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Cost-Benefit Analysis of Outsourcing Cleaning Services at Mahalapye Hospital, Botswana

Cali, Jonathan, Heather Cogswell, Mompati Buzwami, Elizabeth Ohadi, and Carlos Avila


December 29, 2015
The Government of Botswana (GoB) is currently implementing a long-term strategy to diversify the economy, create opportunities for growth in the private sector, and increase the efficiency of the public sector. Outsourcing service delivery is one of four main approaches to privatisation outlined in the GoB’s policies, and the Ministry of Health (MoH) has been a leader in the privatisation policy by initiating outsourcing of nonclinical services at seven regional and district hospitals. Without complete data on the costs of services, hospital managers have been signing outsourcing contracts without knowing whether outsourcing offers better value for money than the current ‘insourcing’ system, in which hospitals provide the nonclinical services in-house. USAID's Health Finance and Governance (HFG) project, led by Abt Associates, was tasked with exploring the costs and cost drivers of providing nonclinical support services at health facilities in Botswana to assist the MoH with planning, managing, and implementing its outsourcing strategy and programme. Based on a cost-benefit analysis of cleaning services at Mahalapye General Hospital, and observations from outsourcing in six other hospitals in Botswana, this report analyzes the costs and benefits of outsourcing nonclinical services, and provides Botswana health authorities and managers with best practices and recommendations for determining whether they should outsource and at what price.