How Cost-Effective Is Outsourcing?
February 1, 2019 3 minutes read
We all do it, some more than others. Some do it all the time, and others just a few times per month. After a while, you want to do it all the time, and that is when you open yourself up for disappointment.
When you first outsourced, it probably was housekeeping, laundry, human resources, or some other essential service that you did not want to deal with internally or that was too expensive. Other examples of outsourced services include billing, management, IT, contracting, credentialing, patient registration, website, social media, forms, anesthesia, medical records consultant, pharmacy, EMR, staffing, linen, gas sterilization, infection control consultants, payroll, human resources, housekeeping, and custom packs. Has it become that complicated? Perhaps for some facilities more than others. Everything lately seems to take too long, cost too much, or is just not available.
Should a facility bring all these services back in house again? Billing seems too complex now to return to an old model. I know many facilities still handle billing in house, but they seem to struggle. It is practically impossible to make a profit or just break even by hiring your own internal staff to handle anesthesia. Who wants the smell of detergent in the place or wants to spend valuable staff time reviewing medical records?
We have become so dependent on others to handle tasks we cannot or do not want to do that it might be tough bringing all these services back in house. But what does all this cost? What are we paying someone to check a patient’s insurance deductible and out-of-pocket obligation? Is it a good deal or too expensive? One of the largest outsourcing tasks we handle is management services. After almost 30 years in business, I have observed that many who hire someone to manage their facilities for them do not need it. Conversely, many who have not hired someone to manage their facilities should. Similarly, billing is a complicated task and a big expense. Are you capable of doing this yourself? Or should someone else handle that service?
Start by meeting with your business office staff and identifying all the money going out the door for these services. There are lots of hidden costs with some of these services. It is important to turn over every stone and see what is hiding under there.
After calculating these costs, figure out what it would cost to handle services in house with your own staff. Most facilities are likely to discover many additional headaches and, in some cases, perhaps additional costs when it comes to bringing services back in house. The cost of software, personnel, training, and keeping up with the changes takes it way beyond the bandwidth that the average and even above-average facility can handle. The larger the facility, the more disparity exists. I have looked at this from every angle and cannot make the numbers work. If you take the time to run the numbers yourself, you will agree with me. The next time you want to complain about an outsourcing partner and think you can do it better yourself, back away and crunch the numbers. You might think twice before cancelling that contract.
(Earnhart & Associates is a consulting firm specializing in all aspects of outpatient surgery development and management. Earnhart & Associates can be reached at 5114 Balcones Woods Drive, Suite 307-203, Austin, TX 78759. Phone: (512) 297-7575. Fax: (512) 233-2979. Email: searnhart@earnhart.com. Web: www.earnhart.com.)
Facilities have become so dependent on others to handle tasks many cannot or do not want to do that it might be tough bringing all these services back in house. But what does all this cost? Is it a good deal or too expensive?
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