12 private health management organizations to receive backlogged funds

KP Govt Releases Rs1 Billion to Outsourced Hospitals Amid Funding Crisis

To prevent disruptions in healthcare services, the Khyber Pakhtunkhwa (KP) government has ordered the release of Rs1.061 billion in overdue payments to private organizations managing outsourced government hospitals. The decision follows months of financial strain that forced several hospitals to suspend elective medical procedures, affecting patients.

Key Issues & Background

1. Delayed Payments & Hospital Crisis

   • 9 out of 19 outsourced hospitals had not received payments for eight months.

   • Many hospitals suspended elective services due to lack of funds.

   • Contracts of 7 hospital management organizations expired in June 2023 and were only temporarily extended.

2. Structural & Administrative Hurdles

   • The KP Health Foundation (HF), responsible for outsourcing hospitals, faced challenges in appointing new hospital management partners.

   • The Board of Governors (BoG), which must approve outsourcing agreements, ceased to function due to leadership disputes.

   • BoG rejected the selection of new organizations for seven hospitals, delaying service continuity.

3. Impact on Healthcare Services

   • Hospitals lacked funding to pay staff salaries and maintain medical services.

   • Public-private partnership efforts in healthcare were undermined by bureaucratic delays.

   • The HF plans to re-tender contracts, which may take several months, prolonging uncertainty.

Government’s Response & Next Steps

✅ Immediate Fund Release:

• Rs1.061 billion has been allocated for pending dues from July-Dec 2024.

• The government has committed to quarterly payments to hospitals.

🚨 Challenges Ahead:

• The new BoG must finalize outsourcing contracts to ensure hospital operations continue.

• The tendering process for seven hospitals will take time, potentially worsening service gaps.

• Healthcare staff in outsourced hospitals are still waiting for salary disbursements.

Outlook: A Critical Test for KP’s Healthcare System

While the fund release provides temporary relief, KP’s public-private healthcare partnership remains fragile. Without clear governance and a permanent outsourcing framework, hospitals may continue to struggle with service disruptions and staff shortages.

The KP government must accelerate decision-making on hospital outsourcing to ensure uninterrupted healthcare for patients across the province.