When it comes to whether a hospital support service department should be outsourced or managed in house there really is no simple answer. Working with a significant amount of healthcare institutions across the country has affirmed that surprises are to be expected. Hospitals are wise to begin with examining their overarching strategic objectives and goals when it comes to making the determination about outsourcing or managing in house. They are also wise to challenge their own assumptions and keep an open mind about possible advantages.
One example that illustrates alignment to larger goals well is Hospital A*. Hospital A requested our support in providing an assessment of their food services and environmental services departments. They were motivated to save money but they were also bent on adhering to larger strategic objectives that would make their hospital system remarkable and truly different than others in the area. Hospital A was beautifully constructed and one of their main goals was to deliver a unique and special patient experience.
During our work with them it became clear that though they had a good contract in place outsourcing multiple support services, in order to provide the powerful patient experience they craved, moving to an in-house management model was the best way to meet their objectives. We worked with Hospital A to meet a tight 5-week timeline of moving both their food services and environmental services departments from outsourced to an in house solution for each of the 3 main hospital campuses and Skilled Nursing Facilities. As part of this process, they were able to free up some funds from the contracts and direct these to creating a new position.
So while they assume additional risk with the in-house model, they also gained the ability to hire a Senior Director-level person responsible for overseeing the Hospital Food & Nutrition Department and the Hospital Environmental Services Department as well as other system support positions and crafting the processes that will further ensure their exemplary experience for patients.
Hospital A’s decision reflects part of what makes our work and process so fascinating. We are able to maintain the agility to quickly make necessary changes while ensuring that broad, strategic goals are met.
Another example of extreme surprise comes from our work with Hospital B*. Hospital B felt confident in the food service contract they negotiated on their own 2 years prior to our assessment. The main objective documented in that contract was to improve patient satisfaction scores and the hospital was happy with the steady upward progress they had been seeing in recent quarters.
During our assessment phase with Hospital B, we uncovered an astonishing $1M in potential annual savings within their contract. This savings was available by shifting the financial risk of the operations from the hospital currently under a management fee contract to a guaranteed rate contract. Hospital B’s leadership was stunned that so much money was being left on the table, as they had ever confidence in their previous engagement. With our assistance, they were able to negotiate a new contract that focused on both patient satisfaction and guaranteed savings.
These two examples illustrate surprises uncovered by so many of the hospitals we work with. Whether supporting strategic goals or uncovering missed revenue, we partner with our customers to ensure savings are realized and the best all-around fit is established. There is no easy answer when it comes to outsourcing or managing in house and our team is expertly versed at examining all of the angles.
*Hospital examples are real. Their names are withheld for privacy purposes.