Outsourcing in the Italian National Health Service: findings from a national survey

Abstract

Over the last decade, outsourcing has become one of the major issues in health care. Two major concerns are related to public health care outsourcing practice. The first one involves the suitability of the outsourcing strategy in the public sector, principally with reference to the outsourcing of essential clinical services. The second one relates to the actual benefits of the outsourcing practice in health care, in terms of cost reduction and increasing efficiency. This paper aims to contribute to the debate and literature on outsourcing through a national survey carried out in the Italian National Health Service. In order to achieve the research objective, a questionnaire was developed and, after a pilot test, it was mailed to all Italian public providers. The total response rate was around 42%. Results showed that outsourcing is a widespread phenomenon within health care, especially in the ancillary services area. Moreover, results showed many criticalities of the outsourcing practice in the Italian health-care sector. On the one hand, criticalities concerned the reasons for outsourcing, the characteristics of the outsourced services and the management of the relationship with the vendor. With reference to essential clinical service, outsourcing, as currently managed by health-care providers, may potentially weaken their ability to reach its own objectives. On the other hand, criticalities related to respondent-perceived benefits. Despite the overall positive outsourcing experience expressed in the survey, the results on perceived benefits showed that the effects of outsourcing did not always align to managers' expectations, especially in the cost containment and efficiency area.

Caring More by Doing Less? An Enquiry About the Impacts of Outsourcing on Patient Care

“…More generally, authors (Roberts, 2001;Macinati, 2008) recognize that ancillary services are more likely to be outsourced, as they are considered strategically less important by healthcare organizations. Diagnostics and clinical services tend to be managed internally, due to their importance, although laboratory services and nursing are increasingly being outsourced.…”

“…Outsourcing choices are driven by the necessity to reduce costs and increase efficiency, as a result of the increased attention to the rise of healthcare expenditure and the decrease of quality in services and by strategic considerations, as a result of managerial choices to focus on core activities to increase competitive advantage while externalizing the peripheral and non-core activities (Roberts, 2001;Macinati, 2008;Billi et al, 2004). Outsourcing provides the benefit of flexibility, enhancing the capability of the organization to face changing environments, as adaptation does not require reconfiguring internal resources (Roberts, 2001).…”

“…Nonetheless, cost reduction is not always in line with the expectation of managers: outsourcing is likely to have scarce positive effects on financial performance (Macinati, 2008) and cost-effectiveness of outsourcing choices is becoming a main concern (Burmahl, 2001). Pressures from institutions to reduce healthcare expenditure have driven managers to externalize services and activities traditionally managed in-house, leveraging scale economies and focusing on the expertise of the outsourcee.…”

“…Nonetheless, there is a high risk of fragmentation of control on the core activities and on externalized functions (Roberts, 2001;Billi et al, 2004). In fact, it is not always clear which core and non-core activities shall be externalized (Billi et al, 2004;Macinati, 2008) and this issue can lead to a mistakes in externalizing competences that are critical for the success and competitive advantage of the organization (Roberts, 2001), exposing the organization to the risk of services below the standards.…”

“…Even in those activities that looking at quality/performance ratios would not be externalized otherwise (Macinati, 2008), outsourcing specialized services can be a strategic option when keeping them in-house would require special training or new hiring (Burmahl, 2001). …”