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66-504: The Mid Staffordshire NHS Foundation Trust was a NHS foundation trust which managed two hospitals in Staffordshire , England : The trust was awarded NHS foundation trust status on 1 February 2008. Previously it was named Mid Staffordshire General Hospitals NHS Trust , which was created in 1993. The trust served about 320,000 people from Stafford , Cannock , Rugeley and the surrounding rural areas. About 3,000 employees worked in

132-402: A cap on the proportion of their income that can come from non-NHS treatments. It did not only apply to income derived from individual patients, it covered income from all non-NHS sources. This could include joint ventures to develop medical technologies, employers paying for counselling services or income from treating UK military personnel overseas. The Health and Social Care Act 2012 abolished

198-410: A company should only seek to subcontract in those areas in which it demonstrated no special ability. The business strategy outlined by his slogan recommended that companies should take advantage of a specialist provider's knowledge and economies of scale to improve performance and achieve the service needed. In 2009, by way of recognition, Peter Drucker posthumously received a significant honor when he

264-419: A different country from the one where the software will be used. The global software R&D services market, as contrasted to information technology outsourcing (ITO) and business process outsourcing (BPO), is rather young and currently is at a relatively early stage of development. Canada, India, Ireland , and Israel were the four leading countries as of 2003. Although many countries have participated in

330-479: A government outsourcing arrangement poses difficulties. There are many outsourcing models, with variations by country, year and industry. Japanese companies often outsource to China, particularly to formerly Japanese-occupied cities. German companies have outsourced to Eastern European countries with German-language affiliation, such as Poland and Romania . French companies outsource to North Africa for similar reasons. For Australian IT companies, Indonesia

396-446: A half page cartoon showing someone who had just ordered a pizza online, and was seeking help to download it. Step-in rights allow the client or a nominated third party the right to step-in and intervene, in particular to directly operate the outsourced services or to appoint a new operator. Circumstances where step-in rights may be contractually invoked may include supplier insolvency , a force majeure event which prevents or impedes

462-487: A link between the community and the board of directors. The size of the council of governors and its exact composition are determined by the constitution of the particular trust. Each trust adopts its own constitution subject to certain restrictions in legislation. These restrictions include that a majority of the council of governors must be elected governors and governors must be unpaid volunteers. Some trusts are more committed to co-operative principles and have even written

528-577: A major motivation for offshoring. Cost savings from economies of scale and specialization can also motivate outsourcing, even if not offshoring. Since about 2015 indirect revenue benefits have increasingly become additional motivators. Another motivation is speed to market. To make this work, a new process was developed: "outsource the outsourcing process". Details of managing DuPont 's chief information officer Cinda Hallman 's $ 4 billion 10-year outsourcing contract with Computer Sciences Corporation and Accenture were outsourced, thus avoiding "inventing

594-725: A major source for the advantages of a highly educated labor force, a large bilingual population, stable democratic government, and similar time zones as the U.S. It takes only a few hours to travel between Costa Rica and U.S. Companies such as Intel , Procter & Gamble , HP, Gensler , Amazon and Bank of America have big operations in Costa Rica. Unlike outsourced manufacturing, outsourced white collar workers have flextime and can choose their working hours, and for which companies to work. Clients benefit from remote work , reduced office space, management salary, and employee benefits as these individuals are independent contractors . Ending

660-819: A new organisation – the NHS Trust Development Authority – was established by the Health and Social Care Act 2012 to supervise trusts which have not reached foundation status, of which there were 99 in April 2013, 47 of which were never expected to reach foundation status. The Health and Social Care Bill 2011 , overseen by Lansley, proposed that all NHS trusts become foundation trusts or part of an existing foundation trust by April 2014. The early foundation trusts were generally financially buoyant, but during 2013 and 2014 more faced financial difficulties. A foundation trust finance facility, managed by an advisory committee to

726-481: A process if we'd done it in-house". A term subsequently developed to describe this is midsourcing . Outsourcing can offer greater budget flexibility and control by allowing organizations to pay for the services and business functions they need, when they need them. It is often perceived to reduce hiring and training specialized staff, to make available specialized expertise, and to decrease capital, operating expenses, and risk. "Do what you do best and outsource

