Outsourcing in Healthcare Essay

2005 Words Nov 3rd, 2014 9 Pages
Outsourcing in Healthcare
Outsourcing in the health care industry continues to grow in an effort to cut the raising cost, to increase efficiency and quality of care by hospitals nationwide. As annual healthcare spending in United States hit $3.8 trillion (Munro, 2014), and aging population in America is increasing with the retirement of baby boomers and higher demands for patient care, the cost of healthcare will continue to grow. In response to increasing cost, many hospitals will employ outsourcing to save money and combat rising costs. This paper will examine outsourcing trends in healthcare.
Prevalence and Trends
Outsourcing is not a new trend in healthcare. In the past, medical centers successfully outsourced support services, such
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The United States healthcare IT outsourcing market is expected to grow by 42.8 percent in the next five years, according to a report by MarketsandMarkets (Punke, 2013). As reported by Healthcare IT News, the global healthcare IT outsourcing market is forecast to grow at annual growth rate of 7.6 percent to reach $50.4 billion by 2018 from $35 billion in 2013, according to the RnR Market Research report (Monegain, 2013). Demands for outsourcing IT in healthcare is fueled by rising healthcare costs and higher demands for quality of care (Monegain, 2013).
The growth is predicted for the top five most outsourced clinical services as well, such as anesthesia, emergency department staffing, dialysis services, diagnostic imaging and hospitalists staffing (Punke, 2013).
Literature Review of Successful Outsourcing An example of successful partnership with outsourced IT company is Jefferson Regional Medical Center in Pittsburgh, PA that was presented by Outsourcing Center in 2007 in their report. After being $16 million in debt in early 2000 and continuously loosing patient revenues, the hospital top management realized that IT was not a hospital’s core competency. Outsourcing a hospital’s IT systems and processes will not only reduce operational costs but also enable the hospital to bring in new technology cost-effectively on an ongoing basis (Goolsby, 2007). Successful partnership with Lexmark, St. Edward Mercy Medical Center and St. Joseph Mercy Health

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