Centre Urges States to Tap PPP Potential in Healthcare

 Vijayawada: The Union Government has made a forceful recommendation to make extensive use of the Public-Private Partnership model in the healthcare sector, even as a political row is brewing in Andhra Pradesh over PPP.

The Centre cited the model’s strong potential to expand infrastructure, improve service quality and support the achievement of public health goals.

Union health minister JP Nadda made a push for PPP in a detailed letter to state health minister Satya Kumar Yadav, calling for the early preparation of PPP projects planned for the next three years.

Highlighting the success of PPPs since 2000 in sectors such as roads, airports, ports, energy and urban infrastructure, Nadda said the healthcare sector offered similar, if not greater, opportunities.

He enclosed a five-page policy note explaining the framework and necessity for implementing PPPs in medical and health services.

The Union minister said the Centre was extending substantial financial support through the Viability Gap Funding (VGF) scheme. Under this, up to 60 per cent of project costs would be supported for setting up medical colleges and related infrastructure.

For pilot projects, VGF assistance could go up to 80 per cent of the total project cost and 50 per cent of operational expenditure for the first five years. The Centre and the States would share the VGF burden equally, translating into 30–40 per cent central support for healthcare PPP projects.

Explaining the advantages of the model, Nadda listed seven key benefits, including rapid expansion of healthcare infrastructure through joint public-private investment, improvement in service quality, encouragement to innovation, optimal use of existing facilities, sharing of risks, enhanced accountability and transparency, and faster delivery of quality services to patients.

The Union minister noted that PPPs were already being implemented in areas such as medical education, hospital development, diagnostic services, mobile medical units and dialysis services. So far, projects worth around `2,000 crore have been approved under the VGF scheme, and 919 dialysis centres are currently operating in 20 states under the PPP mode, he noted.

With the rising demand for healthcare, Nadda said PPPs could play a vital role in setting up new medical colleges, modernising hospitals, expanding diagnostic and tele-radiology services, adopting technology-driven solutions and strengthening data-based decision-making.

He suggested that the state government set up a dedicated PPP cell to design projects and ensure close coordination with the Centre.

Satya Kumar Yadav thanked the Union minister for the guidance and support, outlined the coalition government’s efforts to develop 10 medical colleges under the PPP model in Andhra Pradesh, and sought continued assistance from the Centre.