Public Financing into Build-Operate-Transfer Hospital Projects in Italy

An empirical analysis is presented to investigate the factors that have significant influence on the share of public financing into the total initial investment required to develop Build-Operate-Transfer (BOT) healthcare projects. Based on a model describing the main risks associated with public participation in BOT projects, a linear regression analysis has been conducted on a dataset of Italian BOT hospital projects to yield implications. Outcomes reveal that the size of investment, the financial strength of the concessionaire, the duration of the concession period, the number of services, and the level of borrowing of the local healthcare granting agency are significant factors of the level of public funding. The study confirms that public funding is not only provided to cover the non self-financing portion of investment, but also as a way to undertake a project in periods of scarce public financial resources. The methodology may be useful to refine the decision criteria for determining the level of public funding of a BOT hospital project in order to gain an understanding of the value that could be obtained from funding similar projects