Labor is the largest cost in any provider or health system and essential in creating a low-cost system. There are several important components that need to be in place.

Partner and Chairman

KPMG in the UK


Related content

Redesign work and develop new roles

One of the main ideas is ensuring staff work to the full extent of their licensing and training. A common approach is to break down tasks so those that require lower levels of skills or training can be devolved. Extending the scope of staff can enable lower grade members to do more work, leaving higher paid staff free to focus on their area of expertise.

This approach works particularly well where it is possible to have a high degree of standardization and there is little variation in patients’ conditions, for example, where complex cases are dealt with in a central facility. This needs to be done carefully as in some types of care fragmenting roles and using less qualified staff can increase handoffs, errors and costs and may reduce quality. Sometimes it may be more cost-effective to allow a member of staff to work at a lower level if this reduces handovers and wasteful travel.

Matching staff to the right level often involves significant job redesign. This may be difficult for some professions, for example, where regulations mean some tasks that could be done by other suitably trained professionals are reserved for doctors.

In some cases, new roles may be required to fill gaps or to replace scarce or expensive staff, for example, the Aravind Eye Centers train lay workers to undertake preoperative assessment and Narayana Health have developed a range of assistant roles to support nursing and theatre staff. In summary, these programs are often aimed at people without higher levels of education who would not normally be considered for work of this kind but with proper training and clear guidelines can effectively carry out a large share of the work.

Promote team work

There are opportunities to deliver lower healthcare costs through development of teams with high levels of autonomy and appropriate supervision – particularly multi-disciplinary teams, and where teams enable staff to develop new roles stretching their capabilities (APPG 2012). The evidence points to the importance in many low-cost settings of keeping physicians as well-paid, salaried staff rather than fee-for-service arrangements and the development of team-based incentives linked to performance objectives of quality, satisfaction and efficiency rather than just revenue.

Remove administrative tasks from clinicians

It is important to minimize the time professionals spend on administrative tasks by streamlining processes and providing administrative support. For example, LifeSpring Maternity Hospital doctors deliver almost three times as many babies as those in private clinics and an important enabler to this is ensuring they do not have to spend time on administration. Care must be taken to ensure that introducing information systems does not increase the burden.

Clear performance standards and feedback

Performance standards and feedback create a workforce culture focused on productivity and continuous improvement. Cardiac surgeons at Narayana Cardiac Hospitals in India receive feedback on their performance and financial results via their cellphones each day. Similarly, doctors working for Ribera Salud in Valencia get rapid feedback on patient satisfaction and real time information about waiting times. For emergency room doctors these are linked to incentives to ensure patients are less likely to incur costs by going to other providers for their care.

Training, development and pay

A number of case studies identified in this paper put an emphasis on human resource strategies and, in particular, training and development. While training is costly, the investment is seen as paying back. A well-trained and flexible workforce is likely to make fewer errors and to have the skills to deal with patients and events that are out of the ordinary. The use of techniques, including lean are a key part of developing a low-cost health system, requiring a workforce with the capability to learn and deploy these methods.

Another interesting feature of some of these low-cost models is that staff is paid at least the average rate of other providers if not more. Fewer, more qualified staff seems to be a good strategy for some services in low-cost systems. The money saved by paying lower wages may be wiped out by the need for more, less efficient staff, increased leakage (theft) and a higher propensity to look for alternative revenue such as soliciting bribes, including unnecessary referrals, prescribing more expensive branded pharmaceuticals and unnecessary interventions.

Recruitment and reverse migration

Recruiting high quality staff can be a challenge for lower income countries and particularly for rural and remote areas. The active recruitment of people from the local community (including incentivizing people who have left a community to return), is a key part of the strategies of a number of low-cost providers.

A number of healthcare systems in Eastern Europe have introduced salary incentives for physicians to work in rural areas and provide housing for GPs opting to work in rural settings. Thailand and Costa Rica have been successful in recruiting and training community health workers from within the very communities they will serve.

Using technology to power the workforce

Many low-cost providers have been early adapters of electronic health records (EHRs) to support staff and enhance efficiency by allowing faster, more accurate sharing of information. Sharing EHRs between the hospital, outpatient settings and other providers can ease transitions into and out of hospital, and reduce duplication of tests and procedures. Evidence-based clinical guidelines can also be programmed into EHRs, giving instructions and reminders to nurses and physicians at the bedside.

Done badly, these can make extra work, for example, by requiring multiple log-ins/log-outs, shortage of access to devices and software that fails to reflect workflow.

Low-cost providers are also extensive users of telemedicine to enable specialists to provide advice, opinions and support to less specialized staff, allowing their expertise to be spread across a wider network. Phillips eICU, for example, offers remote support to critical care units in community hospitals in the US, while GE and Fortis are developing a similar model in India.

Technologies can allow staff to take on more advanced roles, reducing costs and overcoming role shortages in key staff. This includes, for example, decision support systems, automated equipment, and imaging equipment that can be used by non-specialist staff. Low-cost miniaturized equipment may also allow point of care testing and extension of care into more remote or sparsely populated areas.

GE and Medtronic, for example, are designing low-cost lines of key products, including ultrasounds and glucometers costing around 20 percent of the higher cost products but retaining all core functionalities. There are an increasing number of approaches allowing staff workflow to be managed more effectively, including systems for collecting patient observations wirelessly, e-rostering, scheduling and itinerary planning for community staff.

Workforce issues and priorities for low-cost systems:

  • There is a need to change regulations to allow more mobility of staff between countries in Africa
  • Improving the training and education of nurses and healthcare managers is a priority. This includes learning new models of care, team work, ways of working and more patient-centered approaches
  •  There is a danger of over-professionalization. Pharmacists, paramedics, technicians and middle grade staff can do much more, particularly when supported by technology. New types of workers are also needed. Regulatory and educational changes are needed in many countries to allow changes in staff roles allowing task shifting
  •  There are questions about whether training of physicians and other staff could be shortened
  •  Further development is needed in performance management systems for staff required to support high-quality, low-cost careTeam-based working is the future – this needs to include social work and people with coordination.


Report about challenges emerging health economies face delivering high-quality healthcare.

Read more

Connect with us


Request for proposal



KPMG's new digital platform

KPMG's new digital platform