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Outsourcing of health-commodity supplies to third-party logistics providers is one of the ways of reducing costs and/or improving service levels in the public sector. This paper evaluates three forms of outsourcing: full outsourcing of inventory management, partial outsourcing of specific activities, and contingent partial outsourcing of specific logistics activities. It notes that, in Africa, contracting-out supply logistics has mostly taken the form of partial outsourcing of transportation only or storage and transportation of specific health commodities to all or selected geographical regions. Partial outsourcing offers limited benefits since it cannot provide adequate pressures on public-sector logistics to be efficient or maintain uninterrupted supplies in times of catastrophes. Improvements in logistics performance achieved through partial outsourcing should not mask the need for more expansive arrangements that support not only partial outsourcing but also full outsourcing in situations of inefficiency and in times of supply-disruption catastrophe.

Economic globalization has swept the whole world. To focus on their main business, enterprises that are referred to as original equipment manufacturers (OEMs) outsource non-core production activities to contract manufacturers (CMs). By constructing a two-level supply chain consisting of two competing OEMs and one upstream CM, the strategic interaction of the OEMs between outsourcing and purchasing is studied. Specifically, the CM can offer custom- and predefined modes of original equipment manufacturing (namely, CO mode and PO mode, respectively). The former mode enables OEMs to determine product quality, while the latter only allows them to purchase from several quality configurations. The results show that, first, since the CO mode allows the adopter to lead the product design, whether to choose this mode depends on the required R&D cost. Interestingly, however, a lower R&D cost does not necessarily result in the adoption of the CO mode if the product quality difference is small under the PO mode. Second, the optimal purchasing strategy of an OEM is indifferent to the outsourcing mode (CO and PO) of its rival but significantly affected by the quality cost. However, compared to the PO mode, choosing the CO mode would cause the competitor to suffer more profit losses. Third, differing from the prior literature, this paper finds that when the downstream OEM can make quality decisions, although this may lead to profit loss of the contract manufacturer in some channels, it could benefit the CM overall., Competing Interests: The authors have declared that no competing interests exist.

Outsourcing has become an integral part of how research and early development (R&D) is executed in biotech companies and large pharmaceutical organizations. Drug discovery organizations can choose from several operational models when partnering with a service provider, ranging from short-term, fee-for-service (FFS)-based arrangements to more strategic full-time-equivalent (FTE)-based collaborations and even risk-sharing relationships. Clients should consider a number of criteria when deciding which contract research organization (CRO) is best positioned to help meet their goals. Besides cost, other factors such as intellectual property protection, problem solving skills, value-creation ability, communication, data integrity, safety and personnel policies, ease of communication, geography, duration of engagement, scalability of capacity, and contractual details deserve proper consideration. In the end, the success of a drug discovery partnership will depend in large part on the people who execute the science.

Development of new diagnostic tests in a commercial laboratory for neurologic disorders is challenging. Development occurs in a highly regulated environment. Relevant research infrastructure may not be readily available in-house and may require outsourcing with additional management and costs. Clinically characterized specimens for validation of biomarkers for esoteric diseases may be difficult to acquire, and market size may be difficult to predict. More common diseases with heterogeneous subsets may require better clinical definition. Absence of guidelines may delay health provider acceptance of novel testing. Regulatory agency approval and categorization of tests affects validation requirements and impacts market acceptance and reimbursement., Competing Interests: Disclosure I. Venkataraman is employed by EUROIMMUN US; S.J. Naides is employed by EUROIMMUN US; was formerly employed by Quest Diagnostics, Inc., (Copyright © 2020 Elsevier Inc. All rights reserved.)

