Public-Private Innovation in Health and Social Care: The Implications of Transaction Costs

In response to the continual pressure on health and social services worldwide, there has been a demand for innovation in this sector. One area of interest has been collaboration between public and private actors in developing new solutions for service delivery. So far, knowledge of how such private-public innovation (PPI) processes emerge has been limited. We studied barriers to PPI, focusing on how transaction costs influence the innovation process. We conducted a single case study, following the collaborative efforts of a Norwegian municipality and a local fire and rescue company searching for new care service delivery models. The data consist of interviews with central stakeholders and documents from the PPI process. The findings add to the knowledge on barriers in public-private innovation by highlighting transaction costs as a factor influencing the PPI process. An increased awareness of transaction costs throughout the innovation process may be important in planning and resource allocation. Findings from this case study may be useful in the development and implementation of innovative ideas. Our case illustrates the need for organisational change in service innovation. A focus on transaction costs can provide a useful tool for analysing necessary structures and their consequences when beginning PPI initiatives.