Running our public health system

Health-care managers and policy makers should subject their decisions to the same level of evidence-based scrutiny demanded of medical professionals and other health providers, an award-winning international study has found.

hospital signage La Trobe University’s Dr Suzanne Young and an Italian colleague, Dr Manuela Macinati, have scrutinised more than a decade of change-management in public health.

Their research showed that the outsourcing phenomena that swept through the international health care sector in the ‘90s often failed to deliver intended outcomes.

It found that problems related to quality, loss of control and inefficiency have resulted in many of these decisions being reversed, by bringing things back in house, or ‘backsourcing’.

The study revealed that over the past three years nearly 30 per cent of Australian and 15 per cent of Italian health-care providers have returned to doing internally things that had been outsourced for between two and 12 years.

In Australia the main activities brought back in were diagnostic services, especially in bigger health organizations; in Italy it was largely clinical services.

Dr Young says while backsourcing has been widely studied in the private sector, their research report – which won the ‘Best Paper of the Year’ award from the Italian Academy of Health Economics – is the first such study in the public health sector.

Both outsourcing and backsourcing, she says, can be important management tools.  However, their study found managerial processes in public health were often based on past results.

What is needed is a clearer understanding of local environments and greater critical evaluation of factors that impact on individual health care activities. These range from institutional and government pressures to legal and labour market considerations.

‘In this way, managers can develop an evidence-based approach, and not accept or simply follow fads or paradigms imported blindly from other sectors or contexts without questioning,’ the study concludes.

The researchers said there were high levels of dissatisfaction with outsourcing arrangements.

In both countries, even when people were satisfied with outsourcing, they stuck with the arrangement largely because of lack of in-house personnel, capabilities, skills, and knowledge to operate the service.

The move to backsourcing in Italy related more to freedom in hiring personnel, whereas in Australia it was due to quality issues with outsourcing.

The study was based on a ten point questionnaire, sent to all Australian health networks (135) and all Italian hospitals (302).  The response rate was 46 per cent in Italy and 29 per cent in Australia.

• Dr Suzanne Young is Associate Professor and Director of Corporate Responsibility and Global Citizenship at the Graduate School of Management at La Trobe University. Dr Manuela Macinati is from the Catholic University of the Sacred Heart, Rome.

Their research paper is titled: International Perspectives in Backsourcing: Is it just a Merry-go-round?

For interviews and further information, contact:
Dr Suzanne Young, Tel: 03 9479 3140, Email: