Hospital Outsourcing vs. In-House: How to Move Forward?

Reimbursement compression continues driving healthcare organizations to seek ever-increasing cost reductions and operational efficiencies, specifically around activities or services that are not core to the organizational mission of patient care.

Hospitals are primarily geared for acute care operations and the complexity involved with direct patient care. Outsourcing can be a great partnership for long term organizational success while allowing focus to remain on quality care delivery. At the end of the day, your facility should have the resources and focus to worry about one thing: patient care.

For outsourcing options, the following factors should be considered when choosing an effective partner:

Culture and Fit

  • Understand the history of your potential partner. What is their mission, their vision, and their values?
    • Request client references – Schedule time for a candid discussion without vendor involvement
    • Inquire about employee retention rates – These statistics are key to understanding their “people fit” for your operation
  • Ask what defines success for their organization? How does this align with your organizational goals?

Selection and Implementation

  • Before the transition:
    • Designate a dedicated executive business partner to manage the outsourced relationship
    • Require clarity and consistency from the partner during the transition
    • Communication is critical – You cannot over-communicate during this type of change
    • Ensure impacted resources and personnel are supported throughout the transition process
  • During contracting:
    • Define baseline performance and metrics – This establishes measurement parameters for payment terms and should be agreed upon at contract execution
    • Determine service level agreement (SLA) terms and the consequences if they are not met
    • Clearly define escalation process to resolve conflicts in a timely and productive manner
  • Develop clear expectations for first year improvements – Is the goal cost or quality? Prepare a team to actively measure against those targets

Post-Implementation

  • Routinely track and report metrics previously defined during contracting
  • Hold resources accountable to defined terms – Revise the contract terms if necessary

Outsourcing can be an emotional decision for a healthcare organization, but with thoughtful planning and a successful transition, outsource partners can provide non-core services at greater cost savings. Additionally, they can potentially increase efficiencies and allow your organization to more ably focus on core patient care elements.  If not for these reasons, why outsource?

Soriant Healthcare is not pro-contract or pro self-op, but pro-client. We’ve served hundreds of hospitals and are proud to say we’ve exceeded and sustained targeted savings 100% of the time. How can we help your organization move forward?

About the Author:

Christina has served as Chief Financial Officer since 2008. A stock options trader for over 20 years, Christina spearheads the financial and human resources divisions. Her background gives a fresh vantage point to running a healthcare consultancy. She is responsible for maintaining Soriant’s competitive edge, attracting top executives and standardizing processes.

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