With the rapid development of informatization, an increasing number of industries and organizations outsource their data to cloud servers, to avoid the cost of local data management and to share data. For example, industrial Internet of things systems and mobile healthcare systems rely on cloud computing's powerful data storage and processing capabilities to address the storage, provision, and maintenance of massive amounts of industrial and medical data. One of the major challenges facing cloud-based storage environments is how to ensure the confidentiality and security of outsourced sensitive data. To mitigate these issues, He et al. and Ma et al. have recently independently proposed two certificateless public key searchable encryption schemes. In this paper, we analyze the security of these two schemes and show that the reduction proof of He et al.'s CLPAEKS scheme is incorrect, and that Ma et al.'s CLPEKS scheme is not secure against keyword guessing attacks. We then propose a channel-free certificateless searchable public key authenticated encryption (dCLPAEKS) scheme and prove that it is secure against inside keyword guessing attacks under the enhanced security model. Compared with other certificateless public key searchable encryption schemes, this scheme has higher security and comparable efficiency., Competing Interests: The authors have declared that no competing interests exist.

Although risk-based monitoring (RBM) high-level definitions and processes are similar across the pharmaceutical industry, the practical implementation, organizational structures, naming of documents and processes, system capabilities, etc. can be different from company to company. Through an alliance-level relationship, Janssen, PAREXEL, and IQVIA have gained experience and developed best practices with RBM operational deployment, particularly regarding RBM setup and collaboration between sponsor and contract research organization (CRO). As part of the operational strategy, Janssen, PAREXEL, and IQVIA jointly developed an outsourcing manual to consistently guide trial delivery. The outsourcing manual recently adopted policies and implementation guidelines for RBM. Clarity around roles and responsibilities as well as a good understanding of system capabilities and data flows, especially where there are shared systems between the sponsor and CRO, are found to be key success factors. Besides possible organizational changes and the development of mutual processes and system capabilities, the human element is not to be underestimated. Managing the changes in processes and change in mind set within both the sponsor and CRO organization is crucial to successful implementation of RBM, and our experience in this regard forms the basis of this paper.

Most healthcare organizations (HCOs) engage Group Purchasing Organizations (GPOs) as an outsourcing strategy to secure their supplies and materials. When an HCO outsources the procurement function to a GPO, this GPO will directly interact with the HCO's supplier on the HCO's behalf. This study investigates how an HCO's dependence on a GPO affects supply chain relationships and power in the healthcare medical equipment supply chain. Hypotheses are tested through factor analysis and structural equation modeling, using primary survey data from HCO procurement managers. An HCO's dependence on a GPO is found to be positively associated with a GPO's reliance on mediated power, but, surprisingly, negatively associated with a GPO's mediated power. Furthermore, analysis indicates that an HCO's dependence on a GPO is positively associated with an HCO's dependence on a GPO-contracted Original Equipment Manufacturer (OEM). HCO reliance on GPOs may lead to a buyer's dependence trap, where HCOs are increasingly dependent on GPOs and OEMs. Implications for HCO procurement managers and recommended steps for mitigation are offered. Power-dependence relationships in the medical equipment supply chain are not consistent with relationships in other, more traditional, supply chains. While dependence in a supply chain relationship typically leads to an increase in reliance on mediated power, GPO-dependent HCOs instead perceive a decrease in GPO mediated power. Furthermore, HCOs that rely on procurement service from GPOs are increasingly dependent on the OEMs.

We draw from documented characteristics of the biopharmaceutical industry to construct a model where two firms can choose to outsource R&D to an external unit, and/or engage in internal R&D, before competing in a final market. We investigate the distribution of profits among market participants, and the incentives to coordinate outsourcing activities or to integrate R&D and production. Consistent with the empirical evidence, we find that the sign and magnitude of an aggregate measure of direct (inter-firm) and indirect (through the external unit) technological externalities drives the distribution of industry profits, with higher returns to the external unit when involved in development (clinical trials) than in early-stage research (drug discovery). In the latter case, the delinkage of investment incentives from industry value, together with the ability of firms to transfer risks to the external unit, imply a vulnerability of early-stage investors' returns to negative shocks, and the likely abandonment of projects with economic and medical value. We also find that competition in the equity market makes a buyout by one of the two firms more profitable to a research biotech than to a clinical services unit, and can stimulate early-stage investments. However, this long-term incentive can be minimal, notably if the superior efficiency of outsourced operations originates from economies of scope that can hardly be exploited when a firm takes control of the external unit exclusively for itself. R&D outsourcing thus does not always qualify as a relevant pathway to address the declining productivity in innovation that has characterized the industry over several decades., (Copyright © 2019 Elsevier B.V. All rights reserved.)

