Strategic interaction of original equipment manufacturers between outsourcing and purchasing in a quality-differentiated market.

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.

Leveraging Health Department Capacities, Partnerships, and Health Insurance for Infectious Disease Response in Massachusetts, 2014-2018.

Policies facilitating integration of public health programs can improve the public health response, but the literature on approaches to integration across multiple system levels is limited. We describe the efforts of the Massachusetts Department of Public Health to integrate its HIV, viral hepatitis, sexually transmitted infection (STI), and tuberculosis response through policies that mandated contracted organizations to submit specimens for testing to the Massachusetts State Public Health Laboratory; co-test blood specimens for HIV, hepatitis C virus (HCV), and syphilis; integrate HIV, viral hepatitis, and STI disease surveillance and case management in a single data system; and implement an integrated infectious disease drug assistance program. From 2014 through 2018, the number of tests performed by the Massachusetts State Public Health Laboratory increased from 16 321 to 33 674 for HIV, from 11 054 to 33 670 for HCV, and from 19 169 to 30 830 for syphilis. Service contracts enabled rapid response to outbreaks of HIV, hepatitis A, and hepatitis B. Key challenges included lack of a billing infrastructure at the Massachusetts State Public Health Laboratory; the need to complete negotiations with insurers and to establish a retained revenue account to receive health insurance reimbursements for testing services; and time to train testing providers in phlebotomy for required testing. Investing in laboratory infrastructure; creating billing mechanisms to maximize health insurance reimbursement; proactively engaging providers, community members, and other stakeholders; and building capacity to transform practices are needed. Using multilevel policy approaches to integrate the public health response to HIV, STI, viral hepatitis, and tuberculosis is feasible and adaptable to other public health programs.

Contracting as a bridging factor linking outer and inner contexts during EBP implementation and sustainment: a prospective study across multiple U.S. public sector service systems.

BACKGROUND: Bridging factors are relational ties (e.g. partnerships), formal arrangements (e.g. contracts or polices) and processes (e.g. data sharing agreements) linking outer and inner contexts and are a recent evolution of the Exploration-Preparation-Implementation-Sustainment (EPIS) framework. Bridging factor research can elucidate ways that service systems may influence and/or be influenced by organizations providing health services. This study used the EPIS framework and open systems and resource dependence theoretical approaches to examine contracting arrangements in U.S. public sector systems. Contracting arrangements function as bridging factors through which systems communicate, interact, and exchange resources with the organizations operating within them. METHODS: The sample included 17 community-based organizations in eight service systems. Longitudinal data is derived from 113 contract documents and 88 qualitative interviews and focus groups involving system and organizational stakeholders. Analyses consisted of a document review using content analysis and focused coding of transcripts from the interviews and focus groups. A multiple case study analysis was conducted to identify patterns across service systems and organizations. The dataset represented service systems that had sustained the same EBP for between 2 and 10 years, which allowed for observation of bridging factors and outer-inner context interactions over time. RESULTS: Service systems and organizations influenced each other in a number of ways through contracting arrangements. Service systems influenced organizations when contracting arrangements resulted in changes to organizational functioning, required organizational responses to insufficient funding, and altered interorganizational network relationships. Organizations influenced service systems when contract arrangements prompted organization-driven contract negotiation/tailoring, changes to system-level processes, and interorganizational collaboration. Service systems and organizations were dependent on each other as implementation progressed. Resources beyond funding emerged, including adequate numbers of eligible clients, expertise in the evidence-based practice, and training and coaching capacity. CONCLUSION: This study advances implementation science by expanding the range and definition of bridging factors and illustrating specific bi-directional influences between outer context service systems and inner context organizations. This study also identifies bi-directional dependencies over the course of implementation and sustainment. An analysis of influence, dependencies, and resources exchanged through bridging factors has direct implications for selecting and tailoring implementation strategies, especially those that require system-level coordination and change.

Meeting report: optimising procurement of continence pads.

A group of continence care experts attended a round table to identify best practice for awarding a contract for disposable continence products. Here, Tracy Cowan, JWC Consultant Editor, describes the outcomes.

