1.1 About This Step

The first step requires determining and understanding the main issues and problems related to the needs of the organization (or the local government) in hospital management services in a chosen site or area. These concerns will form part of the bases of public-private partnership (PPP) in the hospital management project. For example, if the key problem is poor and unreliable hospital services in a particular locality, the PPP project should ensure that this problem is adequately addressed. Going further, the organization should also have an idea on the scope of the PPP enterprise-for example, whether it should begin with just one hospital or immediately establish PPPs in hospital management projects in the whole province or district.

Having identified the problems, needs, and goals, the organization will have to come up with proposed solutions through the conduct of a market study (or a full-blown feasibility study, if deemed necessary). This step then involves a review of the market or the area that will be covered by the PPP project. A market (or feasibility) study should include strong financial models, which will help to facilitate the decision-making process. Box 1.1 briefly shares an experience of the Sarangani local government unit (in the southern Philippines) during the initial phase of its project development.

To reiterate, it is very important for any organization to understand the market before establishing a business or enterprise. In the case of an organization or a local government hoping to establish a PPP in hospital management, it is crucial to understand the local hospital services environment and the requirements of the public health care system.

In this step, the organization should also look into the legal and policy framework of a PPP in a hospital management project. It should have strong legal bases for such an intervention. Prospective partners should look into and understand pertinent national and local regulations. In the Philippines, PPP project developers should look into the Build-Operate-Transfer (BOT) Law (Republic Act 7718), the Procurement Law (Republic Act 9184), Department of Health's Administrative Order 2012-0004, and the local PPP code (if one exists).

Most, if not all, countries will also have pertinent laws related to the environment, social development, gender equality, and indigenous peoples. These policies must be reviewed, particularly during the feasibility study phase, and adhered to through-out the life of the project. PPP implementers and participants should recognize that any development intervention should respect the integrity of humans, nature, and the natural order of things.

Finally, consultations with affected sectors may also be conducted in this initial step and in Step 2.