One of the first things a health-care outsourcing sceptic will say is that you will lose control of key functions, to a partner which may be an unknown entity, be unaccountable or not have the key skills which the service provider has developed over many years.

But the degree of control a health- care provider has when a function is outsourced can actually be greater. A long established in-house department may have been toiling away in a poorly audited way for years without having to account for its methodology or business practices.

An outsourcing agreement brings what is going on out into the open and formalizes the tasks required – so bringing more control, not less.

This is a common and understandable concern – ‘losing ownership of your customers’. In outsourcing arrangement the service provider become an extension of your office. Popular areas for outsourcing are often customer facing, be they be Accounts Receivable or help desks services.

In terms of personal contact many of the people in day to day contact with customers after an outsourcing contract is agreed remain the same, as new services are adopted seamlessly providing you back end virtual support with the non core administrative support.

If customers are happier because customer service standards have risen then they will be more receptive to more ‘intimate’ cross selling or value-added propositions. If your outsourcing partner can provide a more effective or refined interface with customers, then an outsourcing contract is actually a better way of maintaining intimacy with the customer base.

It’s a natural sentiment that because a department’s work is being outsourced it has somehow failed and that its people have let the company down. But challenging this false assumption is all about good people management.

‘An outsourcing solution is in no way an indictment of how well a department or its employees have performed’

Mostly, the health-care outsourcing partner has access to assets and skills which enable economies of scale that the internal group could never match. Also, changing market conditions may have simply rendered the old way of doing things inappropriate.

And moving people out of the present repetitive tasks into more strategically core activities, including client facing, business development into a new outsourcing arrangement with a host of career and job satisfaction benefits they might not otherwise have enjoyed. Employee concerns about the introduction of outsourcing can be allayed by showing people the positive career development advantages of the new arrangements.

Far from letting your people down, outsourcing can and should people new opportunities. Career growth is actually, in most cases, greatly enhanced.

The opposite of the skepticism about losing control is the notion that once an outsourcing deal is in place that part of the business can be quietly forgotten about. Nothing could be further from the truth. The whole point about outsourcing is that it is a partnership. That means that there can be no question of turning its back and walking away.

An outsourcing arrangement needs constant input from the health care provider company. This does not mean contract interference and micro-management – otherwise there was no point in going down this route in the first place. But it does mean regular appraisal and auditing, and advice when market conditions or company strategy demand a change in emphasis.

Trust and inclusiveness mean that both halves of the partnership must maintain a good working relationship for the entire lifetime of the outsourcing arrangement. For a utility to wash its hands of a key business activity just because it has outsourced that function is a recipe for disaster.

If the need to address a business challenge presents itself suddenly, a health-care provider company may come under pressure to find an answer quickly. An outsourcing solution may be considered, but flounder on the misconception that it will take a year or longer to put in place, while an internal solution could be established more quickly.

It is true that outsourcing solutions can take a while to ‘nail down’. But today’s outsourcing partners can move quickly and effectively. With experience in working with healthcare service providers and an awareness of the speed that changes sometimes need to be enacted, organisations are well aware that taking a year to put an outsourcing partnership in place is sometimes just not an option. With the maturity of outsourcing vendors and new comparative selection processes, the effort and time to decide upon the strategy, pick the vendor and contract for the services is significantly reduced.

It is sometimes said that once an outsourcing arrangement is in place it is difficult to change the terms of that arrangement if market conditions change. It is also said that some organisations come up with low cost but inflexible bids to win outsourcing contracts and then use the inevitable changes to work up margins to target levels.

The counter to these arguments is to build into the arrangement from the start the necessary flexibility to allow for an appropriate response when, as is almost inevitable, action by a regulator, customer or investor means that the business scenario which presented itself when the outsourcing agreement was signed has altered. Do not approach an outsourcing agreement with the view that what is agreed at the outset as prevailing market conditions is set in stone.

The view here is that an outsourcer should first and foremost demonstrate an understanding of systems and business functions rather than an understanding of the industry.

In fact, the two go hand in hand. An understanding of a health- care provider service systems and working practices is a pre-requisite, but so too is knowledge of the healthcare sector. Health-Care providers in turn will respond positively to an outsourcing partner who can demonstrate an understanding of the particular pressures and challenges that the health-care sector face.

Many healthcare providers treat outsourcing as a commodity during their procurement process. They attempt to rigorously define a specification and then select a partner based solely on price. This encourages provider to bid low knowing that they will be able to use contract change notices to generate margin once they have their feet under the table.

The organisations who achieve the best value for money are those who focus on the value that an outsourcing contract can deliver.

Many utilities take the approach that outsourcing should only be applied to non-core areas of the business. Across other industry groups it is apparent that the world’s leading organisations apply outsourcing to a wide range of business activities including those which are at the heart of their business success.

Healthcare providers should consider outsourcing a wider range of the functions that they currently perform. The criteria for selection should be twofold; first that material value can be delivered by performing a certain function more effectively; and, second that an organization exists which is willing to underwrite that better performance in a partnership contract.

The last myth is the simplest – outsourcing solves the problem forever. It doesn’t. It is part of an overall strategic solution, is not appropriate everywhere and works well only if properly and attentively managed. Even the most enthusiastic supporters of outsourcing will agree that it is not a silver bullet that will solve every health care service provider’s challenge.

But it will succeed if the economics of the deal are the responsibility of both the vendor and the client, collaboration is viewed as a key priority and the strategy of outsourcing is integrated into the business strategy of the client.

Strip away the myths, and outsourcing can and should play an important role in driving forward the high performance healthcare provider company in the years to come.