John is Chairman, Sanitas, the Spanish arm of the BUPA Group, Britains largest private healthcare provider.

Theme: Balancing State and Private Contributions in European Healthcare Systems

I’ve been in the health business for 16 years - this is my penance for selling fast food snacks and soft drinks earlier in my career

If you look at an ideal health system, you want low cost, high quality and easy access and if you can do all three you’re doing well. Spain is good at cost and quality but access isn’t easy, they have crowding and waiting lists.

When Spain reached a population of 40m all predictions were that it would reduce, but now thanks to immigration, particularly in the last five years it’s gone up to 44m. We have universal coverage for people who live here, provided by 17 autonomous regions. Catalonia, where we are today was one of the earliest and so one of the most developed but still services are characterised by budget deficits and patient dissatisfaction.

We offer complementary services - eg adult dental care or IVF where the public services can’t or won’t provide but we also play a substitute roles where public services are farming out their services to private provders. In Spain we have the equivalent of PFI (Private Finance Initiative) both in terms of construction of a hospital, or as in the Valencia model the private provision of the core clinical practice. 7 new hospitals are being built this way in Madrid and others in the Balearics. Valencia is doing PPP in 5 hospitals and 1 such hospital is coming in Madrid.

Our investement so far is 144m euros and we expect an 80m euro per year turnover or 1,200m over 15 years. The challenge for us is that we are responsible for *all* the medical care.

We have oportunities in long term care too. In long term care, public and private have been working together since the start. Most nursing homes are privately owned and managed with a 60:40 ratio of private to public funding, although public funding is set to increase soon.

There’s a range of ways to cooperate with the public system.

Direct management of publically owned care homes.
Private ownership, private management, public offer
An allocation of a quota of publically funded beds within a private home
PFI project to build and manage for the provincial government.

I believe there’s quite a potential for us to work as partners with the public system. Because we can do things cheaper, because we control our costs and are willing to work with a capitative price. Theres been more interest in conservative-controlled areas, but it’s increasing in all the regions because the advantages are so clear.

Q: I’ve had responsibility for PPP and one difficult thing is service levels - who sets the clinical criteria by which you decide, say, how many transplants get done (or not)?
A: We haven’t really started on that battle yet as we’re just starting building. But it’s a joint decision. In the ones that are operating there is a dialogue - if we don’t have capacity then sometimes it will be picked up by public but occasionally, we will lose money and then we cry

Q: How does a public system deal with profits or gains in productivity.
A: Profits are capped, so gains in productivity are immediate for the public purse. They allow us a certain margin but above that it goes back to them.

Q: Why was it necessary for this mix of public and private? (Why not just private?)
A: It’s a political objection, since it’s based on universal coverage and politicians are very unwilling to give the whole pie away because privatising the public system is a vote-loser.