Research on outsourcing in a developing country using a mixed methods approach can provide insights on outsourcing decisions and practices. This study investigated motivations, practices, perceived benefits, and barriers to outsourcing by general hospitals in Uganda. An explanatory sequential mixed methods design was used. Quantitative data were collected using a self-administered questionnaire from managers in 32 randomly selected hospitals. Qualitative data were latter collected from eight purposively selected managers using an interview guide. Quantitative data were statistically analyzed using SAS 9.3. Qualitative data were managed using ATLAS ti 7 and coded manually, and content analysis was conducted. Quantitative findings indicate that outsourcing of support services was prevalent (72% of hospitals). The key motivation for outsourcing was to gain access to quality service (68%). Limited availability of service providers was a key challenge during outsourcing (57%). Managers perceive improved productivity and better services as key benefits of outsourcing (90%). The main barrier to outsourcing is limited financing. These findings were confirmed and explained by the qualitative data. Findings and recommendations from this study are critical in developing interventions to encourage effective outsourcing by hospitals in Uganda and other developing countries., (© 2019 John Wiley & Sons, Ltd.)

This study focuses on the primary health care (PHC) performance of the four capitals of the Southeast Region of Brazil in the years 2009 and 2014 in terms of the indicators of the 2013-2015 Guidelines and Goals Pact (PDM, in Portuguese). Two capitals turned to Social Organizations (OS, in Portuguese) and two kept the provision and administration of PHC through Direct Administration (AD, in Portuguese), configuring distinct management models. Freely accessible secondary data and research on websites subsidized the characterization of the cities and their PHC performance. The characterization was based on demographic and socioeconomic data, PHC management model, health and PHC spending, importance of the Municipal Participation Fund for the budget and percentage of Executive Branch spending on personnel. In order to measure PHC performance, we calculated 13 indicators for 2009 and 2014, in three PDM guidelines: (i) access, (ii) integral care for women and children's health and (iii) reduction of health risks and harms. The comparative performance analysis considered the year 2014 and each capital's evolution during the period we analyzed. The capitals São Paulo and Rio de Janeiro, with OS management, did not have a better performance in the set of indicators than the capitals than maintained a direct administration. We highlight the rapid expansion in PHC coverage in Rio de Janeiro through OS. In the performance evolution, there was improvement in indicators such as child mortality and hospital admissions due to conditions sensible to PHC in all capitals. The cities are different with regard to many parameters that can influence PHC performance. We did not intend to establish a direct relationship between the administration model and performance.

Background: In 2002 Afghanistan's Ministry of Public Health (MoPH) and its development partners initiated a new paradigm for the health sector by electing to Contract-Out (CO) the Basic Package of Health Services (BPHS) to non-state providers (NSPs). This model is generally regarded as successful, but literature is scarce that examines the motivations underlying implementation and factors influencing program success. This paper uses relevant theories and qualitative data to describe how and why contracting out delivery of primary health care services to NSPs has been effective. The main aim of this study was to assess the contextual, institutional, and contractual factors that influenced the performance of NSPs delivering the BPHS in Afghanistan., Methods: The qualitative study design involved individual in-depth interviews and focus group discussions conducted in six provinces of Afghanistan, as well as a desk review. The framework for assessing key factors of the contracting mechanism proposed by Liu et al. was utilized in the design, data collection and data analysis., Results: While some contextual factors facilitated the CO (e.g. MoPH leadership, NSP innovation and community participation), harsh geography, political interference and insecurity in some provinces had negative effects. Contractual factors, such as effective input and output management, guided health service delivery. Institutional factors were important; management capacity of contracted NSPs affects their ability to deliver outcomes. Effective human resources and pharmaceutical management were notable elements that contributed to the successful delivery of the BPHS. The contextual, contractual and institutional factors interacted with each other., Conclusion: Three sets of factors influenced the implementation of the BPHS: contextual, contractual and institutional. The MoPH should consider all of these factors when contracting out the BPHS and other functions to NSPs. Other fragile states and countries emerging from a period of conflict could learn from Afghanistan's example in contracting out primary health care services, keeping in mind that generic or universal contracting policies might not work in all geographical areas within a country or between countries.

