Review findings
Financial sustainability concerns regarding public health systems in developed countries were widely acknowledged, along with the associated need for efficiency improvement to meet these concerns. Papers selected for inclusion in this review described various approaches to address these issues, however no single, best-practice or evidence-based comprehensive framework for managing these issues at the system level was identified. The findings discussed in the subsequent section of this paper outline the efficiency context, factors, considerations and approaches relevant to the review question in order to inform a framework for managing efficiency improvement that offers a range of strategies and supporting evidence. Given the fragmented and disparate nature of the evidence identified, there were no clear and consistent themes or factors which were consistently identified across all countries or health systems. Rather, the synthesis of these factors provides a collective view of factors which may be applicable to public health systems in developed countries. The thematic analysis of factors outlined below is the result of the synthesis of related but separately-identified issues with each issue being identified in only one or a few papers evaluated, rather than a wide consensus of repeated key themes identified across all papers reviewed.
Definitions and concepts relating to efficiency improvement
The concept of efficiency in the context of health services is well-explored in the literature, with clear links to expenditure, health system and health service outcomes. Productive efficiency involves making the most of available resources while maximizing outputs(1). Multiple factors contribute to the efficiency landscape. Efficiency is comprised of technical and allocative factors within the context of existing resources, operating requirements, regulatory environments and health service outputs(13,4). In healthcare these elements extend to the delivery of services with comprehensiveness, coordination, accessibility, quality and continuity all seen as determinants of health services efficiency(15). In this context Pelone et al.(15) further provided that quality involves health service effectiveness, safety and appropriateness along with patient-centeredness and patient experience. When considering processes and outcomes, the concept of technical efficiency involves achieving specified outputs using the minimum amount of resources(16). The concept of value is also associated with efficiency in terms of weighing outcomes against the costs required to achieve them(17).
Central support and leadership for system-wide efficiency improvement
The current public health services environment in developed countries is consistently described in the literature in terms of increasing resource pressure and system demand, creating an increasing focus on sustainability across public health systems(18). Specific and clear support for efficiency improvement initiatives from the system management entities of public health systems is critical to efficiency improvement success(19). Despite this requirement, policy guidelines for enhancing public health service efficiency are not readily evident despite widespread focus on measuring efficiency(1). Across the literature, examples of facility-level efficiency improvement projects are common however studies focusing on efficiency improvement at the system-level are rare(1). Variable levels of efficiency appear to be evident within any given public health system between the different services and facilities of that system(20).
The decentralized, department-based nature of healthcare facilities within public health systems has been identified as a source of inefficiency(21). This issue may be scalable to entire public health systems with devolved governance structures. It is noted than while reform can drive short term efficiency change, long-term sustainability requires ongoing focus and monitoring(22). Limiting the empowerment of individual facilities to determine unique management and operating models in favour of central control is not effective in improving efficiency, which suggests that efficiency improvement can be supported through empowering facilities to tailor operating models which best fit their unique local needs while providing specific guidance on required outcomes(3,23). This process requires consideration of public health priorities, training, policy frameworks and business models(24). Devolution of governance from central bodies to health services can be managed through service agreements and performance measures or indicators(25,26). Successful performance against these metrics can be supported at the system level by embedding a central focus on resource allocation in tandem with a focus on optimizing care outcomes and resource utilization, with such an approach also having the potential to avoid ethical dilemmas associated with return on investment in the context of promoting health outcomes(27).
In systems with fixed budgets, cost savings can be absorbed in other areas of the system and therefore be masked in terms of overall financial performance. This is further complicated by initiatives which take several years to produce favorable impacts in systems with annual financial cycles(28,29). Realistic timeframes for efficiency improvement must be considered when weighing initial investment and planned returns(28). Establishing prompts, targets, guidelines, triggers and mandatory requirements for resource allocation consideration has been linked with successfully embedding efficiency improvement and disinvestment in routine systems and processes(30). This can also be supported through gaining an understanding of the points where efficiencies are redistributed throughout the system(31). It has also been suggested that focusing on productivity, savings, waste reduction and resource maximization together when managing health services can promote efficiency and quality outcomes concurrently(32,33). Of these measures it has been suggested that productivity is less frequently used than other performance and operational efficiency measures, making productivity an area where additional insight may be generated(34).