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792-570: A shared services solution". By the end of 2013–14, foundation trusts collectively had built up cash reserves of £4.3 billion and it was suggested in the NHS Five Year Forward View that the government would "support" foundation trusts to spend this money "to help local service transformation". In response, the chief executive of the Foundation Trust Network, Chris Hopson, said: "The responsibility for these surpluses lies with

858-767: A variety of tests, which have changed over time. In 2003 only trusts with three stars from the Commission for Health Improvement were eligible for foundation status. In that year Aintree Hospitals, Essex Rivers Healthcare, Newcastle upon Tyne Hospitals and Walsall Hospitals were all downgraded to two stars and so did not make the first wave of foundation trusts. Formerly referred to as foundation trust equivalent (FTe) instead of Equivalent Foundation Trusts , this designation applies only to trusts providing high secure psychiatric services, of which there are three: Nottinghamshire Healthcare NHS Trust , West London Mental Health NHS Trust and Mersey Care NHS Trust . These trusts abide by

924-519: A £19.9 million annual deficit, the regulator, Monitor , sent in a team to resolve the trust's poor financial situation. This could involve a solvent restructuring of the trust, or to place the trust in special administration. In February 2013 it was confirmed that the process of putting the trust into administration had begun. In October 2014 it was announced that the Trust would be dissolved with Stafford Hospital to be renamed County Hospital and taken over by

990-432: Is a staff constituency, a patient constituency, and a "public member" constituency, consisting of members who are neither patients nor staff but live in a defined geographical area. In addition, there are governors appointed by bodies with whom the trust works in partnership. So, for example, appointments may be made by local councils, local medical schools, and local voluntary organisations. Governors are intended to act as

1056-569: Is described in Schedule 7 of the National Health Service Act 2006 , with the formal corporate form being called a "public benefit corporation". Each foundation trust has a council of governors. This is made up of elected governors and appointed governors. Elected governors are chosen by a secret postal ballot of the membership, which is open to the general public. The elections are usually held in separate constituencies. Typically there

1122-427: Is one of the major choice of offshoring destination. Near-shore location, common time zone and adequate IT work force are the reasons for offshoring IT services to Indonesia. Another approach is to differentiate between tactical and strategic outsourcing models. Tactical models include: Strategic consultancy includes for business process improvement . When offshore outsourcing knowledge work, firms heavily rely on

1188-466: Is pure R&D or run-of-the-mill IT outsourcing. Focusing on software quality metrics is a good way to maintain track of how well a project is performing. Globalization and complex supply chains , along with greater physical distance between higher management and the production-floor employees often requires a change in management methodologies, as inspection and feedback may not be as direct and frequent as in internal processes. This often requires

1254-436: Is relocating a business process to another country but does not imply or preclude another company. In practice, the concepts can be intertwined, i.e. offshore outsourcing , and can be individually or jointly, partially or completely reversed, as described by terms such as reshoring , inshoring , and insourcing . Global labor arbitrage can provide major financial savings from lower international labor rates, which could be

1320-406: Is when on-site hardware interacts with outside identity services. This contrasts with an "all in-the-cloud" service scenario, where the identity service is built, hosted and operated by the service provider in an externally hosted, cloud computing infrastructure. Offshore software R&D is the provision of software development services by a supplier (whether external or internal) located in

1386-589: The 2016 U.S. presidential election "the most disruptive change agent for the outsourcing industry", especially the renewed "invest in America" goal highlighted in campaigning, but the magazine tepidly reversed direction in 2019 as to the outcome for employment. In the case of armament acquisition, section 323 of the National Defense Authorization Act for 2014 requires military personnel "to solicit information from all U.S.-owned arsenals regarding

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1452-664: The Rochdale Principles into their constitution; they aspire to work closely and in partnership with other mutual and local organisations. At first, foundation trusts were authorised and regulated by Monitor , a non-executive body under the Department of Health. Monitor was merged into NHS Improvement in 2016. The trade body for foundation trusts is NHS Providers , formerly known as the Foundation Trust Network, which has 95% of all acute, ambulance, community and mental health foundation trusts in its membership. A 2014 report by

