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Five advantages of outsourcing for healthcare industry

When evaluating future possibilities for the healthcare sector in 2024, Fitch Ratings did not hold back. The credit-rating agency stated that the outlook was "deteriorating" and disclosed that hospital and health system downgrades were exceeding upgrades by a ratio of around three to one.

Following "a generationally challenged period in 2022 and 2023," as noted by Fitch Ratings experts, the healthcare sector is highly competitive for personnel due to a number of variables such as increasing living costs and the early retirement of some skilled workers.3.

Global analysis firm Deloitte found that just 3% of executives in health systems and 7% of executives in health plans viewed their prospects for 2024 as "positive." The fact that those figures were lower than 15% and 40% year over year contributed as well to this outcome.

It should come as no surprise that more and more healthcare facilities are collaborating with outside suppliers in light of these difficulties; in fact, the healthcare outsourcing market is expected to grow to $312 billion by 2025.

What does the healthcare sector intend by outsourcing?

In the healthcare sector, outsourcing is the process of allocating specific duties to outside companies or people in an effort to enhance hospital or health service performance. In addition to broad administrative duties like IT, customer service, and HR, specialised third-party suppliers can assist with clinical roles like medical transcription and billing.


Healthcare administrators are growing more and more inclined to outsource due to the persistent talent scarcity that is making it difficult to hire both medical and non-medical staff and since financial restrictions are hurting capital investment and operations decisions regardless of the size of the hospital or health service. In addition, there is intense rivalry within the industry from a growing number of ancillary firms entering the healthcare space as well as from other providers.

Which five advantages does outsourcing provide the healthcare sector?

Better cost control: Outsourcing is an effective way of lowering expenses that can assist give regular operations and long-term corporate planning more consistency and predictability. Reduced labour expenses are one of the direct savings; wages and salary can be cut by up to 70% in offshore locations like the Philippines due to their lower cost of living. When paired with a decrease in direct HR costs associated with recruiting, integrating, and retaining qualified staff, the favourable effect on balance sheets is evident.

A significant extra expense associated with hiring is technology acquisition and upkeep. Buying or updating equipment requires an enormous initial expenditure, as do ongoing maintenance expenses; however, outsourcing transfers these costs to the outsourced provider. It also significantly lowers employee turnover, which spares the direct expenses of hiring new hires and retraining current staff members as well as the indirect costs of errors and productivity lapses.

Greater access to worldwide talent pools: outsourcing gives health administrators access to a pool of desirable individuals who would not otherwise be available on a global scale. Seeking assistance and knowledge from outside can lead to companies that take great satisfaction in developing highly competent talent pools full of diligent, experienced, and capable individuals who are prepared to produce.

Competitive edge: As a growing number of rivals enter the healthcare industry, hospitals and health systems are facing an increasingly competitive environment as a result of the "business" of healthcare. This covers the rapidly expanding retail and ambulatory care sectors, as well as the exploration of novel care models by more established firms.

Smaller healthcare organisations may benefit from outsourcing by having access to a wealth of talent and enhanced capabilities that would be impossible to obtain internally owing to financial or physical constraints. Because outsourcing is naturally adaptable, suppliers can offer valuable scalability. Healthcare operators require this kind of agility to accommodate changing needs, promote planned development, and adjust to unexpected shifts.


Better patient care: Outsourcing has been demonstrated to enhance patient outcomes and provide higher-quality care, even if healthcare is a business. The patient should always be at the centre of the discussion. Health professionals are prone to stress and tiredness, thus relieving clinical personnel of ordinary administrative labour not only allows them to focus on patients but also improves their health and morale.

Healthcare outsourcing frees up internal staff members to devote more of their time to clinical care, which raises patient satisfaction and service quality, rather than tedious and time-consuming administrative duties. Long-term revenue can increase due to happier patients' greater likelihood of staying loyal and referring others to the service.

Increased accuracy: In the healthcare industry, medical billing and coding are critical procedures that require speed and precision to optimise revenue streams. Errors are expensive; based to one research, the medical industry lost $20 billion as a result of billing errors[6]. Medical coding is a specialised subject, and reputable outsourcing companies may connect you with highly qualified individuals or teams who can produce fewer errors in a role where errors count.

What healthcare services can be outsourced?

Medical Coder

Medical Coding Trainer

Quality Assurance Supervisor

Quality Assurance Manager

Medical Transcriptionist

Medical Claims Processor/Analyst

Medical Billing Specialist

Quality Assurance Specialist

Chart Retrieval Specialist.

The sector also lends itself to outsourcing opportunities across areas as diverse as:

Patient scheduling and follow-up

Information technology (data management, digital transformation systems design, cybersecurity)

Customer service, which includes call centres

Management of compliance

Accounting and finance


Marketing and Sales.

How do you pick an established healthcare outsourcing company?

Exercise due diligence by resisting the urge to work with the least expensive supplier. Make a goal evaluation first. Different companies offer varying services, so the easiest approach to narrow down your options is to decide which jobs you actually need assistance with.

Experience: Try to collaborate with healthcare organisations that have a track record of success working with providers, especially in the specialisations and/or procedures that will be most helpful to you. Ask questions, seek case studies, and conduct research.

Talent pool: Look for proof that your outsourcing partner has developed a talent pool with access to a wide range of exceptionally skilled individuals or groups. The Philippines has a wealth of people with strong English language proficiency, knowledge of the intricacies of US compliance, and, frequently, training and experience in healthcare systems.

Compliance and data security: outsourcing companies are required to adhere to compliance guidelines and safeguard the business data of their clients. It is imperative to have clearly defined risk management policies and procedures in place since a data or security breach could have catastrophic effects.


Scalability: Increasing or decreasing teams according to demand is one of the advantages of outsourcing. Vendors who appear like a good fit but are unable to assist an organisation in scaling should be avoided as they could convert an exciting project into yet another source of trouble.



In the realm of healthcare outsourcing, there is no one size fits all solution. Even for a solo practitioner, what functions well for a tertiary hospital might not be appropriate for a rural medical clinic. It is crucial to look for the outsourcing company that best meets one's needs because of this.

Significant changes are occurring in government policy and industry practices that affect the US healthcare system. Find out which five trends will have an immediate impact on the healthcare industry in these revolutionary times.

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