Healthcare Outsourcing

Healthcare Outsourcing

1. How prevalent is outsourcing in the healthcare industry? Is the outsourcing trend in healthcare growing? and if so in what types of organizations in healthcare?

Healthcare is the multipart in needs? data demands? regulations? market size and revenue models? “core functions and outsourcing niche vendors. Regardless of the fact that in recent years the complexity of healthcare IT solutions has significantly increased? this industry is still projected to be one of the most dynamically developing and fastest growing segments of IT technologies' implementation and development in 2009 (Dossani, 2003).

Though outsourced customer relationship management (CRM) is common in many vertical markets? only in the last few years has it grown significantly in healthcare. From 2002 through 2005? outsourced CRM in this niche has achieved a healthy cumulative average growth rate (CAGR) of 13.4 percent? according to Brian Bingham? Manager? Global CRM and Customer Care Research? IDC. Gartner predicts CRM customer service and support and business process outsourcing (BPO) will grow from $7.6 billion this year to $12.2 billion in 2007 and credits CRM in healthcare with about 7.5 percent of that total value. In general? the business drivers for outsourced CRM are similar to those for most outsourced IT. Business process costs have increased and fast-evolving technology is too hard for in-house personnel to keep up with. In addition? insurance payers require faster speed to market launching products and need to focus on core competencies to remain competitive. New HMOs and pharmaceutical companies are offering ancillary products and services? which puts increasing competitive pressure on incumbents. For this reason? he explains? companies need a competitive differentiator to sell? market? grow? and retain customers and? as a result? they are inclined to enhance their CRM capabilities. The difficulties of doing that internally have driven providers to consider outsourcing.”

Along with these factors? “there's a general increase in healthcare premiums and a real push by insurance companies to keep down costs they can control so as to maintain competitive pricing. So administrative costs have come under the knife — particularly through implementation of self-service health insurance. Unfortunately? most patients don't even understand the complexities of an HMO? never mind coping with coverage and rate issues by themselves. CRM is valuable here in that it allows the insurance company to reach out to payers? understand their needs? and inform them of their self-service options. Outsourced CRM is especially compelling in this scenario because insurers can deploy it for a fraction of the cost of a complicated installed system and still provide the kind of customer service that differentiates them from the competition. Today's US healthcare organizations are faced with growing pressure to reduce overall labor costs and at the same time to improve the quality of patient care. In order to painlessly and efficiently implement the required technology? organizations need to access the best IT talent pool requiring the latest technology skills coupled with excellent recruiting expertise (Nicholson, 2007).

Progressive healthcare organizations are currently resolving the problem of IT talent shortage ...