What medical practices benefit most from outsourcing?
All kinds and sizes of practices contract with outsourcing firms, but the arrangement is particularly useful for smaller practices, Mr. Holder said. “Larger practices have the economies of scale that allow services to be in-house,” he said, “but smaller practices don’t have that opportunity.”
Dr. Hochman added that outsourcing firms can be hired part-time when the practice doesn’t have enough work for a full-time position. Alternatively, a full-time outsourcing firm can perform two or more separate tasks, such as scribing while handling prior authorizations, she said.
Outsourcing is also useful for new practices, Ms. Deabler said. “A new practice is not earning much money, so it has to have a bare-bones staff,” she said. “Billing, for example, should be contracted out, but it won’t cost that much, because the outsourcer typically charges by volume, and the volume in a new practice is low.”
Meanwhile, Mr. Holder said that the outsourcing of prior authorization work can particularly benefit specialty practices because they typically have a lot of prior authorizations to deal with.
The pros and cons of outsourcing
Experts with experience in outsourcing agree there are both pluses and minuses. “Practices with outsourced workers have less overhead, don’t have to deal with staff turnover, and costs may be lower than for in-house staff,” Ms. Deabler said. “However, you have limited control over outsourced workers and the practice may seem more anonymous to patients, so you need to consider this option very carefully.”
“With outsourcing, you lose control,” said John Machata, MD, a recently retired solo family physician in Wickford, R.I. “You’re trusting someone else to do work that you could do anyway.”
When he briefly considered outsourcing the practice’s billing many years ago, he found that billing companies wouldn’t handle bills that took a lot of work, such as getting in touch with the insurance company and explaining the patient’s situation. “They would only handle the easy bills, which the practice could do anyway,” he said.
However, he does think that answering services may be useful to outsource. “Patients are more inclined to call an anonymous entity than the doctor,” he said. When he gave patients his cell phone number, he said that some patients held off from calling because they didn’t want to bother him.
“Outsourced staff should be less expensive than in-house staff,” said Daniel Shay, an attorney at Gosfield & Associates in Philadelphia. “On the other hand, you are liable for the outsourcer’s mistakes. If your outsourced billing company is upcoding claims, your practice would be on the hook for repayment and penalties.”
Mr. Holder said: “An outsourcer ought to be more efficient at its chosen task because that is what they know how to do. This is a plus at a small practice, where the practice manager may need to do the billing, HR, IT, marketing, some legal work, and accounting,” he said. “No one person can do all of those things well.”
He added, however, “If you choose outsourcing and then decide you don’t like it, it’s difficult to unwind the arrangement. Staff that have been dismissed can’t easily be hired back, so it shouldn’t be an easy decision to make.”
Also, sometimes the staff at offshore outsourcing firms may have accents that are harder for patients to understand, and the offshore staff may not readily understand a U.S. caller. However, Dr. Hochman said that practices often have a chance to interview and select specific persons on the offshore team who best fit their needs.