Healthcare IT Outsourcing : An Overview

There is an unseen pressure compelling all small, mid, and large kinds of organizations to outsource. The rift shows no signs of slackening and why would it, after all, you get to save a hefty price as a major incentive. Of course, the cost is not just the only advantage here there are several other factors enabling companies to outsource IT including healthcare IT outsourcing such as access to innovation, increased speed to market, service quality, etc.

It may quite interest you to know that outsourcing and business process management are one of the fastest-growing sectors across the world. Also, you can do some extensive research on IT outsourcing companies where you will find dozen of resources and information on platforms like Clutch, Quora, GoodFirms, etc. So you see finding a reliable IT outsourcing company is not an issue, but understanding the concept well is.

Table of Content

  1. Know the Outsourcing Market
  2. Common Outsourcing Myths Debunked
  3. Healthcare IT Outsourcing Market
  4. Why Do Healthcare Units Need To Outsource IT?
  5. How is Outsourcing Beneficial for Healthcare Organizations?
  6. How to Choose the Right Outsourcing Partner?
  7. And That’s a Wrap!

Unfortunately, we have come across many businesses that simply tend to jump on the healthcare IT outsourcing bandwagon just because their competitors are doing it. Well, that should never be the case! So without any further ado, let’s begin with the basics!

1. Know the Outsourcing Market

Outsourcing is said when there is a transfer of responsibility for carrying out an activity (previously carried on internally) to an external service provider. The outsourced service providers in turn provide services back to the customer against agreed service levels for an agreed charge. In many outsourcing, the transfer of the activity involves the transfer of staff and assets.

Seems pretty tricky, right? Well, outsourcing is not a new concept. In fact, you might feel shocked knowing that several organizations are into their second or third generation of outsourcing. Earlier the financial sector and the motor, defense, and aerospace industries dominated the outsourcing market but not anymore. Several industries such as healthcare organizations, retail, education, media and entertainment now irrespective of their vertical have started outsourcing IT due to multiple benefits it offers:

First, outsourcing reduces IT costs through efficiencies and economies of scale on the part of the service provider

Second, access to world-class IT skills, experience, and resources

Third, relieve you from non-core business activities

Fourth, minimizing sizeable capital expenditure on IT infrastructure

Even though outsourcing is a widely used business practice, businesses are unable to decide whether they should build an app by hiring an in-house team of developers or should they outsource it. One of the reasons for this confusion lies in the myths prevailing about outsourcing.

2. Common Outsourcing Myths Debunked

Myth 1 – You lose Control over your project

This is a pretty common myth of the outsourcing market is that prevents most businesses and healthcare service providers from delving into outsourcing. Whereas the reality is, with healthcare IT outsourcing you will be able to evolve your space to the extent you wish to. More or less, you will be fully updated on the progress of the project and provide them with comprehensive reports.

Communication and collaboration tools help businesses to interact in real-time with the staff of the outsourcing services providers. And also exercises full control over the project.

Myth 2 – It reduces the existing workforce

You see bringing a portion of your operations offshore doesn’t have to mean a wholesale elimination of in-house positions. Outsourcing is definitely a viable option but most healthcare providers choose to outsource in order to supplement or make the most of the skilled talent they’ve already hired. This means that the outsourcing market is rising pretty high!

Information technology is an industry that has the potential to stop the churn, contain costs and create a better quality of life for the team you hired. And this will help you strategize the best ways to make your organizational assets grow. Adding a supportive remote component to an all-star team definitely doesn’t have to be about job cuts.

Myth 3 – Core functions shouldn’t be outsourced

Small businesses have been outsourcing accounting for decades, along with customer support and other auxiliary processes. And delegating software development might be great too. However, many companies especially in the healthcare industry are reluctant to outsource. The reasons for this are fear of loss of control, security breaches, or plain incompetence.

Do you know software development reluctant to outsource, fearing loss of control, security breaches, or plain incompetence? So having an experienced team and IT outsourcing models onboard can perform several advanced tasks such as:

  • Business analysis
  • Software architecture design
  • UI/UX Design
  • Frontend and backend development
  • Website or app overhaul
  • Project launch
  • Ongoing updates and technical support

3. Healthcare IT Outsourcing Market

There are many major aspects of global healthcare IT outsourcing. One of them is managed IT services to provide a healthcare organization with the best and right mix of scalability, security, flexibility, and reliability.

Most certainly, no other market or industry can better depict the advantages of Information technology than healthcare services. After all, this is the only industry that generates a large amount of data. This also means both players and providers of the healthcare sector are in constant need to access and electronically track patient data.

The data we are talking about here is extremely crucial after all, it is related to patients’ medical records, electronic monitoring systems, billing codes, and even patient care. And managing such tons of medical data without any technology is a foolish step to take especially in today’s fast-paced world. To manage this valuable information via electronic health systems, healthcare industries need to go with a strong healthcare IT outsourcing infrastructure. Today’s healthcare organizations are now increasingly relying on IT as one of the essential components of their operations.

Nonetheless, choosing such services is an indispensable solution so that healthcare organizations can remain focused on their core service areas, i.e. to enhance quality care and curtail cost.

4. Why Do Healthcare Units Need To Outsource IT?

Healthcare IT outsourcing always results in delivering a financially feasible solution for their worrisome troubles. The environment of healthcare operations is way complex. They need a structure that is capable of connecting every individual system and device that are in use by the healthcare unit. Now, what are the key drivers of this healthcare IT outsourcing market here?

