In April 2018, the Regional Government of Valencia reversed the administrative concession to ‘RiberaSalud’, the emblematic public-private partnership (PPP) incepted in 1999 under the “Alzira’s model” trademark. This resulted in the regional health authority taking back responsibility for the governance and provision of hospital and primary care services delivered to 259,537 inhabitants in the area of La Ribera (Generalitat Valenciana, 2016). The decision of reversion reflects the electoral commitment of the current parties co-running the regional government, who assumed the profound controversy in the Valencian society related to the (so called) ‘privatization’ of public health services.
Context
The role of public provision in the statutory Spanish National Health System has been crucial since its inception and private providers used to play only a subsidiary role. Nonetheless, new regulation in the mid-1990s allowed health authorities to consider alternative governance and provision models (Bernal-Delgado et al., 2018). On this regard, the Autonomous Community (AC) of Valencia set up several PPPs as administrative concessions (del Llano et al., 2017). The first PPP established in 1999 was “Alzira”, where a private company, whose capital was owned by the Bank of Sabadell (50%) and Centene Corporation (50%), was in charge of providing hospital care, and, since 2003, primary care to all people living in the administrative healthcare area of La Ribera (García Armesto et al., 2010).
Impetus for the reform
Beyond the increasing societal discontent with the, so claimed, privatisation of public services, numerous flaws in the administrative concession process and its governance undermined the continuation of the contract. Among those failures: a) only one for-profit company (namely, RiberaSalud) presented an offer to the bidding process and hence, there was no real competition (Acerete et al., 2011); there was strong political influence on the decisions of regional savings banks (Acerete et al., 2011); c) the system showed high-potential of regulatory capture (NHS European Office, 2011); d) the intrinsic difficulties of a proper contract design resulted in high transaction and supervision costs; and, e) inappropriate incentives enabled cross-subsidization from public providers (Peiró-Moreno, 2017).
Content of the reform
Instrumentally, the reversion of the PPP entailed the termination (and non-renewal) of the contract between ‘RiberaSalud’ and the Health Authority of Valencia, and implied some changes in the purchasing and provision mechanisms; in the former case, the purchasing mechanism has evolved from an annual capitation procuring hospital and primary care services towards a yearly lump-sum budgeting mechanism; and, in the latter case, affecting the workforce, the personnel has been kept assuming its original labour conditions under private legislation, while the regular mechanism established to gain the condition of public servant is put in place.
Notably, in terms of coverage, the reversion has not implied any substantial modification in the scope, depth and breadth of the basket of benefits; nevertheless, the AC has highlighted its interest in enhancing primary care, developing home care services and increasing capital investments in high-technology.
As a final note, this reform is observed as a first step in the reversion of the remaining administrative concessions in the AC of Valencia, nowadays providing care to up to 655,000 inhabitants.