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Innovations in Health Service Delivery. the Corporatization of Public Preker • Harding Human Development Network Health, Nutrition, and Population Series Innovations in Health Service Delivery Public Disclosure Authorized Hospital care is the largest expenditure category in the health systems of both industrialized and developing countries. Although hospitals play a critical role in ensuring delivery of health Innovations in services, less is known about how to improve the efficiency and quality of care provided. Much can be learned in this respect from the experiences of hospital reforms initiated during the Health Service 1990s. Innovations in Health Service Delivery: The Corporatization of Public Hospitals is an attempt Public Disclosure Authorized to examine the design, implementation, and impact of reforms that introduced market forces in the public hospital sector. Delivery This book provides the valuable knowledge and experience needed to avoid many of the obstacles that arise in the process of “corporatizing” public hospitals. —Professor Per-Gunnar Svensson, General Director, International Hospital Federation The Corporatization of A splendid book that is essential reading for health care professionals, policymakers, and health Public Hospitals service managers. All will benefit from the expert analysis and well-documented case studies presented here. —Dr. E.K. Yeoh, President, International Hospital Federation In a world where we often seem to learn and relearn the same lessons over and over again, this Alexander S. Preker book provides a valuable source of advice to policymakers and practitioners as they work to make April Harding things better. —Sir Alan Langlands, FRSE, Principal and Vice Chancellor, University of Dundee, U.K., and Public Disclosure Authorized Editors Former Chief Executive, National Health Service Delivered by The World Bank e-library to: The World Bank IP : 192.86.100.35 Mon, 26 Oct 2009 20:29:32 ™xHSKIMBy344941zv":/:/:*:% THE WORLD BANK THE WORLD BANK ISBN 0-8213-4494-3 (c) The International Bank for Reconstruction and Development / The World Bank Public Disclosure Authorized Innovations in Health Service Delivery The Corporatization of Public Hospitals Alexander S. Preker April Harding Editors Delivered by The World Bank e-library to: The World Bank IP : 192.86.100.35 Mon, 26 Oct 2009 20:29:32 THE WORLD BANK Washington, D.C. (c) The International Bank for Reconstruction and Development / The World Bank © 2003 The International Bank for Reconstruction and Development / The World Bank 1818 H Street, NW Washington, DC 20433 Telephone: 202-473-1000 Internet: www.worldbank.org E-mail: [email protected] All rights reserved. First printing January 2003 1 2 3 4 05 04 03 The findings, interpretations, and conclusions expressed herein are those of the authors and do not necessarily reflect the views of the Board of Executive Directors of the World Bank or the governments they represent. The World Bank does not guarantee the accuracy of the data included in this work. The boundaries, colors, denominations, and other information shown on any map in this work do not imply any judgment on the part of the World Bank con- cerning the legal status of any territory or the endorsement or acceptance of such boundaries. Rights and Permissions The material in this work is copyrighted. Copying and/or transmitting portions or all of this work without permission may be a violation of applicable law. The World Bank encourages dissemination of its work and will normally grant permission promptly. For permission to photocopy or reprint any part of this work, please send a request with complete information to the Copyright Clearance Center, Inc., 222 Rosewood Drive, Danvers, MA 01923, USA, telephone 978-750-8400, fax 978-750-4470, www.copyright.com. All other queries on rights and licenses, including subsidiary rights, should be ad- dressed to the Office of the Publisher, World Bank, 1818 H Street, NW, Washing- ton, DC 20433, USA, fax 202-522-2422, e-mail [email protected]. ISBN 0-8213-4494-3 Library of Congress Cataloging-in-Publication data has been applied for. Delivered by The World Bank e-library to: The World Bank IP : 192.86.100.35 Mon, 26 Oct 2009 20:29:32 (c) The International Bank for Reconstruction and Development / The World Bank Contents Forewordxi Sir Alan Langlands, FRSE Forewordxiii James Christopher Lovelace Acknowledgmentsxvii Acronyms and Abbreviationsxix Introduction1 Part 1:Overview of Marketizing Organizational Reforms21 1A Conceptual Framework for the Organizational Reforms of Hospitals23 April Harding and Alexander S. Preker 2 Implementing Organizational Reforms to Hospitals in the Public Sector79 Chris Ham and Loraine Hawkins Delivered by The World Bank e-library to: The World Bank 3 Evaluating the Impact ofIP