Outsourced Providers: Critical Questions and Key Activities

We’re continuing our series on ensuring quality and financial high-performance from outsourced providers. For part one, please click here.

Here are four critical questions that must be answered:

1. What should be outsourced and what services should be performed internally, within the hospital?

2. For those services that should be outsourced, how should the contract be structured?

3. For those services that should be outsourced, how should the contract be negotiated?

4. For those services that should be outsourced, how should the relationship be managed to ensure its continued strategic success? When will the relationship be terminated?

Whether you are in a current agreement with an outsourced provider, in the process of a contract renewal with your current provider or are analyzing the option of outsourcing – it all starts with understanding the needs of your organization and those needs do change over time.

Aspects of a needs assessment can include cost reduction, revenue improvement, and/or the lack of internal specialization. Click To Tweet

The key activities in a needs assessment include:

• Defining the business needs and key objectives.

• Benchmarking the current processes.

• Understanding the standard activities and service level measurements (“as-is”).

• Reviewing future state service delivery options (“to-be”).

• Assessing the gaps between the current and desired state.

• Assessing the feasibility of options & defining the strategy for service delivery alternatives (insource, nearshore, multi-shored delivery, combinations of, etc.).

• Investigating the implications of assessment.

• Validating the associated costs, cost savings, revenue and process improvements.

• Identifying risks, assumptions, dependencies, and creating a mitigation plan.

• Business case development and sponsor alignment.

Once you have a detailed analysis of what your organization “needs” then everything is built from there. Your contract, monthly, quarterly and annual measurements, the ability to ensure you will have best-in-class services provider, competitive pricing for those services as well as a system of accountability built into your agreement.

In the next part of this series, we’ll cover the steps to optimize the value of your outsourced agreements.

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