Armchair Finance

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Outsourcing Rules!

During one of those interminable exhibitor sessions at the Healthcare Financial Management Association’s Annual National Institute, I was struck by the sheer number of companies that want to do business with hospital administrators. Gazing across thousands of square feet of exhibit space filled by companies large and small, I realized how much responsibility hospital leaders could potentially outsource: literally just about everything.

You can hire an emergency room physician provider to make sure your ER is always staffed. You can outsource sanitation, food service, or your entire revenue cycle. You can get someone else to build (and own) an outpatient clinic, an imaging center, or even a satellite hospital. You can hire enough consultants to sail a slow boat to India, and while they’re in the country they can outsource radiology reading, among other high-skilled procedures. Even your high-end surgeries are outsourced to a degree, because your top surgeons are free agents, anyway—they play for the hospital that makes their life easiest.

It all reminded me of an interesting (and extremely funny) article in Esquire magazine last year called “My Outsourced Life.” Writer A.J. Jacobs begins the article by complaining that he has to write it. After all, the piece is about the army of cheap labor he has assembled from Asia to handle the prosaic tasks of his life—paying bills, buying things online, making vacation reservations. Soon he gets addicted. Before long, his Indian personal assistants are buying gifts for family members and researching articles for him.

Jacobs got me thinking about the interconnected relationships in healthcare that can be outsourced. Managing a hospital has become less about managing the enterprise than it is about managing the managers who run the little bits and pieces of the enterprise. As I looked at the booths at HFMA, I realized just about everything a hospital does outside of direct patient care can be outsourced. But should it be? That’s a decision only those with a “C” in their title can make.

The idea of outsourcing is enticing and seductive. It allows leaders with major responsibilities to delegate mundane tasks and focus on higher-level pursuits. The meeting of performance targets is contractually guaranteed on penalty of, well, penalties. The worrying about employee benefits, pensions and healthcare coverage can all be offloaded—often resulting in better efficiency and cost certainty. But taken to a logical conclusion, if you outsource enough functions of your business, do you make yourself obsolete?

Possibly. Those with Cs in their titles can be outsourced, too. Happens all the time.

—Philip Betbeze




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