Top 7 Misconceptions About Healthcare Outsourcing
Over the past decade or so, the business process outsourcing (BPO) industry has experienced tremendous growth, fueled primarily by the realization that contracting for specific business tasks has a strategic value. Outsourcing is ideal for:
- reducing costs through economies of scale
- gaining access to high-level skills & expertise for a fraction of the price of hiring internally
- increasing productivity by freeing up time for in-house staff to focus on the core product or service
Even before Covid-19 emerged, rising healthcare costs were a known issue. The emergence of a global pandemic simply reinforced the point. For many health services providers, outsourcing provided a tool for better balancing the delivery of care with the cost of doing so.
Still, some organizations are hesitant about outsourcing. One drawback is a lack of understanding about how it works and the benefits it can provide. With that in mind, here are the top seven misconceptions about healthcare outsourcing.
This may be the biggest mental hurdle. Size is irrelevant. Any business can outsource; the question is what aspect of operations is a good fit. The BPO industry provides enough flexibility that a company can start on a small scale, if necessary, and expand as needed. There is no single formula to outsourcing, and any provider that insists on offering only one approach is not acting in your interests.
Flexibility is a standard trait of serious BPOs, and any solution can be customized to accommodate a client’s situation while also planning for possible future growth. No matter the size of your business, a reputable outsourcing provider will evaluate your current state and present a service offering that is in line with the organization’s needs and budget. It is perfectly acceptable to start with a pilot program to give outsourcing a test run before committing to a longer term.
Within healthcare organizations, the questions often boil down to application and scale – what function can be outsourced, how many agents will be needed, and how easy is it to adjust the workload? A larger operation may well require more personnel than a smaller company. And by the way, the largest multi-nationals outsource and so do solopreneurs.
Business knowledge is a tremendous strategic asset for any company; the combination of insights, skills, and experiences necessary to run an organization can be challenging to replicate. But what about the parts that are not specific to the company? Certain day-to-day tasks are universal – scheduling, billing, supplies, and in this case, managing the technology behind telemedicine. No outsourcing partner will suggest agents as replacements for doctors and nurses, but a healthcare business has more moving parts than direct patient care.
A question to explore here is whether a potential outsourcing partner is a generalist who services a wide variety of industries or one who is deeply experienced in a small number of business sectors. Industry familiarity is always helpful but is it necessary? Companies who know the pulse of a particular industry can share insights of what worked with similar clients, but operational pain points are often shared among multiple business lines.
There is no question that reducing costs is a significant reason why companies outsource. However, it is not the only reason and it should not be the sole motivation. Advantages such as access to skills, expertise, better processes, and management bandwidth are equally important considerations. If efficiency is improved, for instance, that is a form of cost-savings.
For example, suppose a provider has a third party that handles its non-medical patient issues. In that case, practitioners can spend more time on patient care, making them more productive while contributing to their satisfaction and that of your clients. The ability to focus on the core business is why people entered the profession in the first place; no one went to medical or nursing school over a desire to handle paperwork. Eliminating tasks that some on the staff see as drudgery will positively impact their outlook, which will carry over to the quality of patient care that they deliver.
Executives are not shy about wanting control over operations, often as much control as possible. Letting a third party come inside can feel like one’s toes are being trampled; therefore, it is vital to look at outsourcing not as a contract, but as a partnership. A quality outsourcing provider will act in your best interests and is motivated to treat your customers as you would in order to retain their business.
Let’s say that a business outsources IT services. The company retains control by defining the KPIs that will govern performance. There will be a service level agreement (SLA) that the outsourcer must live by. And there will be regular communication between the two parties. That last point – the communication – is vital and underscores the importance of the partnership model. Seeing the third party as an adjunct department rather than as a vendor will forge a tighter bond, promote a greater sharing of information, and agents who are speaking directly with your customers are gathering a great deal of valuable insight.
Whether it is customer service, technical support, payroll, or something else, every business that works with a third party has a primary objective – to ensure the best possible experience for clients. Customers can be forgiving of many things, but they will seldom overlook rude or indifferent service.
There is a sense among some healthcare organizations that outsourcing leads to a degradation in service quality, customer happiness, and outcomes. This is a misnomer; the healthcare organization will set the bar of expectations and the tenor of the relationships through active involvement and clear KPIs and SLAs, exercising regular oversight, and a mechanism for measuring patient sentiment.
The calculus is far more straightforward for outsourcing providers than it may seem – earn that client’s business every day by doing what was promised. The efficacy of outsourced work can be readily measured for adherence to standards and, again, the outsourcing provider is motivated to perform or risk losing the relationship. In the best-case scenario, high-quality customer service becomes a retention tool or creates referrals by patients who are so delighted with their experiences that they tell their friends about your fantastic staff. And they will think that the outsourced agents are your staff because that is a feature of the partnership model.
While there is overlap between these terms, they are not synonymous. Outsourcing is when a business enters an agreement with a third party for the provision of specific work. Offshoring is when the production of the core product is done in a different country. While it is possible to outsource work to an offshore location – a call center in India or the Dominican Republic, for example – the product itself, patient care in this case, will continue to be delivered from the home office.
The BPO glossary has grown in recent years: offshore, of course, means outside the US, usually far away. A nearshore location means Latin America or the Caribbean, and onshore entails a staff working in the States. The three options can be mixed and matched as needed, depending on the work to be done and the availability of the talent required to do it. For example, the sizeable bilingual population in LatAm is ideal for companies with an extensive Spanish-speaking consumer base.
There is always a measure of risk when a third party is involved and information becomes visible outside of the internal staff. This risk, however, is easily mitigated. Reputable outsourcing companies are heavily invested in IT security and attain a host of certifications attesting to their operational standards and practices. There are also internal policies that govern employee conduct where potentially sensitive information is involved.
According to research by Deloitte in 2016, only 23 percent of the respondents said that concern for the company’s privacy and security risks affects their outsourcing decisions. This is not a show of indifference; it is a sign of increased confidence among companies that their outsourcing partners take the job of keeping client information safe very seriously. It is also a recognition that privacy and security issues frequently stem from internal actors, not external ones.
The outsourcing industry has grown markedly over the past several years, and all evidence suggests that this pattern will continue. It is well past being a trend or a fad; it is more of a business strategy that highlights the value of subject matter expertise.
While we are obviously advocates of the benefits of outsourcing, we also understand that it can be a difficult step for some organizations to take, a step filled with questions. It is why we advise a deliberate approach in finding the right partner who can tailor and scale a customer support program to individual business needs. That is what we at GlowTouch do; it is what we have done since 2002. Get in touch with us today to learn more; you will not be disappointed.