1518-541: The Socialist Health Association said that on the whole after 10 years, "Foundation Trusts [had]... not deepened in terms of democratic practice and participation". The independence of Foundation Trust governors was challenged in 2021 when the governors of Queen Victoria Hospital , a small specialist trust, called for a pause to plans for it to merge with University Hospitals Sussex NHS Foundation Trust . NHS Improvement were said to have effectively ordered

1584-481: The A&;E department at Stafford, in order to double the space and reduce overcrowding. In 2017 the two trusts which took over services - Stoke and Wolverhampton - were still looking for extra financial support as the transition funding of more than £300m had expired. Both were in deficit. Ernst & Young were paid more than £3 million for their services during the trust special administration process. The organisation

1650-551: The Department of Health definition of a foundation trust, but the Secretary of State for Health maintains a direct line of communication and accountability with them because he or she has the responsibility to provide healthcare to patients who have been detained under the Mental Health Act , and have been judged to pose a grave and immediate danger to the public. Unlike full foundation trusts, governors have no statutory role, and

1716-410: The Department of Health was promoting "A new type of NHS hospital". In 2011, the 116 trusts then in the pipeline to make applications were required to sign a formal agreement, with a deadline for the application to be made. Board members at a number of trusts which missed the deadline were sacked. It was accepted by Andrew Lansley that a number of trusts would never reach foundation trust status, and

1782-479: The Department of Health, was established to process loans for capital developments, but during 2014 applications were made by trusts which had trouble paying utility bills or replacing medical equipment. Guidance issued under the tenure of Jeremy Hunt in October 2014 said that conditions could be set which could include: reductions in the use of temporary staff, "use of collaborative procurement routes" or "the adoption of

1848-458: The FTs; any attempt by the statutory bodies to make a grab for them will be furiously resisted". By 2016, the distinction between foundation trusts and other NHS trusts was widely regarded as eroded, and in that year the two regulators were combined into a new body, NHS Improvement . The notion that every trust should become a foundation trust was abandoned, and the widespread financial crisis undermined

1914-489: The Foundation Trust Network it was raised to 1.5%. These caps disappeared on 1 October 2012. Collective earnings from private patients increased 14%, from £346.1 million in 2012–13 to £395.9 million for 2014–15. Private earning is concentrated on specialist hospitals in London who see many patients from other countries. Most trusts have negligible private income. In order to achieve foundation trust status, NHS trusts have to pass

1980-566: The International Association of Outsourcing Professionals gave recognition to Electronic Data Systems Corporation's Morton H. Meyerson who, in 1967, proposed the business model that eventually became known as outsourcing. The growth of offshoring of IT-enabled services, although not universally accepted, both to subsidiaries and to outside companies (offshore outsourcing) is linked to the availability of large amounts of reliable and affordable communication infrastructure following

2046-573: The NHS to reconsider "whether the model of foundation trusts is sensible", arguing "If one-third of the hospital system is permanently not demonstrating good viability and good governance, is that telling you something about actually how the system should run as opposed to how we thought it should run?". In January 2022 Sajid Javid , writing in The Times said he was planning a “revolution” that would allow “well-run hospitals more freedom”. Foundation trusts had

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2112-564: The U.S. in 2007, which could exceed 400 times more than average workers—a gap 20 times bigger than it was in 1965, is not a factor. Other reasons include reducing and controlling operating costs, improving company focus, gaining access to world-class capabilities, tax credits, freeing internal resources for other purposes, streamlining or increasing efficiency for time-consuming functions, and maximizing use of external resources. For small businesses, contracting/subcontracting/"outsourcing" might be done to improve work-life balance . Following

2178-412: The adding of management layers in the 1950s and 1960s to support expansion for the sake of economy of scale, corporations found that agility and added profits could be obtained by focusing on core strengths; the 1970s and 1980s were the beginnings of what later was named outsourcing. Kodak 's 1989 "outsourcing most of its information technology systems" was followed by others during the 1990s. In 2013,

