Health Strategy: Construction and Development Industry
The Situation
The UK arm of a global developer had 8 Private Finance Initiative (PFI) hospitals in the UK, however had not been successful in winning new contracts for 5 years despite bidding on several of these. They wanted to understand what the major changes were in the UK health sector (NHS, Private and 3rd Sector) and what opportunities there would be for them both within PFI of hospitals and more broadly across the sector. This was to inform their thinking of where best to focus their PFI work, alternative options being schools or waste disposal sites.
The Approach
This was an 8 week pure strategy engagement for Corum and we deployed one strategy consultant to do the work. It involved both desk based research and a series of focus interviews within the company (PFI hospital general managers and assistant general managers etc) and with industry decision makers (H.M. Treasury, PwC, Hospital Trusts, Department of Health, Public Affairs Consultants, etc). The analysis was shared within the client to inform a series of workshops to develop and then assess strategic options. We presented these options to the senior management team.
The Outcome
Our recommendations were a set of short, medium and long term opportunities for the client to pursue with a risk and cost/benefit assessment. One of these was to pursue an innovative PFI funded site re-development at an existing PFI hospital. Another example was to look at options in PFI around Primary Healthcare Trusts. We identified the challenge that large scale PFI deals were being replaced with smaller scale deals that were just as expensive to bid and less likely to be profitable. The commercial, political and reputational risks we identified for PFI in health were seen to be too great and investment was switched to waste management. There was an ongoing debate about the merit of selling off existing PFI investments to the secondary market and this impinged on our work due to the impact this might have on winning future PFI bids.
The UK arm of a global developer had 8 Private Finance Initiative (PFI) hospitals in the UK, however had not been successful in winning new contracts for 5 years despite bidding on several of these. They wanted to understand what the major changes were in the UK health sector (NHS, Private and 3rd Sector) and what opportunities there would be for them both within PFI of hospitals and more broadly across the sector. This was to inform their thinking of where best to focus their PFI work, alternative options being schools or waste disposal sites.
The Approach
This was an 8 week pure strategy engagement for Corum and we deployed one strategy consultant to do the work. It involved both desk based research and a series of focus interviews within the company (PFI hospital general managers and assistant general managers etc) and with industry decision makers (H.M. Treasury, PwC, Hospital Trusts, Department of Health, Public Affairs Consultants, etc). The analysis was shared within the client to inform a series of workshops to develop and then assess strategic options. We presented these options to the senior management team.
The Outcome
Our recommendations were a set of short, medium and long term opportunities for the client to pursue with a risk and cost/benefit assessment. One of these was to pursue an innovative PFI funded site re-development at an existing PFI hospital. Another example was to look at options in PFI around Primary Healthcare Trusts. We identified the challenge that large scale PFI deals were being replaced with smaller scale deals that were just as expensive to bid and less likely to be profitable. The commercial, political and reputational risks we identified for PFI in health were seen to be too great and investment was switched to waste management. There was an ongoing debate about the merit of selling off existing PFI investments to the secondary market and this impinged on our work due to the impact this might have on winning future PFI bids.
