A serious shortage of beds, the quest for more effective management with quality as a benchmark, the presence of foreign operators, poor planning and erratic political decisions all need to be considered when analyzing hospital infrastructure in Latin America.

The urgent need for resources to finance public health infrastructure without incurring significant burdens on fiscal budgets has led some countries in the region - especially Peru, Chile, Colombia and Mexico - to seek private sector participation in recent years in two areas of hospital management: financing and operations.

To achieve these objectives, governments have implemented financing mechanisms and management contracts. The concession system or public-private partnerships (PPPs) have been launched in recent years, and probably will continue to be used in the future if these can satisfy the unmet needs and resolve the region's shortage of hospital beds.

In general terms, the model applied in Latin America is similar to the concession system created decades ago in Spain: separating the roles of the public and private sectors, competition in the tendering process, an open bidding system and risk transfer.

 A hospital in the Chilean city of Copiapo, some 800 km north of capital Santiago. (CREDIT: AFP)

Over time, the system has been adapted according to each country's characteristics, and the model has even been rejected, as is currently the case with the administration of Michelle Bachelet in Chile. This may seem paradoxical in a country that since 1995 has been awarding concessions that have led to a significant improvement in public infrastructure, especially in transport.

Colombia and Mexico also have years of experience of awarding infrastructure concessions, some of which have resulted in success and others in failure, while Peru is currently launching ambitious programs to build and modernize hospitals under PPP schemes.

However, there is no single opinion on the benefits or the disadvantages of incorporating private capital and management. While in Peru in 2014 some US$400 million of private investment was channeled into health projects that have reduced the shortage of beds in the public system, in other countries there doesn't seem to be the same dynamism.

Figure: Hospital Beds in 2011


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