Promoting Private Sector

Engagement in Health
Mongolia

Eglantine Germain
Intern for EASS Health Sector

Supervisors:
Claude Bodart
Altantuya Jigjidsuren
28th November 2013

The views expressed in this paper are the views of the author and do not necessarily reflect the views or policies of the Asian Development Bank
(ADB), or its Board of Governors, or the governments they represent. ADB does not guarantee the accuracy of the data included in this paper and
accepts no responsibility for any consequence of their use. The countries listed in this paper do not imply any view on ADB's part as to sovereignty
or independent status or necessarily conform to ADB's terminology.

1. OBJECTIVES : UNDERSTANDING THE PRIVATE HOSPITAL SECTOR

Private
Public

PRIVATE HOSPITALS ROLE INSTITUTIONAL, LEGAL & BUSINESS ENVIRONMENT PPPS

Promoting Private Sector Engagement in Health Mongolia 2

AGENDA
1. METHODS AND CONSTRAINTS: DATA & QUALITY

2. A PRIVATE HOSPITAL OVERVIEW: UNREGULATED & GROWING

3. THE INSTITUTIONAL FRAMEWORK : KEEN & UNSETTLED
4. THE LEGAL AND BUSINESS ENVIRONMENT : BIASED BUT PROMISING
5. PUBLIC PRIVATE PARTNERSHIPS : LAWS & PROSPECTS
6. PRIVATE HOSPITAL QUALITATIVE ANALYSIS
7. RECOMMENDATIONS

Promoting Private Sector Engagement in Health Mongolia 3

1. METHODS AND CONSTRAINTS: DATA & QUALITY

Document
Review

18

Data Collection

Interviews with
Health
Experts
CONSTRAINTS
DATA
QUALITY

20

Survey private
hospitals

Promoting Private Sector Engagement in Health Mongolia 4

2. A PRIVATE HOSPITAL OVERVIEW: UNREGULATED AND GROWING

851 PRIVATE CLINICS IN UB

~100 PRIVATE HOSPITALS IN UB
NO DEFINITION OF PRIVATE HOSPITALS

IN THE

HEALTH LAW

STUDY DEFINITION:
1. Owned by a profit company or non-profit organization
2. Privately funded by out-of-pocket payments, & government health
insurance
3. Provide out & in patient care

36%

16%

15%

Promoting Private Sector Engagement in Health Mongolia 5

2. A PRIVATE HOSPITAL OVERVIEW: UNREGULATED AND GROWING

Table. Public and Private Hospital Bed Density per District, 2012
District

Chingeltei
Songinokhairkhan
Nalaikh
Baganuur
Khan Uul
Bayanzurkh
Sukhbaatar
Bayangol
1]
[2]

No. of private
beds/10 000
population
1.3
27.3
4.6
3.7
32
19.7
30.2
65.4

No. of public
beds/10000
population
22.7
10.6
42.9
50.2
26.6
76.7
88.7
92.0

Problems:

No. of total
beds/ 10000
population
24
37.9
47.7
53.9
56.6
95.4
118.9
157.4

-Concentration of private hospitals beds

-Erratic variations
Reasons:
- Legal and regulatory loop holes

Statistics Department of UB, 2011 population / district

Ministry of Health, 2011 number of private beds/ district

Table: Number of private clinics, hospitals and patients in Mongolia, 2004-2012

Facility
1 Private hospitals
growth rate
2 Private clinics
growth rate

2004

2005

2006

2007

2008

2009

2010

2011

2012

143

160

168

159

159

160

166

171

179

12%

5%

-5%

0%

1%

4%

3%

5%

523

612

698

904

922

947

1013

851

21%

17%

14%

30%

2%

3%

7%

-16%

434

Source: Health development centre, 2012

Promoting Private Sector Engagement in Health Mongolia 6

3. THE INSTITUTIONAL FRAMEWORK : KEEN & UNSETTLED

Figure: Health systems organizational hierarchy

Entities that license private hospitals

Entities that accredit private hospitals

Source: Developed from MOH website

Promoting Private Sector Engagement in Health 7

Mongolia

4. THE LEGAL AND BUSINESS ENVIRONMENT

Table: Discrepancies between public and private regulations and business environment

Area

Public

Private

Definition of role

Health Law 2011

No definition

Licensing Standards

Six standards for the public No standards

hospitals

Training HR

2 programs

No trainings

Importing Equipment

Government provides

Technology is very difficult to

import & high import taxes

Tax

No taxes

No tax privileges

Financing

Composition of all the public Composition of all the private

hospitals income:
hospitals income:
76% State budget
0% State budget
20.9% HIF
7.9% HIF
3% Other revenue
92.1% OOP

HIF rates are much higher

half the amount reimbursed to

government hospitals.

