Outsourcing Trends: Health Services Professionals
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MGT 6220 – Health Care Human Resource Management
Outsourcing Trends – Health Services Professionals
Fall 2012 Research Paper
Anthony Edens
Thomas Grumley
Outsourcing Trends – Health Services Professionals
In today’s healthcare environment, hospitals are facing increasing pressure to reduce costs, increase efficiency and improve the quality of patient care. Although some of the details of the impending changes may not be perfectly defined, the industry is certain that changes are inevitable. Going forward, there will be an increased focus on quality; penalties for re-admissions, medical errors and hospital acquired infections (Buser, 2010). Several factors, such as aging populations, new treatments, low patient financial responsibility and misalignment of incentives have forced the Government to reconsider current Medicare reimbursement arrangements (Kaplan, Porter, 2011). For example, fee for service, which reimburses providers and hospitals based on the procedure performed, are not based on the desired outcome which should be good patient health. Therefore, the incentive for the provider could be to perform more of the higher reimbursement procedures and not to focus on decreasing the costs of business. Unfortunately, this has lead to a cycle of increasing costs for the government and payers, who are now looking for ways to decrease reimbursement and align incentives with quality while reducing re-admissions. Decreasing reimbursement will force hospitals that are not currently focused on cost control to rethink the existing strategies.
In light of this, hospitals will need to concentrate on expense control, staffing productivity and service line efficiency. Crucially, hospitals will need to focus on effective alignment with physician practices and hospitalists. One consideration that continues to arise is whether to outsource certain functions from an employment model to one involving outsourcing, and one
MGT 6220 – Health Care Human Resource Management
Outsourcing Trends – Health Services Professionals
Fall 2012 Research Paper
Anthony Edens
Thomas Grumley
Outsourcing Trends – Health Services Professionals
In today’s healthcare environment, hospitals are facing increasing pressure to reduce costs, increase efficiency and improve the quality of patient care. Although some of the details of the impending changes may not be perfectly defined, the industry is certain that changes are inevitable. Going forward, there will be an increased focus on quality; penalties for re-admissions, medical errors and hospital acquired infections (Buser, 2010). Several factors, such as aging populations, new treatments, low patient financial responsibility and misalignment of incentives have forced the Government to reconsider current Medicare reimbursement arrangements (Kaplan, Porter, 2011). For example, fee for service, which reimburses providers and hospitals based on the procedure performed, are not based on the desired outcome which should be good patient health. Therefore, the incentive for the provider could be to perform more of the higher reimbursement procedures and not to focus on decreasing the costs of business. Unfortunately, this has lead to a cycle of increasing costs for the government and payers, who are now looking for ways to decrease reimbursement and align incentives with quality while reducing re-admissions. Decreasing reimbursement will force hospitals that are not currently focused on cost control to rethink the existing strategies.
In light of this, hospitals will need to concentrate on expense control, staffing productivity and service line efficiency. Crucially, hospitals will need to focus on effective alignment with physician practices and hospitalists. One consideration that continues to arise is whether to outsource certain functions from an employment model to one involving outsourcing, and one
References: Buser, M., (2010, December). Hospitalist Programs in the Age of Healthcare Reform. Journal of Healthcare Management, 55:6, 378-380. Chin, T., (2003, August 11). The Doctor is Outsourcing: To Hire or Not to Hire. American Medical News, Retrieved November 15, 2012 from http://www.ama-assn.org/amednews/2003/08/11/bisa0811.htm Daly, R., (2011, September 5) Darves, B., (2007, May). Hospital Medicine’s Management Shuffle. Today’s Hospitalist. Retrieved November 10, 2012 from http://www.todayshospitalist.com/index.php?b=articles_read&cnt=64.html Hays, P., Smith, C Kaplan, R., Porter, M., (2011, September). How to Solve the Cost Crisis in Health Care. Harvard Business Review, 48-49. Kutscher, B., (2012, September 3). Expertise on Call. Modern Healthcare, Vol. 42 Issue 36, 20-27. Mantone, J., (2003, November 24). Letting Someone Else Do It Better. Modern Healthcare, Vol. 33 Issue 47, S10 McKinney, M., (2010, September 20) Morrissey, J., (2003, May 12). Not Paying Off: Baylor, EDS Terminate Revenue Management Deal. Modern Healthcare, Vol. 33 Issue 19, p3, 1/2p. Robeznieks, A., (2012, April 2). Partnering up: As Consolidation Begins to Sweep through Healthcare, Hospitalists Expect to See the Trend Accelerate in their Sector. Modern Healthcare, Vol. 42, Issue 14. Schechter, K., (2000, July 24). Compare Costs, Benefits of Billing Service vs. In-House. American Medical News, Retrieved from http://www.ama-assn.org/amednews/2000/07/24/bica0724.htm Sharma, A., Worthen, B., (2010, November) Stevens, L., (2007, April 16). The Ins and Outs of Billing: Pros and Cons of Outsourcing. American Medical News, Retrieved November 15, 2012 from http://www.ama-assn.org/amednews/2007/04/16/bisa0416.htm