How the Healthcare Outsourcing Market Reduces Medical Costs

Healthcare organizations tap into third-party service providers to streamline their back-office functions, including medical billing, claims processing, medical coding, and data management. The following article illustrates ways healthcare outsourcing helps reduce medical costs.
Healthcare Outsourcing Market Reduces Medical Costs- Featured Image _1962667570

Written by Joyce Ann Danieles



Are you struggling to provide quality patient care without spending more on back-office resources? Is your administrative work becoming an extra burden on your costs? Do your non-core functions overwhelm your primary projects and offerings?

If you answer yes to all three questions, consider healthcare business process outsourcing (BPO) to cut your non-clinical expenses. BPO firms provide an effective solution to your cost containment problems. 

This article covers how the healthcare outsourcing market helps businesses save money and keep growing.


Six Ways Healthcare Outsourcing Helps Reduce Medical Costs

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Healthcare organizations tap into third-party service providers to streamline their back-office functions. These non-core tasks include medical billing, claims processing, transcription, medical coding, and data management. Most healthcare providers outsource to cut operating expenses

The following list illustrates how healthcare outsourcing makes cost savings possible.


1. Reduce Human Resource (HR) Expenses

Many healthcare organizations seek support from BPO companies to avoid high labor costs for non-core functions. Although the back office does not contribute directly to revenue generation, it is crucial to balancing clinical and non-clinical workloads. 

The in-house administrative staff handles the paperwork to ensure primary healthcare projects run smoothly. A skilled workforce helps achieve that goal, but employee recruitment and retention require significant upfront capital. So medical providers rely on BPO companies to avoid the following HR activities:

  • Produce creative copy and posters for hiring campaigns
  • Screen and interview job applicants
  • Prepare competitive compensation and benefits packages
  • Hire and onboard selected candidates
  • Host frequent training, coaching, and upskilling sessions
  • Provide incentives for excellent work performance
  • Invest in comfortable workstations and advanced infrastructure
  • Conduct workforce engagement programs such as team building

Contractors also offer two options that allow client organizations to maximize the HR-focused advantages of healthcare BPO. These healthcare outsourcing market selections are available through long-term contracts or pay-as-you-need setups.

First, medical institutions can fully outsource their back office without worrying about recruitment. BPO companies already employ highly trained workers, hold regular training sessions, and provide reasonable income and work necessities. These workforce benefits encourage contractors to complete their tasks effectively and quickly. 

But suppose healthcare organizations want third-party teams to take over specific administrative duties during peak season. In that case, HR agencies can help. They have a roster of contract workers and freelancers ready to accept assignments. This type of service is payable per hour or upon project completion.


2. Provide Cost-efficient Advanced Technologies

Cost-efficient Advanced Technologies_

Whether software or hardware, modern technologies automate labor-intensive business processes. Many organizations do not regret investing in such solutions because they make work easier. But as these platforms continue to upgrade, the funding needed to keep pace also increases.

The healthcare outsourcing market offers different options to help medical providers reduce technology and infrastructure costs. As part of their healthcare BPO services, third-party providers deliver advanced solutions with two payment options:

  • Subscription. This option enables client organizations to receive a complete package of software capabilities through a signed contract. They can pay for the product and related support services through monthly or annual billing.
  • Pay-as-you-go. This payment model allows healthcare companies to pay only for software apps they use or share. The plan helps reduce license procurement costs and operating expenses.

Technology offerings from contractors also expedite administrative work. These solutions automate repetitive tasks such as data entry and management. Artificial intelligence (AI), machine learning (ML), robotic process automation (RPA), and cloud computing power the following platforms to ease healthcare delivery:

  • Electronic health records (EHRs)
  • Remote patient monitoring
  • Telemedicine or virtual care
  • Online patient portal
  • Medical coding platform


3. Reduce Maintenance Fees

BPO companies already provide modern software solutions and workstations. Hence, healthcare businesses do not need to buy equipment for their back-office functions. Hiring extra staff to maintain relevant resources is no longer needed, either. 

Medical providers experience lower back-office costs because the burden of monitoring, maintaining, and repairing equipment falls on the shoulders of the BPO company. They instead allocate the additional capital to keep primary healthcare technologies in good condition. 


