Sector News
Public Procurement Podcasts – Interview on Outsourcing Healthcare Services

Continuing his interview series of Public Procurement Podcasts (PPP) Dr Pedro Telles of Swansea University talks to leading academics, researchers and graduates who have an interesting viewpoint on aspects of public sector procurement. He recently interviewed Suvi Taponen MPA, a Doctoral Researcher at Aalto University School of Business, in Finland, who also works as a Procurement Consultant and previously worked at Hansel, the Finnish centralised purchasing body. She answers questions on her thesis topic ‘Improving the efficiency of public service delivery through outsourcing and management.’ The core of her research is in risk management in outsourcing of healthcare services.

In her research, she was particularly interested in the reasons why a public authority would outsource its services, and whether that is the more sensible thing to do. She began by collecting interview data from eight case studies (private and public), used information about their ‘make or buy’ decision-making processes, and looked at their models where they existed, to give her a comparative perspective, and to be sure she was comparing like with like. She went on to use the private sector’s data to identify best practices that public sector organisations could use.

She went on to highlight the risks of outsourcing a health service function. For this she drew on data from a medium-sized city in Finland, a country where there is a large propensity to outsource public services, that was outsourcing more of its healthcare provision.She interviewed a whole project team that was preparing an invitation to tender to understand from the City Council how the outsourcing should be conducted. Her focus was on what the risks are in the outsourcing consideration phase and how the contracting authority should mitigate these risks during the quantitative tendering procedure.

To follow through she returned a year later, and gained a good insight into the different impactors between public and private sector decision making – for example – did the upcoming election affect whether or not the council decided to oursource certain outpatient clinics, and how many did they consider outsourcing? You will have to read the whole interview on the Public Procurement Podcast website for more on that, and for insight into how the ourtsourcing is being delivered and working.

Suvi’s final part of her thesis involved the context of the National Health Service in the UK. It looked at the purchaser/provider relations after outsourcing has been done, and at the contract management of it. “… in England there are these Clinical Commissioning Groups that are responsible for purchasing care and I think there are more than two hundred of those, so from the two hundred we were able to get twelve organisations that gave us interviews and in addition to interviewing the representatives of the Clinical Commissioning Groups we also got a few interviews of these strategic organisations that work nationally to improve care.” But she didn’t find the process as straightforward as she did in Finland.

In terms of main findings – overall she found that private organisations are more proactive, while the public sector is more reactive, outsourcing when there is little other choice when service has become so poor. There are obviously many reasons behind this, and Telles was interested to know her evidence, which she explains briefly. You can read much more in the transcript on the PPP website and of course, her papers will soon be published online for you to read in full.