IT Outsourcing in Healthcare [Checklist for Hospitals]

The need to provide quality care and to decrease costs are the key drivers of IT outsourcing in the global healthcare industry. Do you know how many IT healthcare services are outsourced? According to Black Book survey of 2015, 75% of hospitals over 300 beds were outsourcing IT services. The predictions on health IT outsourcing by the Statista statistics portal define the global market size of IT healthcare outsourcing by 2017 at 47 billion U.S. dollars. And, according to Markets and Markets, the healthcare IT outsourcing market will be worth $50.4 billion by 2018, and U.S. and Canada hold the highest share of the global healthcare information technology outsourcing market.

Reasons to outsource IT in healthcare

Why Do Hospitals Need to Outsource IT?

Hospital CEOs, COOs, and CFOs reach out to outsourcers to get efficient and financially feasible solutions to their most worrisome troubles. The amount of data being operated by the healthcare industry is so huge that it has already reached dozens of petabytes. Healthcare providers, as well as payers, deal with electronic information related to electronic medical records or electronic health records (EMRs, EHRs), various medical or billing codes, electronic monitoring systems (including remote monitoring), and patient care.

So it’s no wonder that healthcare institutions are in need of reliable and state-of-the-art IT infrastructure capable of connecting all systems and devices used by healthcare facilities. Unfortunately, healthcare industry institutions lack the necessary skills and IT domain expertise and that is one of the main drivers of IT outsourcing in healthcare, which enable healthcare providers to concentrate on their core business – providing healthcare services while enhancing quality care and cutting costs.

Outsourcing healthcare services include a wide range of complex technology services, such as hosting, network infrastructure, service desk, application support and even full IT department outsourcing. Such a wide range of necessities can also be attributed to the rise in demand for application management services and application development on in-house IT experts. The growing and aging population to be covered under insurance policies in accordance with HIPPA Act and the new regulations, including ICD 10 guidelines, also generate a need for health IT outsourcing.

Therefore five major reasons can be identified for why Hospitals are Outsourcing IT Functions:

1. Reducing and controlling operating costs

2. Improving facility focus on its core business

3. Gaining access to best practices and state-of-the-art technologies

4. Using external resources to enable internal resources for other purposes

5. Getting resources that are absent in-house

outsource healthcare app development

What Technologies Can Hospitals Outsource?

The analytics of Future Market Insights claims that the most popular solutions in the worldwide IT healthcare outsourcing include:

·         Hospital Information Systems

·         Electronic Health Records

·         Laboratory Information Systems

·         Pharmacy Information

·         Hospital Inventory Management

·         E-Prescriptions

·         Clinical Decision Support

·         Revenue Cycle Management

·         other applications such as picture archiving and communication systems or PACS

The list is by no means complete and the opportunities for outsourcers look promising, but there are some concerns affecting the decision making when healthcare organizations are considering IT outsourcing. The key problems revealed by the above-mentioned Black Book survey refer both to technical and administrative domains.



·         Ineffective statements of work for the services to be outsourced

·         The performance of the contracted outsource agencies is not monitored properly

·         Poor communication between the parties

·         Lack of expertise of the outsourced partner in the specific field

·         Inability of the outsourcing partner to comply with the applicable laws and guidelines

·         Some services should stay within the organization, especially if they involve knowledge of hospital routines

·         Inadequate criteria for services for vendor selection

·         The full cost of outsourcing is not realized by the healthcare organization

·         The outsourced service is not controlled or supervised properly

·         Unrealistic expectations with regard to the outsourced services/products

·         Lack of know-how or best practices for hospital IT outsourcing

Let us look closer at the possible pros and cons of remote/mixed IT teams in the healthcare industry.

Pros and Cons of Health IT Outsourcing

The benefits of working with IT outsourcing are obvious:

·         Lower costs without compromising the quality of the business. The biggest advantage of outsourcing healthcare services is the reduced costs in healthcare operations. The savings are based on the low cost of outsourced manpower and infrastructure. Analysts suppose that healthcare outsourcing can result in 30-60% cost reductions.

·         Avoiding critical mistakes due to human error. These include mistakes due to outdated billing or information tracking systems.

·         Increased productivity as an outsourcing partner takes care of the technical nuances and provides training for a healthcare organization staff.

·         24x7 workforce. Outsourcing is a good method of augmenting healthcare organization staff to provide 24-hour smooth operation of healthcare IT networks. When outsourcing healthcare organizations make use of support experts available on call 24/7/365.

·         Freeing up internal resources. A reliable outside partner can reduce downtime and stay protected. Such a partner also handles all aspects of managing data through cloud storage and ensures proper storage scalability  Thus, your employees can focus on providing care and the projects which are prerequisites for reimbursements like electronic health record (EHR) implementation.

But disadvantages can also be seen. They are basically:

·         Lack of routine as your IT partner may not know all the processes of your facility.

·         Communication challenges as not every person in your team and your partner’s team may know the people who are responsible for certain operations.

·         New management style to be implemented to manage the work with your partner.

·         Lack of trust can be disastrous for smooth and efficient operations.

It is known that 75% to 80% of hospitals outsource IT to streamline their operations, reduce costs of services and create a better experience for their patients. How can you make sure you get it right?

healthcare management solutions

Checklist for Picking an Outsource Company – How to Choose an Outsource IT Partner

The first thing you should think about is to look for a partner, not a vendor. A partner is something more than a service provider working for a certain amount of money per hour – he is committed to achieve your goals and help you to improve your business operations. A partner is committed to creating a product or service that improves user experience, quality of performance and efficiency.

Then you should check the experience of the partner in hospital IT outsourcing. Of course, there are certain skills related to technology, but your partner should be aware of all the guidelines and compliance requirements specific for the healthcare industry. And your partner should be aware of the rules and regulations that govern privacy and intellectual property, too. The key to successful outsourcing relationships is the knowledge of deep interconnection between IT, care provision and hospital business workflows.

Clearly define services to be provided and the necessary levels of performance. Service level agreement must be the foundation of your contract with the partner. Of course, it is impossible to foresee all the details in an SLA, but it should include best practices and standards of the industry.

And finally, choose a company you can trust. Problems may arise in any project, especially in healthcare where the operating environment is extremely complex. The scope of the original contract may be stretched, and the partner must have enough resources and expertise to cope with your requirements. An IT partnership in healthcare can last for years, that is why a trusted relationship between the parties is very important.

Do you need a reliable partner to solve your IT problems? Archer Software has 19+ years of experience in healthcare IT outsourcing and has a thorough understanding of how technology can remain HIPAA compliant. Find our full healthcare-related portfolio here. Reach out to us directly and we’ll help you to build the solution you need.