Elements of transparency in target-setting and performance reporting are linked with more-efficient health organizations(35). The setting of system-wide financial rules has been associated with a modest reduction in public health expenditure, however this may not occur until 1-2 years following implementation(36). Local networking and benchmarking can promote collaboration identify both high-performing and low-performing sites and is associated with higher-performing health services(35,37). This suggests that setting realistic timeframes for improvements to be delivered and benefits realized while benchmarking to track performance are evidence-based success factors in efficiency improvement performance evaluation.
Peer benchmarking and comparison can also provide insight into new potential opportunities for efficiency improvement by identifying approaches which are achieving positive outcomes(38). Successful initiatives can then potentially be scaled and shared to similar settings elsewhere(39,40). This sharing of successful initiatives promotes sustainability through increasing buy-in and by building evidence of success(41). The ability to adapt an initiative to suit local needs is a key long-term initiative success factor and a factor which also includes the ability to modify approaches over time(41).
Identifying high-performing sites and organizations provides opportunities to identify and share factors associated with high performance(42). Monitoring activity against set targets and requirements can enable success to be championed and support to be targeted as needed(43). Allin, Grignon & Wang(1) suggest that peer benchmarking provides opportunities to better allocate resources and take specific actions to improve performance, as does identifying high-performing sites and organizations in order to identify and share factors associated with high performance.
Despite a focus on changes which improve efficiency the longevity of these changes appears variable, with one study suggesting that only 60% of improvement projects in health are able to maintain at least one key project element on an ongoing basis(44). This calls for a system-wide focus on embedding key elements of successful programs upon project completion. Less-successful programs can also contribute to efficiency improvement practices, as examining reasons for failed programs can assist with supporting those at risk(45). It is therefore recommended to identify the causes of efficiency improvement failure and take action to ensure these causes are not repeated in future efficiency improvement initiatives.
Sharing risks, goals, responsibilities and feedback across public health systems can promote a sustainable win-win outcome for patients and public health systems(46). Health systems can utilize performance and activity data to detect opportunities for disinvestment, track progress towards targets and evaluate the impact of initiatives(47,48). Disinvestment and investment should be considered in parallel rather than separately(49). Transparent, accountable systems and processes are required to coordinate these factors(49). Improvements to services and processes must align with and embed into existing structures in order to last(41).
It is important for public health systems to identify and overcome barriers to successfully promoting efficiency improvement. Performance measurement processes are important, however delays in reporting back from central bodies to local facilities it seen as a barrier to improvement(41). A lack of business plans in proposed efficiency improvement processes poses a risk to achieving desired outcomes(50). Over-restructuring, focusing on short-term goals, focusing on advances rather than results and a culture of complacency were also identified as barriers to efficiency improvement(51). Avoiding these pitfalls should be a constant consideration at the system level.
Public health system management bodies can take a lead role in identifying low-value and high-risk procedures then removing less efficient choices, removing funding, producing policy guidelines/regulatory frameworks for cost-effective alternatives and raising the profile of correct/incorrect interventions(52,43). The identification and scaling-up of high-value initiatives is an area of opportunity in this space(53). Evidence for cost savings in similar initiatives in other health jurisdictions can be used to justify investment decisions and develop business cases for efficiency improvement initiatives(54). Centralizing and consolidating services can enhance performance, as can centrally-set, system-wide annual efficiency targets(55). Evidence is mixed for extending this approach to public-private partnerships, which have been described as complex, difficult to implement and dependant up a range of pre-existing conditions to succeed(56,57). Pay-for-quality schemes and mergers between public hospitals intended to improve performance are similarly fraught with limited evidence for efficiency and quality improvement(2,58).
Centralized efficiency improvement units such as Program Management Offices can have an impact on improving efficiency across public health systems by providing support and reducing pressure on health service managers(59). The extent to which the support offered by such units is adopted can be significantly dependent upon the engagement and enthusiasm of senior leadership across their public health system(4). The decision-making level of the efficiency improvement unit has significant bearing on the efficiency improvement focus and activities of the unit(1). Program Management Offices in health care promote efficiency as they can help solve operations issues, reduce spending, share expertise, standardize practices/processes, build capability, provide regular progress reporting, promote effective communication, assist various stakeholder groups to deliver results, optimize processes, evaluate impacts and align management approaches to client satisfaction(59).
