Online Program

Outsourcing services to add value and improve efficiency among public hospitals in Botswana

Monday, November 2, 2015

Heather Cogswell, MPH, MBA, International Health Department, Abt Associates, Bethesda, MD
Elizabeth Ohadi, MPA, International Health Department, Abt Associates, Inc., Bethesda, MD
Carlos Avila, MD, PhD, International Health Division, Abt Associates, Bethesda, MD
Background: As an upper-middle-income country with a gross domestic product per capita of US$16,060 and per capita expenditure on health of US$444, a significant challenge for Botswana’s health system is the efficient and effective allocation of health resources. Operational reforms in the hospital system focus on privatization and outsourcing of non-clinical services.

Objective: To documenting costs and budgetary implications of Botswana’s outsourcing policy.

Methods: Cross sectional data of hospital size, occupation rates, length of stay, and hospital budgets were analyzed and complemented with standardized surveys from the staff at seven district and referral hospitals.

Results: Hospitals in Botswana spent 53% of the US$789 million in total health expenditures (THE) in 2010. District and referral hospitals accounted for 26.6 percent of THE; three major hospitals (S’brana, Nyangabgwe and Princess Marina), with a combined recurring budget of US$11.7 million (excluding capital and labor) were operating contracts for laundry, cleaning, security and landscaping services. On average, these contracts represented 37% of the recurring budget. These contracts are output-based and operate under fixed-rate reimbursement for delivery of services; however, without cost benchmarks, paying lower prices has the potential to affect quality and undermine the development of a nascent market thrive.

Conclusions: Outsourcing non-core health services represents a major change in hospital operations.  Health systems can drive economic development through local procurement of goods and services, however, it is first necessary to determine fair prices and evaluate changes in efficiency, cost, and quality. Public-private partnerships are essential to the design of a value-based system of health-care delivery.

Learning Areas:

Public health or related public policy

Learning Objectives:
Analyze trends in hospital operating costs. Describe how to evaluate changes in efficiency, cost, and quality of outsourced services. Discuss Public-private partnerships as an essential component of the design of a value-based system of health-care delivery.

Keyword(s): International Health, Hospitals

Presenting author's disclosure statement:

Qualified on the content I am responsible for because: I am a Senior Health Analyst at Abt Associates. I hold a Master's in Public Health and a Master's in Business Administration. At Abt, I specialize several in health financing projects under USAID's Health Finance and Governance Project and specifically serve as technical coordinator for the Botswana portfolio.
Any relevant financial relationships? No

I agree to comply with the American Public Health Association Conflict of Interest and Commercial Support Guidelines, and to disclose to the participants any off-label or experimental uses of a commercial product or service discussed in my presentation.

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