The challenges for healthcare practices are immense. Especially due to rising inflation and supply chain costs. The most difficult challenges to overcome are rising costs of products, high salaries, complex regulations that are continuously changing, and the constant demand to deliver exceptional patient care. So, survival is difficult in this situation.
To counter this and to stay competitive and grow, many practices are turning to business process outsourcing (BPO) as a strategic solution. But is it really a good solution or a strategic blunder?
That’s what we are going to discuss in this blog. We will discuss the key reasons behind this shift, backed by data from authentic studies. So, let’s start.
The Growing Administrative Burden in Healthcare
The healthcare industry has long struggled with complex administration, but recent trends have made survival even more difficult. Doctors and the practice staff now spend almost double the time on paperwork as they do with patients. This administrative burden is very inefficient and leads to a lot of unnecessary overhead costs.
Administrative tasks in healthcare generally fall into three categories: learning costs (understanding processes and requirements), compliance costs (completing paperwork and navigating bureaucracy), and psychological costs (stress and frustration). These burdens collectively represent a significant drain on resources.
That’s not all. The financial impact is equally concerning. Do you know that according to the National Library of Medicine, US workers spend the equivalent of $21.6 billion worth of time dealing with healthcare administration annually?
Medical practices are now realizing this and see these administrative issues as fundamental obstacles to growth and quality care. So, many practices are now trying to outsource their in-house operations to specialized third-party companies.
Key Areas Where Medical Practices Are Outsourcing
Medical Billing and Revenue Cycle Management
Revenue cycle management is among the hardest issues for healthcare providers to deal with. Naturally, it is also among the most frequently outsourced services. The complexity of medical billing, with its constantly evolving codes, payer requirements, and compliance regulations, makes it particularly suitable for BPO.
According to the MGMA data, outsourcing medical billing typically costs between 4 and 9% of collected revenue. This might sound like a lot at first. However, all practices find that outsourcing medical billing services results in higher collection rates, fewer denied claims, and faster payment cycles. This means a lot more revenue than you can make on your own.
The benefits are not only limited to financial gains, but also offer:
- Faster insurance payments: When billing specialists handle claims, reimbursements are typically received more quickly.
- Reduced billing errors: When you outsource your billing to specialized billing companies, you get fewer errors and a better first-pass ratio, which leads to higher revenue.
The benefits are enhanced even more for complex specialties like cardiology practices. Cardiology medical billing involves unique challenges, including complex procedure codes, intricate documentation requirements, and specialized knowledge of cardiovascular treatments.
Patient Care Support Services
Apart from billing, medical practices are now also outsourcing patient care services. Medical transcription holds the biggest chunk of patient care BPO. Other patient care services frequently outsourced include:
- Telehealth support: Managing virtual visits and related documentation
- Device monitoring: Tracking and analyzing data from remote monitoring devices
- Medical imaging: Processing and managing diagnostic images
Compelling Benefits of Healthcare BPO
Operational Excellence and Efficiency
As we have already discussed, the main benefits of business process outsourcing are cost reduction. That’s because in-house medical billing is not just limited to billing. Rather, you need investments in staffing, training, technology, and physical space. Outsourcing these functions can eliminate or reduce these overhead expenses.
However, the cost benefits are not limited to just better revenue, but they branch into:
- More consistent claim submission and processing
- Reduced claim denials and rejections
- Faster payment cycles
- Improved collection rates
Enhanced Focus on Core Mission
Perhaps the most significant benefit of healthcare BPO is that it allows medical practices to refocus on their core mission: providing quality patient care. When most of the billing and administrative work is outsourced, physicians and clinical staff are freed from burdens, and they can devote more time and attention to patients.
This refocusing has measurable benefits:
- Reduced physician burnout
- Improved patient satisfaction
- Enhanced quality of care
- Greater capacity for growth
Selecting the Right BPO Partner
Outsourcing is important, but selecting the right BPO partner is even more important. Practices should consider several factors when evaluating potential BPO providers:
- Specialization and Expertise
- Technology and Security
- Performance Metrics
- Communication and Transparency
- Scalability
Wrapping Up
Medical practices are facing a difficult situation nowadays. Rising costs and regulatory demands make it harder to grow, but business process outsourcing offers a lifeline. Outsourcing non-core functions to specialized BPO partners can reduce costs and workload, and help you focus on patient care.
The practices that embrace this approach will be best positioned to thrive in an era of unprecedented change and opportunity in healthcare delivery.
Also Read: How Mental Health Innovation Is Driving Growth in the Healthcare Business Sector
