“The more a hospital uses consultants, the more its efficiency decreases”

Grandstand. A Senate report titled “A Sprawling Phenomenon: The Growing Influence of Consulting Firms on Public Policy,” revealed in March that French state consulting spending exceeded one billion euros in 2021. public have an interest in calling on consultants? On the one hand, their methods and their outside view would allow them to solve most of the problems that their clients are facing. On the other hand, they are sometimes criticized for making promises to their customers that they fail to keep.

While much has been written about the use of consultants in public services, this crucial question has not really been answered. In France, consultants have notably worked on improving the functioning of hospitals. Have these investments paid off? If the data which would make it possible to answer this question are not available in France, they exist in England.

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In a forthcoming study, five researchers have used these data to investigate the relationship between consultancy spending and efficiency in English hospitals (AJ Sturdy, I. Kirkpatrick, NR Alvarado, A. Blanco‐Oliver, G. Veronesi: “ The management consultancy effect: Demand inflation and its consequences in the sourcing of external knowledge”, Public Administration, forthcoming). Efficiency was measured using an indicator called “reference cost index” which compares the costs of providing the same service from one hospital to another.

Poor knowledge of how hospitals work

The study shows that there is a relationship between consulting expenditure and hospital efficiency. The problem is that this relationship is negative. The more a hospital uses consultants, the more its efficiency decreases. Note that this relationship does not stem from the fact that the least efficient hospitals are more likely to use consultants.

There is no link between a hospital’s efficiency and the decision to hire consultants the following year. Nor can it be explained by a lack of managers. The hospitals that employ the greatest number of managers are also those that use the most consultants.

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How to explain the negative impact of consulting expenditure on hospital efficiency? According to the researchers, the costs induced by the services of the council would reduce the capacity of the hospitals to invest in their own competences. In some cases, the consultants also do not seem to know enough about how hospitals work to improve their performance.

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