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BENEFITS OF OUTSOURCING IN HEALTHCARE

Author: Mahanthi Reddy

What is Outsourcing in Healthcare?

In the healthcare industry, outsourcing is the practice of hiring a third-party supplier to carry out specific tasks or deliver certain services.

Outsourcing can also be termed as “healthcare business process outsourcing,” or simply “healthcare BPO,” refers to any commercial activity or process that offers administrative or other assistance to medical organizations, and institutions. This can include non-clinical duties like managing human resources, providing technical IT support and services, scheduling patient appointments, keeping track of compliance, invoicing and coding, and more clinical services like home health care or physical therapy.

Introduction:

Outsourcing has emerged as one of the healthcare industry’s buzzwords, offering a defined framework for it in different nations with various healthcare systems. Outsourcing decisions have particular significance in the supply chain management of healthcare businesses. They bring in increasing profitability and efficiency in the healthcare industry.

• According to research performed in these areas, there are potential serious drawbacks to outsourcing in the fields of emergency medical, radiology, laboratory services, and environmental services.

This article will focus on the advantages of healthcare outsourcing, including reduced staffing costs, greater profitability, skilled workers, etc. Using the advantages of outsourcing operations, healthcare provides a positive patient experience.

Objectives:

Finally, as was already said, many healthcare businesses have thought about raising the caliber of their goods and services to reap additional rewards. Putting obstacles aside, there are best practices that can help the hospital in ways that balance them. The transfer of an organization’s core services or operations to a provider who concentrates on customer benefits or healthcare operations is known as outsourcing. Healthcare outsourcing has helped nations like China, India, South Africa, Thailand, Bangladesh, Turkey, and Central and Eastern Europe. A solution as outsourcing encompasses the advantages of corporate management, including cost savings, attention to justice and social responsibility, and boosting productivity, and customer satisfaction.

Who Utilizes Outsourced Healthcare and Why?

The paramount importance of BPO is due to the lack of internal assets or skill sets necessary to do the assignment internally. For instance, a small hospital might not have the personnel or resources to meet all of its internal communication demands for employees and patients. In other situations, it can be because the service provider believes that outsourcing to a specialist would allow them to access better-qualified staff or higher-quality services.

Though BPO has been acknowledged worldwide, it is quite difficult to convince the hospital’s top management board to start the outsourcing journey without first obtaining the necessary positive and quantifiable advantages. According to Hazelwood et al. (2005), healthcare institutions get compensation when services are outsourced. It is clear from his study, BPO installed in hospitals can reap quantifiable advantages from the services supplied by India in the field of reading radiological findings to be entered in patient records. It is now challenging to track and handle reimbursements from federal and state authorities.

Process Outsourcing in Healthcare: Types

Medical billing and coding:

• Medical coding and billing are frequently more complicated than in other industries, where reimbursement and billing are more easily understood. For instance, medical coders must be knowledgeable about the numerous global numeric and alphanumeric codes that are utilized in the billing process.
• Hiring highly qualified personnel such as third-party programmers who have necessary experience and understanding, to process patient invoices and classifying medical services can significantly reduce major mistakes and delay the Processing of claims.

Data Entry Services:

• You may use the time and resources you would have spent on data entry outsourcing for other, more crucial tasks. The safest task to outsource is often data input. However, compared to coding in other professions, medical coding is more sophisticated and intricate.
• Work solely with reputable healthcare process outsourcing companies that have staff members who are informed about the industry.

Medical Record Transcription:

• Medical practitioners rarely ever have time for administrative tasks. A lot of medical reports are recorded as audio files to be later transcribed.
• The written records serve as a resource that doctors can use as needed. There are a few common records that are transcribed: surgery records, a summary of the science, doctor’s observations, and diagnosis

Benefits Of Outsourcing:

1) Cost Reduction:

• Due to low wage standards and trustworthy service delivery, the greatest and most crucial factor is to avoid incurring needless expenditures. Employing in-house teams for various non-core processes will demand a significant investment in both training time and salary costs. Whether or not to outsource services should be determined using transaction cost economics (TCE), which serves as the foundation for make-or-buy choices.
• The relative production cost and comparable transaction cost of internal vs external provision should be balanced if the choice to outsource is supported by evidence of direct advantages. The potential cost of cash and other resources committed to an idea, on the other hand, if it is supported or driven by opportunity cost activity in terms of their alternative use.

