Why are some health systems flip outsourcing models and selling their own services
Healthcare consultants say a few health systems are exploring new revenue streams as services for other providers by selling backend functions such as support, revenue cycle management or planning.
Tyler Giesting, director of healthcare M&A, noted that ongoing financial headwinds, such as undercompensation and rising labor costs, are pushing health systems to find new sources of income rather than traditional cost-cutting methods such as cutting jobs, closure of service lines and outsourcing.
Giesting explains that this approach to boosting revenue is really only available to large health systems that can provide backend functions internally – with scale, expertise and infrastructure that can do so at a high level. Although trends are still rare, he said interest is growing.
“We see some systems saying, ‘Well, we know we might be able to take that to some community or district or small hospitals looking for partners.” And I think there is a value proposition consistent with your area’s system or another health system that understands your patient population in a large outsourcing aggregator or a way to get to know your patient population. [managed services provider] Probably not because they were removed from another degree. ” said Gistin.
For example, a large health system might use its centralized call center to manage patient calls on behalf of an affiliated hospital network. Large systems can also sell their IT services to organizations using similar EHR settings, Giesting said.
For health systems that are selling their services, he said, allowances include more revenue, the potential to use too much capacity and the possibility of building closer relationships with partner systems.
He added that there are some risks, as this new product may diversify the provider’s core business.
“If you pay too much attention, you may put other things at risk. So, I think the 'crawl, walk, run' approach these groups will take when they decide to do so. They won't be allowed to sign up. They won't be able to do more than they think they can, and they will interact with them very carefully, but you can take some range, but if you can choose these models. Announce.
As for the health system that purchases the services, he explained, the provider gained access to expertise and was more familiar with its EHR configuration, perhaps with a more personalized service than the ones obtained from large non-personal vendors.
This “AS-A-Service” model is still new, but Giesting believes it could be an increasingly attractive strategy for health systems looking to turn their operational expertise into a competitive and profitable advantage.
Photo: Krongkaew, Getty Images
