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PNAs are driven by innovation, coordination or new markets

PNAs are driven by innovation, coordination...

Across the key markets where PNA has been occurring, it is clear that different countries are pursuing partnerships for a variety of reasons, notably to spread innovation, coordinate service delivery or open up new markets.



Mark Britnell

Global Chairman and Senior Partner

KPMG in the UK


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These motivations have a major impact on the types of PNA activity chosen and the ease with which these take place. However, it is clear that local market conditions are not a significant factor in the success or failure of PNAs.

Many countries are pursuing PNAs to stimulate care coordination

Innovation in patient care integration is one of the key issues in healthcare. The Netherlands has made significant progress in health system integration, yet as Dr Anna van Poucke, Head of Health, KPMG in the Netherlands, explains, the path to integration is not easy: “Although coordinated care is one of the features of our health system, the reality is that integration is one of the hardest levels to achieve. It asks for an incredible stretch of all involved — letting go of old interests and converging these to collective goals and approaches. Finances, payment schemes and organizational boundaries must all be redesigned so that caregivers, patients, payers and providers are aligned.”

Alberto De Negri, Head of Health, KPMG in Italy, is working with a number of regions to strengthen horizontal and vertical integration. A strongly regional government-led approach to market management is being taken — made necessary by the impact of the global financial crisis on Italy’s public health system.

Alberto notes three key components to the Italian integration approach: creating a Care Delivery Value Chains Officer, reshaping provision through an Organizational Management Unit and centralizing non-core services. He exemplifies the Fondazione Don Gnocchi, a provider of hospital, children’s, disability and aged care services, as making particularly strong progress on integration and care coordination. “The strong points of Fondazione Don Gnocchi lay in the diversification of the healthcare services offered and in its territorial fragmentation: together they constitute an essential asset that has the potential to let Fondazione Don Gnocchi become the first Italian provider to provide true continuity of care.” Figure 1 shows what the Fondazione strategy looks like in practice.

Fondazione Don Gnocchi strategy

However, New Zealand’s strategy is quite different. Here, District Health Boards operate as all-in-one commissioners, providers and market managers, fostering integration through the abandonment of all forms of marketization in favor of a ‘one system’ approach. One Board in Canterbury, NZ, can point to improvements in finance and access without serious impact on quality as a result of organizational integration. Contracting has become more ‘relational’ rather than transactional, and they have been able to achieve greater control over services for long-term conditions and greater engagement of primary care.

Countries are using PNAs to open up new markets

In Germany, PNAs have led to considerable market movement through mergers, takeovers (e.g. of local authority hospitals) and revenue. High quality hospital and health service chains have evolved through this process — often funded by private equity. The largest of these is the Fresenius-funded Helios group. The Sana group, the third-largest private-sector hospitals operator in Germany, has sold two hospitals in regions where they felt they could not be strong. This reflects clever positioning and recognition of limitations.

As Wolfram Wildermuth, Partner, KPMG in Germany and previously Sana’s Chief Financial Officer, says, “We are committed to developing our profile in parts of Germany where we can concentrate our expertise, where we understand all the components of the health environment and can thus partner with public health services properly. This is so we can deliver on our commitment to quality, effective operations and strong finances. Where we are less certain about these factors we prefer not to invest.”

The Asia-Pacific market is quite different. With emerging economies, such as Indonesia and Malaysia and established economic hubs such as Singapore, consolidations and expansions into new markets are an equally striking feature. Singapore operates a public hospital system and it is also home to IHH/ Parkway, one of the world’s largest private hospital chains. It targets a customer base among the emerging affluent within and beyond Singapore’s borders, including Indonesia whose citizens generate 1.5 million overseas consultations a year and treatments valuing US$10 billion.

CEO Dr Tan See Leng describes how the company adapts in each new country to different market conditions, working under different payer arrangements, sometimes competing with existing providers, sometimes collaborating. “As a healthcare company, clinical quality and patient safety are our core values and are deeply engrained in our culture. Quality indicators are measured in all our hospitals and reported to the highest level. We rely on the trust and recognition of our brand standards for our success and ability to attract talent.”

PNAs are helping government and the private sector work together

Australia is often perceived as a public payer — public provider environment, but a closer look reveals a complex and intricate picture of partnerships and coexistence. In recent years, the balance has shifted through the developing policy of contestability in New South Wales, Queensland and Western Australia (already operating in Victoria). Here a growing range of publicly funded services, including some clinical services are subject to market testing and outsourcing (see figure 2).

Australia's healthcare sector

PNAs spread improvement and innovation

In the National Health Service (NHS) of England, both providers and payers have linked together into 15 Academic Health Science Networks. The intention is to ensure adoption of proven innovations across health systems. In other words, ‘leveling up’ standards. These innovations are either locally produced or identified more generally. The key will be how far innovations from ‘islands of excellence’ can be implemented across other providers in a regional system. It is early in the journey of these networks and they are a bold attempt to challenge the concept of organizational sovereignty which has been the hallmark of provider development in the NHS. Another policy being pursued by the NHS is the horizontal partnering of ‘successful’ providers with ‘unsuccessful’ ones. Challenged organizations that fall into the ‘special measures’ category have been able to select ‘buddy’ organizations to help them work their way out of trouble. For instance, University Hospitals Birmingham NHS Foundation Trust has buddied with Medway NHS Foundation Trust after the quality regulator, the Care Quality Commission, labelled Medway as inadequate in July 2014. The early signs are not promising. While this opens up useful contacts and understanding within the challenged organizations, at the time of this report, none had moved out of the special measures category.


  • Do you understand your market conditions and market signals prior to a PNA activity?
  • Does your PNA work reflect those conditions?
  • How can you lead as well as follow the market?

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