A survey of implementation of outsourcing strategy in private hospitals in Nairobi

Abstract

This study sought to establish practices relating to implementation of outsourcing in private hospitals in Nairobi and the factors that influences such practices. Outsourcing has been studied as a strategy that allows firms to focus their efforts on core business, improve their services and reduce service costs.

In conducting the study, data from the medical directory was used to come up with a list of 54 private hospitals. Out of the list 3 hospitals were found to have closed down and 40 hospitals responded bringing the response rate of 80%. Data was collected primarily using a questionnaire with respondents giving information on the characteristics of the hospitals, activities outsourced, service provider identification, contract management, actual implementation and post implementation review. These data was analyzed by way of tabulation and cross tabulation.

The results indicate that all hospitals outsource at least one non core activity and waste disposal is leading with 80% of the hospitals outsourcing the activity, followed by specialized doctors and surgeons (75%), maintenance (57.5%) and security (47%) respectively. The main reasons for outsourcing are given as; concentration on core business, efflciency and service cost reduction.

The results also indicated that the most common methods of selecting service provider are selective tendering, open tendering and recommendation ~ ,..- respectively and on award, most respondent hospitals will sign a contract (60%)

and for only one year (52.5%).

It was found that hospitals have developed clear objectives of outsourcing but do not have proper implementation practices, which might explain why in some cases the desired results are not realized. It was also found that there are weak structures that support the relationship after the activity has been given to the service provider.