Hospitals have opted to outsource different aspects of operations, whether it’s the ED, information technology, revenue cycle or other departments. They’d rather rely on the expertise of specialists than try to do something internally. They also set specific performance and efficiency goals as they look to save money and improve quality.
Concord Medical Group took over ED billing for North Texas Medical Center when it inherited the unit’s operations, which is typical in most outsourced ED arrangements.
After Community Hospital Corp. leased North Texas Medical Center from the Gainesville Hospital District in 2018, Concord met with local employers to learn about the payers they used and their billing processes, said Ashlie Boazman, executive vice president of operations at Concord.
“We were hearing concerns from the local community,” she said. “So we partnered with the local community to mitigate complaints about surprise bills.”
But some hospitals, particularly those that are financially unstable, outsource primarily for financial reasons. That is where they get into trouble, said Mark Armstrong, a shareholder at the consultancy LBMC.
“Sometimes outsourcing is a necessity,” Armstrong said, like when a hospital has trouble recruiting physicians, he added. “But it often doesn’t work if the main imperative is to save money—that is where you start to see quality problems.”
If that’s the case, staffing agencies can cut doctors’ pay, increasing turnover as well as credentialing problems when doctors aren’t in-network, Armstrong explained.
“But if you do it to maintain consistency and coordination, relying on firms’ more efficient scheduling processes and other expertise, it makes sense,” he said. “That can attract doctors.”
It’s common for some health systems to shop their ED outsourcing every three years, Fry said. Sometimes it’s related to contract changes; service or quality levels; recruitment; or revenue cycle, she said.
SCP and other staffing firms also take on consulting roles, overseeing hospitals’ employed doctors. SCP, for instance, takes on recruiting, training, setting clinical standards, managing performance, coding and billing, Fry said, noting that coding accuracy often improves.
“If a hospital employs doctors, those relationships to the hospital are the family jewels,” she said. “What it takes to get world-class performance out of one specialty takes a lot of expertise. A health system may not be able to cost-effectively do so in-house.”