A Critical Evaluation of the Management Issues Raised in the Health Care Delivery System - Case Study Example

Introduction The socio-economic changes brought about by rapid globalization, have necessitated the government to formulate new strategies and policies to meet the challenges of the emerging new compulsions of the pluralistic societies. In the recent times, partnership between public and private organizations has increasingly become a symbol of modernization and democratization of enterprises’ functioningORIGINAL. The shift is seen as an effort from “the colonization of the public realm by private sector values to a greater inter-sectoral cross-fertilization of ideas” (Ref.1 Morrissey & Gaffikin, p.11). It has, therefore, become crucial for the government to forge alliances and foster partnership with private and public organization so that they are able to meet the growing demands of the pluralistic society with efficiency and timeliness. Health care delivery system is one of vital component of public welfare schemes of the government. The healthcare components like accessibility to good medical care, quality and cost are increasingly moving beyond the grasp of general public. The down trend in the important component of the healthcare delivery system of the nation has become a major issue which, if not tackled soon, may boomerang on the government with serious consequences. The needed reforms, therefore, require not only a comprehensive feedback of delivery system as a whole, but a careful consideration to all the various pros and cons of the developing situations in the concerned areas of the public health care, has become the need of the hour. The NHS facing multi pronged problems needs to introduce some radical organizational changes to improve the health delivery systems. We would be looking at the strategies and policies that NHS has introduced in the field of PFI, to improve its overall performance in health delivery system in UK. ORIGINAL-OBSERVATION AND CONCLUSION Overview of NHS In Britain, Welfare State was conceptualised after the Second World War when the war had wrecked havoc with the socio economic system of the countries and had made its people vulnerable towards poverty, ill health and wildly disparate social system that needed to be addressed urgently. Sir William Beveridge, a liberal, is hailed as the founding father of the welfare state and had helped conceptualize NHS (Ref. 2-16 www.rcgp.org.uk). “Since its launch 60 years ago, the NHS has grown to become the world’s largest publicly funded health service. It is also one of the most efficient, most egalitarian and most comprehensive” (Ref.3 www.NHS.co.uk). It provides wide range of healthcare services like primary care, long term care, in-patient care etc. and other areas which require more comprehensive treatment are referred to its partners in healthcare. It is publicly funded and most of the health care services are free while others which are more complicated and exclusive are charged normallyBASIC FUNDA OF WELFARE STATE AND GENERAL OBSERVATION. The rising cost of living has necessitated the NHS to form partnership with private health delivery systems so that it can provide state of the art medical care to the people at affordable cost OBSERVATION. In the recent time, the role of private sector has become more prominent and is increasingly being encouraged so that NHS is able to provide better services in the area of healthcare. Scotland’s Health White Paper states “Healthcare improvement will best be delivered when the different parts of the health system work in partnership as teams of professionals and with patients. We believe that this approach is most likely to come up with integrated solutions in line with the wants and need of patients” (Ref.4 www.scotland.gov.uk, p33). Overview of Private Finance Initiatives (PFI) PFI schemes have been part of government strategy to involve private enterprises in the areas which leave the government agencies to concentrate on their core competenciesNATURAL CONCLUSION WHEN ORGANIZATION LETS OUT PART OF ITS WORK TO OTHERS!. “In trying to bring the public and private sector together, the government hopes that the management skills and financial acumen of the business community will create better value for money for taxpayers” (Ref.5 news.bbc.co.uk, 12 Feb. 2003). There is separate fund allotted to the government agencies for PFI. Generally the schemes have capital values around £15 million and there have been about 300 such schemes, having collective capital worth of about £38 billion since 1992 (Ref.6 www.brunswickis.co.uk). Structure and process methodology Public sectors dealing in healthcare, education, transport, water etc. have the power to initiate private participation by starting a project in which non core activities and services, including the infrastructure may be provided by the private parties on a contractual basis, for a specified period of time, at the initially predetermined cost and terms and conditions (Ref.6 www.brunswickis.co.uk). The contract for the services and infrastructure may be awarded through tenders or public auction. Thereafter, for the whole duration, the private organization has the responsibility of