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When outcomes matter: Outsourced providers versus outsourced partnerships | Lenny Castiglione


Outsourced partnerships can stabilize and improve operations, leading to a greater likelihood of achieving objectives due to their focus on driving better outcomes.

MTV co-founder Tom Freston once said, “Innovation is taking two things that exist and putting them together in a new way.”

As hospitals and health systems struggle with reducing costs and improving care in this turbulent environment, senior-level healthcare leaders would benefit from understanding creative combinations.

Lenny Castiglione

Lenny Castiglione

For some hospitals, 2022 may be a slow-walk recovery from the COVID-19 pandemic or more of the same.

Many of the factors affecting hospitals’ financial stability will not immediately change. While more patients may return to higher-margin outpatient care after several years of delay, hospitals will likely not see pre-Covid volume in the immediate future.

And the great migration out of health care by clinical staff is nearing crisis level. A recent Kaufman Hall survey found 94% of administrators report difficulties filling clinical vacancies and almost as many report staff burnout and early retirements. Desperate hospital administrators are raising salaries, offering overtime, and signing bonuses to keep their staff.

The Kaufman Hall report concludes, “Organizations are going to have to risk giving up some control and find partners who can perform some of their functions more effectively and efficiently.”

As someone who has worked on the provider, hospital, and payor sides of healthcare delivery, I appreciate the growing need for outsourcing, yet also understand the anxiety around the thought of “giving up control.”

That’s why I urge hospital administrators to consider the difference between outsourcing companies that provide clinical partnerships versus those that simply offer staffing solutions.

Outsourced partnerships can stabilize and improve operations, leading to more control and a greater likelihood of achieving objectives due to their focus on changing the course of quality to drive better outcomes.

Based on our experience at OB Hospitalist Group and reviewing the current healthcare environment, here are five key points to keep in mind.

First, administrators should look at their staffing challenges through a different lens: one of opportunity. For years, outsourcing was simply considered a way for hospitals to cut costs by turning over hiring and scheduling to an outside company. While true, modern partnerships not only alleviate administrative burdens, but also prevent burnout and shortages, provide value-added expertise, and improve outcomes. The right partner will work with hospital leaders to craft a customized solution that fits the needs of the organization and functions with integrity, reflecting the hospital’s values.

Second, the outsourcing partner must bring to the table specialized expertise in necessary clinical and departmental management. Meaningful cost-savings and improved outcomes can be derived from improved data reporting, benchmarking and analysis, standardization of activities, enhanced compliance, assumption of risk, and implementation of best practices and protocols. Most importantly, the partner should be fully integrated with clinical and administrative teams to participate in the longer-term planning and ensure annual objectives are met.

Third, partnership decisions should consider existing workload and stresses on the entire clinical care team. A reported 43% of nurses are considering leaving the field, and our recent national survey of OB clinicians found 58% of respondents named the nursing shortage as the biggest safety risk to the industry.

A comprehensive outsource partner will take a holistic look at the department, focusing on how a team-based approach can lead to better continuum of care for the patient and eliminate “scope creep” pressure on nurses, helping with retention and care-team satisfaction. Ask any OB nurse and I’m sure they will tell you that having the right OB hospitalist team alongside them in labor and delivery brings a heightened level of job satisfaction.

Fourth, when the decision is made to outsource a certain department and the contracts are in place, hospitals must make the transition seamless across the organization. Leadership must engage in communication before, during and after implementation. Change in any fast-paced workplace is challenging, and the key to ensuring a positive transition for clinical staff is transparency and trust. No organization will be able to solve all the critical problems that have been festering for years, but the commitment to the partnership for the long term will be evident in the progress made in the first year.

To realize this progress, quality and outcomes metrics must be embedded into the management contract. Senior-level managers should clearly articulate how the engagement will take place and take the lead in integrating physicians into the hospital’s physical and cultural environment. Total alignment and collaboration between site directors and departmental leadership is imperative, and new clinical team members must be welcomed as part of a “one-team” approach.

Fifth, patients should realize an improved care experience. Partnering is doing the best thing for quality care and outcomes. From the patient’s perspective, that includes everything from care rendered to doing the right thing for the patient financially (such as being an in-network provider).

Hospitals and healthcare organizations have risen to meet extraordinary challenges in the last two years. In the spirit of Tom Freston’s wisdom, they must continue to innovate with creative combinations even in the face of an uncertain operational future.

When implemented and managed correctly, outsourced partnerships allow hospital executives to focus on what they do best: driving clinical excellence.

Lenny Castiglione is CEO of Ob Hospitalist Group, the nation’s largest dedicated provider of obstetrical hospitalist services.

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