CFOs, CIOs both favor outsourcing for technology, analytics, Black Book report says
Outsourcing offers providers immediate access to a fully-trained staff as well as a more recognizable return on investment, execs said.
Nearly three-quarters of health systems with more than 300 beds -- and 81 percent of providers with fewer than 300 beds -- are shifting their focus to IT outsourcing as bottom-line pressures force systems to choose outside vendors, according to a new Black Book Research survey of hospital finance and tech administrators.
"The reimbursement and population health challenges ahead to get paid may require several new applications," Brown said Doug Brown, managing partner of Black Book, in a statement. "The frank reality is that outdated, understaffed and failing current solutions will close marginally performing hospitals for good."
Outsourcing offers providers immediate access to a fully-trained staff and its technology as well as a more recognizable return on investment, respondents told Black Book, something that's especially important as healthcare organizations grow in complexity.
[Also: Overwhelming support for outsourcing revenue cycle management in healthcare]
"Most hospital leaders see no choice but to evaluate and leverage next-generation information and financial systems as an outsourced service in order to keep their organizations solvent and advancing technologically," Brown said.
Black Book surveyed 1,030 hospital chief information officers and IT leaders and 243 chief financial officers and financial executives from 266 hospitals, it said. It also surveyed business managers from 1,400 outpatient, alternative care and physician practices for their insights on technology and outsourcing services options.
About 600 of those surveyed are former and current users of IT outsourcing. And of these respondents, 90 percent reported they're at or near a full return on their investment within three months or less.
The healthcare industry has used IT outsourcing for decades, from administrative to clinical needs. But the push for more sophisticated electronic health records, analytics and population health management are fueling a the shift toward outsourcing to reduce costs, the Black Book survey claimed.
[Also: Survey: Healthcare finance execs expect to outsource collections]
Hospital executives also are no longer looking to vendors to make the case for outsourcing; they're taking the initiative to research the cost and benefits on their own, poll results show.
Additionally, 84 percent of respondents using the services stated they're satisfied with rendered services and their expectations have been exceeded.
Meanwhile, 83 percent of those who've used IT outsourcing agreed when the strategy didn't work it was due to reasons that include: choosing the wrong vendor, neglecting to prepare accurate budgets, unrealistic expectations and unmonitored performance for contracted outsourcing.
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Despite past failures, 86 percent of CFOs and 91 percent of CIOs are willing to restructure their organization to support a combination of outsourced providers and hospital staff, according to Black Book. And 68 percent of CIO respondents endorse software developments to support big data, predictive analytics and claims management for possible enhancements to the EHR systems.
"This pressure on bottom lines has again raised IT outsourcing as a panacea for cost control, but it is also a way to access needed software solutions and expertise in running these applications," Brown said.
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