Last update:
16-Oct-2008

The use of public-private hospital partnerships (PPPs) shows a tendency to become an international phenomenon. Recently, PPPs have been adopted in Greece also, where they are already in the stage of design. In this study, the British experience of Private Finance Initiative (PFI) and an efficiency evaluation, through a literature review of Britain's empirical evidence, are presented. Empirical evidence from Britain shows that PFI hospital projects do not offer value for money: Their total costs are too high, and higher than public procurement. The lands and assets of the National Health Service (NHS) are being sold or transferred on very advantageous terms to the private sector. New PFI hospitals have been downsized, through clinically unacceptable reductions in bed capacity of up to 30% and in clinical staff budgets of up to 16%, compromising their ability to cope with local health needs. Within PFI projects the transfer of risk from the public to the private sector remains unlikely. Finally, PFI/PPPs affect and restrain future generations of taxpayers by obliging them to pay unaffordable annual fees to private consortia. The preference the governments show in using PPPs as the means of capital investment in the hospital sector rather than using public financing, reflects their ideological preference for the free market potential, a preference that appears to disregard the empirical evidence that opposes it.

Key words: British Health Care System, PFI, PPPs, Private finance initiative, Public private partnerships.