MOH approved user charged No regulations to set ceilings or

services
limit OOP.
OOP : Out of Pocket Payments

Promoting Private Sector Engagement in Health Mongolia 8

5. PUBLIC PRIVATE PARTNERSHIPS

Graph IX.1: Problems faced by public and private providers and the problems in public health.

Problems
Complaints

Private hospital

Public hospital

Unregulated growth
Disparity of quality of
services offered
Inaccessible to the poor

Over burdened facilities

Under equipped and staffed
Inefficiency

Lack of financial assistance

Lack government support
Unfair competition

insufficient funds
Line-item budget restrictions
No autonomy

PPP- Long Term Risk Sharing

institutional

relationships between the state and the private for-profit and/or the
private not for-profit sector, where the different public and private actors jointly participate
in defining the objectives, the methods and the implementation of an agreement of
cooperation.

Promoting Private Sector Engagement in Health Mongolia 9

5. PUBLIC PRIVATE PARTNERSHIPS: TYPE

Infrastructural Integrated
PPP
PPPs

Facility based Lease contract

hospital PPP

Services
Infrastructure + Infrastructure + Diagnostic
+ Diagnostic
provided
by non
clinical clinical and non clinical services
private sector services
clinical services
Type
contracts

of DBFM

DBFO

BOT or BOO or BLT

franchises

Initial situation No hospital

No hospital

In pre-existing Out
of
the
public hospital public hospital

Best countries

Developed

Developing

Developing

Examples

Canada,
Australia

UK, Lesotho
Brazil

and India

Developing
India

Promoting Private Sector Engagement in Health Mongolia

10

5. PUBLIC PRIVATE PARTNERSHIPS : LAWS

National PPP
legal
framework

Health specific
PPP legal
framework

State Policy on
PPP
2009

Government
Resolution #198
2010

Concession Law
2010
amended in
2012

Health PPP
policy
2011

Ministerial
Order
#305/320, 2011

PPP potential projects:

Center for burnt victims
Research center
Hemodialysis centers
General tertiary hospital
Tripartite PPP
Medical waste management:

US$240,000 investments
792 hospitals

Promoting Private Sector Engagement in Health Mongolia

11

6. PRIVATE HOSPITAL QUALITATIVE ANALYSIS

Selection:
15 hospitals in UB
3 hospitals in Khovd and Arkhangai
Number
of hospitals
4 clinics

Opened less than 14 Opened for more than

years
14yrs
8

Average number of inpatients

4208
Criteria:
Goodnumber
reputation
Average
of outpatients
24 375
More than 50 beds or a special license from MOH
Average
number of
108fund
Accreditation
andbeds
receives Health insurance

3625

Average price of a room for 1 person

For one person 51 000

27 000

Most popular specialties offered

Internal
medicine, Internal,
emergency,
general surgery and neurology and traditional
obstetrics

Number of hospitals with CT and MRI

3 CT and 1 MRI

2 CT

Number of hospitals with Laboratories

13 429
90

Number of hospitalsPromoting
that ownPrivate
theirSector
7
6 Mongolia 12
Engagement in Health
building

6. PRIVATE HOSPITAL QUALITATIVE ANALYSIS

Offer & demand of health services
increased
100%

Willingness to pay increased

50%

Business climate & Government relations

Number of private hospitals that
have borrowed
86%

Lack of income & competent staff

Bad relations with government

Agreed to work with

government
86%

60%

80%

Promoting Private Sector Engagement in Health Mongolia 13

7. RECOMMENDATIONS

GENERAL
ORGANIZATIONAL
RECOMMENDATIONS

GOAL 1 :
ESTABLISH LEGAL
ENVIRONMENT FOR

Build institutional
memory

FREE MARKET
CONDITIONS

Data collection and

transmission
Reassessment of tasks
and workload
Plan the Health Market
Certificate of Need

Defining the private

sector
Drafting licensing
standards

Insitu accreditation and

communication

GOAL 2: INCREASE

GOAL 3: ESTABLISH

EFFICIENT
INVESTMENT IN
HEALTH

A LONG TERM
RELATIONSHIP WITH
PRIVATE SECTOR

Fairer financing of
private facilities: HIF +
credit loans
Increasing HIF
efficiency: software,
HR, tariffs

Organize seminars
including private and
public sector
Jointly define potential
projects & discuss with
private companies

Promoting Private Sector Engagement in Health Mongolia 14

7. RECOMMENDATIONS: PUBLIC PRIVATE PARTNERSHIPS

Primary health care franchises- Facility based PPP- South Africa

- Cambodia

Improving technology- Facility based PPP or Lease contracts- Radiology in Andhra Pradesh
- Hemodyalisis in Andhra Pradesh

