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Optimization of Hospital Management and Operation Domestically and Internationally Using Private Sector Know-how
ODA Projects

Hospital PPP/PFI Consulting and Global Expansion

PPP (Public-Private Partnership) is a business method in public projects for developing public facilities, where private companies are entrusted with everything from financing to development and operation, utilizing private sector creativity to fulfill public services.
In the case of hospitals, for public hospital development, the public institution as the client typically prepares the budget, commissions design and construction to design firms and general contractors, and then manages the hospital itself. However, in PPP, a private business entity (usually forming an SPC: Special Purpose Company) raises funds through project finance, builds the hospital through design and construction, and continues part of the hospital management and operation (mainly non-medical services). (Note: The division of roles and responsibilities between the public and private sectors varies by project.)

Since the early 1990s, public projects using PPP have been introduced in the UK. In Japan, the PFI Law, which defines PFI (Private Finance Initiative), a representative method of PPP, was enacted in 1999 and has been utilized since then.
Hospital development using the PFI method has been implemented in 17 cases in Japan (according to the Cabinet Office website), accumulating the necessary know-how for project implementation.
ITEC has supported the realization of multiple hospital PFI projects across Japan, with comprehensive experience from planning to implementation, post-opening evaluation, and management advice.

The PPP (PFI) method can also be used to quickly develop necessary public infrastructure in developing countries where sufficient budget allocation is difficult. Therefore, the introduction of PPP methods is being considered and implemented worldwide.
To provide the know-how Japan has developed for infrastructure development in developing countries using PPP methods, JICA (Japan International Cooperation Agency) is providing technical support necessary for the introduction of PPP in several countries.

Among these, hospital PPP is a highly challenging project due to the many stakeholders involved, the direct impact on life through medical activities, and the complex revenue structure.
Therefore, ITEC, which has consulted on multiple hospital PFI projects in Japan, has participated in JICA’s surveys and technical cooperation projects to utilize its specialized knowledge and experience in infrastructure development in developing countries.
Specifically, these include technical cooperation projects for PPP system design and implementation capacity enhancement in Indonesia and the Philippines, and information collection and confirmation surveys on hospital PPP and PPP infrastructure cooperation preparation surveys in Turkey.
Additionally, we have introduced PPP methods at international conferences (Kazakhstan) and supported needs surveys and feasibility studies (FS) for project implementation as private sector consultants in various countries.

The introduction of hospital PPP presents many challenges, but it is a method that allows for the efficient implementation of necessary infrastructure development under public-private partnerships. We will continue to support its realization worldwide.

Key Success Points

POINT1
Accumulated Experience in Japan
In hospital PPP/PFI, many considerations different from traditional public project procurement methods are required, such as optimal role division and responsibility adjustment between the public and private sectors, drafting requirement standards to stimulate private sector creativity (performance-based rather than specification-based), and calculating cost benefits from PPP/PFI introduction (VFM: Value for Money).
When the client side implements it for the first time, they may not understand these consideration methods and key points, making optimal utilization of PPP/PFI difficult.
ITEC Strengths

ITEC has experience in supporting multiple hospital PFI projects in Japan from start to finish and conducts monitoring and evaluation of hospitals post-opening. Therefore, we have accumulated the know-how on what and how to consider and decide at the ordering stage, enabling us to support necessary tasks at the appropriate timing.

POINT2
Proposing PPP Methods Tailored to Local Conditions
In hospital PPP/PFI, many considerations different from traditional public project procurement methods are required, such as optimal role division and responsibility adjustment between the public and private sectors, drafting requirement standards to stimulate private sector creativity (performance-based rather than specification-based), and calculating cost benefits from PPP/PFI introduction (VFM: Value for Money).
When the client side implements it for the first time, they may not understand these consideration methods and key points, making optimal utilization of PPP/PFI difficult.
ITEC Strengths

ITEC has experienced various patterns of hospital PFI (ordering methods, task division, etc.) in Japan and proposes optimal methods based on a thorough understanding of local conditions in the target country.
Especially in setting task divisions that allow for smooth private sector participation, it is important to confirm the legal basis in the target country and the development and competitiveness of medical-related service businesses. ITEC can support the realization of feasible hospital PPPs in the target country.

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Phone：03-6810-7710
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Department in Charge: Administration Department
Email Address: info@itec-ltd.co.jp

19-Sep-23
Ningyocho First Building 3F
3-3-6 Nihonbashi Ningyocho, Chuo-ku, Tokyo 103-0013, Japan
ITEC Ltd.
President: Hiroomi Suzuki

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