Background: Contracting-out (CO) to non-state providers is used widely to increase access to health care, but it entails many implementation challenges. Using Bangladesh's two decades of experience with contracting out Urban Primary Health Care (UPHC), this paper identifies contextual, contractual, and actor-related factors that require consideration when implementing CO in Low- and Middle- Income Countries., Methods: This qualitative case-study is based on 42 in-depth interviews with past and present stakeholders working with the government and the UPHC project, as well as a desk review of key project documents. The Health Policy Triangle framework is utilized to differentiate among multiple intersecting contextual, contractual and actor-related factors that characterize and influence complex implementation processes., Results: In Bangladesh, the contextual factors, both intrinsic and extrinsic to the health system, deeply impacted the CO process. These included competition with other health projects, public sector reforms, and the broader national level political and bureaucratic environment. Providing free services to the poor and a target to recover cost were two contradictory conditions set out in the contract and were difficult for providers to achieve. In relation to actors, the choice of the executing body led to complications, functionally disempowering local government institutions (cities and municipalities) from managing CO processes, and discouraging integration of CO arrangements into the broader national health system. Politics and power dynamics undermined the ethical selection of project areas. Ultimately, these and other factors weakened the project's ability to achieve one of its original objectives: to decentralize management responsibilities and develop municipal capacity in managing contracts., Conclusions: This study calls attention to factors that need to be addressed to successfully implement CO projects, both in Bangladesh and similar countries. Country ownership is crucial for adapting and integrating CO in national health systems. Concurrent processes must be ensured to develop local CO capacity. CO modalities must be adaptable and responsive to changing context, while operating within an agreed-upon and appropriate legal framework with a strong ethical foundation.

Reducing carbon emissions, including emission abatement outsourcing at the supply-chain level, is becoming a significant but challenging problem in practice. Confronting this challenge, we therefore break down the practice to focus on a low-carbon supply chain consisting of one supplier, one manufacturer and one third-party emission-reducing contractor. The contractor offers a carbon reduction service to the manufacturer. In view of the increasing proportion of Greenhouse Gases (GHG) emissions and absence of carbon reduction policies in developing countries, we adopt the prospect of consumers' low-carbon preferences to capture the demand sensitivity on carbon emission. By exploiting the Mean-Variance (MV) model, we develop a supply chain game model considering risk aversion. Comparing the supply chain performances of the cases under risk neutrality and risk aversion, we investigate the impact of the risk aversion of the supplier and the manufacturer on the low-carbon supply chain performances, respectively. We show that the risk aversion of chain members will not influence the relationship underlain by the profit-sharing contract between the manufacturer and contractor, whereas they may extend the supplier's concerning range. Although the manufacturer's risk aversion has a positive impact on the wholesale price, interestingly, the supplier's impact on the wholesale price is negative. Furthermore, we propose a contract to coordinate the risk-averse low-carbon supply chain by tuning the aversion levels of the supplier and the manufacturer, respectively. Through numerical study, we draw on managerial insights for industrial practitioners to adopt a low carbon strategy potentially by managing the risk attitudes along the supply chain channel., Competing Interests: The authors declare that they have no conflict of interest.