In order to realize the potential benefits offered by centralized efficiency improvement units, challenges were identified which require consideration. These include task prioritization, managing expectations and managing multiple concurrent projects(59). The manner in which the capabilities and system knowledge of these teams is perceived by stakeholders impacted by efficiency improvement-related change is a determinant of the degree to which improvement initiatives are adopted across public health systems(4). This suggests that appointing team members recognized for their experience, credibility and familiarity with the public health system involved will facilitate the team’s ability to deliver efficiency improvement support. Establishing and managing realistic expectations as to the service offerings of such teams across their stakeholders has also been associated with the effectiveness of efficiency improvement support(59).
Concurrently managing efficiency, service delivery and service quality outcomes
An emerging focus on concurrently improving both quality and efficiency is replacing the previous focus on purely financial efficiency, with evidence suggesting that focusing solely on financial efficiency does not result in health service efficiency improvements(3). At a system level the factors contributing to efficiency improvement include focusing on efficiency at all facilities and organizational levels, addressing unwarranted variation, considered use of funding levers, and monitoring appropriate performance indicators(16). Public health systems have a role in shaping policy to encourage services which promote both efficiency and better stakeholder outcomes(60). Underpinning any efficiency improvement initiative are concurrent requirements to improve patient satisfaction, service quality and staff engagement in addition to managing cost(60). Gerald(61) suggests that this can be successfully approached through setting policy levers which prioritize affordability, access to care and innovation rather than targeting price or utilization-based metrics as priority outcomes.
Efficiency improvement can be addressed in alignment with patient outcomes and service quality, although inefficiency cannot be rectified simply through additional resourcing(5). Efficiency gains can be realized in combination between quality and patient outcomes, with quality, cost and productivity regarded as interlinked rather than isolated(39,62). Addressing health services overuse and low-value activities is also linked to both effectiveness and efficiency(63). While technological solutions can potentially enhance efficiency across a broad range of areas their potential is frequently overrated, with developing and implementing such solutions being a driver of cost(64,65). Importantly, health services cannot be expected to operate at near-maximum efficiency levels as consideration to reduced efficiency is a trade-off for workforce training capacity, research and innovation(66). This calls for the setting of realistic and balanced efficiency improvement targets and timeframes. It has also been suggested that effective training in the actions required to deliver efficiency improvement, consistent leadership and continued post-implementation monitoring are required in order for improvements in efficiency to be maintained(4).
Stakeholder engagement
Underpinning any efficiency improvement initiative are concurrent requirements to improve patient satisfaction, service quality and staff engagement in addition to managing cost(60). Despite the clear need to enhance efficiency, overcoming the challenges of staff resistance and staff expectations can prove difficult. Common misconceptions amongst staff and patients that ”more is better” and ”newer is better” are a significant barrier(63). There is a risk for resource investment to be considered a waste if no value is added to patient outcomes(46). To mitigate this risk, the involvement of stakeholders in target-setting has been associated with improved acceptance and compliance towards established targets(67). Clear target definition and stakeholder collaboration during improvement initiative development are factors for improvement initiative success(68,69). Collaboration, knowledge sharing, performance monitoring and continuous training in performance improvement are associated with project sustainability and impact(4). It was clear throughout the studies reviewed that effective, ongoing consultation and collaboration is a core element in efficiency improvement.
To counter stakeholder engagement challenges, public health systems can focus on enhancing collaboration and engagement to promote efficiency improvement(46). Stakeholders are unlikely to be motivated to engage in efficiency improvement solely because of cost-effectiveness(70). Local management priorities can be aligned across the system by linking unit manager goals, measures and incentives to those of the Organization, thereby promoting efficiencies at a system level and moving away from isolated pockets of improvement(71). Central bodies can sponsor collaborative networks to share successful practice and performance information, with links to improved patient outcomes and costs while also linking researchers with implementers and beneficiaries(72). Consideration towards the issues of data security and systems interoperability is required when planning technological solutions to support collaboration, information sharing and performance management(73). Although change management approaches were not the focus of this review, the evidence identified in this study consistently indicated that effective change management is required in any efficiency improvement initiative.