A strategic research project commissioned by Medirest, the specialist healthcare division of Compass Group PLC, and undertaken by business-to-business market research specialist B2B International, reveals critical issues facing hospital boards.
In Spring 2012, Board Directors* in publicly funded hospitals across four European markets (UK, France, Germany and Italy) were interviewed about the issues they are facing, influences on delivering healthcare and the services that support this, and attitudes towards outsourcing of support services.
The main challenge is the current economic conditions and the expectance of this prevailing for some years into the future. The need for greater creativity from health boards was highlighted to enable the delivery of healthcare that meets the needs of the population, in the context of political influence. Outsourcing of services, particularly non medical and administrative services, despite some concerns, is felt to be increasing and carries with it significant advantages.
Key challenges impacting on healthcare strategy and delivery
Political changes across Europe have created challenges in relation to healthcare reform – changes in government and political unrest were mentioned specifically in the UK, France and Italy. Legislation affecting healthcare organisation, and the targets set by governments, were driving the agenda, but respondents felt they were a distraction from the key issues facing healthcare.
The overwhelming economic challenge is the current financial situation across Europe – a view expressed by respondents in all four countries. Issues relate to reducing budgets, the requirement to provide more services with less resource, and reduced investment in public healthcare.
The cost of equipment and drugs for new treatments at a time when finance is not easily available is a key concern, particularly in relation to competitive forces. The growth of larger hospital groups may be the result of a need for greater collaboration to provide the full range of services required of a modern health service.
Reduced budgets have also halted many modernisation programmes, many of which were felt to be critical to deliver the treatments of modern day medicine. The need to be up-to-date and at the cutting edge of medicine is seen as a challenge in the current mood of austerity.
Many social factors were felt to be impacting on healthcare. Increasing demand for healthcare provision coupled with public attitudes towards healthcare were of major concern. Some felt that public attitudes may need to change in relation to the level of provision which can be administered, and alternative models of healthcare may need to be considered in the future.
The ageing population and the need to provide care models which take account of this, coupled with more complex multiple pathologies, are particular challenges. Additionally, the increased incidence of particular health problems associated with lifestyle was noted, including diabetes, heart disease and obesity.
Recruiting skilled workers is a challenge, especially in Germany. The economic position, the need to make cuts, and pay freezes have compounded this problem, making the healthcare professions seem less attractive.
Significant technological changes have occurred and continue to, including developments in treatments and in information provision. Respondents feel co-ordinated systems which give access to information both about patients and about activity are needed. Getting a system which can deliver what is required, is accessible, and works with other systems, was seen as one of the biggest challenges.
The research found diverse usage patterns of outsourcing. Non-medical housekeeping services were most likely to be outsourced, i.e. catering, laundry and cleaning, while rental of space for retail opportunities is seen as an opportunity for income generation. Medical services were less likely to be considered for outsourcing, though in some areas elements of this are being undertaken, e.g. lab services.
Advantages of outsourcing are seen as allowing innovation and creativity, such that service quality, cost and support can be determined in the contract. Outsourcing means that the supplier takes responsibility for delivery of the service and the staff, allowing the Board to concentrate on medical issues. It also enables income generation opportunities and could protect the service from further cuts, due to having contracts.
Respondents did raise concerns about outsourcing, fearing loss of control and poorer quality of the service, and possibly higher costs. Other problems surrounded in-house staff attitudes, security and the position of the Unions, plus the perception that some suppliers may not understand the issues facing healthcare.
Meeting the challenges
The study found that tough decisions are being made by healthcare boards to meet these challenges, decisions which often question the current model of healthcare delivery.
• Looking overseas towards other healthcare models
• Identifying alternative methods of generating income
• Co-operation and partnership with neighbouring hospitals
• Creation of “super hospitals”
• Public and private sector collaboration
• Outsourcing of services – mainly non-medical, but also some medical services
* 32 Board level directors (CEO, Director General, Director of Finance or Operations) participated in the study. Half of those who took part have more than 20 years’ experience in healthcare management.
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24 July 2012