Development partners and donors have encouraged and incentivized governments in developing countries to explore ways of working with third-party service suppliers to reduce costs and increase service delivery capacity. The distribution of vaccines and medicines has for a long time shown demand for outsourcing but public health systems have struggled to develop the expertise and capital assets necessary to manage such ventures. Existing transport and logistics capacity within public health systems, in particular, is well documented as being insufficient to support existing, let alone future immunization needs. Today, a number of countries are contracting party logistics providers (3PLs) to supplement the in-house distribution operations of public health systems. This commentary reflects on recent, leading examples of outsourcing initiatives to address critical gaps in transport and logistics., (Copyright © 2017. Published by Elsevier Ltd.)

Objective: To determine the level of managers' propensity for outsourcing the services in hospitals using decision-making matrix., Methods: The applied, cross-sectional study was conducted at three hospitals affiliated to Bandar Abbas University of Medical Sciences, Iran, in 2013, and comprised managers and employees of four service units: radiology, laboratory, nursing, and nutrition services. Data was collected using two questionnaires and face-to-face interviews. Data was analysed using SPSS 16 and by using decision-making matrix., Results: Of the 122 subjects in the study, 12(9.8%) were managers and 110(90.2%) were other employees. The highest and lowest propensities for outsourcing were related to nutrition (66.6%) and nursing services one (8.33%). The decision-making matrix showed low outsourcing of the nursing, radiology, and laboratory services based on the services' features. However, there were difference between the results obtained from laboratory service decision-making matrix and the propensity for laboratory service outsourcing., Conclusions: The difference between the results obtained from the matrix and managers' viewpoint can be due to the lack of managers' sufficient attention to the features of hospital services when making decisions on outsourcing them.

The pharmaceutical industry has responded to the declining research and development (R&D) productivity over the past decade by decreasing its cost base and outsourcing parts of drug research, with China increasingly being the preferred destination for such outsourced work. For this Focus article, we collected and analyzed data for 66 China-based nonclinical contract research organizations (CROs); approximately 60% of the companies were localized in the Yangtze River Delta cluster and another 20% within the Beijing cluster. Almost 25% of the companies offered services in discovery biology, the single largest service offering in the data set, with another 20% offering preclinical research (toxicology, pharmacology, and animal models) and approximately 15% offering pharmaceutical development. The biologics and pharmaceutical development services represent key future growth areas, with CROs showing an increasing appetite for risk-sharing partnerships., (Copyright © 2015 The Authors. Published by Elsevier Ltd.. All rights reserved.)

In this paper, I describe the experience of 'outsourced' patients who are sent by their governments or insurers through contractual arrangements to a hospital in another country for treatment. I present case studies of nine patients and their accompanying families from the Gulf Cooperation Council (GCC) who were interviewed in a Thai hospital as part of a broader study of medical travel from patients' perspectives. The health systems of the GCC suffer shortages in infrastructure, human resources and management skills, and as a consequence patients with particular needs, especially in neurology, orthopaedics and oncology may be sent overseas for treatment. Patients experience long stays overseas producing a considerable burden to their families supporting them. Such patients complicate notions of medical travel but their status also contrasts markedly from stereotypes held about Gulf patients within Thailand. Despite their appreciation of government sponsoring, for many patients the experience of care in Thailand underscored perceived inadequacies of their home health systems and governments. For some, outsourcing represented a betrayal of the obligations of their states to its citizens.

