Review of strengths and weaknesses of public-private partnerships from a health economics perspective

Abstract

This paper analyzes the economic strengths and weaknesses of public-private partnerships (PPPs) in the health sector from a health economics perspective, moving beyond a view of PPPs as a mere financing alternative to evaluate them through resource allocation, efficiency, fiscal sustainability, and equity. The study utilizes a qualitative synthesis of theoretical frameworks—including the IMF’s PFRAM and World Bank guidelines—and empirical literature to examine the "lifecycle" logic of PPP contracts and their alignment with universal health coverage objectives. The findings indicate that while PPPs can accelerate capital-intensive infrastructure development and improve technical efficiency in facility management, they often introduce significant long-term fiscal rigidities and contingent liabilities. For example, performance data from Turkey shows an increase in technical efficiency scores from 0.76 to 0.91 during the PPP period, yet these gains are often offset by higher financing costs, contract complexity, and risks to physical accessibility for low-income populations. Consequently, this study contributes to the field by framing PPPs as a selective rather than universal policy tool, emphasizing that their rational use should be limited to infrastructure and ancillary services supported by rigorous value-for-money analysis and strong public contract management.