000 people • First hospital resulting from a concession model in an urban area. Only 8 km. away from Valencia • Doors opened on May 7 th , 2009 • In May 2010, 44.200 persons added from Mislata 12

Our Health Department A new department created from three different ones CE Aldaia Manises Military 20 CS Hospital Hospital CE Mislata Competitive Environment - The Major public hospitals are in the catchment area Hospital La Fe Hospital General Hospital Peset Hospital Arnau Hospital Clínico 13

Our Stakeholders BUPA Bancaja CAM 50 % 50 % Ribera Sanitas Salud 40 % 60 % Especializada y l’Horta Manises Government, Mayors and Community Association’s satisfaction is one of our goals We collaborate with them to provide the best medical care We develop health programmes together The quality of our assistance is one of their objectives 14

Manises Hospital Resources 10 221 Single 24 53 Large Post-surgical rooms Consultation multipurpose posts rooms operating rooms 32 10 6 18 Outpatient Intensive Dilation 2 Dialysis hospital care rooms rooms Delivery stations Examination rooms rooms 16

Military Hospital Resources 2 12 137 28 Large Outpatient Beds Consultation multipurpose hospital rooms operating Examination rooms rooms 17

3. Manises Key Management Model 18

Manises Management Model Business Case Strategic Premises STRATEGIC PLAN High level of Satisfaction & Clinical Safety What do we want to achieve? Efficiency: Scorecards OPERATING AND ORGANISATIONAL MODEL How do we operate? Clinical & Quality Governance SH Model HR: FTE + Remuneration Model RESOURCES (HUMAN, SYSTEMS, INFRASTRUCTURE, EQUIPMENT) Services, Technology & Infrastructure What resources are available? The structure of the management model is the key to managing a new business 19

Business case: P&L P&L Profit & 2009 2010 2011 2012 2013 2014 Loss (M. €) Total 43,7 108,7 125,5 131,5 137,3 143,4 revenues Operating 50,5 94,5 107,4 111,3 115,3 119,4 costs EBITDA -6,9 14,2 18,0 20,2 22,0 24,0 EBIT -11,9 5,8 8,7 10,4 12,0 13,7 Profit & Loss Account (M. €) 300 250 200 150 100 50 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 Total Revenues EBIT 20

Business Case: Capex & Return Analysis CAPEX Capex Construction Total Total Reinvestment (M. €) Phase Capex Manises 101,8 46,5 148,3 Hospital Military Hospital & 15,1 15,1 Manises Total 101,8 61,7 163,4 investment IRR: 12,3 % 21

Revenue Structure Capitation Revenue: 116,7 M.€ (192.329 inhabitants x 607,14€) Revenue Positive Intercentres invoicing: Activity from non capitative population Other customers: Traffic Accidents Insurers, Mutual Insurers… Complementary revenue: Parking, Vending machines, TV, etc… 12% 85% 22

PPP ´ s: Valencia and Madrid models Valencia Madrid • 15 years, extendable an additional 5 years by • 30 years beginning with the signing of the Contract length mutual consent, beginning once the hospital is contract, therefore including the operational construction period (~21 months) • Primary care • Outpatient and inpatient specialised care • Outpatient and inpatient specialised care • A&E • A&E • Pharmaceuticals provided with inpatient care Services • Pharmaceutical management across all included centres managed (but only responsible for cost of inpatient pharmaceuticals) • Addiction rehabilitation and family planning • Does not include the cost of prosthesis, • primary care ambulance or oxygen therapy • organ transplants Services • ambulance services explicitly • oxygen therapy • addiction rehabilitation excluded • family planning services • pharmaceuticals • All statutory personnel currently working in • All hospital personnel are primary health centres included in the health employees of the company Personnel area continue to be employees of the state, responsible for managing the although managed by the company responsible health area for the health area 23

PPP ´ s: Valencia and Madrid models (II) Valencia Madrid • Cannot subcontract medical services Subcontracting • Cannot subcontract medical services • 18 months from issuance of planning permit Construction • 25 months from signing of contract period Capita established by CAV Bidders define: • A capita payment to cover medical services Payment provided • A fixed fee to cover the cost of the construction and maintenance of the infrastructure Incentive for reducing pharmaceutical ´ s • • Commercial activities (parking, Other revenue • Commercial activities (parking, restaurant, flower shop) streams restaurant, flower shop) • Maximum of 85% of list price for incoming • 90% of list price for incoming activity activity, could be reduced in the bid terms • 100% of list price for all services Inter-centre presented provided to health area residents • 100% of list price for all services provided outside of managed centres (except costs to health area residents outside of excluded services) managed centres (except excluded services) 24

PPP ´ s: Valencia and Madrid models (III) Valencia Madrid • Annual increase based upon the lower of: • 85% of inflation growth in hospital Price increase • growth of Valencian government health spend in the Community of Madrid mechanism budget • average growth national health budget • Capped at 7.5% for medical • No Cap Return on services investment