Facilitators and barriers to implement the family doctor contracting services in China: findings from a qualitative study.

OBJECTIVE: To identify the facilitators and barriers to implement family doctor contracting services in China by using Consolidated Framework for Implementation Research (CFIR) to shed new light on establishing family doctor systems in developing countries. DESIGN: A qualitative study conducted from June to August 2017 using semistructured interview guides for focus group discussions (FGDs) and individual interviews. CFIR was used to guide data coding, data analysis and reporting of findings. SETTING: 19 primary health institutions in nine provinces purposively selected from the eastern, middle and western areas of China. PARTICIPANTS: From the nine sampled provinces in China, 62 policy makers from health related departments at the province, city and county/district levels participated in 9 FGDs; 19 leaders of primary health institutions participated in individual interviews; and 48 family doctor team members participated in 15 FGDs. RESULTS: Based on CFIR constructs, notable facilitators included national reform involving both top-down and bottom-up policy making (Intervention); support from essential public health funds, fiscal subsidies and health insurance (Outer setting); extra performance-based payments for family doctor teams based on evaluation (Inner setting); and positive engagement of health administrators (Process). Notable barriers included a lack of essential matching mechanisms at national level (Intervention); distrust in the quality of primary care, a lack of government subsidies and health insurance reimbursement and performance ceiling policy (Outer setting); the low competency of family doctors and weak influence of evaluations on performance-based salary (Inner setting); and misunderstandings about family doctor contracting services (Process). CONCLUSIONS: The national design with essential features including financing, incentive mechanisms and multidepartment cooperation, was vital for implementing family doctor contracting services in China. More attention should be paid to the quality of primary care and competency of family doctors. All stakeholders must be informed, be involved and participate before and during the process.

How the health institution combinative contracting mechanism influences community residents' patient experiences in Shanghai: A comparative study of data from two cross-sectional surveys.

OBJECTIVE: To understand the effect of the health institution combinative contracting mechanism (which make participating residents make a "combinative contracting" involving family doctor of community health center, one secondary hospital, and one tertiary hospital) on community residents' patient experiences in Shanghai, China. METHODS: We conducted two questionnaire surveys (2016 and 2018) on the patient experiences of 1200 permanent residents of 12 subdistricts of Shanghai, who were selected via stratified random sampling. Of these, 926 participants were included after propensity score matching. We compared five dimensions of patient experience-accessibility, environment and facilities, service attitude and emotional support, communication and patient engagement, and service integration-before and after implementation of the health institution combinative contracting mechanism in June 2016. Furthermore, logistic regression analysis was used to explore the factors related to residents' overall experience. RESULTS: The health institution combinative contracting mechanism influenced most dimensions of residents' patient experience, such as accessibility, service attitude and emotional support, communication and patient participation, and service integration. The mechanism in general helped contracted residents obtain a better patient experience than before its implementation. Referral had a significant effect on participants' overall experience. CONCLUSION: Contracted family doctors play active roles in improving nearly every dimension of residents' service experience, as well as their overall experience of services. The health institution combinative contracting mechanism not only increases interaction and strengthens trust between doctors and patients but also makes it possible for residents to obtain integrated health services.

Quality Management Systems in the Ambulant Sector: An Analytical Comparison of Different Quality Management Systems.

BACKGROUND: Since 1 January 2004, all physicians, psychotherapists, and medical care centers that are under contract to statutory healthcare in Germany are obliged, according to § 135a Section 2 of the Fifth Social Security Statute Book, to introduce an intra-institutional quality management system. METHODS: A total of 24 medical practices were chosen through random sampling. In total, there were 12 family physicians and specialist practices each and eight practices each per quality management system. The analysis was carried out with the help of three specially developed questionnaires (physician, employee, and patient). A total of 26 quality categories with different questions were available in the three survey groups (physicians, employees, and patients). The Kruskal⁻Wallis test checked the extent to which the different scores between the quality management systems were significant and effective for specialists or family physicians. RESULTS: "Quality and Development in Practices (QEP)" had the highest average score. Due to a specific family practitioner specialism, "Quality management in Saxony medical practices (QisA)" followed with good average scores. The individual quality categories in the quality management systems, such as the "range of services" or "allocation of appointments", received the highest average scores among the specialists. In contrast, categories such as "telephone enquiries" and "external cooperation and communication" received the highest average scores among the family physicians. CONCLUSION: Differences in the evaluation of quality management systems and medical groups (specialists/family physicians) were found in the study. The reasons for these differences could be found in the quality categories.

