Building and operating a hospital
Operating a hospital requires a wide range of skills from different organisations with their own risks and delivery profiles. It’s important to analyse each one in order to work out how best to procure and offer these services, says Barry Francis, Partner at Pinsent Masons
B
oth across borders and within borders, people are looking for new ideas in delivering healthcare services and bringing global best practice to the benefit of
patients and other user groups. The operation of hospitals draws together a wide
range of skills, often in different organisations and with their own risks and delivery profiles. In working out how best to procure and offer those services, it is important to analyse each one. This includes looking at what needs to be done by whom; who should be taking what risk on what basis, and who should integrate what risks so as to provide a more complete service to the customer or procurer. In a simple risk integration model, a government or municipality may take full responsibility, and provide everything needed for a hospital itself, or take responsibility of bringing together the necessary goods and services needed to provide a hospital service. It could commission the building, pay for it out of the government treasury, take responsibility for design, and oversee the installation of medical equipment and maintain it. If, for example, it outsourced the catering services, it could take responsibility for making sure the kitchens were equipped and suitably located and directly manage the contract. The range of interconnecting responsibilities is huge.
Risk integrators However, we are increasingly seeing that the government and other procurers such as charities, do not wish to or do not have the resources to integrate all the risks and directly manage the services. In doing so, they turn to other organisations to provide services and act as a risk integrator. Whatever the solution, risks and
responsibilities will only be properly managed if they are properly understood and allocated. The chart (right) helps us to ‘segmentise’ the
responsibilities and see how they can best be integrated and by whom. We see five circles, each segmented to identify key areas of responsibility. It would not be an unusual model for an authority to commission the design and build of a hospital, finance the construction and then let out responsibility for all or some of the operation. It need not be like that, some public-private partnership (PPP) models will leave a private partner to design, build and finance the hospital.
Range of services Looking at the large circle, we have set out at a high level the range of services which may go into delivering healthcare at a hospital or clinic. The outer bands break down the services into groups which help describe which services will be grouped together for risk integration purposes. The core is divided into segments. Not all may be provided. There may be a specialist day centre which has no concern with general medical services, for example. Our model is designed to support any organisation
embarking on procuring hospital operational services. Organisations should look at all the
BARRY FRANCIS
Barry Francis leads Pinsent Masons Structured Health Solutions business, having spent over 20 years advising and delivering on major commercial and financial projects in healthcare, including 10 hospital PFI deals.
Barry’s current and recent experience includes structuring private hospital transactions in England, advising on new delivery vehicles for NHS health provision, financing and building a hospital in The Gambia and various joint ventures in the Gulf.
32 Global Opportunity Healthcare 2015 | Issue 01
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