Background: Out-of-hours primary care has been provided by general practitioner (GP) cooperatives since the year 2000 in the Netherlands. Early studies in countries with similar organizational structures showed positive GP experiences. However, nowadays it is said that GPs experience a high workload at the cooperative and that they outsource a considerable part of their shifts., Objectives: To examine positive and negative experiences of GPs providing out-of-hours primary care, and the frequency and reasons for outsourcing shifts., Methods: A cross-sectional observational survey among 688 GPs connected to six GP cooperatives in the Netherlands, using a web-based questionnaire., Results: The response was 55% (n = 378). The main reasons for working in GP cooperatives were to retain registration as GP (79%) and remain experienced in acute care (74%). GPs considered the peak hours (81%) and the high number of patients (73%) as the most negative aspects. Most GPs chose to provide the out-of-hours shifts themselves: 85% outsourced maximally 25% of their shifts. The percentage of outsourced shifts increased with age. Main reasons for outsourcing were the desire to have more private time (76%); the high workload in daytime practice (71%); and less the workload during out-of-hours (46%)., Conclusion: GPs are motivated to work in out-of-hours GP cooperatives, and they outsource few shifts. GPs consider the peak load and the large number of (non-urgent) help requests as the most negative aspects. To motivate and involve GPs for 7 × 24-h primary care, it is important to set limits on their workload.

With the globalization of drug development, there is an increasing need for global bioanalytical support. Bioanalysis provides pivotal data for toxicokinetic, pharmacokinetic, bioavailability and bioequivalence studies used for regional or global regulatory submission. There are many known complications in building a truly global bioanalytical operation, ranging from lack of global regulatory guidelines and global standard operating procedures to barriers in regional requirements on sample shipping, importation and exportation. The primary objective of this article is to discuss common experiences and challenges facing the biopharmaceutical industry when providing bioanalytical support in a global setting. The key components of global bioanalytical services include the supporting infrastructure, spanning project management, IT support of data management, best practices in bioanalytical method transfer and sample analysis, and comprehensive knowledge of the requirements of bioanalysis guidelines and differences in these guidelines. A case study will highlight best practices for successful management of a global project.

Retaining regulated bioanalysis within AstraZeneca (AZ) is important for the effective delivery of nonclinical and clinical bioanalysis. The focus for the in-house team is the delivery of high-throughput bioanalysis and toxicokinetics support for investigational toxicology; however, by retaining GLP compliance, AZ will have an in-house understanding of every candidate drug that is progressed into development by supporting the first rodent GLP study for each project. The majority of nonclinical bioanalysis and all of the clinical bioanalysis are delivered by two external partnership models. This article describes the key benefits of retaining GLP compliance, the partnership interactions, discusses the management of non-GLP support in a GLP environment and how, having practical experience of regulatory facing method development, validation and study execution adds value to the AZ portfolio delivery.

The portfolios of pharmaceutical companies have diversified substantially over recent years in recognition that monotherapies and/or small molecules are less suitable for modulating many complex disease etiologies. Furthermore, there has been increased pressure on drug-development budgets over this same period. This has placed new challenges in the path of bioanalytical scientists, both within the industry and with contract research organizations (CROs). Large pharmaceutical, biotechnology and small-medium healthcare enterprises have had to make important decisions on what internal capabilities they wish to retain and where CROs offers a significant strategic benefit to their business model. Our journey has involved asking where we believe an internal bioanalytical facility offers the greatest benefit to progressing drug candidates through the drug-development cycle and where externalization can help free up internal resources, adding flexibility to our organization in order to deal with the inevitable peaks and troughs in workload.

Pharmaceutical drug development is a complex and lengthy process, requiring excellent project and laboratory management skills. Bioanalysis anchors drug safety and efficacy with systemic and site of action exposures. Development of scientific talent and a willingness to innovate or adopt new technology is essential. Taking unnecessary risks, however, should be avoided. Scientists must strategically assess all risks and find means to minimize or negate them. Laboratory Managers must keep abreast of ever-changing technology. Investments in instrumentation and laboratory design are critical catalysts to efficiency and safety. Matrix management requires regular communication between Project Managers and Laboratory Managers. When properly executed, it aligns the best resources at the right times for a successful outcome. Attention to detail is a critical aspect that separates excellent laboratories. Each assay is unique and requires attention in its development, validation and execution. Methods, training and facilities are the foundation of a bioanalytical laboratory.

