By: Staff Writer
March 12, Colombo (LNW): Sri Lanka’s decision to expand Public-Private Partnerships (PPPs) in the health sector has triggered a growing debate about the long-term future of the country’s free public healthcare system.
While the government insists the initiative is intended only to improve efficiency and expand services, critics warn that outsourcing key medical services to private operators could gradually reshape the foundations of the state-run healthcare model.
The proposed reform centres on a plan to outsource certain high-cost diagnostic and treatment services within government hospitals to private providers under performance-based contracts. Officials say the arrangement will allow hospitals to access advanced technology such as CT scanners, MRI machines, catheterisation laboratories and automated laboratory equipment without requiring the state to finance the full investment.
To facilitate these initiatives, the Ministry of Finance is preparing to establish a new unit responsible for implementing PPP projects. The body will replace the National Agency for Public-Private Partnership (NAPPP) and is expected to operate under new legislation aimed at streamlining project approvals and attracting private investment.
Authorities argue that the shift is necessary due to fiscal constraints and complex procurement procedures that often delay the acquisition of specialised equipment. Demand for advanced diagnostics has also surged as non-communicable diseases increasingly dominate Sri Lanka’s health profile.
Another component of the programme involves expanding haemodialysis services. Although roughly 80 government hospitals currently offer dialysis treatment, health authorities acknowledge that capacity remains inadequate for the growing number of patients suffering from kidney disease.
Under the proposed model, private partners would manage dialysis machines and supply medical consumables while the government continues to provide hospital infrastructure and clinical supervision.
Cabinet has already approved the framework for obtaining diagnostic services and equipment through PPP agreements, subject to existing procurement rules and a performance-based payment mechanism.
Government representatives emphasise that the reforms do not amount to privatisation. According to officials, patients will continue to receive treatment free of charge at public hospitals even when services are delivered through privately operated equipment.
However, observers remain cautious. Some analysts argue that increased reliance on private operators could gradually introduce commercial dynamics into public healthcare delivery, potentially influencing pricing, access, and policy decisions over time.
The debate is unfolding as Sri Lanka’s private healthcare industry expands rapidly. The sector currently includes about 55 private hospitals with inpatient facilities along with numerous specialised services, making it an influential player in the national health ecosystem.
Industry representatives have welcomed the government’s willingness to deepen collaboration. They argue that structured partnerships could help modernise healthcare infrastructure while also positioning Sri Lanka as a competitive destination for medical tourism.
Private sector leaders have also called for policy changes to support the industry’s growth, including reduced tariffs and taxes on imported medical equipment.
Nevertheless, some health policy observers caution that the expansion of PPP arrangements must be carefully regulated to ensure that private interests do not overshadow the public health mission.
Sri Lanka’s free healthcare system has long been considered one of the country’s most significant social achievements. As the government turns increasingly toward public-private collaboration to address financial and technological gaps, the central question now emerging is whether these partnerships will strengthen the system or quietly transform it.