https://mailchi.mp/12e6f7d010e1/the-weekly-gist-february-24-2023?e=d1e747d2d8

Unsurprisingly, given the mounting economic pressures many health systems are facing, we’re beginning to hear more discussions among executives about outsourcing non-core services as a way of containing costs. Whether it’s contracting with an outside company for things like laundry and dietary services, or more extensive outsourcing to vendors for revenue cycle and IT services (such as the much-ballyhooed partnerships with Optum that have grabbed headlines recently), we’ve seen a resurgence of interest in finding ways to offload key areas of non-clinical operations.

In some ways it makes sense: we’ll stick to our knitting, and let someone else handle areas that they’re probably better at. But a recent comment from one system CEO captured our concern about the outsourcing trend. “For us, outsourcing is like Lucy and the football…we’ve been here before.

What we’ve learned is the complexity of managing the vendor relationship often outweighs any potential cost savings. And in the end, we never seem to garner enough savings to make it worth the effort.” 

As to the broader “partnerships” around revenue cycle, IT, and population health, she added, “We’d never give up control of those aspects of the business—they’re too important. Plus, I’m not sure how you’d ever unwind it once you’d let your own staff become employed by a vendor.” We’ll be keeping a close eye on these outsourcing deals as the year goes on, and we’d love to hear your experience with the strategy as well.