Financing and cost-effectiveness analysis of public-private partnerships: Provision of tuberculosis treatment of South Africa

Background: Public-private partnerships (PPP) could be effective in scaling up services. We estimated cost and cost-effectiveness of different PPP arrangements in the provision of tuberculosis (TB) treatment, and the financing required for the different models from the perspective of the provincial TB programme, provider, and the patient. Methods: Two different models of TB provider partnerships are evaluated, relative to sole public provision: public-private workplace (PWP) and public-private non-government (PNP). Cost and effectiveness data were collected at six sites providing directly observed treatment (DOT). Effectiveness for a 12-month cohort of new sputum positive patients was measured using cure and treatment success rates. Provider and patient costs were estimated, and analysed according to sources of financing. Cost-effectiveness is estimated from the perspective of the provider, patient and society in terms of the cost per TB case cured and cost per case successfully treated. Results: Cost per case cured was significantly lower in PNP (US $354-446), and comparable between PWP (US $788-979) and public sites (US $700-1000). PPP models could significantly reduce costs to the patient by 64-100%. Relative to pure public sector provision and financing, expansion of PPPs could reduce government financing required per TB patient treated from $609-690 to $130-139 in PNP and $36-46 in PWP. Conclusion: There is a strong economic case for expanding PPP in TB treatment and potentially for other types of health services. Where PPPs are tailored to target groups and supported by the public sector, scaling up of effective services could occur at much lower cost than solely relying on public sector models. © 2006 Sinanovic and Kumaranayake; licensee BioMed Central Ltd.