PUBLIC-PRIVATE PARTNERSHIPS FOR HEALTHCARE DEVELOPMENT IN KYRGYZSTAN

Abstract. Public-private partnerships (PPPs) are currently a priority area for healthcare development and are considered an effective tool for improving the material and technical infrastructure of healthcare facilities, introducing innovative treatment practices, and improving access and quality of medical care. At the same time, healthcare and medical services are a specific part of the economy and social sphere. For this reason, methods of attracting private investors that have proven successful in other sectors may be unacceptable in this case. Furthermore, the state also performs significant social and regulatory functions (budget allocation, asset management, etc.) and guarantees the quality of healthcare for citizens. The goal of businesses is to profit from their investments and increase their market share. Therefore, the success of PPPs largely depends on how optimally the functions of the partners (the state and business) are combined in the implementation of joint projects. This article provides an analytical review of existing PPP projects in Kyrgyzstan healthcare sector, as well as the operational practices of medical organizations created through PPPs. In the first part, the authors analyze the specifics of PPP promotion in healthcare. The second part provides an overview of innovative PPP projects. The third part examines specific projects, their development and current status, and analyzes the main challenges and objectives for the further development of PPPs in Kyrgyzstan healthcare sector.

Keywords: healthcare, projects, public-private partnerships, investment.

Introduction: The practice of public-private partnerships (PPPs) has become firmly entrenched in all spheres of public life and currently occupies a stable position as one of the main mechanisms for modernizing countries with developed economies. For example, in many countries, at both the national, regional, and local levels, the PPP institution is being promoted to overcome the traditional shortcomings of public procurement. For example, in the United Kingdom, Australia, Portugal, Spain, and other developed countries, there has been a steady increase in the number of PPP projects [15: 293-294]. The experience of foreign countries with a high level of economic development can play a significant role in the development of the PPP institution in Russia, as well as in further economic growth and overcoming crises in the country [8: 122]. The introduction of the PPP mechanism in the implementation of infrastructure projects essential to society is an effective tool for attracting extra-budgetary funding sources in all sectors.

Infrastructure development is necessary for the state, since it allows for the necessary socio-economic growth, but budget financing does not always allow for the realization of the necessary innovative, technological and infrastructural potential due to limited funds, the duration of the implementation of such projects and other unfavorable economic externalities [3: 20-22]. In addition, there was a problem of an agreed definition of public-private partnership, which was expressed One definition suggests understanding PPP in healthcare as "a form of interaction between the state and the private sector in relation to medical institutions and related medical care provided by state and municipal institutions and enterprises established for a specified period in accordance with legislation" [4: 10]. In general, in Kyrgyztan, a broad interpretation of PPP prevails, encompassing virtually any form of private sector participation in solving societal problems [5: 40]. Both the government and business are interested in public-private partnerships in healthcare, believing that this form of cooperation can lead to significant social and economic benefits for society by accelerating the development of healthcare as a socially significant sector, ensuring its technical re-equipment and technological breakthroughs, increasing the efficiency of state- and municipally-owned medical institutions, and ensuring their better management and sustainable operation

The importance of developing institutional and legal mechanisms regulating the implementation and operation of PPP projects, creating a monitoring system, and supporting the promotion of best practices for effective interaction between government agencies and the private sector was particularly emphasized. The article examines the development of PPPs, focusing on the implementation of PPPs in healthcare in Bishkek. The purpose of this work is to assess the level of regulatory support for PPP in Bishkek and Kyrgyzstan, to describe and analyze existing PPP projects in the healthcare sector, as well as the operating practices of medical organizations created on the basis of PPP through the prism of effective regional management.Previously, an analysis of PPP projects in healthcare in Kyrgyzstan has not been conducted. The research hypothesis is that further development of the PPP institution in  healthcare sector will have a positive multiplier effect. This, coupled with the active implementation of cutting-edge technologies and improved regulatory frameworks, will create new opportunities to ensure accessibility and improve the quality of medical care for the population.

