Centre to roll out first-of-its-kind PPP specialty hospitals 

The Centre is set to roll out first-of-its-kind Public Private Partnership (PPP) speciality hospitals to provide affordable healthcare in four underserved districts of Odisha with viability gap funding (VGF) under which private players would pool in investment and run these hospitals.

Not only CapEx grants from the Centre and the state, the concessionaire will also receive operational expenditure grants given the high cost of manpower and low-paying capabilities of people in smaller towns and cities.

Recently, the Union Finance Ministry gave its final nod for VGF for the development of affordable healthcare facilities at Angul (200 beds), Barbil (200 beds), Bhadrak (100 beds) and Jharsuguda (100 beds) in Odisha.

These PPP hospitals, being set up under the design, build, finance, operate and transfer (DBFOT) model, would be operationalised by December 2026. The concessionaire would run these hospitals for 32 years and can get the concession period extended further with the ‘right of first refusal’.

Of the total project cost of Rs 354 crore discovered through bidding, the VGF for CapEx would be Rs 230.5 crore with the Centre’s share of Rs 116.72 crore and the state’s share of Rs 113.78 crore. The rest would be pooled in by the private concessionaire. Given the high cost of running hospitals in smaller towns, the Centre will provide an aggregate Rs 124 crore operational expenditure grants the four hospitals while Odisha will give Rs 38 crore crore for the purpose.

“With adequate VGF support, successful PPP healthcare projects at these locations could be demonstrated. The model may be replicated in other districts of Odisha and in other states,” a senior official said, adding that it would help improve the quality of life of people in the districts they are located.

These projects have gone through a lot of support and handholding by the Department of Economic Affairs and the NITI Aayog.

India needs an additional 2.4 million hospital beds to reach the recommended ratio of 3 beds per 1,000 people, fuelling the demand for healthcare-related real estate space, Global real estate consultant Knight Frank said in a report. India’s existing bed-to-population ratio is 1.3/1000 population (both private and public hospitals included).

The Centre has plans to build at least one major hospital in each of India’s 761 districts to improve healthcare access in smaller towns.

There was a nearly 80% shortage of surgeons, physicians, gynaecologists and paediatricians at community health centres in rural India as of March 2022, according to a government report.

Prime Minister Narendra Modi recently said that in the last 10 years, 100,000 new medical seats have been added, with plans to increase that number by another 75,000 over the next five years.

Under the Ayushman Bharat Scheme, which offers Rs 5 lakh health cover/annum to poor families and senior citizens above 70 years (irrespective of income status), poor families have approximately saved Rs 1.25 lakh crore in healthcare expenses. The Financial Express