Outsourcing vs In-Sourcing: Which is Cost Effective for Healthcare?

Not everyone approves when healthcare organizations outsource their human resources and systems, knowing that their primary concern is always the safety and protection of the patients in their care, as a single mistake may put their welfare at risk.

However, more and more healthcare providers turn to outsource for healthcare management solutions to comply with the regulatory issues and federal mandates, which require providers to lower costs while maintaining the quality of service.

Issues against outsourcing

As of current, services being outsourced include Imaging, Electronic Medical Record (EMR) services, supply chain, lab, human resources, and administration tasks.

In its earlier years, there have been cases of poor performances and lack of coordination between organizations and vendors, but internal conflicts arising due to cost concerns have pushed for improvement in quality and better outsourcing services.

Outsourced departments need overseers

Outsourcing has a lot of benefits to offer the healthcare community—if properly managed by the right people.

While outsourcing can provide solutions to many provider facilities, it is imperative for someone from the organization to be assigned to oversee the departments being outsourced to ensure proper implementation of processes and alignment of strategies with the organization’s objectives.

It’s a matter of finding the right company to partner with. Thorough research and background check on the vendors being considered must be done and should include who they are, what their track record says about them, and their history of partnerships with other organizations.

You are buying process, expertise, and performance. Hence, the outsourcing company must have the capability to meet the requirements of the organization they will be partnering with.

Benefits of Outsourcing

1. Efficiency

Healthcare organizations can concentrate on its core business that is to provide quality care to their patients while the non-core functions are being attended by people who have the right skills and training to accomplish them.

2. Technology

The organization can upgrade their services, expand their knowledge, and have access to innovative ideas and state of the art systems using the vendor’s programs and facilities.

3. Costs

Healthcare organizations can expand organizational flexibility, meet standards on the quality of staff, and have access to the technology required to provide better services to their patients—without disregarding costs and reductions.

Outsourcing vs. In-sourcing

The decision to outsource must not be solely based on cost concerns, as organizational objectives, service quality, and management factors must also be considered.

Will there be a significant improvement in services as costs are reduced? Will outsourcing be able to accomplish a more manageable environment? Will it promote behavioral changes necessary for the organization to move forward?

Some organizational structures are better served through in-sourcing solutions, and some HCOs can leverage in-house staff to provide better services at lower costs than having to outsource them.

There are certain benefits to in-sourcing. For instance, you can raise in-house staff to develop a sense of ownership towards the organization and what it stands for. In some ways, in-house staff can also provide a quicker response when needs arise.

Mixing in-sourcing with outsourcing

When deciding on whether to outsource or not, as an organization, you must be able to identify your core functions and keep that in-house. Do not lose control of your service quality.

For instance, if facility management is a core competence, keep it in-house to protect your organization’s credibility.

At the end of the day, the focus must be on the long-term impact to the organization and the quality of its services, more than the costs involved in the decision.