As organizations move towards a strategy that focuses their effort on those aspects of its business model that are core to its strategy, they are increasingly finding that they cannot be bothered with the day to day issues that arise from non-core business functions.
A new study by the Gaertner Group revealed that more than 50% of the surveyed health insurers fully or partially outsource some of their back office business processes. This is up from 15% just a few years back.
Given the rate of change and the new challenges faced by the industry, the role of outsourcing within the healthcare value chain, is being further enhanced. A recent driver for outsourcing has also been HIPAA compliance. Many payor organizations and other ?covered entities? have taken this opportunity to outsource some of their IT/business processes and have the vendor meet compliance requirements. As organizations move towards a strategy that focuses their effort on those aspects of its business model that are core to its strategy, they are increasingly finding that they cannot be bothered with the day to day issues that arise from non-core business functions.
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This rationale has been the main driver for business process outsourcing growth. Business ?to determine operational impact that do not align with this objective are being subjected to scrutiny to determine operational impact and value addition. Outsourcing results in middle management having only oversight responsibilities and thus freeing up most of its time for strategic planning and execution.
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The flux in the industry has also attracted new players who bring with them totally different paradigm. They have a strong read on the future direction that this industry is moving in and have the flexibility to adapt quickly in a changing environment. It is their business model that gives them this ability to be flexible. Traditional payor organizations with their excess baggage are finding it difficult to be nimble and are feeling threatened. They are also not able to keep up with the pace of technological change and find that their legacy systems are just not up to the challenge.
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Given the inherent process intensive nature of the industry, outsourcing is and will become more and more important as plans/payor move towards concentrating their efforts on activities that help them differentiate from competition. These organizations are not only looking at pure solutions its infrastructure but are also pursuing BPO opportunities to help them become flexible and impact the bottom line.
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Outsourcing in the best sense allows companies to operate at a higher level of flexibility and at the same time see direct implications in cost reduction and revenue enhancement with a dramatic improvement in profitability.
Read related article:?How to Successfully Transition to Outsourcing
Source: http://northernworx.com/the-need-for-outsourcing-in-healthcare
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