Over the last few years, the extended usage of medical imaging procedures has raised the medical community attention towards the optimization of their workflows. More recently, the federation of multiple institutions into a seamless distribution network has brought hope of increased quality healthcare services along with more efficient resource management. As a result, medical institutions are constantly looking for the best infrastructure to deploy their imaging archives. In this scenario, public cloud infrastructures arise as major candidates, as they offer elastic storage space, optimal data availability without great requirements of maintenance costs or IT personnel, in a pay-as-you-go model. However, standard methodologies still do not take full advantage of outsourced archives, namely because their integration with other in-house solutions is troublesome. This document proposes a multi-provider architecture for integration of outsourced archives with in-house PACS resources, taking advantage of foreign providers to store medical imaging studies, without disregarding security. It enables the retrieval of images from multiple archives simultaneously, improving performance, data availability and avoiding the vendor-locking problem. Moreover it enables load balancing and cache techniques.

Since 2003, the Afghan Ministry of Public Health (MoPH) and international partners have directed a contracting-out model through which non-governmental organisations (NGOs) deliver the Basic Package of Health Services (BPHS) in 31 of the 34 Afghan provinces. The MoPH also managed health service delivery in three provinces under an alternative initiative entitled Strengthening Mechanisms (SM). In 2011, under the authority of the MoPH and Delegation of the European Union to Afghanistan, EPOS Health Management conducted a cost and technical efficiency study of the contracting-out and SM mechanisms in six provinces to examine economic trade-offs in the provision of the BPHS. The study provides analyses of all resource inputs and primary outputs of the BPHS in the six provinces during 2008 and 2009. The authors examined technical efficiency using Data Envelopment Analysis (DEA) at the BPHS facility level. Cost analysis results indicate that the weighted average cost per BPHS outpatient visit totalled $3.41 in the SM provinces and $5.39 in the NGO-led provinces in 2009. Furthermore, the data envelopment analyses (DEAs) indicate that facilities in the three NGO-led provinces scored 0.168 points higher on the DEA scale (0-1) than SM facilities. The authors conclude that an approximate 60% increase in costs yielded a 16.8% increase in technical efficiency in the delivery of the BPHS during 2009 in the six provinces.

The purchaser-provider split (PPS) is a service delivery model in which third-party payers are kept organizationally separate from service providers. The operations of the providers are managed by contracts. One of the main aims of PPS is to create competition between providers. Competition and other incentive structures built into the contractual relationship are believed to lead to improvements in service delivery, such as improved cost containment, greater efficiency, organizational flexibility, better quality and improved responsiveness of services to patient needs. PPS was launched in Finland in the early 1990s but was not widely implemented until the early 2000s. Compared to other countries with PPS the development and implementation of PPS in Finland has been unusual. Firstly, purchasing is implemented at the level of municipalities, which means that the size of the Finnish purchasers is extremely small. Elsewhere purchasing is mostly implemented at the regional or national levels. Secondly, PPS is also applied to primary health care and A&E services while in other countries the services mainly include specialized health care and residential care for the elderly. Thirdly, PPS in health and social services is not regulated by any specific legislation, regulative mechanisms or guidelines. Instead it is regulated within the same framework as public procurement in general., (Copyright © 2013 The Authors. Published by Elsevier Ireland Ltd.. All rights reserved.)

Accountable Care Organizations (ACOs) need to reconsider their provider configuration and make it capable of managing clinical and financial risk. To that aim, their management must decide which medical procedures are done by the ACO itself, and which are contracted out to market providers. Making this decision requires a balanced treatment of market and firm organization, recognizing that each has properties that can turn into relative strengths. Such a balanced treatment is lacking in the ACO debate. Using the transaction cost theory, we provide such a balanced treatment of market and firm organization, and discuss implications for the design of ACOs and accountable care initiatives in general.