A general or specialized tertiary hospital - Integrated PPP

- Mamohato Memorial Hospital Lesotho
- Hospital do Suborbio Brazil

Promoting Private Sector Engagement in Health Mongolia 15

3 THINGS TO REMEMBER FROM THIS PRESENTATION

1031 private
health facilities
in UB
Business
Opportunities

Establish Legal
Environment for free
market conditions

Erratic growth
patterns

POORLY
REGULATED

Thank you
Political
Will

Increase efficient
investment in Health

BETTER
MEDICAL
CARE
Establish a long term
relationship with
private sector

Promoting Private Sector Engagement in Health Mongolia 16

16

THANK YOU
QUESTIONS?

Promoting Private Sector Engagement in Health Mongolia 17

ANNEXES
name

institution

domain of interest

Ms. B Purevdav

MOH - Department of Policy Implementation and

Coordination- Division of diagnostic, treatment technology

private hospital standards

Ms. Oyuntsegtseg G.

MOH Department of Public Administration and Management

- Division of health care organization, management and
development

accreditation

3
4
5
6
7
8

Ms. N. Gerelmaa

MOH-Policy planning department

HIF regulation

Ms. Ts Tsolomongerel

MOH- Policy and planning department

Health PPP policy; new Health insurance law;

Mr. B. Batarsukh

MOH-Policy planning department

Public Private Partnership

Ms. B. Soninkhu

MOH-Policy planning department

Public Private Partnership

Ms. G. Lkhomsuren

UB city Health Department

Statistics on private hospitals and licensing

procedures

Ms. Kh Zendmaa

UB city Health Department

Statistics on private hospitals

Mr. B. Bayarbold

GASI- Health, Education, Culture and Science Department

in charge of hospital inspections for quality of

medical care, epidemiology and pharmacology

10
11
12

Mr A. Bold

Fourth Health Sector Development Project

Health service planning and private sector role in

service provision

Ms Davaajargal

Health Development Center

Private hospital statistics

Ms. Aruntuya

Health Development Center

Private hospital statistics

13

Dr. Tumurtogoo

GIZ

Citizen Health Insurance Law specifications

14
15

Ms. T. Gantuya

SIGO- Health insurance fund Division

Statistics of HIF reimbursement to private

hospitals

Ms. G. Byambsuren

United Association of Private Sectors Health Organization

Understanding private hospitals perspective

Promoting Private Sector Engagement in Health Mongolia 18

Name of the
Hospital

Avitsena

43

chetan Elite

286

100

Bayangol

40

4
5
6
7
8
9
10
11
12
13
14
15

Bayanzurkh
District Hospital
Bolor Melmii
Gurun Gal
Mamba Datsan
Mangut
Mong-Em
Nomin
Tani Tulu bid
Songdo
Elec
EMJJ
Enk Undra

beds
according to beds according to beds according to
ANNEXES
MOH
HDC
UBHD

40
250

100

158
65
70
75

140
50
60
-

310
28
14
140
22
115
50
7
35
45

Promoting Private Sector Engagement in Health Mongolia 19

Characteristics

IndicatorsANNEXES

Initial investment
private facilities

Loan from
institutions

of the Personal investment

Multiple
owner's 4
contribution
Father company
2

Foreign investment

13
2

0
3

13
5
3
2

0
0
0
0

Commercial loans

commercial Yes
No

Purpose of the Loan

Private hospitals Private

in UB
clinics
UB

Investment
Equipments
Own building
Expansion

Promoting Private Sector Engagement in Health Mongolia 20

in

Characteristics

Indicators ANNEXES

Private hospitals in Private

UB
in UB
Intentions for the hospital for the Investing in innovative equipment 4
2
next 2 years
Having big surgery department
4
0
Expansion of the hospital
3
0
Investing in human resource
2
0
Making hospital more comfortable 2
0
and luxurious
Expanding specialization/service 1
2
Building 2 subsidiaries: pediatrics 1
0
centre and adult centre
Building a sanatorium
1
0
Collaborating with foreign high 1
0
quality and more experienced
hospital, exchanging experience.
Plan of the investment
Equipment
7
2
Both infrastructure and equipment 4
1
Infrastructure
3
0
Training of doctors
2
0
Human resource
1
0
Redoing or rethinking investment The building
4
0
in aspects of the hospital
The clientele
4
0
The size
3
1
The location
1
1
The specialties
1
1

Promoting Private Sector Engagement in Health Mongolia 21

clinics