The outsource contract

Outsourcing business functions has become part of the US corporate culture in the 1990s. The general concept of outsourcing is that a company, which historically has performed its own services in a given area using in-house employees, transfers these services to an outside vendor. Many companies in a variety of industries have found the economics and the flexibility that outsourcing can offer to be attractive; healthcare is no exception. Whether the entity that outsources an internal function is a hospital, health insurer, or another entity involved in the delivery of services, outsourcing is now a viable alternative in healthcare. This is particularly true with respect to hospital support services, such as accounts receivable collection and processing, medical records, laboratory testing, and dietary. While outsourcing can be highly beneficial, several issues exist that could create pitfalls for the uninitiated. Wary outsourcers should consider the following issues to reap maximum benefits from the outsourcing experience.