The role of collective labor contracts and individual characteristics on job satisfaction in Tuscan nursing homes.

BACKGROUND: The role played by remuneration strategies in motivating health care professionals is one of the most studied factors. Some studies of nursing home (NH) services, while considering wages and labor market characteristics, do not explicitly account for the influence of the contract itself. PURPOSE: This study investigates the relationship between the labor contracts applied in 62 Tuscan NHs and NH aides' job satisfaction with two aims: to investigate the impact of European contracts on employee satisfaction in health care services and to determine possible limitations of research not incorporating these contracts. METHODOLOGY: We apply a multilevel model to data gathered from a staff survey administered in 2014 to all employees of 62 NHs to analyze two levels: individual and NH. Labor contracts were introduced into the model as a variable of NH. RESULTS: Findings show that the factors influencing nursing aides' satisfaction occur at both the individual and NH levels. Organizational characteristics explain 16% of the variation. For individual characteristics, foreign and temporary workers emerge as more satisfied than others. For NH variables, results indicate that the labor contract with the worst conditions is not associated with lower workers' satisfaction. CONCLUSION: Although working conditions play a relevant role in the job satisfaction of aides, labor contracts do not seem to affect it. Interestingly, aides of the NHs with the contract having the best conditions register a significantly lower level of satisfaction compared to the NHs with the worst contract conditions. This suggests that organizational factors such as culture, team work, and other characteristics, which were not explicitly considered in this study, may be more powerful sources of worker satisfaction than labor contracts. PRACTICE IMPLICATIONS: Our analysis has value as a management tool to consider alternative sources as well as the labor contract for employee incentives.

Service Coordination by Public Sector Managers in a Human Service Contracting Environment.

Despite emerging evidence of contracting for evidence-based practices (EBP), little research has studied how managers lead contract-based human service delivery. A 2015 survey of 193 managers from five San Francisco Bay Area county human service departments examined the relationship between contract-based service coordination (i.e., structuring cross-sector services, coordinating client referrals and eligibility, overseeing EBP implementation) and the predictors of managerial role, involvement, and boundary spanning. Multivariate regression results suggested that county managers identified fewer service coordination challenges if they were at the executive and program levels, had greater contract involvement, and engaged in contract-focused boundary spanning. In conclusion, we underscore the organizational and managerial dimensions of contract-based service delivery.

Contracting-out primary health care services in Tanzania towards UHC: how policy processes and context influence policy design and implementation.

BACKGROUND: Governments increasingly recognize the need to engage non-state providers (NSPs) in health systems in order to move successfully towards Universal Health Coverage (UHC). One common approach to engaging NSPs is to contract-out the delivery of primary health care services. Research on contracting arrangements has typically focused on their impact on health service delivery; less is known about the actual processes underlying the development and implementation of interventions and the contextual factors that influence these. This paper reports on the design and implementation of service agreements (SAs) between local governments and NSPs for the provision of primary health care services in Tanzania. It examines the actors, policy process, context and policy content that influenced how the SAs were designed and implemented. METHODS: We used qualitative analytical methods to study the Tanzanian experience with contracting- out. Data were drawn from document reviews and in-depth interviews with 39 key informants, including six interviews at the national and regional levels and 33 interviews at the district level. All interviews were audiotaped, transcribed and translated into English. Data were managed in NVivo (version 10.0) and analyzed thematically. RESULTS: The institutional frameworks shaping the engagement of the government with NSPs are rooted in Tanzania's long history of public-private partnerships in the health sector. Demand for contractual arrangements emerged from both the government and the faith-based organizations that manage NSP facilities. Development partners provided significant technical and financial support, signaling their approval of the approach. Although districts gained the mandate and power to make contractual agreements with NSPs, financing the contracts remained largely dependent on donor funds via central government budget support. Delays in reimbursements, limited financial and technical capacity of local government authorities and lack of trust between the government and private partners affected the implementation of the contractual arrangements. CONCLUSIONS: Tanzania's central government needs to further develop the technical and financial capacity necessary to better support districts in establishing and financing contractual agreements with NSPs for primary health care services. Furthermore, forums for continuous dialogue between the government and contracted NSPs should be fostered in order to clarify the expectations of all parties and resolve any misunderstandings.

