HLTH 4313 Module 3 Structured Decision Analysis Example

Keep the Crew or Sign the Contract? A Structured Decision on Outsourcing a Community Hospital's Environmental Services Department

Student Name

American College of Education

HLTH4313: Leading and Decision-Making in Health Services

Module 3 Assignment

Instructor Name

October 19, 2026

The Decision

The chief financial officer of our composite 300-bed community hospital has received a proposal from a national facilities services company to take over environmental services. The company would hire our current staff, manage the department with its own supervisors and systems, and guarantee annual savings of about $640,000, roughly 12% of the department's current cost of $5.3 million. The hospital's leadership team asked the environmental services management to prepare an analysis before the board votes. As night supervisor, I was asked to help structure it.

The decision matters beyond money. The department cleans every patient room, operating room and public area, and its work is a line of defense against health care associated infections. A choice made only on the savings figure would ignore most of what the department does.

The Options

The leadership team agreed to compare three options rather than two, since a yes-or-no framing hides alternatives. Option A is full outsourcing on the proposed terms. Option B is to keep the department in-house with no changes. Option C is to keep the department in-house but pursue the efficiencies the proposal identified on our own: the vendor's savings came mainly from a scheduling system that matches staffing to discharge patterns, bulk purchasing of supplies and a reduction in overtime. The hospital could buy similar scheduling software, join a purchasing cooperative for supplies and address overtime through the same scheduling change. The finance team's estimate of Option C's savings is about $380,000 a year after the software cost.

Criteria and Evidence

The team set five criteria with weights before scoring. Infection prevention and cleaning quality, weighted 35%, because it bears on patient harm. Cost, 25%. Workforce stability and treatment of current staff, 15%. Control and flexibility, meaning the hospital's ability to change priorities quickly, such as during an outbreak, 15%. Implementation risk, 10%.

Research on the first criterion is the most important evidence in the decision. Toffolutti et al. (2017), studying 126 English acute hospital trusts from 2010 to 2014, found that outsourcing cleaning services was associated with a higher incidence of MRSA, fewer cleaning staff per bed, and worse patient perceptions of cleanliness, although it was also associated with lower costs before accounting for the cost of treating infections. In the United States, Litwin et al. (2017) linked infection data to the organizational features of California general acute care hospitals and found support for the theory that outsourcing environmental services workers, who are then more likely to be under-rewarded, undertrained and detached from the care team, is associated with a higher incidence of health care associated infections.

Both studies are observational, so they cannot prove that outsourcing causes infections; hospitals that outsource may differ in other ways. But two studies in different health systems pointing the same way deserve weight, particularly when the mechanism they describe, fewer staff and weaker connection to the care team, is plausible. A saving that shows up in the environmental services budget and a cost that shows up in the infection rate belong on the same page.

Scoring the Options

The leadership team gave every option a rating of one to five against each criterion, using the evidence and the finance estimates. On infection prevention and quality, Option A scored 2, because the vendor's model reduces staff per bed and the research suggests risk; Options B and C scored 4, with C's scheduling change expected to put more staff on at discharge peaks. On cost, A scored 5, C scored 4 and B scored 1. On workforce stability, A scored 2, since staff would move to a new employer whose wages and benefits were guaranteed for only one year, B scored 4 and C scored 4. On control and flexibility, A scored 2 and both in-house options scored 5. On implementation risk, B scored 5, C scored 3 because it requires new software and purchasing changes, and A scored 3.

Weighted totals were 2.75 for Option A, 3.60 for Option B and 4.05 for Option C. A sensitivity check showed that Option A would rank first only if cost were weighted above 55% and infection prevention below 15%, a weighting no member of the team considered defensible for a hospital.

Putting the Infection Risk in Dollars

The leadership team asked a fair question: how large would an infection increase have to be to erase the vendor's savings? Published cost estimates allow a rough answer. In a meta-analysis of attributable costs in the United States, Zimlichman et al. (2013) estimated that a case of Clostridium difficile infection added about $11,285 in costs, a surgical site infection about $20,785 and a central line-associated bloodstream infection about $45,814, in 2012 dollars. The difference between the vendor's guaranteed saving and our in-house option's estimated saving is about $260,000 a year. At the C. difficile figure, about 23 additional infections a year would consume that difference; at the bloodstream infection figure, about six would.

Our hospital records roughly 40 hospital-onset C. difficile infections a year. The research does not tell us how many more infections, if any, outsourcing would cause here, and the team did not pretend it could. But the calculation shows that the savings gap is small enough that a modest rise in infections would close it, and that the infections would carry costs to patients no budget line captures. That was enough for the team to keep infection prevention as the heaviest criterion.

Recommendation and Decision Risks

The analysis supports Option C: keep environmental services in-house and pursue the vendor's efficiencies directly. It captures about 60% of the promised savings while avoiding the infection risk the research associates with outsourcing and keeping control of a department whose work matters most during outbreaks and surges.

The recommendation carries risks that the board should hear. The $380,000 estimate is less certain than the vendor's guarantee, because it depends on the hospital carrying out changes it has not attempted before. To manage that risk, the department should set quarterly savings targets and report them to the finance committee, with the understanding that if Option C delivers less than half its estimated savings after eighteen months, the board may revisit outsourcing. The team should also recognize its own bias: the people analyzing the decision work in the department that would be outsourced. For that reason, the finance team, not environmental services, prepared the cost estimates, and the infection prevention director reviewed the evidence section.

What the Process Teaches

Structured decision-making does not remove judgment, but it puts judgment where others can see it. The vendor's proposal was framed around a single figure, and in many hospitals that figure would have decided the question. Separating the sources of savings created an option no one had proposed, and fixing criteria and weights before scoring prevented the team from arranging the numbers to fit a preference. The sensitivity check turned a disagreement about weights into a clear statement of what one would have to believe for outsourcing to win. Those steps are useful in any health services decision where money is visible and other consequences are not.

References

Litwin, A. S., Avgar, A. C., & Becker, E. R. (2017). Superbugs versus outsourced cleaners: Employment arrangements and the spread of health care-associated infections. ILR Review, 70(3), 610-641. https://doi.org/10.1177/0019793916654482

Toffolutti, V., Reeves, A., McKee, M., & Stuckler, D. (2017). Outsourcing cleaning services increases MRSA incidence: Evidence from 126 English acute trusts. Social Science & Medicine, 174, 64-69. https://doi.org/10.1016/j.socscimed.2016.12.015

Zimlichman, E., Henderson, D., Tamir, O., Franz, C., Song, P., Yamin, C. K., Keohane, C., Denham, C. R., & Bates, D. W. (2013). Health care-associated infections: A meta-analysis of costs and financial impact on the US health care system. JAMA Internal Medicine, 173(22), 2039-2046. https://doi.org/10.1001/jamainternmed.2013.9763