Outsourcing or insourcing: a case study of regional hospitals in public health within eThekwini District.

Abstract

Outsourcing has been adopted by public health to improve the efficiency and quality of health care services. Essentially, outsourcing of services such as catering, believed to be a non-core function, has become vital element to afford management time to focus on improving performance on the clinical function. Traditionally, non-core services have been rendered in-house and thus the role of government as the employer and service provider has been altered. Many countries in the world, including South Africa, have come under pressure resulting from scarce financial resources, increased patient demands, high unemployment, and increased health care costs. Thus, the need to control expenditure and provision of high quality service has led hospitals to sought relief from financial pressure by outsourcing non-clinical functions. This study has cross-examined two regional hospitals including Addington and R K Khan situated in EThekwini District to investigate the advantages and disadvantages of outsourcing and insourcing as well as the impact thereof on cost saving, human resource and efficiency in service delivery, specifically in catering services. The study is qualitative in nature and a case study research design is employed to explore whether a relationship existed between outsourcing and insourcing and efficiency. Semi structured interviews were used to collect data. A total number of 14 government officials including managers and employees directly involved with catering in the hospital were interviewed. On one hand, findings from the study show that outsourcing unit displayed added advantage of offering catering services with stable monthly expenditure, improved performance, and quality of service. On the other hand, insourcing unit proved to have an advantage of being the preferred by the employer. The recommendations stemming from the study concludes that if insourcing is to be adopted as a strategy that is efficient and effective, skilled employees should be employed, and a training fund should be allocated for the existing employees and does away with single source supplier of food to allow for better negotiations. For outsourcing, improved conditions of employment should be implemented through clearly stated contract terms and stricter monitoring tools should be implemented. In its final analysis, the study concludes that public health could benefit by marrying the two strategies.