2244-463: The area of call-center outsourcing, especially when combined with offshoring, agents may speak with different linguistic features such as accents , word use and phraseology, which may impede comprehension. In 1979, Nobel laureate Oliver E. Williamson wrote that the governance structure is the "framework within which the integrity of a transaction is decided", and that "because contracts are varied and complex, governance structures vary with

2310-416: The assimilation of new communication methods such as voice over IP , instant messaging , and issue tracking systems , new time management methods such as time tracking software , and new cost- and schedule-assessment tools such as cost estimation software . The term "transition methodology" describes the process of migrating knowledge, systems, and operating capabilities between the two sides. In

2376-655: The availability of technical personnel at offshore locations. One of the challenges in offshoring engineering innovation is a reduction in quality. Co-sourcing is a hybrid of internal staff supplemented by an external service provider. Co-sourcing can minimize sourcing risks, increase transparency, clarity and lend toward better control than fully outsourced. Co-sourcing services can supplement internal audit staff with specialized skills such as information risk management or integrity services, or help during peak periods, or similarly for other areas such as software development or human resources. Identity management co-sourcing

2442-521: The bank. Richard Baldwin 's 2006 The Great Unbundling work was followed in 2012 by Globalization's Second Acceleration (the Second Unbundling) and in 2016 by The Great Convergence: Information Technology and the New Globalization . It is here, rather than in manufacturing, that the bits economy can advance in ways that the economy of atoms and things cannot: an early 1990s Newsweek ran

2508-622: The board of directors have no statutory duty towards the governors. The governors cannot, without the board of directors' permission, have any control over the direction of the trust, and cannot appoint or remove trust auditors. The chair and directors are not appointed by their board of governors. Outsourcing Outsourcing is a business practice in which companies use external providers to carry out business processes , that would otherwise be handled internally. Outsourcing sometimes involves transferring employees and assets from one firm to another. The term outsourcing , which came from

2574-559: The capability of that arsenal to fulfill the manufacturing requirement" when undertaking a make-or-buy analysis. Furthermore, there are growing legal requirements for data protection , where obligations and implementation details must be understood by both sides. This includes dealing with customer rights. UK government policy notes that certain services must remain in-house, citing the development of policy , stewardship of tax spend and retention of certain critical knowledge as examples. Guidance states that specific criteria must govern

2640-508: The contract between the client and the suppliers, fraud cases have been reported. In April 2005, a high-profile case involved the theft of $ 350,000 from four Citibank customers when call-center workers acquired the passwords to customer accounts and transferred the money to their own accounts opened under fictitious names. Citibank did not find out about the problem until the American customers noticed discrepancies with their accounts and notified

2706-528: The contracting out of a business process (e.g., payroll processing, claims processing), operational, and/or non-core functions, such as manufacturing, facility management , call center /call center support. The practice of handing over control of public services to private enterprises ( privatization ), even if conducted on a limited, short-term basis, may also be described as outsourcing. Outsourcing includes both foreign and domestic contracting, and therefore should not be confused with offshoring which

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2772-537: The council of governors to work towards a merger. A study undertaken in 2005 by the King's Fund of Homerton University Hospital NHS Foundation Trust found some governors disappointed and disillusioned. Another report in 2005, funded by the Nuffield Foundation , found that it was too easy to invite members to sit on sub-committees, where they quickly became bogged down in the minutiae of operational planning, whilst

2838-508: The early 21st century. The digital workforce of countries like India and China are only paid a fraction of what would be minimum wage in the United States. On average, software engineers are getting paid between 250,000 and 1,500,000 rupees (US$ 4,000 to US$ 23,000) in India as opposed to $ 40,000–$ 100,000 in countries such as the U.S. and Canada . Closer to the U.S., Costa Rica has become

2904-758: The effect of what looks like outsourcing from one side and insourcing from the other side can be unexpected; The New York Times reported in 2001 that "6.4 million Americans .. worked for foreign companies as of 2001, [but] more jobs are being outsourced than" [the reverse]. While U.S. companies do not outsource to reduce high top level executive or managerial costs, they primarily outsource to reduce peripheral and "non-core" business expenses. Further reasons are higher taxes, high energy costs, and excessive government regulation or mandates. Mandated benefits like social security , Medicare , and safety protection (e.g. Occupational Safety and Health Administration regulations) are also motivators. By contrast, executive pay in