implementing the defined services and activities, on behalf of the parent organization. The private participation in the non core activities are presumed to improve the parent organizations performance in their core competencies mainly because of the fact that they are better able to focus on issues that directly affect their major aims and objectives. THESE ARE GENERAL OUTCOME AND PROCESS OF PUBLIC PRIVATE PARTNERSHIP! Normally the parent organization or public sector is referred to as ‘Authority’ and the private organization as ‘Project Company’. The project company is the main private organization that takes guarantee for the work carried out by its sub contractors and thus the authority is not involved in how the project company provides for the services that it has been awarded but it just focuses on the that the quality of the services are maintained. The diversity of arrangement that has to be entered may comprise of complex supply chain and may be specific for the scheme. Therefore each public sector has the responsibility of fostering partnership with appropriate private agency that is fully capable of executing the services with high quality and has to maintain it throughout its period of contract. THIS IS WHY THE PARTNERSHIPS ARE ENTERED INTO! Partnership with NHS Public Private Partnership or PPP as it is broadly referred, are the initiatives undertaken by the government agencies whereby private enterprises are encouraged to participate in the efficient delivery of public services like healthcare NATURAL CONCLUSION FOR ANY PARTNERSHIP DEAL. The NHS has specifically taken initiative in involving the PFI in the ‘non clinical’ support services like portering, catering, laundry etc. Such ancillary services form important part of NHS administration which not only stretch the NHS budget but they are also observed to reduce the efficient execution of core competency of the NHS in emergency and critical hours (Ref.7 Amicus Union Guidelines, pg3). NHS has stressed the need on participation from local bodies as it provides an opportunity “to overhaul an inappropriate system of governance characterized by a high level of centralization and a low level of accountability” (Ref.8 Hughes et al.,p.231). Thus, opting for private participation ensures that high quality of such services are maintained at comparatively low cost and NHS is able to carry on with its main aims and objectives of providing the quality healthcare services to the people NATURAL CONCLUSION. The NHS has to go through different stages for PFI process. They have to get the approval from the department of health for the schemes that need to be outsourcedIT IS WORK PROTOCOL AS IT COMES UNDER DOH. NHS must ensure that the services that are intended to be given to private sector are such that they favourably equate to value for money. “Value for money should be a key governance issue for partnerships… the established definition of value for money is the relationship between economy, efficiency and effectiveness” (Ref.9 www.audit-commission.gov.uk, 2006). After the consent from DOH, the open tender for the PFI provider facilitates transparency and promotes democratic process in awarding the long term contract which is normally for minimum of twenty years or so. Normally NHS requirements are advertised in the Official Journal of European Construction (Ref.7 Amicus Union Guidelines, pg4). The outsourcing of some of the administrative services to private sector goes a long way in improving the quality and effectiveness of NHS. “In general, all hard FM staff, estates and maintenance are transferred, whilst the majority of ancillary staff in FI schemes remain NHS employees and are merely seconded to the PFI provider for the duration of the contract (known as the ‘Retention of Employment’ model or ROfE)” (Ref.7 Amicus Union Guidelines, pg3). Therefore, even though the employees work under the PFI provider, they also enjoy the benefits of being NHS employees. Apart from this, government has assured that PFI services would be an integral part of growth in NHS and their contribution would be sought in the building of many hospitals. In year 2007, the government and Independent Healthcare Association as come to mutual agreement regarding healthcare services which is called ‘concordat’IT IS AS REFERENCED BELOW. “The concordat ‘set out the parameters for a partnership between the NHS and private and voluntary health care providers.’ It envisaged a partnership approach to enable NHS patients in England to be treated free in the private and voluntary health care sectors” (Ref.10 www.bma.org.uk). The basic underlying principle remained that of providing quality services at affordable costBASIC AIM OF WELFARE STATE. The partnership with private players was extended to three main areas of healthcare: elective care; critical care; and intermediate care facilities. The partnership with private healthcare centres not only facilitate better delivery of healthcare services but it also helps to reduce the long queue of patients who need urgent attention. PFI is also a major player in the maintenance of NHS building and building of new hospitals (Ref.7 Amicus Union Guidelines, pg2). It will also be responsible for developing