Outsourcing in Healthcare Industry Outsourcing in Healthcare Industry Introduction Today many healthcare organizations recognize outsourcing as the best strategy to cut down their capital expenditure and to address challenges like labor shortage…
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In addition, rapid changes in technological advancements force the healthcare organizations pace with the latest changes. Outsourcing is a better way to minimize risk factors in terms of technology evaluation and result accuracy. Many healthcare professionals believe that the outsourcing approach in the healthcare sector would deliver quality services to beneficiaries and thereby improve patient safety. This paper will discuss several aspects of the outsourcing practice in healthcare industry and suggest best practices that can make outsourcing effort successful. Prevalence and Trends The practice of outsourcing is extremely prevalent in the healthcare industry and admittedly, this trend is growing dramatically. US healthcare system is the most expensive in the world. As Pear (2004) reports, the US’ healthcare spending accounts for nearly 15% of its GDP whereas most other developed nations spend only 7-10% of their GDP in healthcare. The increased healthcare expenditure forces the country to adopt low cost and efficient options like outsourcing in order to cut down its spending. An aging population in the US not only increases the demand for healthcare but also leads to a paucity of available experts. In addition, the medical transcription (MT) industry has undergone tremendous changes over the past few years. As a result, the scope of MT jobs has increased and MT professional are expected to undertake additional tasks such as editing, checking, and supervision in the near future. Therefore, the US healthcare organizations increasingly and extensively follow the outsourcing approach so as to reduce healthcare expenses and to deliver better services to clients. Today, it is widely seen that healthcare firms outsource their administrative processes that require high degree of expertise and huge resources. By practicing this approach, healthcare organizations can focus more on service quality and patient safety. The services such as billing, coding, staffing, and information technology are greatly outsourced by hospitals and other healthcare institutions. “Modern Healthcare’s annual Outsourcing Survey found that the top 20 outsourcing firms, based on the number of national healthcare clients, reported 13.1% growth between 2010 and 2011” (Expertise on call, n. d.). Staff shortage is growing to be an immense challenge in the modern healthcare environment because of a number of socio-economic factors. As staff recruitment is an expensive and time consuming task, today many of the healthcare organizations outsource this task to external agencies (American Healthcare Outsourcing, n. d.). Since this approach would assist the health organizations to enhance staff retention, more and more firms tend to outsource staff recruiting and training activities to outside agencies. Health care technologies and practices are advancing everyday and firms perceive outsourcing as a better way to take advantages of the potential innovations and to reduce unproductive work time. It is found that the outsourcing practice is more common in large sized health organizations because those firms need to manage troublesome administrative and operational activities. Successes and Failures While evaluating the experience of healthcare organizations that have tried outsourcing, it seems that majority of those firms could attain competitive advantages while some others failed to achieve the desired benefits. Generally, the
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“Outsourcing Essay Example | Topics and Well Written Essays - 2000 Words”, n.d. https://studentshare.org/nursing/1461167-outsourcing.
This paper begins by defining outsourcing and then describing the different forms of outsourcing. Next it outlines why organizations opt to outsource and how they select what to or not to outsource. The paper then dwells on the advantages and disadvantages of outsourcing from two perspectives: from the point of view of a company and from the point of view of the country.
Many people know that outsourcing has been a way to save money in the long run. When information systems problems happen, it is easier to bring an expert in to fix the problem because it is less costly. One of the reasons it is less costly is because a consultant can be hired for a short time and the company does not have to pay overhead or pay a regular salary and benefits to an employee.
It is a task or an operation that can be done by employees of the internal organization but are instead contracted to a service provider for a significant period of time. The service provider can be offsite or onsite but the most common method of outsourcing is off shoring of activities to different developing countries like India or China.
Most multinational companies outsource their production and manufacturing activities, but these organisations are under constant pressure to control costs. They have to outsource non-core but essential services. The question of time also demands outsourcing since products have to get to the market as quickly as possible.
While in all markets executives think outsourcing is better for the world economy rather their own markets, the issue has become politically sensitive in America (P&P, 2004). The issue has become highly emotional
There have been many reasons for the companies to outsource there is business and some of them are trying to cut costs of IS services, the demand for good quality systems and the inability of the company to establish complex computer systems. The major hurdle in
These considerations lead to decisions on the investment level for captive resources and the extent of outsourcing to support operations.
Outsourcing has always been a part of all enterprises, except to the degree to which it is
They have been able combine their professional activities with the operation of the firm. According to usatoday, most of small businesses lack the ability to employ permanent workers. Thus, they prefer outsourcing their portions of work to people online.
This led to numerous effects on the American populace as well as the economy. In this case, a company that bases in South Carolina plans to outsource its call center to Asia. This will lead to the loss of 120 jobs in South Carolina. Such a move raises concerns on whether