Outsourcing of Hospital Services

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Topics: Management, Hospital
Outsourcing of Hospital Services

Every business has to determine whether they should perform a service themselves in-house or outsource that particular service to an outside vendor. Facility services and managements are just two of the services that can be performed either in-house or outsourced to a vendor. The following graph shows the relationship between company size and potential need for outsourcing. As a company reaches 1,000-10,000 employees, the potential need for outsourcing drops dramatically. In organizations of this size, sufficient resources can usually be found in-house to perform a function, as well as having resources to handle backup coverage.
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At first glance, it seems counterintuitive for a company to outsource highly-visible or important services. Once you look at all the things a company must do to handle a service in-house (and keep it running continuously), it becomes more evident why many companies choose outsourcing versus operating a service in-house. If a service is provided in-house, a company must: • Locate a qualified employee • Train the employee • Pay employee wages and benefits • Provide the employee a physical workspace • Provide the required equipment and technology
With outsourcing, the company must only: • Locate a reliable and high-quality vendor • Pay the vendor for the services provided Trying to structure your business today can be a difficult task. With each decision that is made, there are many questions that should be asked first; What and how can we increase profits the most, What and how can we cut cost? How can I increase efficiency? How can I control capital cost?
To answer that question, some businesses choose to outsource parts of it business structure. With one definition of outsourcing being the process of contracting a third party, you then have to ask yourself how or where the work will be performed. Let’s suppose that one organization, such



References: Outsourcing Linen Services: Practice Greenhealth. Retrieved from http://cms.h2e-online.org/ee/waste-reduction/waste-minimization/textile/outsourcing (2006). Benefits of Outsourcing Facility Management: Ezine Articles. Retrieved from http://ezinearticles.com/?Benefits-of-Outsourcing-Facilities-Management&id=383048 Manko, David, (2004). Hospital Outsourcing Continues to Expand. Retrieved from http://rivkinradler.com/rivkinradler/Publications/newformat/200403manko.shtml In-house versus Outsourcing: KMA One. Retrieved from http://www.kmaone.com/inhouseoutsource.htm Hunt, Heather, (2010) Muller Steam Specialties

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