Contracting non-state providers for universal health coverage: learnings from Africa, Asia, and Eastern Europe.

BACKGROUND: Formal engagement with non-state providers (NSP) is an important strategy in many low-and-middle-income countries for extending coverage of publicly financed health services. The series of country studies reviewed in this paper - from Afghanistan, Bangladesh, Bosnia & Herzegovina, Ghana, South Africa, Tanzania and Uganda - provide a unique opportunity to understand the dynamics of NSP engagement in different contexts. METHODS: A standard template was developed and used to summarize the main findings from the country studies. The summaries were then organized according to emergent themes and a narrative built around these themes. RESULTS: Governments contracted NSPs for a variety of reasons - limited public sector capacity, inability of public sector services to reach certain populations or geographic areas, and the widespread presence of NSPs in the health sector. Underlying these reasons was a recognition that purchasing services from NSPs was necessary to increase coverage of health services. Yet, institutional NSPs faced many service delivery challenges. Like the public sector, institutional NSPs faced challenges in recruiting and retaining health workers, and ensuring service quality. Properly managing relationships between all actors involved was critical to contracting success and the role of NSPs as strategic partners in achieving national health goals. Further, the relationship between the central and lower administrative levels in contract management, as well as government stewardship capacity for monitoring contractual performance were vital for NSP performance. CONCLUSION: For countries with a sizeable NSP sector, making full use of the available human and other resources by contracting NSPs and appropriately managing them, offers an important way for expanding coverage of publicly financed health services and moving towards universal health coverage.

Emergence of three general practitioner contracting-in models in South Africa: a qualitative multi-case study.

BACKGROUND: The general practitioner contracting initiative (GPCI) is a health systems strengthening initiative piloted in the first phase of national health insurance (NHI) implementation in South Africa as it progresses towards universal health coverage (UHC). GPCI aimed to address the shortage of doctors in the public sector by contracting-in private sector general practitioners (GPs) to render services in public primary health care clinics. This paper explores the early inception and emergence of the GPCI. It describes three models of contracting-in that emerged and interrogates key factors influencing their evolution. METHODS: This qualitative multi-case study draws on three cases. Data collection comprised document review, key informant interviews and focus group discussions with national, provincial and district managers as well as GPs (n = 68). Walt and Gilson's health policy analysis triangle and Liu's conceptual framework on contracting-out were used to explore the policy content, process, actors and contractual arrangements involved. RESULTS: Three models of contracting-in emerged, based on the type of purchaser: a centralized-purchaser model, a decentralized-purchaser model and a contracted-purchaser model. These models are funded from a single central source but have varying levels of involvement of national, provincial and district managers. Funds are channelled from purchaser to provider in slightly different ways. Contract formality differed slightly by model and was found to be influenced by context and type of purchaser. Conceptualization of the GPCI was primarily a nationally-driven process in a context of high-level political will to address inequity through NHI implementation. Emergence of the models was influenced by three main factors, flexibility in the piloting process, managerial capacity and financial management capacity. CONCLUSION: The GPCI models were iterations of the centralized-purchaser model. Emergence of the other models was strongly influenced by purchaser capacity to manage contracts, payments and recruitment processes. Findings from the decentralized-purchaser model show importance of local context, provincial capacity and experience on influencing evolution of the models. Whilst contract characteristics need to be well defined, allowing for adaptability to the local context and capacity is critical. Purchaser capacity, existing systems and institutional knowledge and experience in contracting and financial management should be considered before adopting a decentralized implementation approach.

