As you seek to ensure your medical practice keeps pace with the competition, consider outsourcing as a potential weapon in your arsenal going forward. There are many ways to incorporate outsourcing into your practice, whether it involves billing, technology or lab services.

Outsourcing key aspects of practice management can enable you to better focus on providing excellent care to your patients. But before you go down that road, it’s wise to consider the pros and cons.

Costs and benefits

To be clear, you shouldn’t make any outsourcing decision willy-nilly. Perform a careful cost-benefit analysis.

For some tasks, the direct cost of outsourcing will be clearly less than that of performing the task in-house. But, for other tasks, the direct cost may be close to — or even exceed — that of handling the activity yourself. The question then is whether outsourcing the given task will improve results that positively affect the practice’s bottom line, reduce indirect costs or provide other valuable benefits.

An effective outside billing service or professional management firm may help increase the practice’s cash receipts and improve its handling of accounts receivable. Revenue that your practice generates from more effective billing and follow-up may easily exceed the incremental direct cost increase of an outside billing service.

In other situations, factors such as tax consequences, savings in capital expenditures or other financial trade-offs may make a significant difference. For instance, the cost of an outside billing service may be expensed on your practice’s income statement, but the cost of acquiring a better computerized billing system is generally a capital expense that the practice may have to depreciate over an extended period.

Commitment and expertise

Regardless of the task your practice is considering outsourcing, there are several factors that will help you determine the initial feasibility. First, look at the size of your practice and the level of internal expertise that’s needed to perform the task.

Second, consider your physicians’ interest and commitment to participating in management decisions and oversight of the task. And third, explore the availability of expert external sources that can perform the task well and at a competitive rate. Make sure you weigh all three of these factors in relation to your practice.

Improved service

Outsourcing offers several primary benefits: improved results from a provider specializing in a particular activity, a potential for reduced costs, and the elimination of responsibilities and hassles for physicians and administrators.

Diagnosis and testing

Outsourcing doesn’t necessarily have to be limited to administrative tasks. Specialty group practices performing diagnostic and therapeutic services may outsource not only the administrative responsibility and equipment maintenance, but also the technical component of those services. Niche companies that specialize in these areas can provide well-trained personnel.

A cardiology group may, for instance, choose to outsource its cardiac stress tests. This type of outsourcing can provide expansion opportunities — often without the risk, capital expense and lead time required to develop comparable in-house capabilities.

Be strategic

In some cases, keeping services in-house is more efficient and cost-effective. But in the increasingly niche-based and technology-dependent arena of medical care, finding external sources for some tasks can help your practice streamline and stay profitable.

In a world where medical practices face unique challenges in managing costs, staffing, and compliance, outsourcing certain functions can provide critical support and efficiency. Did you know Nisivoccia offers outsourced accounting, CFO, and advisory services specifically designed for healthcare practices? Our dedicated team manages the daily financial functions, so you can focus on patient care and strategic growth. Learn more about our Client Accounting and Advisory Services here.

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