Yokl: Outsourcing Could Be One Answer

When I look at the huge challenges facing healthcare organizations over the next decade I believe that one answer to this dilemma could be to outsource some clinical and most, if not all, non-clinical functions so that hospitals, systems and IDNs can concentrate on improving the cost and quality of their core competencies.

This isn’t a radical idea, since most healthcare organizations already outsource one, two or more clinical (e.g. dialysis, emergency room, and hospitalist) and some non-clinical (e.g., food service, housekeeping and laundry) functions in today’s healthcare environment. Yet, according to a VHA’s 2007 Services Contracting Survey there are 10 top reasons why more hospitals, systems and IDNs don’t outsource:

1.         Too disruptive for employees and negative impact on morale

2.         Difficult to measure the value of external contracting

3.         Losing control of work

4.         Our organization’s unique culture

5.         Long-term commitment to external contracting

6.         Cost of evaluating external options is too great

7.         Bringing the work back in at a later date

8.         Work is too closely integrated internally

9.         Work can be too strategic to be externally sourced

10.       The work within our system is too varied

In looking at this list of excuses for not outsourcing, I couldn’t find one that held up to scrutiny. It reminds me of the old Jewish proverb, “When you don’t want to do something, any excuse is good enough”.   It would be interesting to see if these same answers would be given in 2010 in the new healthcare environment we are facing today.

In the final analysis, I think there should be only one guiding principle that healthcare executives should be steered by in making their outsourcing decisions over the next decade: If an outsource service will cost less than their current internal operations and will provide equal or better quality then the answer must be YES to outsourcing. There can be no other rational answer to this question, if healthcare organizations are to survive and thrive in the 21st century.

Robert T. Yokl

Chief Value Strategist

Strategic Value Analysis® in Healthcare

www.strategicva.com

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