Local Sourcing and Supplier Development in Global Health: Analysis of the Supply Chain Management System's Local Procurement in 4 Countries.

From 2006 to 2014, Supply Chain Management System (SCMS), the global procurement and distribution project for the U.S. President's Emergency Plan for AIDS Relief (PEPFAR), distributed over US$1.6 billion worth of antiretroviral drugs and other health commodities, with over US$263 million purchased from local vendors in 14 countries in sub-Saharan Africa. A simple framework was developed and 39 local suppliers from 4 countries were interviewed between 2013 and 2014 to understand how SCMS local sourcing impacted supplier development. SCMS local suppliers reported new contracts with other businesses (77%), new assets acquired (67%), increased access to capital from local lending institutions (75%), offering more products and services (92%), and ability to negotiate better prices from their principles (80%). Additionally, 70% (n=27) of the businesses hired between 1 and 30 new employees after receiving their first SCMS contract and 15% (n=6) hired between 30 and 100 new employees. This study offers preliminary guidance on how bilateral and multilateral agencies could design effective local sourcing programs to create sustainable local markets for selected pharmaceutical products, laboratory, and transport services.

Strategies to Facilitate Equitable Resource Sharing in Community-Engaged Research.

BACKGROUND: Community subcontracts are an essential component of community-engaged research, particularly community-based participatory research (CBPR). However, several barriers have limited community-based organizations' (CBOs) ability to serve as subcontractors on research grants. This article describes the barriers and strategies to implementing community subcontracts through a case study of the implementation of one federal grant. LESSONS LEARNED: Specific lessons learned at the CBO level, budget-creation level, and university-level are described to overcome barriers in executing community subcontracts in community-engaged research. CONCLUSIONS: We call for institutional changes to facilitate equitable resource sharing in community-engaged research.

The Effect of Plan Type and Comprehensive Medication Reviews on High-Risk Medication Use.

BACKGROUND: In 2007, the Centers for Medicare & Medicaid Services (CMS) instituted a star rating system using performance outcome measures to assess Medicare Advantage Prescription Drug (MAPD) and Prescription Drug Plan (PDP) providers. OBJECTIVE: To assess the relationship between 2 performance outcome measures for Medicare insurance providers, comprehensive medication reviews (CMRs), and high-risk medication use. METHODS: This cross-sectional study included Medicare Part C and Part D performance data from the 2014 and 2015 calendar years. Performance data were downloaded per Medicare contract from the CMS. We matched Medicare insurance provider performance data with the enrollment data of each contract. Mann Whitney U and Spearman rho tests and a hierarchical linear regression model assessed the relationship between provider characteristics, high-risk medication use, and CMR completion rate outcome measures. RESULTS: In 2014, an inverse correlation between CMR completion rate and high-risk medication use was identified among MAPD plan providers. This relationship was further strengthened in 2015. No correlation was detected between the CMR completion rate and high-risk medication use among PDP plan providers in either year. A multivariate regression found an inverse association with high-risk medication use among MAPD plan providers in comparison with PDP plan providers in 2014 (beta = -0.358, P < 0.001) and 2015 (beta = -0.350, P < 0.001), the CMR completion rate in 2015 (beta = -0.221, P < 0.001), and enrollee population size in 2015 (beta = -0.203, P = 0.001). CONCLUSIONS: This study found that MAPD plan providers and higher CMR completion rates were associated with lower use of high-risk medications among beneficiaries. DISCLOSURES: No outside funding supported this study. Silva Almodovar reports a fellowship funded by SinfoniaRx, Tucson, Arizona, during the time of this study. The other authors have nothing to disclose.

The social integration of healthcare agency workers in long-term care facilities: A cross-sectional study.

