PESHAWAR: The Khyber Pakhtunkhwa government has ordered the payment of over Rs1 billion arrears to the private organisations running outsourced government hospitals in the province in order to prevent the disruption of health services to patients, say health officials.

They told Dawn that following the recommendation of the cabinet’s supervisory committee on outsourced hospitals, chief secretary Shahab Ali Shah directed the finance department to release the amount as nine of the total 19 outsourced hospitals hadn’t received any payments for the last eight months. The officials said the contracts of seven organisations for hospital management had expired, forcing most of them into suspending elective services due to non-payment by the finance department, so patients were suffering.

They said the chief secretary recently directed the finance department to release Rs1.061 billion to organisations as payment of dues from July 2024 to Dec 2024.

The officials said the hospitals got funds from the government on a quarterly basis.

Move will prevent disruption of health services to patients, say officials

They also said the provincial government had also decided to release funds to the hospitals every three months after assessment to ensure continued provision of health services to patients.

The officials said the Health Foundation, a public sector entity established under the Khyber Pakhtunkhwa Health Foundation Act, 2016, had outsourced those hospitals over “failure to perform” due to the unwillingness of doctors, nurses, and paramedics to be posted there.

They said the foundation had so far outsourced 19 public hospitals to private organisations, mostly in merged tribal districts, to improve services, and of them, the contracts of seven with HF expired in June 2023 but were temporarily extended by the provincial cabinet.

The officials insisted that the public-private partnership initiative of the health department continued to suffer due to the HF’s failure to select new organisations to take over seven hospitals whose outsourcing contracts expired one and a half years ago.

They said that as hospital contracts were extended from time to time, the HF selected new organisations after fulfillment of all formalities in Dec last year, but the new organisations couldn’t be given the control of the hospitals as the foundation’s board of governors didn’t exist.

The BoG has the final authority to give the go-ahead to the new agreements.

The BoG was notified last year but its chairperson rejected the selection of new hospitals and hinted at the re-tendering of the entire process.

The officials said HF managing director Dr Adnan Taj developed differences with the chairperson and wrote to the health department about the situation saying the selection had been done as per law and going for the selection process afresh would take three more months.

Meanwhile, the BoG chairperson resigned and new members were required to be selected either to award the contract of the seven hospitals to the selected private organisations or start the tendering process again, according to officials.

They said all 19 hospitals wanted the government to pay them Rs1.5 billion, which also included Rs1 billion of the seven hospitals whose outsourcing contracts had expired.

The officials said the new BoG, in its meeting early this month, rejected the selection of partners to operate seven hospitals, dealing a serious blow to the public-private partnership initiative of the health department.

They said that the HF’s board decided to refloat tenders for the selection of new partners that would take many months, and the partners whose contracts had expired couldn’t run the hospitals as a stop-gap arrangement as they weren’t getting money.

The officials said that the outsourcing of hospitals aimed to ensure that the people get services, but in many hospitals, they didn’t receive the desired care.

They added that the organisations managing hospitals had always cited a shortage of funds as a reason for not paying the salaries to staff members.

Published in Dawn, March 30th, 2025