a comprehensive computerized information system to streamline the working of NHS through proper networking and establishment of electronic database (Ref.10 www.bma.org.uk). Strengths and weaknesses of partnership The biggest strength of the Government initiative in seeking the partnership with private sector is that it has greatly enhanced the overall performance of the NHSMUST BE NATURAL OUTCOME OF ANY PATNERSHIP. NHS caters to the healthcare needs of a large population, almost free of cost and therefore it was under huge financial pressure which was affecting the quality of service. PFI initiatives helped it to streamline the work priorities. Kloot has stressed that “performance measurement promotes accountability to stake-holders, particularly in government organizations” (Ref.11 Performance measurement and accountability in Victorian local government. International Journal of Public Sector Management. vol.12(7), p.565). Outsourcing its part of administrative and management schedule has helped it to become more efficient and better able to focus on its core activities in the healthcare system. The regular appraisal of utilization of resources and implementation of policies and processes are important part of successful partnership. De Bruijn states that performance measurement brings transparency which in turn paves way to a more democratic way of functioning (Ref.12 www.matilde.emeraldinsight.com, 2002,p 580). Partnership with private healthcare agencies and hospital facilitated in reducing the long queues, while at the same time, it was able to give state of the art medical facilities to its patients at nominal cost. In the rapid globalization, the changing socio economic environment has necessitated better understanding of the emerging new healthcare problems which must be addressed at the earliest. Partnership helped give NHS the opportunities to address the issues in the fast changing environment and take the challenged of addressing them with new vigour. GLOBALIZATION HAS RESULTED IN MORE ISSUES THAT NEED ADDRESSING IN GENERAL The public private partnership has also its pitfalls. Many of PFI schemes of NHS have run into deep trouble. In fact the PFIs have become laden with controversies and the initial rosy picture of low cost, quality services have been stripped of their glamour leaving stark realities which are at odds with the NHS projection. While there has been improvement in the delivery system but the cost has increasingly gone up. The tie up with private hospitals has yielded little results so far as the overall costs of surgeries are concerned. People who can pay are accommodated in the private hospitals which have tie-up with NHS. The poor are as excluded from the mainstream as before and the queue has shortened for those who can afford them. ORIGINAL AS THE OVERALL COSTS HAVE GONEUP AND GENERAL REACTION OF THE PUBLIC The private partnership has also resulted in indirect expenses for the patients. Prior to PFI, the parking for the patients was free but it has now become expensive for the patients to park their vehicles, near the hospital. There is also the major issue of paying twice for NHS service because seemingly after PFI schemes, NHS so called nominal charges have gone up and the taxpayers, who have been paying from their salary for mandatory health insurance and social service, now have to pay again for the healthcare in NHS. This has greatly distressed the taxpayersORIGINAL OBSERVATION. Another area that has adverse comments has been the cleaning agencies. The cost cutting measures adopted by the outsourced agencies have often resulted in sub standard hygienic conditions that have led to infections and spread of diseases, across the board in NHS. “Fatal outbreaks of antibiotic-resistant bacteria ("superbugs"), such as Methicillin-resistant Staphylococcus aureus (MRSA) and Clostridium difficile, in NHS hospitals” (Ref.13 news.bbc.co.uk, 7-3-2005). The contract for developing and implementing computerized information system by private sector, has also lead to controversy because it breaches the confidentiality clause of patients’ healthcare details which may be misused. The Amicus union argues that the most important area where there is lot of dissent is the PFI role in the employment of NHS employees. The ancillary staff of NHS work for PFI while remaining NHS emloyees during the contract period. They are often faced with 2 tier supervision dilemma of answering to their PFI and NHS supervisor is not only distressing but also affects their work. TUPE (Transfer of Undertakings – Protection of Employement – Regulations) protects the interests of the employees when they are transferred from one employer (NHS) to another (PFI). It is not comprehensive and unions are often at loggerhead with the employers for the rights of their member employees (Ref.7 www.amicustheunion.org, p.11). The most contentious issue is that of pension which is not carried forwards. “TUPE does not give the right t continued access to the previous employer’s pension scheme (i.s the NHS pension), through accrued pension rights in the scheme are protected at the time of transfer” (Ref.7 www.amicustheunion.org, p.8). Critical analysis The NHS plays a very important part