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Spain

 

The Alzira model: Hospital de la Ribera, Valencia, Spain

 

  • A Public Private Partnership model; a private company formed for the purpose of delivering public hospital services (on a green field site) under contract to a new region of Valencia, Spain
  • The PPP raised commercial capital, commissioned the hospital building and its technologies, delivered a full range of hospital services and proposed to cover debt repayment from service income
  • The hospital was conventional in design and context – similar to most throughout Europe – as was the staffing structure
  • Within a short period the PPP company realised it had miscalculated the business plan:
    • Over optimistic pricing, in undercutting opposition to win the contract it was not generating enough income to cover costs, it also
      • Underestimated cost inflation
      • Underestimated the pace and nature of change in healthcare technologies and models of care
  • Alzira renegotiated its contract with the Valencia region on an entirely different basis. In place of a DRG episode based payment system the hospital agreed a capitation funding model
  • In place of a focus on hospital care Alzira now provides a full primary and secondary care service on the basis of a negotiated (annualised) capitation payment per head of population

 

 

Advantages
  • Alzira has adopted a vertical integration model - it is able to flex and adapt service models to changing clinical and care needs and can also flex and adapt asset utilisation and future investment balance (unlike some systems where there are structural and perhaps legal separations of primary and secondary care).

 

 

Disadvantages
  • It is a high risk model in terms of ensuring adequate population health needs planning and negotiating a realistic contract period and commensurate funding to manage changes in demand and healthcare delivery models. The increasing demands of the chronic ill and elderly may present specific risks.

 

 

Structural Fund relevance – very high
  • A high degree of relevance as it introduces and is based on whole population health needs assessment and delivery. 

 


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