BACKGROUND: Patient care quality is a key concern for long-term care facilities and is directly related to effective collaboration between healthcare professionals. The use of agency staff in long-term care facilities creates important challenges in terms of coordination and communication within work units. OBJECTIVES: The purpose of this study is to assess the mediating effect of common in-group identity in the relationship between permanent employees' perceptions regarding the use of agency workers -namely distributive justice, perceptions of threat, perceived similarities with agency workers, and leader inclusiveness toward agency staff- and the permanent employees' adoption of collaborative behaviours. DESIGN: Cross-sectional study. SETTINGS: Three long-term care facilities. PARTICIPANTS: 290 regular healthcare employees (nurses and care attendants). METHODS: Data were obtained through questionnaires filled out by employees. Hypotheses were tested using structural equation analyses. RESULTS: The results showed the indirect effects of perceived distributive justice, perceived similarity and leader inclusiveness toward agency workers on permanent employees' cooperation behaviours through common group identification. Perceptions of threat were not related to common group identification or collaborative behaviours. The results also showed that common in-group identification is related to cooperation behaviours only for employees without previous experience as agency workers. CONCLUSIONS: This study suggests that permanent healthcare employees who feel they are fairly compensated relative to agency workers, who consider these workers as similar to them, and who believe their supervisor appreciates agency workers' contributions tend to develop a common in-group identity, which fosters collaborative behaviours. Managers of long-term care facilities who wish to foster collaboration among their blended workforce should thus create an environment conducive of a more inclusive identity, particularly if their employees have no previous experience as agency workers.

The Current Status of Outcomes-Based Contracting for Manufacturers and Payers: An AMCP Membership Survey.

BACKGROUND: As the United States health care system shifts from traditional volume-based payments to value-based payments, outcomes-based contracts (OBCs) are gaining popularity among payers and manufacturers as a mechanism for the shift toward value. Under this model, stakeholders hope to align drug payment and value to real-world performance metrics (e.g., biomarkers and health care resource utilization). OBJECTIVE: To understand the experiences, perceptions, and needs of payers and manufacturers related to OBCs. METHODS: The Academy of Managed Care Pharmacy (AMCP) and Xcenda conducted an online survey with AMCP payer and manufacturer members. Participants were asked a series of questions regarding their use of OBCs, barriers to implementation, and elements required in establishing successful OBCs. The importance and urgency of specific impediments to successful OBC implementation were also assessed. RESULTS: The survey was fielded May 12, 2017, to June 7, 2017, yielding 65 responses (35 payers/30 manufacturers). While a minority of payers/manufacturers had at least 1 OBC in place (20%/33%), a majority had interest in future OBC use (71%/63%). Among those with at least 1 OBC in place, 86%/80% of payers/manufacturers had renewed at least 1 OBC in the past 5 years. All payers and 60% of manufacturers with OBCs included compliance measures. Improvement in clinical outcomes was also common (71%/70%) (e.g., reaching set laboratory values goals), and 71%/60% included avoidance of unnecessary medical resource use (e.g., hospitalization and emergency department visit). The barrier most frequently identified by payers in implementing OBCs was evidence that OBCs reduced pharmacy spending (60%), while manufacturers identified the inability to obtain accurate data/outcome measures (73%) as a major limiting factor. Payers/manufacturers endorsed the use of easily measurable outcomes (91%/100%) as most important in establishing successful OBCs. Manufacturers, and to a lesser extent payers, indicated that regulations and legal issues need to be addressed to make progress in OBC implementation (e.g., safe harbor for preapproval health care economic information [77%/46%] and exemption of OBCs for best-price requirements [83%/51%]). The only exception was the clarification of regulations for discussing information outside of an FDA-approved label, in which both manufacturers and payers indicated a very strong need (100%) to be addressed. CONCLUSIONS: Surveyed AMCP members are interested in OBCs and recognize their alignment to societal health goals and health care affordability, although actual use of these contracts has been somewhat limited to date. Results from this survey indicate that there is potential for OBC use to increase as barriers and limitations are addressed. DISCLOSURES: This research was sponsored by the Academy of Managed Care Pharmacy and Xcenda. Duhig, Kaufman, and Hughes are employed by Xcenda. Saha is employed by the Academy of Managed Care Pharmacy. Smith has nothing disclose. Study concept and design were contributed by Duhig, Kaufman, Saha, and Hughes. Kaufman and Hughes collected the data, and data interpretation was performed by all the authors. The manuscript was written by Saha, Smith, and Duhig, along with Kaufman and Hughes.