Table 5.

Cross case comparison of NHS England and RHS Tuscany cases – Structure and Process.

	NHS England	RHS Tuscany cases	Comparison (commonalities and differences)	Explanation for difference
Scope	Outsourcing from public to private sector both the logistics and procurement of consumables	Outsourcing from public to public both the logistics and procurement of consumables and pharmaceuticals	In both case logistics and procurement were jointly outsourced, but the Tuscany outsource includes pharmaceuticals whereas the England outsource excludes them.	Pharmaceuticals are a large part of public expenditure. Due to the importance of such products, the Government maintains control over such category for ethical, equity and accountability reasons.
Transaction volume	£4.6 billion (2006) across more than 600 client organisations	Non-pay expenditure of €650 million∗ (2005) across 16 client organisations ∗includes consumables and pharmaceuticals	Transacted volume and the number of client organisations are is far higher for the England case, however the expenditure for the Tuscany case is still sizeable	There is a significand difference in scale of the population served. In England the NHS serves over 50 million people, while in Tuscany the system covers under 4 million.
Market Structure	Free market model where client organisations are free to choose supply	Mandated market model where client organisations are mandated to buy from the ESTAVs	The England case is a free market model whereas Tuscany is a mandated model	The England case had previously operated on a free market model, and could not mandate public NHS organisations to buy privately
Build up stage
Partner selection	Competitive bidding; on 4th Sept 2006 the negotiation ended and a new private sector organisation (the service provider) was established (NHS SC)	In 2002 three Consortia (CAV) (D.G.R. 144/2000) were created; in 2005, the Consortia were replaced by three public-funded organisations (ESTAVs) (L.R. 40/2005)	Competitive bidding was used to select the private provider in the England case whereas the Tuscany public providers were established by (regional) law	In the Tuscany case no alternative were available, with implications on the governance of the outsourcing relationship
Contract design	A ten-year Master Services Agreement (MSA) states the transfer of assets, contracts and more than 1650 NHS employees	Regional Laws and Regulation	A contract was established for the England case whereas the outsource could be governed by regional law for the Tuscany case	Outsourcing to the private sector required contractual assurances around asset transferred and scope of the activities such as the product categories, and service levels
Execution stage
Operations planning/organisation	The NHS SC value proposition and business model aims to deliver price reductions and improvements to NHS client organisations.	The ESTAV’s value proposition of recognised that they aim to deliver price reductions and improvements to client organisations’ internal operating efficiency	Similar
Communication and information sharing	Boundary spanning managers and joint Board and teams	Boundary spanning managers and joint teams	Similar
Coordination	Resource combination and alignment between the outsourcer NHSBSA and the provider, NHS SC.	Homogenization of language between the ESTAVs and the client organisations	In the NHS case, public and private sector complementary resources were combined to create synergies. In Tuscany, the competences and resources were from public sector.	NHS SC capitalized on private sector experience during the outsourcing. This was not the case in Tuscany, where a massive process of requalification of ESTAVs’ employees was needed
Control/monitoring	Monitoring against limited MSA target plus complex set of measures	The RHS Tuscany performance monitoring system involved a wide range of measures	In both cases, a complex system of performance monitoring was developed. This demonstrate awareness about the risk of a lack of monitoring and the need to control the outcomes of such important decision
Institutionalisation stage
Bonding processes	Combination of formal and informal governance mechanisms	Organisational changes in the client organisations’ structure, procedure and routines	In both case, the outsourcing relationship governance required interventions that went beyond the formal mechanisms established by MSA and regional law. Such interventions were finalized to solve legal and organisational implementation issues (e.g. misalignment of resources, information asymmetry, homogenization of language and information)