Outsourcing Is Exploding In Health Care

1813 words - 7 pages

Outsourcing
Traditionally, hospitals and health care systems have outsourced primarily support services such as housekeeping, laundry and food services, etc. They have contracted with large scale organizations to provide these services utilizing an economies of scale concept whereby contracting out these services allows for lower costs overall. More recently there has been a trend toward outsourcing the information technology services and indeed, healthcare delivery as well, such as dialysis anesthesia and Emergency Department staffing, hospitalists and diagnostic imaging (Punke, 2013)
Prevalence
With consolidation among hospital systems over the last few years there has been a trend toward ways to streamline processes. By having “shared services” such as laundry services, human resources and radiology and diagnostic services it’s possible to lower costs and have common processes. The advent of health care reform and the Affordable Care Act (ACA) with its Information Technology (IT) incentives has led to greater interest in risk management and IT solutions. While there was a decrease in 2012 on outsourcing IT services the finalization by the Supreme Court of the ACA and President Obama’s re-election cemented the need for an IT solution (Kutscher, 2012)
With the federal sequester that added a 2% cut to Medicare reimbursement and the healthcare reform leading to a decrease in hospital admissions for some organizations, the bottom line has become ever more important. Some organizations have used layoffs as one means of cost-cutting but even more are streamlining by outsourcing those services that can be better done by organizations devoted to that one activity (Punke, 2013) The driver of this is the cut to reimbursement.
In Modern Healthcare’s annual Outsourcing Survey they found that the top 20 outsourcing firms showed growth of 13.1% between 2010 and 2011. Electronic Medical Record (EMR) companies are big winners in this process as the need to share information across processes and health care entities grows; therefore companies such as Epic Systems of Vernon, Wisconsin are garnering many partnerships with organizations moving to EMRs (Kutscher, 2012)
UnitedHealthcare has utilized offshore IT and claims payment services for many years with IT services coming from multiple facilities in India and claims payment being done predominantly in Ireland. As the brand Optum, UnitedHealthcare contracts for outsourcing services to other entities (International Presence, 2012) and also supports the National Health Service public trusts in the United Kingdom as well as supporting health plans for 1 million people in India.
Experience
Overall it appears the experience has been positive for those organizations that are outsourcing either at home or abroad. Streamlined and coordinated services within the country but partnered with companies that provide the services at a discounted rate have helped many organizations such as provider offices and hospitals...

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