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Updated by Charles Bystock on 02/27/2023
outsourcing healthcare

Managing and reducing costs in healthcare remains a top concern for most healthcare teams. Meanwhile, demand for health IT outsourcing is growing — and for good reason. Health IT outsourcing is often touted as a way to reduce costs and scale teams affordably. But does outsourcing healthcare IT really cut costs?

The short answer is yes — and you can be strategic about maximizing the benefits from your IT outsourcing provider while still reducing costs by keeping a few important things in mind.

The case for outsourcing IT

With 85% of healthcare providers and hospitals facing staffing shortages, outsourcing has become a necessary strategy for healthcare environments. In particular, IT outsourcing demand in healthcare is growing. Not only is it an efficient way to manage costs, but it also has the potential for the following benefits:

  • Scalable IT options. 54% of CIOs cited “flexible IT staffing support to ramp up or down with real-time project demands” as their biggest desired area for increased support. Outsourcing allows you to have flexible, scalable staffing that adjusts according to demand or current projects. This can be especially beneficial with assimilating any mergers and acquisitions.
  • Enhanced security for sensitive patient data. An outsourced IT team can provide advanced security well suited for the high compliance and privacy needs in healthcare.
  • Immediate access to new technology. With an outsourced team, you don’t have to purchase all the equipment, technology, and licenses needed to maintain your IT systems. Instead, you can access it all immediately through your provider.
  • Improved IT innovation. Whether you seek to outsource basic and maintenance-related IT needs so your internal team can focus on innovation or rely on an outsourced team of experts to help implement necessary innovations, outsourcing your IT team provides more room for innovation and growth.
  • Reduced costs. Bring in specific skills and resources you need without having to cover the overhead, training, hiring, and onboarding costs.

According to Deloitte, “The pandemic’s economic recession and health systems’ increasing costs provide the perfect storm to force health care systems to change their workforce, infrastructure models, and care delivery models to continue to meet quality and access targets but achieve this from a reduced cost base.” As a result, outsourcing IT — whether moving to the cloud, “as a service" offerings, partially or entirely shared support models, or other outsourcing models — provides cost savings while also reducing risk and adding value to operations. This range of options serves as your lever in balancing the cost savings.

Key areas for healthcare IT outsourcing

When it comes to deciding what to outsource in healthcare IT, there are two key areas to consider: skilled IT talent and extensive experience and innovation.

outsourcing healthcare

Skilled IT talent

According to a recent survey by Stoltenberg Consulting, 65% of hospitals and health systems surveyed cited “retaining and budgeting for qualified IT resources” as one of their most significant IT operational concerns. If this is a concern for you, outsourcing for skilled talent gives you immediate access to a team of IT professionals that can scale according to your needs and alleviate uncontrolled labor costs and demands.

Extensive experience and innovation

The importance of IT in healthcare is increasing — with even greater demand since the pandemic for telehealth, automation, and artificial intelligence (AI). The extensive experience of IT outsourcing providers gives you access to necessary innovation. This is especially important for smaller hospitals, which otherwise may struggle to staff in-house teams.

For larger health organizations, IT outsourcing can provide support for routine, monotonous IT tasks and maintenance to provide room for in-house teams to innovate and implement new developments. With 46% of surveyed healthcare executives surveyed by AMN Healthcare reporting that burnout among staff is a challenge that contributes to staffing shortages, utilizing an outsourced IT team can provide necessary support to both clinical and nonclinical teams to effectively counter burnout.

The future of hospital IT outsourcing

Technology is increasingly being used to reduce labor costs and staffing shortage problems. For example:

  • More automation can save clinicians time on reporting and administrative tasks
  • AI and machine learning support diagnostics, testing, and more — which can improve patient care while decreasing clinicians’ demands
  • Scheduling through AI allows teams to analyze labor demands, open beds, and available staffing to create more sustainable schedules and allocate resources more effectively
  • Advanced digital technology can enhance telecommunication and increase telehealth options

As CIO put it, “IT outsourcing is no longer just a lever for faster, cheaper, technology services, but a key partner in driving business growth, improved customer experiences, and competitive advantage.”

Going forward, healthcare environments will need to focus on innovation and digital transformation to reduce costs while also improving patient care and caregiver experiences — and outsourcing is a key way to do so. With the health IT outsourcing market expected to grow annually at a CAGR of around 6.60% between 2022 and 2028, now is an ideal time to find a long-term healthcare IT outsourcing partner.

Are you ready to reduce costs and improve AI and digital transformation across your health organization? Partner with Windsor Group Sourcing Advisory, with their unique engagement model, to give your team the support they need.