Methods of researches

According to foreign researchers, there are nine success factors for the implementation of PPP projects in the healthcare sector: leadership, coordination, regulation, incentives, the ability to maintain partnerships, monitoring and evaluation, high-level support and participation, harmonization and coordination, innovation [14: 3-4]. Implementation of PPP practices in the regions of Russia Concession agreements are one of the main and long-standing forms of PPP in the healthcare sector. Concessions are regulated by a separate regulatory legal act - Federal Law No. 115-FZ of 2005 "On Concession Agreements", according to which “a private partner has the right to actually manage the state property transferred to him and receive income from the operation of this property” [9: 6]. However, the entry into force of Federal Law 115 did not automatically launch the process of mass implementation of the practice of concession agreements, but it did become the basis for the beginning of their application [7: 19], [2: 77]. At the federal level, in order to most intensively implement and support for PPP projects, the Center for Development of Public-Private Partnerships was established in 2009 [6: 172].

Medical clusters have been forming around the world for some time now. Today, international databases (TCI Network, European Cluster Observatory, European Cluster Collaboration Platform) list approximately 40 clusters from countries that are leaders in medical tourism or healthcare development. These clusters are distinguished by their global visibility, involvement in the development of national healthcare delivery systems, and the presence of large medical organizations or university hospitals. However, they also have unique characteristics related to their position in the global healthcare market, the activity of key participants, and their governance systems. Medical clusters can be roughly divided into three groups:

• Global high-tech medical clusters. These bring together a large number of organizations that are active exporters of healthcare services;

• Global biomedical research clusters. These clusters focus on the implementation of scientific discoveries into medical practice, building on strong university clinics and knowledge centers;

• International medical tourism clusters. These clusters unite clinics, hotels, spas, and other hospitality industry organizations; their competitive advantage and key value for patients are integrated services that allow them to combine treatment and relaxation at relatively low prices (table).

Medical clusters are created for various purposes, which explains the differences in the composition of participants and the formats of their interactions.

The most common target model for medical clusters is to coordinate the activities of regional players in the healthcare sector. Clusters are created to increase the competitiveness and investment attractiveness of their host regions.

At the same time, medicine is viewed as a vital economic activity, creating jobs and generating income. Successful implementation of this target model requires synchronization of the regional community, coordination of support measures among cluster participants, and the provision of a unified communications platform. These functions are assumed by the regional development institution.

Global biomedical research clusters often choose to create conditions for collaboration between scientific organizations and businesses in technology transfer as their target model. The logic behind cluster development is as follows: strong universities increasingly develop partnerships with industry over time. The focus of work is shifting: from simply high-quality research to the application of its results in clinical practice, pharmaceuticals, and the production of medical devices and equipment. The cluster is one format that allows for such interaction.

In some cases, the creation of medical clusters prioritizes communications; the target model is the unification of medical and pharmaceutical companies, research organizations, and universities into a global partnership network. Clusters function as international associations, incorporating both national and international companies. Their goal is to exchange knowledge between healthcare organizations, including information on scientific achievements and cutting-edge technological developments.

Finally, there are examples of a very specific goal: establishing cooperation between clinics, travel companies, and insurance companies to develop integrated services. This is entirely consistent with international medical tourism clusters. They need cooperation to minimize the costs of providing services that are linked together, as their competitive advantage is often price.

If medical clusters are so diverse, does this mean that the measure of their achievements is unique in each case (depending on the group or target model)? Is it fair to evaluate the success of global high-tech medical clusters by export revenue, to judge the effectiveness of global biomedical research clusters by investment dynamics in scientific projects, or to judge the success of international medical tourism clusters by ratings on medical tourism websites?

Conclusion

A study of medical clusters around the world showed that their success was based on the implementation of similar practices, the specific set of which was unique to each case. Seven secrets to success can be identified.