  • Lack of in-house well-trained IT professionals
  • Need for improvement and efficiency
  • Shortage of right infrastructure or even funding that is needed for secured and better IT facilities
  • Need to cut down operational costs to take a step ahead and cut the cost of healthcare
  • Government’s focus to introduce and improve IT infrastructure in healthcare along with the eagerness to offer support that is needed for the right implementation
  • Gaining access to the top-class capabilities
  • Freeing up in-house resources to utilize them for other purposes

So what kind of technologies that a healthcare provider can outsource? Electronic Health Records, Hospital Information systems, Revenue Cycle Management, Pharmacy Information, Laboratory Information Systems, Clinical Decision Support, Hospital Management systems, e-Prescriptions, Hospital Inventory Management, and other important applications like PACS – Picture Archiving and Communication Systems and so forth.  Healthcare Management prefers to outsource these IT functions development.

5. How is Outsourcing Beneficial for Healthcare Organizations?

Time to explore how outsourcing IT requirements can prove to be extremely advantageous to healthcare organizations.

5.1 Benefits of Healthcare IT Outsourcing

  • Reduction in Operation Costs – Seems pretty obvious right? Well but this one is a hard point to avoid especially when talking about healthcare IT outsourcing. More and more hospitals and clinics can end up with immense savings. Healthcare service providers do not need to invest in equipment and resources to solve the problem. Many healthcare organizations are seeking outsourced solutions for cost savings, freeing up resources, and the use of healthcare professionals in patient care.
  • Medical Billing Services – Medical billing is something that needs to be precisely done. This is the main reason why providers tend to choose healthcare IT outsourcing. To be correct, access to detailed, coded charges has to be recorded and entered into the patient’s EMR. Make sure to choose outsourcing services that have an error rate of 0.01%.
  • Reduction in Staff Acquisition and Training Costs – The cost of acquiring excess staff and training them goes down to a great extent because an outsourcing partner handles a team of professionals on your behalf. Moreover, the Outsourcing services provider handles the acquisition, training, and retention of the staff, you don’t need to worry about it.
  • Access to Cutting-edge Solutions – Healthcare providers these days ensure using the best technologies to meet customer requirements. Your outsourcing partner can provide solutions in terms of application development and maintenance, enterprise application integration, and quality assurance and testing, amongst others.
  • Improved Security – As the documents are digitized, access to digital data is easy to define. This enhances data security and guards against data leaks. Outsourcing partners must ensure the security of patient data and clinical research of health organizations while complying with HIPAA regulations.

6. How to Choose the Right Outsourcing Partner?

The outsourcing market is growing by leaps and bounds and so should every industry across the globe and healthcare is not an exception. The first and foremost thing to consider in the outsourcing market is to look around for an outsourcing partner and not a vendor. Now what is the difference here, you may ask? A partner is not just merely an outsourcing service provider but works in favor of the healthcare provider. Also, ensure that they are committed to making your organization improve the business operations and committed to achieving goals.

6.1 Choosing an outsourcing partner

A vendor provides basic service delivery, e.g. answering your service desk calls for X dollars but a tech partner is committed to achieving much more – to proactively help you improve your IT operation. Your outsourcing partner looks around for new and better ways to continuously improve your users’ experience, the overall quality of performance, and cost-effectiveness. It works with your hospital to meet its vision of the future.

6.2 Choose a partner with experience in hospital IT outsourcing

The healthcare industry is filled with service firms who think they can handle hospital IT outsourcing but either don’t understand how it’s different from other industries. Knowledge of the urgent interconnections between IT, clinical care, and revenue cycle workflows is essential for a successful outsourcing relationship. Choosing a healthcare IT outsourcing company that carries deep experience with HIPAA requirements is a key issue, often forgotten in the heat of competitive bidding.

6.3 Choose someone you trust

The healthcare IT outsourcing market is pretty wide and that’s the reason why it is advisable to define services prior. The healthcare operating environment is too complex, and the future too fluid to lay out every potential situation in advance. Too often today, vendors and hospitals do not take the face-to-face time needed to establish trust and determine the potential for a synergistic long-term relationship. Buying software or hardware through email and telephone may work well enough, but a multi-year IT services contract located in the healthcare IT outsourcing market requires time and effort in establishing a trusted relationship between both parties’ senior leadership.

7. And That’s a Wrap!

So that’s all for now! I hope now you are ready to make your way into the healthcare IT outsourcing market. In case, if you are still in doubt or have any queries, feel free to mention that in the comment section below.

Itesh Sharma

Itesh Sharma is core member of Sales Department at TatvaSoft. He has got more than 6 years of experience in handling the task related to Customer Management and Project Management. Apart from his profession he also has keen interest in sharing the insight on different methodologies of software development.


  • Leave a message...

    1. Niyati

      This article perfectly explains why healthcare needs IT services and why outsourcing IT services can be beneficial for the healthcare industry. Outsourcing maximizes staff efficiency, productivity. and improve patient care by providing access to trained professionals and industry experts.

    2. Veer Rao

      By Outsourcing IT services healthcare providers can easily manage their patient data and medical records. It also helps the healthcare sector to analyze large amounts of data of clinical research and discover new medicines.

    3. Lana

      Technological advancement is a boon for the healthcare industry, especially involvement of IT in healthcare. This article explains this in detail but it is also important to focus on data security issues in healthcare.