A WA parliamentary question probes the cost-effectiveness of contracting out health services versus providing them in-house. The Minister outlines a review process and upcoming business case evaluation to determine the best approach.

AnsweredQoN 182Legislative Assembly
Asked
9 August 2000
Member
Portfolio
Health

QuestionView source ↗

(b) what was the process and what are the real savings; (c) on what basis has the decision to continue the contracting out arrangements been taken; (d) has there been any consideration of the benefits (cash or non cash) of providing the services in house ? (e) if so, what was the exact nature of those considerations; and (f) if not, why not?
(c) on what basis has the decision to continue the contracting out arrangements been taken; (d) has there been any consideration of the benefits (cash or non cash) of providing the services in house ? (e) if so, what was the exact nature of those considerations; and (f) if not, why not?
(d) has there been any consideration of the benefits (cash or non cash) of providing the services in house ? (e) if so, what was the exact nature of those considerations; and (f) if not, why not?
(e) if so, what was the exact nature of those considerations; and (f) if not, why not?
(f) if not, why not?

AnswerView source ↗

Answered
18 October 2000
Response time
70 days
The Minister Replied:
(a) A review of the contract and attributed direct and indirect savings was undertaken in 1998, some six months prior to expiry of the contract. An estimated direct saving of approximately $350,000 per annum was elicited.
An on-going process of quality management is occurring, including monthly review meetings with Hospital management.
(b) Not applicable.
(c) Contract expires in November 2000. Prior to the expiry of the contract a business case evaluation will be made of the merits of entering into a new contract for service as opposed to providing the service on an in-house basis.
(d) Both cash and non-cash benefits of providing the service in-house will be addressed as part of the business case evaluation referred to above.
(e) Not applicable.
(f) As price is a significant factor, the merits or otherwise of contracting out cannot be determined until new tenders have been received. Experience is that past price is not a reliable guide to future tender pricing.

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