Unlike corporate America?s general financial sectors such as credit card processing and other retail and commercial account?s receivable collections, healthcare finance and business office operations have been slower to adopt many of the strategies offered by the outsourcing of functional processes and tasks.
Recently, due to economic factors, healthcare reform, the rising cost of commercial insurance and the shifting of a larger portion of financial responsibility to the patient, healthcare executives have begun to consider outsourcing revenue cycle processes like never before.
In spite of a looming paradox, which pits opposing goals against each other, maintaining fiscal health through outsourcing some operational functions versus the political pressure of keeping jobs in the local community, healthcare leaders must make critical decisions balancing both?interests.
Gartner Research Inc. estimates healthcare executives spend about twenty percent of their budget on all categories of external sourcing options, compared to the general mainstream industries, which typically invest about a third of their budget on external sourcing. Gartner also estimates that seventy percent of healthcare organizations who do choose to outsource meet or exceed their cost-savings expectations, and most see an improvement of results as they shift their non-core functions to outside experts.
Healthcare outsourcing in general has begun to see a significant rise in acceptance. During the next five to ten years, it is estimated that the healthcare industry will see an increase in the outsourcing of many financial, clinical and business processes. The American Recovery and Reinvestment Act of 2009 (economic stimulus package for the U.S. economy), healthcare reform, and the Health Information Technology for Economic and Clinical Health Act (HITECH), will create significant opportunities for all outsourcing companies to aid healthcare organizations in meeting the requirements for the new set of regulations and requirements mandated by legislative action. These industry changes will increase outsourcing demand because healthcare providers cannot efficiently implement the volume of changes needed in the time-frame required.
Historically, for-profit hospitals and health systems with larger footprints and decentralized operations were the first to embrace outsourcing select financial and billing revenue cycle functions. Typically, non-profit providers relied on internal resources or in limited cases, used local outsourcing firms.
This trend is changing. All healthcare organizations are jumping on the outsourcing bandwagon and are moving toward leveraging IT, clinical and revenue cycle outsourcing to improve the financial viability of their operation. The main drivers for the shift in outsourcing strategy are due in part because of the margin pressure every provider is under and the need to reduce their operating costs.
Healthcare executives have numerous revenue cycle sourcing strategies from which to choose. Utilizing a US based local, regional or national outsourcing company have been the typical choice for healthcare executives who outsource. With today?s technology, especially in the services? sector, it is less important to contract with a local provider than to choose the best-in-class service provider regardless where their business operation is located.
That said, In the US, outsourcing, in general, has become a polarizing political issue driven by poor economic times and localized job losses. Even with local and national pressure to curtail outsourcing activities by consumer advocates, the return on investment (ROI) from cost reductions and improvements in quality have influenced healthcare executives to pursue offshore and onshore outsourcers as an alternative to maintaining an exclusively internal workforce.
American?s value the financial opportunities offered by our free-market economy and in every State or region within the country, community leaders support and protect local labor forces, which serve more localized businesses. Unfortunately, with increased operating complexities, budget cuts and margin pressure, the need to outsource has become greater than it?s ever been.
The healthcare executives who have avoided non-localized outsourcing are beginning to succumb under the pressure they face as they attempt to keep jobs within their community or at the very least within the State they operate. An interesting paradox exists as those same executives and community influencer?s do not think twice about purchasing clothes, food products, electronics, cars, toys, furniture, and household goods produced across the US and throughout the world.
Regardless of the task, business segment or location of the potential outsourcing firm chosen to provide services, the ultimate goal of pursuing any outsourcing strategy is to support the goals of the healthcare provider, which are ultimately to serve the community with the highest level of patient care. That cannot be accomplished if the organization is under financial duress.
In general, revenue cycle outsourcing of processes saves time, effort, demands on infrastructure, manpower, and money. By leveraging the best of breed solution providers, healthcare organizations gain a competitive edge guaranteeing endless benefits to the enterprise and the patients they serve.
For more information about outsourcing, check out Phil C. Solomon?s business process outsourcing?category?on Revenue Cycle News.
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