Pressures of Value-Based Care Reforms Trigger Sharp Increase in Clinical Outsourcing Partnerships, Black Book Survey Results

TAMPA, Fla., September 19, 2019 (Newswire.com) - ​​According to the latest survey on healthcare outsourcing conducted by Black Book Market Research LLC, 90% of hospital leaders are continuing to evaluate whether to work with third-party vendors for cost-efficiencies in both clinical and nonclinical functions and allowing hospitals to focus on value-based programming.

Outsourcing technology, financial services, and facilities management services have been long established ways for hospitals to transfer day-to-day administration of noncore functions to outside vendors. 

“Managed services firms are creating a niche by specifically focusing on healthcare clients only,” said Doug Brown, President of Black Book Research LLC and the author of the 2009 global bestseller “The Black Book of Outsourcing” (Wiley Publishers). “Some leading vendors have recognized the need to bundle services that are only relevant to hospitals and inpatient groups such as IT, cybersecurity, clinical services, analytics and medical facilities management.”

The opportunities to reduce clinical costs in past decades was mainly limited to anesthesia and emergency medicine. “In 2019, hospitals have a cost structure that is not sustainable, and some hospitals are making the decision to actually enhance clinical product lines by outsourcing to power up volumes and improve health consumer satisfaction,” said Brown.

Two of the most popular areas that hospitals are currently vetting is in the diagnostic imaging service lines (Teleradiology and Medical Imaging Equipment) as many hospitals lack the capital funds necessary to invest in new and replacement advanced imaging centers.

“Value-based care reforms have put pressure on hospitals to decrease inpatient volumes, achieve outcomes goals and provide cost-effective care. Clinical services outsourcing is the rage because it offers struggling hospitals with immediate alternatives,” said Brown.

Outsourcing hospital processes to expert partners have become a winning strategy for many organizations. In every outsourced services category surveyed, clients reported service levels had exceeded expectations in over 80% of all hospitals polled in CY 2019 to date. 8% of clients reported 2018 dissatisfaction in meeting expectations that forced contract terminations.

“Outsourcing in the healthcare industry doesn’t get the same bad rap other sectors experience such as banking, insurance, tech and call centers where negative stereotypes associated with offshoring and/or full function outsourcing were largely misinformed,” said Brown. “In hospitals, there is a developed understanding of the broad spectrum of clinical services outsourcing options and how to manage vendors.”

"As hospitals look for ways to reduce costs particularly implementing value-based care programs, outsourcing is a valid strategy to achieve a financially healthier organization. However, caution should be given with the common pitfalls in healthcare when vetting or considering outsourcing," said Brown.

A very small number of surveyed executives (barely 2% of respondents) consider outsourcing an unthinkable option due to the anticipated reaction both internally and externally, from staff, physicians and the community it serves, unchanged from a similar poll in Q2 2017.

“For hospitals in financial danger with margin pressures placing the entire hospital workforce at risk, positively attacking margin by outsourcing one or more areas can actually save jobs in other core departments,” said Brown.

Also, outsourcing agreements in healthcare provider organizations can be structured so they do not affect existing staff or may stipulate the retention of existing staff into the incoming outsourcing entity.

A supplemental poll of 129 vendor executives last month revealed an average three-fold increase in request for outsourcing proposals since Q4 2017 among select clinical functions.

Hospitals are doing a much better job in assessing the need for outsourcing and selecting appropriate outsourcing vendors, but many executives still fail at managing the outsourcing relationship through key clinical, financial and operational performance indicators.

“It is a matter of finding the right company to partner with,” said Brown. “Through research, peer recommendations and due diligence on the firms being considered including the vendor’s history of partnerships with other hospitals.”

4,017 client users of hospital outsourcing responded on customer satisfaction and experience in several functional areas. The top-ranked outsourcing vendors included:

ANESTHESIA DEPARTMENT – NORTH AMERICAN PARTNERS IN ANESTHESIA (NAPA)

BIOMEDICAL & CLINICAL ENGINEERING – ISS SOLUTIONS

CLINICAL DATABASE & ANALYTICS SUPPORT – IBM WATSON

CODING & ICD10 - OPTUM360

CREDENTIALLING & PRIVILEGING – NEWPORT CREDENTIALLING

EMERGENCY DEPARTMENT – EMCARE

FACILITIES MANAGEMENT – VANGUARD RESOURCES

HOSPITALISTS – APOGEE

LABORATORY SUPPORT & RCM – XIFIN

MEDICAL IMAGING SYSTEMS – SIEMENS

MEDICAL STAFFING & RECRUITMENT – US ACUTE CARE SOLUTIONS

PHARMACY DEPARTMENT – COMPLETE RX

PHYSICAL THERAPY & REHAB SERVICES – REHABCARE / KINDRED

SUPPLY CHAIN & PHARMA DISTRIBUTION – CARDINAL

TELERADIOLOGY – VRAD MEDNAX

About Black Book

Black Book Market Research LLC, its founder, management and staff do not own or hold any financial interest in any of the vendors covered and encompassed in the surveys it conducts. Black Book reports the results of the collected satisfaction and client experience rankings in publication and to media prior to vendor notification of rating results and does not solicit vendor participation fees, review fees, inclusion or briefing charges, and/or vendor collaboration as Black Book polls vendors’ clients.

In 2009, Black Book began polling the client experience of now over 700,000 healthcare software and services users. Black Book expanded its survey prowess and reputation of independent, unbiased crowd-sourced surveying to IT and health records professionals, physician practice administrators, nurses, financial leaders, executives and hospital information technology managers.

“The Black Book of Outsourcing” (Wiley & Sons Publishers 2005, 2009) appeared on the business non-fiction bestseller lists of BusinessWeek, Barnes & Noble, Amazon and USA Today. It is available in seven languages worldwide and is listed as #70 in the 100 Top Books for Managers by International Business Editors Guild.

For Black Book vendor satisfaction rating methodology, auditing, resources, comprehensive research, and ranking data, see www.blackbookmarketresearch.com.

Source: Black Book Research