Organizational: 192.86.100.35 Reforms in HospitalsMon, 26 Oct 2009 20:29:32 105 Mead Over and Naoko Watanabe iii (c) The International Bank for Reconstruction and Development / The World Bank iv • Innovations in Health Service Delivery Appendix 3A. Selected Indicators152 Appendix 3B. World Bank Hospital ReformProjects165 Part 2:Cross-Country Views167 4 Reviewing the Case Studies: Tentative Lessons and Hypotheses for Further Testing169 Loraine Hawkins and Chris Ham 5The Missing Link? Hospital Reform in Transition Economies207 Melitta Jakab, Alexander S. Preker, and April Harding 6 Contracting Public Health Care Services in Latin America239 Alexandre Abrantes Part 3:Case Studies263 7 Betwixt and Between: Autonomization and Centralization of U.K. Hospitals265 Chris Ham Appendix 7A. National Health Service and Community Act 1990297 8Maladjustments in the Corporatization Model: Hospital Reform in New Zealand305 Graham Scott, Lynne McKenzie, and James Webster 9 Autonomous Hospitals Become a Commercial Network: Hospital Rationalization inVictoria, Australia345 Simon Corden Delivered by The World Bank e-library to: The World Bank 10 Autonomizing a HospitalIP :System: 192.86.100.35 Corporate Control by Central AuthoritiesMon, in 26 Hong Oct 2009 Kon 20:29:32g391 Winnie C. Yip and William C. Hsiao (c) The International Bank for Reconstruction and Development / The World Bank Contents • v 11 Corporatization of a Single Facility: Reforming the Malaysian National Heart Institute425 Rozita Halina Tun Hussein, Syed Al-Junid, Soe Nyunt-U, Yahaya Baba, and Willy De Geyndt 12 Attacking Hospital Performance on Two Fronts: Network Corporatization and Financing Reforms in Singapore451 Kai Hong Phua 13 Autonomous Structures—with Incomplete Autonomy: Unusual Hospital Reform in Tunisia485 Hédi Achouri and Eva Jarawan 14 Autonomization in Indonesia: The Wrong Path to Reduce Hospital Expenditures511 Samuel S. Lieberman and Ali Alkatiri 15From Plans to Actions: Hospital Reform in Ecuador533 Patricio V. Marquez, Fernando Sacoto, and Marta Molares-Halberg Glossary of Terms549 Bibliographies559 About the Authors589 Index597 Tables 2.1Tools for Planning and Managing Change99 3.1 Hospital Performance Indicators, by Dimension and Production StagDeliverede by The World Bank e-library to: 128 The World Bank 3.2Technical Efficiency IndicatorIP : 192.86.100.35s129 3.3Allocative EfficiencyMon, Indicator 26 Oct 2009s 20:29:32 131 3.4Quality Indicators133 (c) The International Bank for Reconstruction and Development / The World Bank vi • Innovations in Health Service Delivery 3.5Equity Indicators135 3.6 Hospital Autonomy in Ghana, India, Kenya, and Zimbabwe136 3.7 Methodological Approaches to Assessing Reform’s Effects on Hospital Performance138 3.8 Performance Dimensions by Stage of Production Process, Two Sample Surveys143 3A.1Selected Indicators, Organizational Reform152 3A.2Selected Indicators, Hospital Management155 3A.3Selected Indicators, Hospital Performance158 3BWorld Bank Hospital Reform Projects165 4.1Applying the Conceptual Framework170 4.2 Spectrum of Case Studies and Their Market Exposure174 4.3 Preliminary Assessment of the Success of Organizational Reforms177 4.4 Success and Failure in Planning and Managing Implementation 195 5.1 Ownership and Legal Organizational Status of Hospitals214 5.2Decision Rights on Labor Input, Selected Countries216 5.3Internal Incentive Environment during Transition229 6.1Self-Managed Hospital Autonomy in Argentina244 6.2 Self-Managed Hospital Autonomy in Argentina, Chile, and Uruguay250 6.3 Performance Indicators in Hospital Management Contracts in Argentina, Chile, and Uruguay253 7.1 Comparison of the Regimes of NHS Trusts and Directly Managed Units275 8.1Hospital Powers Pre- and Post-1993 Reform308 8.2 Area Health Boards: Aggregate Trends in Costs and Deficits325 8.3 Crown HealthDelivered Enterprises: by The World Aggregate Bank e-library Trends to: in The World Bank Costs and DeficitsIP : 192.86.100.35 326 8.4Users’ Views on NewMon, 26Zealand Oct 2009’ s20:29:32 Health Systems332 9.1Timeline of Policy Changes348 (c) The International Bank for Reconstruction and Development / The World Bank Contents • vii 9.2Acute Health Care Services Access Indicators359 9.3Merging Acute with Extended Care Providers367 10.1Health Expenditures in 1986–87 and 1996–97392 10.2 Characteristics of Governance in Hospitals before Corporatization406 10.3a Characteristics of Governance after Corporatization: Government and the Hospital Authority406 10.3b Characteristics of Governance after Corporatization: Hospital Authority Head Office and Hospitals407 10.4Hospital Authority Attrition Rates412 10.5 Patient Satisfaction with Selected Aspects of Hospital Authority Services, 1997414 10.6What Do Public Hospitals Most Need to Improve?415 10.7Trends in Recurrent Cost
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