Key thoughts:
• There are many advantages to outsourcing services in hospitals and health systems
• The danger of outsourcing is loss of institutional identity and a shared profit margin
• Physician confidence in an institution depends on its consistency and performance
Outsourcing is commonly used by hospitals, including everything from housekeeping and food service, to physicians, nursing and equipment. The obvious benefits include 1) leveraging economies of scale by the service provider, 2) bringing in the newest technologies, 3) having a specialized niche in the workforce that can help establish best practice, 4) spreading the cost of running the hospital over each use, and 5) allowing for seasonal variations in needs and cash-flow. But a heavily outsourced environment is prone to fluidity and change that is not under the control of hospital leadership, especially with people. And physicians need a stable environment to be able to practice predictable medicine.
Institutional identity is also at risk. Consider the example of having a disproportionate number of visiting nurses in the OR. While they often invigorate the work environment with new ideas and a fresh work ethic, it is difficult to build a unique nursing culture with higher turn-over. Efforts are spent on-boarding, rather than mentoring and developing their careers within the institution. Coupling the higher cost of outsourcing with sharing the hospital profit margin, this leads to lost resources that would otherwise strengthen the institution. In another example, temporarily outsourcing hospital leadership may also provide an infusion of new ideas, but it ultimately only benefits the ultra-short-term and limits the time horizon of new projects.
Building physician confidence in a heavily outsourced hospital is paramount to their mutual future in the community. This can be done by
1) limiting turn-over in order to engage the collaborative spirit to enhance teams,
2) understanding the impact on hospital finances by outsourcing,
3) defining the duration or degree of outsourcing to fit within the strategic vision,
4) continuing to invest in mentorship, culture and program development, and
5) leadership setting ground rules to insure a cohesive effort and high performance.
Physician loyalty comes from trust and the ability to provide the best care for our patients. Responsible outsourcing while maintaining institutional identity can achieve both.
This column is part of a series devoted to clarifying and enhancing the physician-health system relationship. Dr. Ken Altman is Chief of Otolaryngology at Baylor St. Luke’s Medical Center in Houston, TX. He is also Secretary/Treasurer-Elect of the American Academy of Otolaryngology – HNS, and past-President of the American Laryngological Association.
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