Outsourcing/ Offshoring in Healthcare

1
Outsourcing/ Offshoring in Healthcare

• Presented by Suniti Ponkshe
• April 2004

2
Todays Focus

• Outsourcing
• Off-shoring
• Offshore Transcription Services
• Other Outsourcing in healthcare
• Issues to remember

3
What is outsourcing offshoring?

• Outsourcing ---
• is the transfer of ownership of a process to a
  supplier.
• Essence of Outsourcing ---
• taking important business functions that dont
  differentiate your business and extracting value
  while minimizing your investment of time, money
  and talent.

• Offshoring ---
• is transfer of internal business process or
  technology processing to an external provider
  outside U S A Essence of
• Offshoring ---
• migrating business processes or technology
  processes overseas to lower costs without
  significantly sacrificing quality countries such
  as India, the Philippines, Ireland, China and
  emerging in Russia

4
State of the Outsourcing Industry

• By 2005 outsourcing will represent 59 of IT
  services Gartner
• US technology and business process outsourcing
  revenues will reach 226 billion by 2006 -- up
  from 103 billion in 2002 - Forrester Research
  
• By 2007 offshore business process outsourcing
  services will represent 14 of total BPO market
  and Indias share will be 57 Gartner
• As many as 588,000 U.S. white-collar jobs will
  be offshored and a total of 1.6 million by
  2010. The U.S. had a total of 138.3 million
  employed workers at the end of February ---
  Forrester Research
• Behind outsourcing debate surprisingly few hard
  numbers The Wall Street Journal
• The debate about the ethics of offshoring misses
  the point that it represents the inevitable next
  generation of business practice MIT Sloan
  Management Review Spring 2004

5
Outsourcing Trends in Health Care

• Most of the outsourcing deals have been ..
• Selective Outsourcing for application support
• Many of the Total Outsourcing deals have been ..
• Completed in the past 5 years
• Many have been traditional facilities management
  models but Few have been other models
• such as Equity Holdings
• Typically, outsourcing models have been
  conservative .
• They have been designed to address fear of
  loosing control

6
Offshoring Trends in Health Care and non-Health
Care markets

• Healthcare has been leveraging offshore market
  for transcription services for almost 10 years
  ..
• Address staffing shortages and extend the working
  day
• Total market is 20 Billion and 40 million is in
  India
• Other healthcare areas are starting to use
  offshore market
• Radiology readings
• Other industries have been leveraging offshore
  market for many years
• Full IT services
• Business Processes
• Emerging areas legal research, tax
  professionals, technical writers

7
Offshoring Trends in Health Care and non-Health
Care markets

• Other industries have been leveraging offshore
  market for many years
• Full IT services
• Business Processes
• Emerging areas legal research, tax
  professionals, technical writers
• Offshore market has come under scrutiny
• State of economy --- Jobless recovery
• One incidence where patient records privacy was
  endangered
• Fear of offshore market becoming stronger than U
  S market
• According to U.S. Chamber of Commerce insourcing
  beats outsourcing by nearly 60 billion annually
  by the year 2010 we will not have a shortage of
  jobs, but rather a shortage of workers report
  released in April 2004

8
Why Outsource or Offshore?

• According to the Outsourcing Institute, top three
  reasons for outsourcing are
• Costs
• Focus
• Resources
• Key reasons for offshoring are
• Lower costs
• Deliver maximum value to customers
• Deliver maximum value to shareholders
• Todays Speakers
• Outsourcing how it is working for Adventist
• Offshoring how it did not work for Tumbleweed
  Corporation
• Offshore Transcription issues related to
  Medical Records profession