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Outsourcing firm Accenture recommends more health authority outsourcing

A prominent provincial government initiative to find cost-savings at Lower Mainland health authorities has been troubled by significant problems.

This, according to a review conducted by Accenture Inc., an international firm known for outsourcing public services.

But the company has come up with a solution for at least some of those problems: outsourcing - a recommendation now being blasted by New Democrat health services critic Adrian Dix.

The initiative was launched in August 2009 to consolidate corporate, clinical support and back office services at the health authorities.

Earlier this year, the government commissioned Accenture to review its progress.

The company has commended the initiative for creating a "solid foundation" that will lead to "more significant savings" in the future.

But the savings achieved as of March have been less than expected.

The health services ministry had hoped the initiative's 12 consolidation projects - which focused on services such as housekeeping, diagnostic imaging and human resources - would shave $103 million or 10 percent off the authorities' total $1.04 billion budget.

But Accenture found their existing project plans will only save $76 million by fiscal 2012/13 - with $6 million in reductions having been achieved in 2009/10 and $33 million targeted for 2010/11.

In part, that's because the projects are "high in effort and complexity and relatively low in savings value."

They've also encountered common problems including:

* "limited baseline data" to measure project progress;

* an "over-emphasis on tactical tasks and lack of long-term planning;"

* "lack of timely issue resolution;"

* an environment where "common tasks such as developing standard job descriptions take up to 2 months" and "service levels are stretched."

In addition, initiative leaders have been repeatedly blocked and stalled by authorities "that have not previously fallen under their jurisdiction."

That's because executives within those organizations haven't acted to remove those obstacles. "Furthermore, the lack of enforced accountability for results has placed the likelihood of savings achievement at risk."

Accenture acknowledged the authorities have identified $44.2 million worth in other ways to achieve cost savings - measures that were outside the scope of the company's review. Optimizing legal spending has resulted in an additional $2.5 million in savings.

Both the authorities and the health services ministry have agreed "broader savings and systemic change" will require additional upfront investments. But there's disagreement on where those investments should come from - with each side fingering the other.

The solution, according to Accenture, is to consider so-called "alternative funding" models - something that hasn't happened to date.

A health services ministry spokesperson acknowledged that could mean outsourcing.

Indeed, Accenture has recommended contracting out a whole range of services - from lab equipment maintenance to information technology support.

At the same time, the company stated the authorities should "aggressively" pursue cost-cutting within those services that remain part of the public sector.

In response, New Democrat critic Dix said, "What we have is a company ideologically predisposed to outsourcing, trying to overturn the decisions by the people in the field. That's what we have here."

"Look, there's nothing wrong with reviewing your structures," Dix continued. But he warned the Campbell administration's past efforts to improve efficiencies have usually involved "taking it out of the wages of the poorest employees. And that's what they describe and continue to describe as efficiencies."

But the ministry spokesperson defended government's decision to award the review work to Accenture, noting the company was selected via a competitive bid process.

The spokesperson also stated the health authorities have made "significant progress" since the review was done. And, if outsourcing happens, "government and health authorities would fulfill their obligations to consult affected stakeholders."

Sean Holman is editor of the online provincial political news journal Public Eye (publiceyeonline.com). He can be reached at editorial@publiceyeonline.com.

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