Outsourcing’s Role in the Delicate Balancing Act Between Growing and Shrinking | Article

balancing outsourcingImagine a seesaw in a child’s playground. You know what happens if the child at one end is much heavier than the child at the other end – the lightest one ends up in the air, tilted far forward, hanging on to the handlebar so as not to fall off. At the same time, the heavier child would like to be up in the air, squealing with delight but, instead, is stuck at ground level.

The same predicament happens when a company’s management team decides it wants to grow the business. The time and effort involved in continually having to find new, high-caliber people to hire and train, while focusing on not shrinking the quality of service, is a heavy demand for a growing business. It’s a balance that’s difficult and costly to achieve, and it keeps some companies grounded.

Others, like Precision Practice Management, Inc. (Precision), recognize that outsourcing truly can make a difference in stepping forward with growth initiatives.

Having a Vision

Basically a one-stop shop helping physicians with their back-office processes, Precision’s services include medical practice billing, software hosting for managing a medical practice, workflow management services and document imaging. When the company wanted to grow, its president, Mike Barnell, recognized they would have to remove the roadblock of hiring new employees.

“Finding, hiring and training new people to do medical billing work always has been a serious drain on our company’s resources,” states Barnell. “Good people in our line of work are hard to find, especially considering what physicians are willing to pay for our services.”

Medical billing services require a great deal of time and effort for each of Precision’s physician clients, and the firm’s 30 percent growth rate per year had created a backlog of work because of difficulty in finding the right people to do the work. Barnell had a vision that offshore resources might get his company over the hurdle of quickly growing its business if the offshore option would quickly increase the number of quality people devoted to the work. “We wanted to get better results for our clients than we could achieve under our traditional business model, given that model’s higher cost structure,” recalls Barnell. “Our concern, though, was to avoid degrading the quality of our service by outsourcing.”

Outsourcing to Vision

In November 2001, after extensive due diligence and evaluation of three medical billing service providers in India, Precision awarded its work to Vision Healthsource, Inc. (Vision). The two companies’ interests definitely were aligned. Satish Ponnaiya, vice president of client services at Vision, says his company doesn’t want clients to turn to them just to save costs. “We want people who look at outsourcing as an opportunity to focus on improving their efficiencies through staffing ratios, technology, service delivery methods, and other process improvements. Our clients are companies that want to grow and are using us for that objective. And, as they grow, we grow with them.”

New clients, like Precision, need only Internet capability and a scanner for implementation of Vision’s services. The offshore provider spends three to four days on its clients’ sites, studying their billing processes, systems and backlog. After training the staff in India as to the work for a new client, the parties begin a 30-day pilot phase, during which the client evaluates Vision’s services. Once comfortable, they finalize the contract.

Barnell’s concerns over quality of work performed by Vision were eliminated in talking with other companies using Vision’s services, as well as the pilot phase, the service level agreement guarantees and the offshore quality assurance team. The 95 percent accuracy guarantee usually comes in at 98-99 percent, with a guaranteed 48-hour turnaround (or 12 hours, for a higher price).

He also can go online and log in to the Vision Information Management System and have total visibility with what’s happening to all of Precision’s work at any moment. “When it comes to offshore, people want to know what’s happening on our side,” comments Ponnaiya. “We are not just a labor replacement – we are also building efficiencies into the process, so we’ve built workflow management software, and it basically tracks all the work the client sends us, from the time it leaves their office to the time it gets back into their hands.”

Vision also has built Web-enabled knowledge management software that houses insurance companies’ business rules. Vision’s clients have access to the program and can add new data, achieving immediate knowledge transfer to Vision’s staff.

HIPAA Compliance

Recognizing that its clients have concerns about whether processing from India falls under the jurisdiction of American law, Vision takes a very strong approach to its standards of compliance with U.S. healthcare industry regulations and even surpasses what many American healthcare providers have achieved thus far.

Beyond meeting the encryption and other technology requirements for secure data, Vision’s internal policies ensure no unauthorized personnel can gain access to their facilities (or even to certain areas like the networking room) and that no one sees information other than what they need to see. Employees receive 120 hours’ initial training on healthcare compliance, risks and privacy laws, followed by an additional four hours each month.

“So we have a system for new direction and improvement, and that’s a continuous process,” Ponnaiya explains. We also have internal monitoring and a quality management department that looks at our processes and makes sure that the processes are being followed. That is followed by people in the U.S. who come to India annually to check our compliance.”

Vision Healthsource Fulfills Precision’s Vision

As Precision shifts its work to Vision, Barnell says his company is handling the growth of future business, and their employees are now “spending more of their time managing the higher end aspects of the business.” His goal is to triple or quadruple the size of the business over the next three to four years, maintaining the same number of employees in the US, mixed with an increasing number of Indian resources.

“Now we devote more people to each client, per dollar of overhead, than we could afford to before,” he explains. “And because the quality of Vision’s employees are equal to our own, we are doing a better job for our clients.”

Lessons from the Outsourcing Journal:

  • The time and effort involved in continually having to find new, high-caliber people to hire and train, while focusing on not shrinking the quality of service, is a balance that’s difficult and costly to achieve without outsourcing.
  • When outsourcing a back-office process to an offshore provider, choose a company that provides online real-time access to reporting features that allow the customer to view the status of its work.
  • When outsourcing healthcare processes to an offshore provider, ensure its HIPAA and other regulatory compliance is proactive, comprehensive and monitored by a U.S. authority.


Post a Comment

Your email address will not be published.

( required )

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>