A Cure for the Fear of Outsourcing

Outsourcing: A Fresh Look

During a financial downturn, many organizations are forced to re-evaluate some of the traditional rules about how they operate. Cutting costs often requires hard decisions, but changes must be made with the long-term health of the organization in mind. When times are good, we don’t often think about change, but a financial crisis presents an opportunity to find efficiencies to strengthen the business.

Still, many hospitals are hesitant to outsource. As outsourcing guru Michael F. Corbett describes in his 2004 book, The Outsourcing Revolution, fear of  Outsourcing often stems from a fear of the unknown. This fear can be summarized in three fundamental reasons.

Fear #1: Loss of Control

“If I outsource the department, I won’t be able to control how it is managed. Experts or not, they aren’t part of my organization.”

When a service is outsourced, an administrator actually gains more control over the department. The provider’s contract depends entirely on customer satisfaction. If the manager does not perform, he or she can be replaced more easily than a hospital-paid manager. The outsourced provider can find a better fit without burdening the hospital’s Human Resources staff. If the outsourced company is not responsive, it can be replaced by a competitor.

Outsourcing firms offer greater flexibility when staffing changes are necessary, either to add staff quickly
for a project or cut back to save costs. They provide a deeper pool of resources to fill positions rapidly,
introduce technology, and share best practices.

Fear #2: Inability to Measure Value

“I have no way of knowing whether I am getting good value for the fee I pay.”

Unlike an in-house department, an outsourced provider can have specific deliverables written into its contract. The hospital administrator can define the metrics  important to achieving the hospital’s goals and hold the provider to guaranteed outcomes and regular update reports. Each of these is tailored to the Key Performance Indicators at each client hospital, specific to the needs and focus of that administrative team. Crothall Services Group requires its managers to hold quarterly Joint Review Committee (JRC) meetings with all key  stakeholders to ensure that our services are fully supporting the hospital’s mission.

Fear #3: Adverse Affect on Employees

“What will happen to our loyal employees? Will outsourcing mean laying everyone off?”

There is sometimes a false impression that bringing in an outside company means the department’s staff will be laid off and replaced with a new team. Crothall values the facility knowledge, tenure, and relationships of the
on-site employees, and preserving continuity through change depends on the support and cooperation of these critical contributors. We have every desire to keep productive employees who can help us meet the goals set out for us by hospital administration.

Even in situations where employees are transitioned to Crothall’s payroll, we are committed to minimizing the disruption to employees. To keep transitioned employees whole, we preserve seniority, compensation, and benefits. This is vitally important to maintaining morale and productivity among the staff, and it’s the right thing to do.

Benefits of Outsourcing While cost reduction may initially prompt an organization
to outsource, this is only part of the total picture. Productivity improvements can provide opportunities for departmental savings, but often this takes time to achieve. Simply cutting staff can be counterproductive if resources are already thin.

Professional support services firms have specialized expertise. This enables them to do a better job than an
in-house program with the same staffing level. In addition, it allows the hospital to focus on those  challenges that are most critical to its mission—providing an exceptional patient experience. Non-core support services become a predictable, guaranteed budget item, reducing financial risk.

Quality of service can be guaranteed through productivity metrics, patient satisfaction scores, and successful regulatory audits. Improved efficiencies can even help the hospital grow revenue. Faster bed turnaround means additional admissions and shorter length of stay. More reliable patient transportation means additional revenue from imaging. Higher patient satisfaction means patients are more likely to return and refer family and friends. Physicians are also enticed to retain their association with the hospital when patients are satisfied with their experiences.

Finally, outside firms specializing in support services can
invest resources in innovation and share best practices  for the benefit of clients. An in-house department does not have the resources to research new technologies and design programs around them. Access to innovation could be the most compelling reason to look to outside experts.

How Does Crothall Rate? On the 2009 VHA Member Satisfaction Survey, Crothall
Services Group’s clients scored us over 80% for all satisfaction categories, with 22% of respondents rating Crothall a“perfect 10” on overall satisfaction. The overwhelming majority of our clients responded that they would be willing to serve as references. More telling are some of the reasons given for client satisfaction with Crothall. Customers mentioned “working with nursing to identify areas for improvement,” “breadth of industry knowledge,” “program innovation,” “patient satisfaction improvement,” and “ability to mobilize additional resources.”

Crothall works to improve efficiencies and deliver cost
savings to our customers. But the true value lies in our
ability to work creatively with our partners and provide
access to an impressive bank of resources unmatched by
an in-house program.