Outsourcing in the Healthcare Industry: Benefits and Risks

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The healthcare sector is one of the most highly competitive and thoroughly regulated industries. Various organizations engaged in healthcare businesses are facing challenges to maximize resources while at the same time delivering quality care to their clients and patients.

With the growing demand for high-quality yet affordable healthcare services, public and private organizations embrace outsourcing to enjoy the best of both worlds.

Why Businesses in the Healthcare Sector Are Outsourcing

Hospitals and other healthcare providers are facing various challenges in every aspect of the operation. These include shortage of skilled talents, budget constraints, difficulty to increase staffing, and even cybersecurity.

Not to mention, the competition in the healthcare sector has become fiercer than ever, along with more complex and changing regulatory requirements. Aside from that, the coronavirus pandemic poses another concern and costs that affect business operations and patients.

Traditionally, it is the non-medical functions like housekeeping, security, and dietary services that healthcare providers outsource. Business processes that rely heavily on technology are also other functions successfully outsourced to third parties, particularly overseas, where labor is much cheaper.

In recent years though, even clinical services such as laboratory, dialysis treatment centers partnering with hospitals, and rehabilitation clinics are areas that hospitals and other healthcare providers have delegated. It helped save on capital investment from additional staff and facilities.

With the proper implementation, healthcare outsourcing can address many of the challenges faced by hospitals and healthcare providers face today. Operation efficiency and productivity are improved, quality customer and patient care are provided, and the bottom line is increased.

Nonetheless, every organization is different. What may work for other healthcare providers may not work for you. So, let us examine first the benefits and drawbacks of outsourcing in the healthcare sector.

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The Advantages of Outsourcing Healthcare

The benefits of healthcare outsourcing are wide-ranging.

Control Expenses: One of the advantages of outsourcing is that it can help cut down on administrative costs while boosting process efficiency. This results in a more stable and predictable day-by-day operation and long-term business planning.

With outsourcing, you also save on substantial capital investment spent on upgrading, replacing, and maintaining technology. The burden is shifted to the third-party provider. The same thing can be said about recruiting, training, and retaining skilled personnel.

Broader Talent Pool: While cutting costs on recruitment and training, outsourcing allows hospitals and healthcare providers to gain access to a vast pool of desirable talents, otherwise not available. For instance, services of technology professionals are lower rate offshore than when acquired within the country.

Competitive Edge: Lastly, outsourcing helps level the playing field among smaller healthcare providers. Through outsourcing, smaller organizations can access a wealth of talents that would not have been possible in-house due to lack of budget and space.

The inherent flexibility of outsourcing allows healthcare providers to gain significant scalability. In the medical landscape, being agile is crucial to meet any unforeseen changes, like the challenges posed by the current pandemic.

The Disadvantages or Risks

Outsourcing has proven to be handy across industries as it enables organizations to control costs while increasing efficiency and productivity. However, there are some risks that you have to put in mind when considering outsourcing.

Exercise due diligence: Before your organization jumps in a deal with a third-party provider, dig deeper to avoid common pitfalls that usually set back even the most promising healthcare outsourcing program.

It is not only the pricing that you need to consider but also the structure and background of the company.

These are some of the aspects you need to consider when picking the right to outsource vendor for your healthcare business:

  • Years of Experience: One crucial aspect of an excellent outsourcing service provider is their years of experience in the business. Work with a third-party provider with a track record when it comes to the processes you consider outsourcing.
  • Pool of Talent: It is essential to have the right people when aiming for success. Find out more about the qualifications of the staff that a prospective outsourcing vendor provides.
  • Tech Compatibility: Being up-to-date with the latest technology cannot be understated. In the healthcare industry, agility is crucial.
  • Scalability: As your business grows, so too would you want your current outsourcing providers be able to cater to your growing needs. Keeping an open line of communication with your outsourcing vendor enables both parties to set expectations, especially about the future.

Data Breach and Privacy Issues. Across all industries, the issue of data and privacy breaches has been an ongoing concern. As technology becomes more sophisticated, so too criminal minds have been ingenious in finding ways to steal. In 2018 alone, over 15 million patient records were compromised.

Thus, when it comes to IT-related outsourcing for healthcare providers, it is crucial to choose a vendor who can vouch for patient data privacy and is compliant with the Health Insurance Portability and Accountability Act (HIPAA).

In any business venture, there are always risks attached, and the healthcare industry is no exception. Nevertheless, as long as providers know how to mitigate risks they are taking and choose vendors wisely, there are more benefits hospitals and other healthcare providers gain from outsourcing.


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