2)Access the skilled personnel:

• When you outsource, businesses may access a big global talent pool rather than just local workers, which broadens your options for hiring employees. The expert specialists do each work with the utmost care, freeing the providers of typical administrative tasks and enabling them to reap the rewards of outsourcing the services and concentrating on providing excellent patient care.
• Medical billing outsourcing businesses make sure that the needs are satisfied and that difficult tasks are completed quickly by knowledgeable workers.

3). Reduced risk and error rates:

• Aside from risk factors unique to the provider’s sector, such as dated technology hazards, financial risks, governmental intervention, ever-changing laws, legal requirements, and compliance, provide a significant degree of risk. The use of outsourcing operations enables service providers to concentrate on the sustainability and scalability of their core capabilities while leaving the rest to the outsourcing firms. Patient data, inventory records, prescriptions, and sensitive information may all be trusted by businesses that have been accredited by the Health Insurance Portability and Accountability Act (HIPAA) and abide by its rules, guaranteeing that the data is safe and doesn’t fall into the wrong hands.

4). Patient care:

• A provider must provide great patient care, improve workflow effectiveness, and concentrate on forging enduring relationships with their patients. As it handles everyday administrative responsibilities like coding and obtaining reimbursements of the claims, medical data entry, and medical billing, among many others, outsourcing operations provide a helpful hand to carry this out.

5). Improves employee satisfaction:

• Businesses that outsource can grow income, improve profit margins, and concentrate on their primary duties. With improved profitability and resources, onshore personnel benefits from outsourcing since it gives them more room to take on jobs with greater responsibility and focus on providing excellent patient care.

6). Increase in revenue generation:

• Structured workflows and accurate claim submission lead to favorable trends in reimbursement rates that boost income streams and enable providers to concentrate on their primary responsibility of providing excellent patient care. With the firms’ offering of inbound call center services, the onshore team’s productivity rises as they are better equipped to concentrate on pursuing new markets and using the enormous potential of the healthcare medical billing sector.

Alternatives to outsourcing:

• It’s possible that some areas or departments would benefit from outsourcing more than others. Still, hospital administration should make the call rather than a third party, especially if the latter has a stake in the result.
• One particular danger is that a vendor could quit being able to offer the service, either because they underbid a contract and then realize they can’t fulfill it or for other reasons.
• Although the expenses of maintaining a departmental function in-house may exceed the danger of an outsourcing vendor’s abrupt withdrawal or default, it is crucial to do due diligence study on the vendor’s long-term sustainability and commitment. After all, the expenses associated with bringing back an outsourced service might be high.
• During the COVID-19 pandemic response in New York City (and elsewhere), a different option to typical outsourcing emerged in the form of collaboration between commercial, public, and community hospital systems.
• These hospital systems, which varied in their organizational and financial setups, were nonetheless able to pool essential resources during the crisis, focusing in particular on critical care doctors and nurses as well as essential tools.

Conclusion:

Since patients are the main focus of the care being provided, patients must be at the center of all choices relating to their care, including those that concern how health services are provided to them. When outsourcing is employed, making an effort to communicate clearly with the service provider can help to reduce misunderstandings and annoyance while fostering mutual trust and understanding.

References:

1. Susanta Kumar Barik, Himanshu Sekhar Rout (2021), Outsourcing of healthcare services in a smart city of Eastern India, https://www.emerald.com/insight/1472-5967.htm
2. Leonard L. Berry, Ph.D., MBA; Sunjay Letchuman; Nandini Ramani, Ph.D., MBA; and Paul Barach, BSc, MD, MPH November 2021, The High Stakes of Outsourcing in Health Car.
3. Cristina Machado Guimaraes, José Crespo de Carvalho, Supply Chain Forum An, International Journal, Vol. 12 – N°1 – 2011, Outsourcing in the Healthcare Sector-A State-of-the-Art Review.
4. Outsourcing in the Healthcare Sector-A State-of-the-Art Review, A critical review of the implication of outsourcing in the National Health Services (UK): a facilities management perspective.
5. Benjamin Goodair, Aaron Reeves, Outsourcing health-care services to the private sector and treatable mortality rates in England, 2013–20: an observational study of NHS privatization, Lancet Public Health 2022; 7: e638–46.