The High Stakes of Outsourcing in Health Care

Abstract

Outsourcing in health care has become increasingly common as health system administrators seek to enhance profitability and efficiency while maintaining clinical excellence. When clinical services are outsourced, however, the outsourcing organization relinquishes control over its most important service value: high-quality patient care. Farming out work to an external service provider can have many unintended results, including inconsistencies in standards of care; harmful medical errors; declines in patient and employee satisfaction; and damage to clinicians' morale and income, and to the health organization's culture, reputation, and long-term financial performance. Research on outsourcing in the areas of emergency medicine, radiology, laboratory services, and environmental services provides concerning evidence of potentially large downsides when outsourcing is driven by short-term cost concerns or is planned without diligently considering all of the ramifications of not keeping key clinical and nonclinical services in-house. To better equip health system leaders for decision-making about outsourcing, we examine this body of literature, identify common pitfalls of outsourcing in specific clinical and nonclinical health services and scenarios, explore alternatives to outsourcing, and consider how outsourcing (when necessary) can be done in a strategic manner that does not compromise the values of the organization and its commitment to patients.

Exposure of Public Sector with the Quasi-market Through Outsourcing: A Case Study in Iran

“…The present study's findings also showed that the dominant model had been service purchasing, as 84% of total outsourced services have been finalized using this model. This part of the findings is consistent with the results of some studies (32,33). One of the reasons attributed to the high usage of this model is that this model has been used for a long time, and as a result, managers are familiar with the terms and conditions of this type model.…”

Exposure of Public Sector with the Quasi-Market Through Outsourcing: A Case Study in Iran

“…Findings the present study also represent that the dominant model has been service purchasing as 84% of total outsourced services have been nalized using this model. This part of ndings is consistent with the results of some studies (Berry et al, 2021;Malovec et al, 2015) .one of the reasons attributed to the high usage of this model is that this model has been using for long time ago and as a result familiarity of managers with the terms and conditions of this type model. Additionally, simplicity in implementation has paved the way for being institutionalized.…”

The impact of outsourcing bed-based aged care services on quality of care: A multisite observational study

“…Moreover, addressing the high stakes associated with outsourcing in health care highlighted the importance of carefully sourcing services for public health services as they do not necessarily result in cost reduction [ 30 ]. Effective outsourcing requires a significant oversight of the overall performance of the outsourced services.…”

“…Effective outsourcing requires a significant oversight of the overall performance of the outsourced services. Detailed contracts between the outsourced services and the contractor should include indicators of clinical quality, business efficiency, patient satisfaction and professionalism [ 30 ].…”