Private medical services in the Italian public hospitals: the case for improving HRM

This study explores how Italian public hospitals can use private medical activities run by their employed physicians as a human resources management (HRM) tool. It is based on field research in two acute-care hospitals and a review of Italian literature and laws. The Italian National Health Service (NHS) allows employed physicians to run private, patient-funded activities ("private beds", surgical operations, hospital outpatient clinics, etc.). Basic regulation is set at the national level, but it can be greatly improved at the hospital level. Private activities, if poorly managed, can damage efficiency, equity, quality of care, and public trust in the NHS. On the other hand, hospitals can also use them as leverage to improve HRM, with special attention to three issues: (1) professional evaluation, development, and training; (2) compensation policies; (3) competition for, and retention of, professionals in short supply. The two case studies presented here show great differences between the two hospitals in terms of regulation and organizational solutions that have been adopted to deal with such activities. However, in both hospitals, private activities do not seem to benefit HRM. Private activities are not systematically considered in compensation policies. Moreover, private revenues are strongly concentrated in a few physicians. Hospitals use very little of the information provided by the private activities to improve knowledge management, career development, or training planning. Finally, hospitals do not use private activities management as a tool for competing in the labor market for health professionals who are in short supply.