2970-403: The end of 2014 with staff transferred to either North Staffordshire or Royal Wolverhampton Hospitals NHS Trust . Accident and emergency services would remain open and a midwife-led maternity unit opened at Stafford Hospital, but consultant-led obstetrics services would move to University Hospital of North Staffordshire NHS Trust . The Trust subsequently reported that senior staff had left and it

3036-581: The final Healthcare Commission report. The 2010 independent investigation report recommended that the regulator, Monitor , de-authorise the Foundation Trust status. In June 2010, the new government announced that a full public inquiry was expected to report in March 2011. The final report was published on 6 February 2013, making 290 recommendations. It was reported in December 2013 that trust would be dissolved by

3102-573: The identification of such services, and that "everything else" could potentially be outsourced. Inflation, high domestic interest rates, and economic growth pushed India's IT salaries 10–15%, making some jobs relatively "too" expensive, compared to other offshoring destinations. Areas for advancing within the value chain included research and development, equity analysis, tax-return processing, radiological analysis, and medical transcription . Although offshoring initially focused on manufacturing, white-collar offshoring/outsourcing has grown rapidly since

3168-529: The legislative basis was the Health and Social Care (Community Health and Standards) Act 2003 . The first ten NHS hospitals to become foundation trusts were announced in 2004. Gordon Brown prevented plans by Alan Milburn that they should be financially autonomous in 2002. By 2012, the Monitor website listed 145 foundation trusts. Successive governments set target dates by which all NHS trusts were supposed to have reached foundation status. For example, by 2009

3234-509: The main decisions were taken at meetings that they only heard about after they took place. The public's perception of foundation trust status implying a high standard of clinical care was changed by the Mid Staffordshire NHS Foundation Trust scandal of the late 2000s ( Stafford Hospital Scandal ) and the ensuing Francis inquiry , published in 2013. At the outset, some critics claimed that foundation trusts went against

3300-618: The nature of the transaction". University of Tennessee researchers have been studying complex outsourcing relationships since 2003. Emerging thinking regarding strategic outsourcing is focusing on creating a contract structure in which the parties have a vested interest in managing what are often highly complex business arrangements in a more collaborative, aligned, flexible, and credible way. Reduced security, sometimes related to lower loyalty may occur, even when 'outsourced' staff change their legal status but not their desk. While security and compliance issues are supposed to be addressed through

3366-481: The newly constituted University Hospitals of North Midlands NHS Trust . Cannock Chase Hospital would be taken over by Royal Wolverhampton Hospitals NHS Trust . The trust was at the centre of the major Stafford Hospital scandal in which many press reports claimed that because of the substandard care between 400 and 1200 more patients died between 2005 and 2008 than would be expected for the type of hospital, though in fact such ‘excess’ death statistics did not appear in

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3432-471: The offshore outsourcing of software development, their involvement in co-sourced and outsourced Research & Development (R&D) was somewhat limited. Canada, the second largest by 2009, had 21%. As of 2018, the top three were deemed by one "research-based policy analysis and commentary from leading economists" as China, India and Israel." Gartner Group adds in Russia , but does not make clear whether this

3498-403: The outsourced service provision, where the client believes that there is a substantial risk to the provision of the services, or where performance fails to meet a defined critical level of service. Suitable clauses in a contract may provide for the outsourced service provider to pay any additional costs which are faced by the client and specify that the provider's obligation to provide the services

3564-470: The phrase outside resourcing , originated no later than 1981 at a time when industrial jobs in the United States were being moved overseas, contributing to the economic and cultural collapse of small, industrial towns. In some contexts, the term smartsourcing is also used. The concept, which The Economist says has "made its presence felt since the time of the Second World War ", often involves

