In 2010, a number of record-setting PPPs formed across three continents to finance hospital infrastructure, including a new 700-bed Karolinska Solna University Hospital in Stockholm, Sweden, the largest hospital PPP in the world. Other deals were made in Canada, Mexico, Africa and Spain.
While the deals are dominated by infrastructure projects, they are also expanding the market for private capital and expertise in health services. As the scope of the partnership projects in healthcare grows, so does the size of the potential market for private companies, PwC said.
PwC estimates that:By 2020, spending on health infrastructure among the Organization for Economic Cooperation and Development countries, and Brazil, Russia, India, and China, will increase to $397 billion annually, up from $263 billion today. However, the larger market for health PPPs will be in non-infrastructure spending, estimated to be more than $7.5 trillion annually, up from $5 trillion in 2010.
Between 2010 and 2020, OECD and BRIC nations will spend cumulatively $3.6 trillion on health infrastructure and $68.1 trillion on non-infrastructure health spending.
Health spending in the United States accounts for half of all health spending among OECD nations. However, the biggest growth will be outside of the U.S. According to PwC projections, the countries that are expected to have the highest health spending growth between 2010 and 2020 are China, where spending is expected to increase by 166%, and India, which will see a 140% increase.
Among OECD countries, health spending as a percent of GDP will increase to 14.4% by 2020, up from 9.9% in 2010. Among BRIC nations, health spending as a percent of GDP is expected to increase to 6.2% in 2020, up from 5.4% in 2010 as their economies grow and they build out their health systems. In actual spending, this amounts to a 117% increase in spending over the decade, with China leading the way.
John Commins is a senior editor with HealthLeaders Media.