1. A robust communications agenda. This is a common feature of most medical clusters and a key function of their management companies. Without active communication, it is impossible to organize a stream of joint projects at the intersection of science and industry, systematically promote research results, introduce innovations into clinical practice, and develop international ties.

2. Intersectoral collaboration. Many medical clusters bring together patients, doctors, researchers, and entrepreneurs who jointly create market-demanding high-tech products and services. New industries, such as the healthy longevity industry, are emerging at the intersection of healthcare, pharmaceuticals, medical equipment and food production, construction, and ICT.

3. Partnership in management. Biomedical clusters bring together participants from various fields (healthcare, the medical and pharmaceutical industries, science, education, and government). For communication and collaboration to be successful, it is necessary to balance these different interests. To achieve this, most clusters have implemented a multi-tiered management system. Strategic development is handled by the cluster council, while operational issues are handled by a professional management company.

4. Support from regional authorities. Medical clusters often unite the entire regional community of companies and organizations in the healthcare sector. The region serves as the cluster's institutional base; the specialized infrastructure required by participants is concentrated within its territory. The regional budget often serves as the primary source of start-up funding for the cluster organization.

5. National recognition. Support from the central government is essential for a cluster, as healthcare regulation occurs at the highest level of government. To become involved in policy, medical cluster participants actively engage with the government, acting as consultants on healthcare development issues or co-implementing national projects and programs.

6. Involvement of doctors and patients. Scientific discoveries in medicine can be converted into commercial products or services, but they will only become truly successful in the market if they are in demand by end consumers. Involving patients and doctors in the development and testing of innovations has become a common practice among many successful clusters.

7. A comprehensive approach to supporting innovation. Many leading medical clusters are located in centers of world-class infrastructure. The young innovative companies that grow there serve as a source of breakthrough, innovative solutions at the intersection of healthcare and high technology. And universities, in most cases, serve as the founding fathers of these clusters.

8. It's difficult to choose a benchmark among the medical clusters we analyzed—each one is interesting in its own way. Germany's Life Science Nord has created its own social network to foster communication. Health Tech Cluster Switzerland, on the other hand, prioritizes face-to-face interaction, regularly holding one-on-one meetings with participants and informal events over a glass of wine. Lithuania's LitCare is fostering cross-sector collaboration, uniting healthcare and hospitality organizations into a single chain. The HealthCapital cluster includes participants from two German federal states—Berlin and Brandenburg—and is managed by two managers under a partnership agreement. All administrative costs for the French Eurasanté cluster are covered by the budget of the Hauts-de-France region; the cluster, in turn, provides basic services to all participants in the regional ecosystem free of charge. Companies in the Estonian Connected Health cluster, working at the intersection of ICT and medicine, are developing software products for the national e-health system. Health Valley Netherlands helps its members test new developments with patients in a living laboratory format; this is how the GoOV mobile app was created, allowing people with disabilities to use public transport freely and safely. The Øresund Bridge, connecting southern Sweden and the Capital Region of Denmark, created the foundations for the formation of the cross-border Medicon Valley cluster: major pharmaceutical companies—Novo Nordisk, LEO Pharma, Ferring Pharmaceuticals and Lundbeck, concentrated on the Danish side, were strengthened by innovative infrastructure—MAX IV and ESS—located in the Swedish part of the cluster. And Turkey's Istanbul Health Industry Cluster grew out of a biomedical science-business collaboration platform established at Boğaziçi University. Today, the cluster comprises 19 university research units.

9. In preparing this article, materials from the report “Biomedical Clusters in the World: Success Factors and Stories of the Best” were used / E. A. Islankina, E. S. Kutsenko, F. N. Filina, V. I. Pankevich, et al.; International Medical Cluster Foundation, National Research University Higher School of Economics. — Moscow: National Research University Higher School of Economics, 2019.

10. Authors: Evgeny Kutsenko, Ekaterina Islankina

11. Source: BRICS Business Magazine No. 2(23)