in the healthcare industry in UK. Being a welfare state, England is the prime example of disbursing state of the art healthcare at nominal cost. In the fast changing environment of cut throat competition, the government alone cannot bear the financial burden. Therefore, PPP (Public Private Partnership) was the most viable option left to the government. The rising cost of living encompasses the cost of medical facilities also. The improvement in the healthcare services through PFI has gone a long way in upgrading the quality and eficiency of NHS. The Partnership with private sector in the area of ancillary services and administrative arena have yielded more efficient delivery system. It is a fact that partnership survive on adjustment and “mutual struggle for transformation” (Ref.14 Partnership: Issues of Policy and Negotiation. Mackintosh, Local Economy, Vol.7(3), p.216). The computerization has made it easier for the public to make appointments and avail other services which would have otherwise accounted for wastage of time on waiting etc. The PFI have facilitated much needed reform and helped to modernize the healthcare services of NHS and brought it at par with that of private sector but at much lower cost. The government must make efforts to address the contentious issues through regular talks with the unions and has encouraged comments from the public so that necessary reforms can be introduced to increase the effectiveness of the the partnershipconclusion for effective partnership Conclusion Private finance initiatives are the important programs of the government to introduce effective reforms in National Healthcare Services. The R&D programmes of NHS service anddelivery system has conducted various research studies and according to one of them, it was necessary to “fill the gap in knowledge surrounding the organization and development of new public-private partnerships … in primary care” (Ref.15 Organisational factors and performance: a review, Report for the NCCSDO, Sheaff et al, 2004: p.171). The imperatives of the changing timed demand modernization that can only be met through comprehensive partnership with private sector. The government through its strategic planning and foresight has been able to meet the challenges through effective PPP and modernized its existing healthcare facilities. The new model of delivery system has brought in new perspective to the emerging processes of meeting the health needs of the patients in a manner that not only includes their (patients’) view of point in the type of care they require but together they help evolve new strategies and model that best serves the interests of all the parties involve. It was indeed a true statement when Blair said “the White Paper we are publishing today marks a turning point for the NHS. It replaces the internal market with ‘integrated care’. We will put doctors and nurses in the driving seat. The result will be that £1 billion of unnecessary red tape will be saved and the money put into frontline patient care. For the first time the need to ensure that high quality care is spread throughout the service will be taken seriously. National standards of care will be guaranteed. There will be easier and swifter access to the NHS when you need it. Our approach combines efficiency and quality with a belief in fairness and partnership. Comparing not competing will drive efficiency” (Ref.16 www.pm.gov.uk, Blair,9 Dec. 1997). Reference 1. Morrissey, M. and Gaffikin, F. (2001), Northern Ireland: Democratizing for Development, Local Economy, Vol.16 (1), p.2-13. 2. RCGP. Available from: [Accessed 6 May, 2008]. 3. NHS. Available: [Accessed 2 May, 2008]. 4. Partnership for Care: Scotland’s Health White Paper. Available: [Accessed 2 May, 2008]. 5. What are Public Private Partnerships? Available: 12 February 2003; 18:58 GMT. [Accessed 2 May, 2008]. 6. PFI Schemes – A Typical Structure. Available from: [Accessed 6 May, 2008]. 7. Guide to NHS PFI Schemes and the TUPE Regulations. Amicus union Guidelines. Available from: [Accessed 26 April, 2008]. Pages: 2, 3, 4, 8 & 11. 8. Hughes, J., Knox, C., Murray, M., and Greer, J. (1998). Partnership Governance in Northern Ireland: The Path to Peace, Oak Tree Press. Dublin. 9. Audit Commission (2006) Governing Partnerships. London: Audit Commission. Available from: < http://www.audit-commission.gov.uk/reports/ ..> [Accessed 26 April, 2008]. 10. BMA. Sepember 2001. NHS & public-private partnership. Available from: [Accessed 26 April, 2008]. 11. KLOOT, L. 1999. Performance measurement and accountability in Victorian local government. International Journal of Public Sector Management. vol.12(7), p. 565-584. 12. DE BRUIJN, H. 2002. “Performance measurement in the public sector: strategies to cope with the risks of performance measurement” available from: [Accessed 26 April, 2008]. 13. Labour hails fall in MRSA cases. BBC news (2005-03-07). Available from: [Accessed 26 April, 2008]. 14. Mackintosh, M. (1992). Partnership: Issues of Policy and Negotiation. Local Economy, Vol.7(3), p.210-224. 15. Sheaff et al. (2004) Organisational factors and performance: a review, Report for the NCCSDO. p.171. 16. Blair, Tony. 1997. Available from: [Accessed 26 April, 2008]. Read More