Medical Recruiting Insights

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Pros and Cons of Outsourcing Administrative Services

Adaptive Medical Partners | Healthcare Administrators, Physician Recruiting

The outsourcing of administrative services, such as those related to medical coding, billing claims and recruiting, increasingly appears in hospitals, physician practices and other health care facilities. For example, the market for outsourced revenue cycle management services is projected to grow 26.5 percent from 2016, reaching a market value of $9.7 billion by 2018. The outsourcing of complex medical claims rose from 20.4 percent of hospital CFOs in 2013 to 39.8 percent in 2016. Outsourcing offers several advantages as well as disadvantages, outlined below along with some tips to consider.

Benefits of Outsourcing

No need to hire additional employees: By outsourcing, you enjoy the benefits of work provided by people you don’t have to recruit, hire, onboard, train and manage. You also don’t provide the physical space for their work.

Reduction in overhead expenses associated with physically housing personnel: In addition to the expense of purchasing or leasing the physical space in-house staff requires, associated overhead costs such as utilities, office supplies and software licenses are reduced or eliminated with fewer employees.

Ability to quickly scale up or down: Outsourcing quickly increases capacity by eliminating the time typically required to hire additional staff. Conversely, outsourcing allows for rapid reduction in capacity without the restrictions placed on employers.

Access to larger talent pool: Staffing your hospital or office is limited to your immediate geographic region, generally. Outsourcing potentially makes workers available in other places and across time zones.

Focus placed on core services and skills: Outsourcing administrative functions frees up resources that can be redirected to providing care. Your vendor, who specializes in the functional area and has a dedicated skill set, focuses on non-care tasks.

Disadvantages of Outsourcing

Loss of control over business processes: Though you provide direction, you give up a degree of control over the actual work and the workers completing the tasks.

Impact on company culture: Employees may feel they are being replaced, staff might not understand the reasons for outsourcing and outsourcing may add new workflows to daily operations, all of which can potentially negatively impact your company culture.

Communication challenges: Working with an outsourced company located in a different time zone presents challenges in communication. Preferred methods of communication, frequency of contact and use of a reliable internet connection should be discussed at the onset.

Things to Consider for More Successful Outsourcing

Choose the right partners: Entering into a long-term contractual relationship with the wrong partner can be disastrous. Be sure to properly vet any service provider, verify appropriate qualifications, and confirm level of knowledge and relevant experience with your type of business. Ask questions, compare costs and speak with references.

Maintain oversight: Build in a requirement for regular reporting from your outsourcing partner and perhaps schedule regular meetings or conference calls to review any issues. You’ll likely need to set up a means of tracking, verifying and performing quality control on the work that is outsourced to be sure the contract terms are being met and the work meets your standards of quality.

Uphold HIPAA and HITECH standards: Be sure appropriate agreements are in place related to the confidentiality of personal health information and that your outsourcing partner has appropriate security controls in place.

Outsourcing the recruiting processes to an experienced, professional vendor such as Adaptive Medical Partners could benefit your practice in many ways. Contact us to discuss how we could fit into your physician recruitment strategy and help you find the right providers to fulfill your needs.