To succeed in today’s healthcare environment, hospitals and health systems must evaluate the best operating model for key functions to enhance efficiency and optimize performance. This often involves determining whether partnering with another organization to perform a business function makes sense for you.
To most of us, the idea of letting go can come with uncertainty. But, what if giving up something actually meant your organization could devote more time to strategic initiatives? What if you had more resources and energy to invest in enhancing the patient experience? What if you had more skilled resources dedicated to performance improvement across your enterprise?
In the right circumstances, partners can provide these kinds
of benefits by implementing more effective and efficient processes in certain business functions for which specialized expertise, scale and enabling technologies are critical for optimal performance. Importantly, finding the right partner for these functions frees the organization’s leadership to focus its energy and attention on strategic priorities and initiatives.
But when is the right time and circumstance to seek expertise outside the organization? How do you decide when you’re losing control or gaining it through a new partnership? Which functions are most ripe for this solution?
Organizations are sometimes surprised at the improved level of performance that a partner may be able to bring to a business function like revenue cycle, or the reduction in pricing that they may be able to obtain for supplies. In the past they didn’t have the time to investigate new approaches or practices that could lead to these better results, or even know the level of results possible. A partner should bring market intelligence that allows you to see what top-performing hospitals are achieving and how.
A partner should always offer you the advantage of scale and volume. For example, they should have extensive human and technological resources available and, more importantly, specialized resources. In some cases, you should be able to get what you need faster and with less cost because of the breadth and scale at which your partner operates. Another example, if suddenly you have a need to fill 30 percent more nursing slots, handling it yourself could cost significant time and money. But if you are working with a partner who is already filling 5,000 nursing slots a day, you can achieve your goals quicker and with less expense.
In addition to technology, does your potential partner invest in intellectual capital and innovation that can provide superior and sustainable results over time? No matter the business function being provided, one potential advantage of a specialized partner is that they are, or should be, regularly scanning the landscape to identify new practices and processes that allow them to continue to deliver great service. And they should be doing this with an understanding of a hospital’s values and needs.
Some hospitals, through partnerships, have chosen to implement innovative workforce strategies that more effectively deploy staff, reduce nurse burnout, increase the pool of nurses qualified for critical positions, and control the high cost of contract labor. Others have put in place new processes in revenue cycle and supply chain management that have been time-tested and honed to decrease costs while improving results most important to hospitals, clinicians and their patients.
A partner organization should also offer access to game- changing technology—such as investments in revenue cycle systems because of their specialty focus and ability to leverage the investment more broadly.
One of the sometimes overlooked values of outsourcing a business function is the ability to free a healthcare organization’s leaders to tackle mission-critical core functions or strategic initiatives that otherwise they don’t have time to execute or even think about in the depth needed. Here’s a different way
to look at this: what is the cost of not being able to focus and accomplish key strategic objectives? Are initiatives delayed or back-burnered for lack of leadership or sponsorship?
If you or your leadership team are spending 30 percent of their time on improving revenue cycle results, and outsourcing that function can cut that in half, that’s significant.
There is no question that the healthcare industry is rapidly changing, with new standards for quality measurement driving the need for change and improvement. Even more attention is being paid to the patient experience. Healthcare organizations, both large and small, are dealing with multiple questions about priorities and how to achieve transformation, sometimes rapidly. Changes in reimbursement models add additional pressure to ensure financial sustainability.
Sometimes an inability to implement change within a needed timeframe can cause an organization to lose significant ground in a competitive marketplace.
In a partnership arrangement, it’s important to know what to expect, have the right documentation and make sure you are getting continual information from your partners. There should be ways to stay in touch with the business, the workforce and the patient.
Clear and transparent communication with your partners is critical. You should work with them on the types of reporting and summaries you want to see, and the business intelligence that you want to gain from the operations data. You need to make sure your organization is ready to manage and engage in the relationship with the partner. Expectations should be clear and ample time should be spent on the front end.
Outsourcing a function can and should be a strategic decision. A partner should help you build a strong business case. The process of building that case will lay the groundwork for managing the relationship and retaining the control you need if you do choose a full-service route. That same process also could point you in a different direction. Some have chosen limited relationships. Others want access to expertise through a consulting arrangement.
In the end, the answer to when a partnership is right for you, and to what level, lies in a full understanding of the value the partner brings and how it can improve your own capacities for better performance in key areas.
Make sure the partner can demonstrate or prove their ability to carry out their promises. A vetting process where you verify and validate will avoid assumptions that could cause problems later.
Document everything—how it’s going to be done, when are service levels achieved, what processes are in place if something goes wrong.
It’s important to be transparent with your own organization and staff—don’t try to hide critical information. If a new partnership is going to shift who your employees will work for, tell them.
You need a plan for rewinding the outsourced function if it doesn’t work out.
Be realistic about how much time it takes to manage a good relationship with a partner. It can bring tremendous value, but it takes work and effort on the front end to get off to a good start.