4. Lower Real Estate Costs

Cutting real estate costs is another significant benefit of the healthcare outsourcing market. Because BPO companies employ administrative staff, they are in charge of providing workspaces or enabling remote work setups. Healthcare providers do not have to buy or lease office space. 

Cost savings have doubled or tripled since the COVID-19 pandemic in early 2020. Many businesses shifted to telecommuting due to strict health protocols and lockdowns. But as the public health crisis subsides, enterprises gradually return to their sites, while others fully adopt remote and hybrid work setups. 

Key findings from Owl Labs show a 24% increase in employees working remotely in 2022 compared to 2021. The demand for hybrid work also grew by 16%. In contrast, interest in in-house work decreased by 24%.

Healthcare workers are not the only ones who benefit from remote and hybrid work environments. Third-party service providers also use these work arrangements to save money on real estate costs. This capability allows them to deliver their products and services at more affordable rates.


5. Offer Integrated Solutions

Outsourcing medical BPO services lets healthcare businesses optimize integrated solutions at low costs. Businesses tend to first purchase single-capability software to meet their current needs. But managing multiple disconnected solutions swamp their teams eventually.

The retail-like software acquisition strategy is costly, despite its low demand for on-premises equipment and office space. Contractors help reduce such expenses by facilitating integration across their software offerings. Medical businesses no longer need to scrap existing solutions or buy new ones; they can connect applications using their providers’ platforms.

Regardless of their distance, vendors and medical organizations can share data and capabilities seamlessly with an integrated solution. The following methods allow this interoperability:

  • Application programming interfaces (APIs) require in-depth technical knowledge to enable custom integrations between software solutions. APIs provide large-scale integration options; users can combine systems with rarely used apps or apps not included in pre-built packages.
  • Custom apps allow businesses to manage their processes, employees, and customers. These platforms feature scalable and customizable tools to enable adjustments according to the users’ changing needs. Custom apps can smoothly function while integrating with other software solutions.


6. Strengthen Data Security

Strengthen Data Security

Similar to other sectors, the healthcare BPO industry encounters cyber threats. These issues are especially prevalent now because most transactions occur online. Even medical checkups and patient monitoring occur virtually.

To avoid high mitigation costs, third-party service providers implement strict security measures. They also use sophisticated software tools to protect sensitive business data and medical records from cyberattacks. The following approaches are also exercised to boost enterprise defense:

  • Data encryption translates information into a code so that only authorized people with a secret key can access it.
  • Multifactor authentication grants users access to a website or app after meticulously verifying their identity. Unique codes sent through email, calls, or text messages are some examples of this capability.
  • Virtual private networks apply encryption to enable secure access to remote computers over the internet.
  • Biometrics strengthens security by enabling individual recognition using distinctive physical characteristics such as fingerprints and facial features.
  • Antivirus scanning and mitigation detect and remove malware lurking in computer systems.
  • Data backup and recovery let users store and recover data from an external drive or network location, especially during emergencies.
  • Network and data monitoring allows users to track and identify potential system vulnerabilities and threats to perform early mitigation.

Given these security measures, medical providers do not need to worry about data protection when working with BPO contractors. By implementing such rigorous methods, healthcare businesses can rest assured their confidential data is safe from malicious actors.


The Bottom Line

Costs for labor, infrastructure, and office space are going up. As such, medical providers spend more to meet their back-office needs. These factors influence how organizations provide patient care and health services. The increased operating expenses also affect how healthcare businesses set medical costs.

Hiring providers in the healthcare outsourcing market address such gaps. These vendors help medical organizations streamline their non-core functions by offering affordable service packages. From HR to security factors, contractors provide different options to assist healthcare providers in reducing administrative costs while delivering a superb patient experience.

You can experience cost-reduction benefits when you tap into an award-winning service provider such as Unity Communications. The Inc. 5000 company provides healthcare BPO solutions to help healthcare organizations cut costs and boost patient care. Contact us today to learn more.

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At Unity Communications, our mission is to consistently assist our clients in growing and achieving success while providing superior leadership and customer service. Our team of over 350 onshore, nearshore, and offshore BPO agents caters to startup clients and Fortune 500 accounts alike. More than 50 U.S.-based companies leverage our expertise to run, grow, and scale their operations
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