3630-533: The private patient income cap but FTs have to do the majority of their work for the NHS. This restriction was kept to reassure those concerned about future developments that FTs would continue to have NHS work as their central concern. Previously each FT had its own cap, set at the level of its private activity when the first FTs were established in 2003/4. About three-quarters of all FTs had a cap of 1.5% or less. Until 2010 all mental health trusts were completely barred from undertaking non-NHS work, but after lobbying from

3696-412: The public sector and less autonomous than was originally expected. By March 2013 there were 145 foundation trusts, of which 41 were mental health trusts and three were ambulance trusts. They included acute trusts, mental health, community and ambulance trusts. By March 2019, the number of foundation trusts had shown a small increase to 151. The basic governance structure and form of foundation trusts

3762-459: The rest" has become an internationally recognized business tagline first "coined and developed" in the 1990s by management consultant Peter Drucker . The slogan was primarily used to advocate outsourcing as a viable business strategy. Drucker began explaining the concept of "outsourcing" as early as 1989 in his Wall Street Journal article entitled "Sell the Mailroom". From Drucker's perspective,

3828-607: The spirit of the principles laid out by Aneurin Bevan , the founder of the NHS. Others feared that it would lead to a two-tier system. Others doubted whether foundation trust members would succeed in having any effective influence over hospital management. In 2011, some argued in a report financed by the Nuffield Foundation that the success associated with foundation trusts had been due to other factors than governance. In June 2014, Bill Moyes, former Monitor executive chair, urged

3894-466: The supposed autonomy when almost all had to rely on money borrowed from the Department of Health, to which strings were attached. Foundation trusts have some managerial and financial freedom when compared to NHS trusts . The introduction of foundation trusts represented a change in the history of the National Health Service and the way in which hospital services are managed and provided. At

3960-472: The telecommunication and Internet expansion of the late 1990s. Services making use of low-cost countries included: In the early 21st century, businesses increasingly outsourced to suppliers outside their own country, sometimes referred to as offshoring or offshore outsourcing . Other options subsequently emerged including: nearshoring, crowdsourcing , multisourcing , strategic alliances / strategic partnerships , strategic outsourcing. Forbes considered

4026-599: The time of introduction, they were described "as a sort of halfway house between the public and private sectors". This form of NHS trust is an important part of the United Kingdom government's programme to create a "patient-led" NHS with an internal market . The stated purpose is to devolve decision-making from a centralised NHS to local communities, in an effort to be more responsive to their needs and wishes. But after Gordon Brown prevented plans by Alan Milburn to make them financially autonomous they have been much more in

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4092-485: The two hospitals. The trust provided services which were formerly commissioned by South Staffordshire Primary Care Trust, which was created in 2006 by a merger of four primary care trusts : Burntwood, Lichfield & Tamworth, Cannock Chase, East Staffordshire and South Western Staffordshire. The trust was in the area covered by the West Midlands Strategic Health Authority . In 2012, following

4158-559: Was built by the Spanish National Health System , but its operational management is contracted out to a private company, and exempt from many of the rules normally imposed on state-owned hospitals, and in particular, that hospital was allowed to negotiate its own contracts with workers. The governance of that hospital includes local government, trade unions, health workers and community groups. Foundation trusts were announced by Health Secretary Alan Milburn in 2002, and

4224-495: Was inducted into the Outsourcing Hall of Fame for his outstanding work in the field. The biggest difference between outsourcing and in-house provision is with regards to the difference in ownership: outsourcing usually presupposes the integration of business processes under a different ownership, over which the client business has minimal or no control. This requires the use of outsourcing relationship management . Sometimes

4290-539: Was not formally abolished until November 2017. It paid out more than £1 million in clinical negligence compensation and £540,000 on court fines and legal fees. Download coordinates as: NHS foundation trust Alan Milburn 's trip in 2001 to the Hospital Universitario Fundación Alcorcón in Spain is thought to have been influential in developing ideas around foundation status. That hospital

4356-426: Was unable to recruit permanent replacements so elective surgery would be stopped in order to concentrate resources on urgent care. Some services will move from Stafford, under the control of Royal Wolverhampton NHS Trust. The cost of the changes is "well over £300m". Mark Hackett, chief executive of the new trust, said the figures were "considerably more" than first estimated. Part of the money will be used to refurbish

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