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Healthcare Outsourcing Done Right

The convergence of challenging economic conditions, constraints in accessing skilled labor and the rise of consumerism has challenged

The convergence of challenging economic conditions, constraints in accessing skilled labor and the rise of consumerism has challenged Healthcare Providers to relook at their traditional approach to managing their back-office processes. Technology is breaking down traditional boundaries for service delivery and Healthcare Providers are discovering new business models in response to their business challenges. Outsourcing Healthcare back-office processes has emerged as one strong contender as it looks to combine technology, low cost labor and innovative operations models in offering a viable solution.



Outsourcing at the simplest form involves the use of external resources in lieu of internal resources. The key objective for most Healthcare Providers that outsource is the reduction in cost. However, and increasingly, more Healthcare Providers have been considering the following benefits in support of their decision to adopt this strategy;

  • Source specialized expertise – certified coders, certified compliance experts etc.
  • Enable more focus on their core offering  – deliver care and less focus on administrative or HR processes.
  • Develop contingencies – – reduce sole dependency on their internal resources and avoid impact of unforeseen absenteeism, attrition etc.
  • Support scaling requirements – setup another practice or hire another provider into the practice within a short period of time.
  • Transfer of business risk


While the expectations may differ by specialty or by Healthcare Provider, the selection of the right partner is crucial in determining the success of the decision to outsource.


Key Steps to selecting the right Partner


Step 1: Define your Critical Objectives for outsourcing FIRST

While the objectives may differ by specialty or by entity, it is important to clearly define the most critical objectives FIRST. If you are outsourcing to secure a scare expertise that may significantly impact your business, while cost is an important consideration, it may not make the list of critical objectives. Clearly defined objectives allow for the selection of the right partner that could deliver on your objectives. Often Healthcare Providers would spend very little time defining its objectives and jump straight into selecting a partner, only to find out – more often than not- that they ended up with the wrong partner.



Step 2: Define the Scope to be Outsourced – Consistent to the Objectives

Once the objectives are determined, it is important that the Healthcare Provider select the scope of processes to be outsourced. It is critical that this be done in keeping within the objectives that were previously defined. For example, a Healthcare Provide may end up incorrectly outsourcing it’s claim billing process since the outsourcing partner offered a lower price although the critical objective would have been to source a certified coder that would ensure the accurate and compliant coding of the claims – a resource the healthcare provider may have had challenges in recruiting due to his area of specialty.



Step 3: Select a Partner That Can Deliver on the Scope of Services Defined

A common mistake Healthcare Providers make is in selecting an outsourcing partner solely based on the recommendation of a colleague. While he still may end up making the same selection, it is important that the selection be made taking into consideration the outsourcing partners capabilities to delivery on the scope of services previously defined. Often outsourcing companies would specialize in a certain area or a combination of a few areas – i.e. coding, transcription, appeals etc. A company that may work well for a certain Healthcare Provider may not necessarily be a good fit for another – unless the objectives and the scope are the same.


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