The Public-Private Debate Best The Public-Private Debate Best Practices & Future DirectionsPractices & Future Directions

Paul Faguy Integrated Vice PresidentSt. Joseph’s Healthcare HamiltonHamilton Health Sciences

“There is nothing more difficult to take in hand, more perilous to conduct, or more uncertain in its success, than to take the lead in the introduction of a new order of things.”

Niccolo Machiavelli

Points for Discussion

• Role of the private sector

• A working perspective to consider

• Lessons learned

Role of the Private Sector

• Take the transactional work

• Add value

• Enable focus

• Collaborate

• Innovate

Transactional to Strategic

Transactional activity is defined by the importance of what is done or accomplished or delivered, not how.

Strategic actions are activities that define the very nature of the enterprise.

Any enterprise that wishes to succeed must constantly shift its intellectual energies from the transactional to the strategic.

What is transactional for one organization, is strategic for another!

“A secret in life is to

keep things simple,

but not too simple.”

Albert Einstein

Challenges for Healthcare

• Traditional view

• Digging the same hole deeper

• Benchmarking

• Lack of funding

• The “private” dilemma

• Unanswerable demand

Measuring the Value of Alternate Sourcing

1. Keeping the lights on for less

2. Increasing innovation

3. Transferring & optimizing risk

SMARTSOURCING, Koulopoulos and Roloff

Keeping the lights on for less

Using scale and process efficiency to reduce the cost of non-discretionary process spending.

Creating more innovation for the given dollar

Discretionary process spending in healthcare usually occurs because of crisis or occurs last! Proper core focus provides greater access to scarce resources to increase the value of the discretionary spending.

Transferring & Optimizing Risk

Moving risk to the partner best equipped to absorb it. Scale, or past investment, makes one partner better able to absorb certain risks. Shifting risk to that partner can create value for both.

““The significant problems The significant problems we face we face

cannot be solved atcannot be solved atthe same level of thinking the same level of thinking

we were at when we we were at when we created them.”created them.”

Albert Einstein

First decide what is core and

then determine opportunity

and priority.

A Working Perspective

Our core competency is

the patient care process

and relationship.

12 Areas of Consideration

• Nursing relief• Security• ER physician

coverage• Clinical

housekeeping• Core housekeeping• Transportation

• Human resource

business processes• Grounds keeping• Parking• Materials

management• Retail food• Laundry and linen

Patient care core

Nursing relief YSecurity YEmergency physicians YClinical housekeeping YCore housekeeping NTransportation NHR BPO NGrounds keeping NParking NMaterials management NRetail food NInpatient nutrition YLaundry and linen N

Lights on

Transfer of risk

Innovation Economies of scope

Core housekeeping

H L L M

Transportation H H M H

HR BPO L H H H

Grounds keeping H H M H

Parking H H H H

Materials management

M M H H

Retail food H M M H

Laundry and Linen

H H M H

High Impact Medium Impact Low Impact

“Strategy without tactics is the

slowest route to victory.

Tactics without strategy is

the noise before defeat.”

Sun Tzu

Lessons Learned

• Changing versus change• Business process transformational

change• Legal Issues• Opportunity or Strategy• Wherewithal• Managing the “new” service

relationship