Ex­tra steps needed for suc­cess­ful out­sourc­ing re­la­tion­ships

Modern Healthcare - - NEWS - By Alex Kacik

Hir­ing an out­side com­pany as an out­sourc­ing part­ner takes some man­age­ment over­sight, ex­perts say. As providers ex­plore dif­fer­ent part­ner­ships and out­sourc­ing op­por­tu­ni­ties, they need to make sure the right pro­tec­tions are in place so that ex­pec­ta­tions are met, said Neil Ol­der­man, a part­ner at law firm Drinker Bid­dle & Reath.

Many providers have shied away from out­sourc­ing goods or ser­vices be­cause they were de­terred by a lack of con­trol, a po­ten­tial shift in cor­po­rate cul­ture or wor­ried they would be ma­nip­u­lated. But there are ways to get the col­lab­o­ra­tion and trans­parency from a busi­ness part­ner to de­liver re­sults with­out dis­pute, he said.

Ty­ing ven­dor ar­range­ments to cer­tain met­rics that in­clude fi­nan­cial penal­ties if they aren’t met or con­versely, bonuses, can drive bet­ter per­for­mance. There also should be a way to re­solve in­ter­nal prob­lems quickly, such as re­quir­ing an on-site man­ager who has de­ci­sion­mak­ing power, Ol­der­man said.

Providers should ap­point a watch­dog with knowl­edge of the service or depart­ment to en­sure things roll out smoothly, he said. One pro­vi­sion could re­quire that the same ven­dor man­ager or point per­son re­mains even if there is re­struc­tur­ing or turnover at the com­pany.

Th­ese re­la­tion­ships will be­come even more im­por­tant as providers add and op­ti­mize out­sourc­ing ar­range­ments, Ol­der­man said.

“Some­times the way to im­prove­ment is cap­i­tal in­vest­ment that hos­pi­tals don’t have, and many are re­al­iz­ing that part­ners or ven­dors can bring a lot to the ta­ble,” he said.

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