Outsourcing of healthcare services is fast growing. In almost every country, healthcare providers are increasingly facing serious economic as well as social pressures that affect their services budgets and ultimately their ability to deliver quality health care services. Just like other businesses, healthcare providers also have to deal with pressures of industry competition.
In the world of today, achieving sustainability even in the healthcare sector means that a healthcare organisation has to do everything possible to remain competitive and attractive. This is why many hospitals today find outsourcing as an attractive approach for health care provision. Roberts et al. (2013) emphasize that a major undertaking that hospitals have to consider is outsourcing. Carr and Nanni (2009) define outsourcing as the assignment of core services or operations of an organisation to another organisation or vendor that specialises in that area of service or operation. Hsiao, Pai, and Chiu (2009) simply define outsourcing as contracting another company or person to perform a particular function. In most cases, hospitals do not outsource their core services because their core function or service is diagnosing and treating patients. To this end, healthcare organisations focus on achieving two primary goals, which are: delivering excellent patient care in terms of quality of healthcare service and maximizing staff efficiency. Not many healthcare organisations outsource their core functions though. In fact, core services, like medical care and nursing care, which involve direct patient care delivery are never outsourced (Martin, 1996). They mainly outsource some of their non-core operations so that they can concentrate on their core functions and services.
Guimaraes and de Carvalho (2011) investigated outsourcing in the healthcare sector in Germany, the US, the UK, Australia and New Zealand and Greece and realized that healthcare organisations outsource many activities/functions, including both clinical and non-clinical services. The clinical services outsourced are medical and technical services such as laboratory (pathology and microbiology), pharmacy, radiology, dialysis, magnetic resonance imaging, nuclear medicine, mental health services, physiotherapy and rehabilitation, speech and language therapy, occupational health therapy, medical tourism, and home delivered high-tech healthcare. Non-clinical services outsourced include information technology services (electronic health records (EHR) integration and management, medical billing services, and cloud hosting), facility management (cleaning, maintenance and laundry), sterilization, meals, patient transport, procurement, security, pest control, waste management, and so on. According to Hsiao et al. (2009), the most outsource functions in the healthcare sector are services related to information technology, medical billing, and support services in that order.
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