Delinking Non-core Services at Central Hospitals

What are non-core services?

Hospital non-core services encompass all support services that are required to ensure that

a hospital is able to deliver care properly. Non-core services have no clinical function and

providers do not engage in the treatment of patients.

Scope of servicesCatering services LaundryMortuary Estate and facilities managementLandscaping Pharmacy services managementCleaning Medical forms printing servicesSecurity Waste disposalEquipment supply and maintenance PorteringRevenue collection (e.g. paying services)

Administration

Ambulance (excluding on-board patient care)

Accounts/Financial management

Information technology

Why delink

• Globally delinking, or outsourcing follows the premise that – Organisations should focus on what they do best:

their core business• Economies of scale can bring about

efficienciesNeed to define the rationale for the health sector

Current OutsourcingKCH QECH ZCH MCH

Catering Services

Landscaping

Security

Waste disposal,

Equipment supply and maintenance

Facilities Maintenance

Medical forms printing services

Cleaning

Current Outsourcing

• Outsourcing conducted following OPPD guidelines

• 1st contracts started in 2006/7 in Zomba• Outsourcing introduced to reduce costs,

improve efficiency, bring in skills

Issues with current contracts

• Contracting costs increasing• In house monitoring of performance of

contractors• Quality of contracted personnel deteriorates

over contract period

Risks of outsourcing

• Poor planning = poor service delivery• Financial burden, can we budget for fixed

costs without decreasing budget for core services

• High investment costs to bring services up to standards

• Organisational capacity to manage contracts• Lack of qualified personnel to run contracts

Benefits of outsourcing

• Increased competition– Drives down costs of provision

• Increased efficiency – Contractors skilled in provision of specialist

services• Improved Quality

– Contractors judged on quality, and skilled in provision of service

Ways forward

• Define why we want to outsource– Rationale, improve quality, save on costs?

• Understand the current costs of service provision– Conduct Value for Money assessments– Establish capital investment required

• Establish standards for all proposed areas to be outsourced– Utilise existing quality standards etc

Ways forward (2)

• Conduct Market Appraisals– Determine if there is sufficient market capacity to

outsource• Develop contract management skills• Decide on staff reallocation

Ways forward1 2 3 4

Define rationale

Value for money assessments

Development of standards

Conduct Market appraisals

Develop contract management skills (MOH and Hospitals)