It has become the mantra of healthcare executives around the country.

Yet while organizations consider how to do more with less, they must
also continue to meet stringent patient safety standards and boost
patient satisfaction and outcomes creating a tall order to fill.
Multiple factors have increased the focus on healthcare quality. Rising
costs have led the government as well as health insurers to look more
closely at the care they pay for. Increased consumer consciousness
has made patients more aware and more likely to demand higher
quality care. And finally, growing social networks can quickly turn
isolated instances of dissatisfaction into networks of disgruntlement.

medspeed.com

This tumultuous environment is requiring healthcare organizations to

be more nimble than ever. A significant way for them to accomplish
this goal while increasing the focus on quality and streamlining is
through the outsourcing of services, particularly services that are not
the core competency of healthcare systems.

To Outsource or Insource:
Todays Healthcare Conundrum

1 The Outsourcing Institute, Executive Survey: The Outsourcing Institutes Annual Survey of
Outsourcing End Users, Top 10 Reasons Companies Outsource, 1998.
2 Global Strategies for Outsourcing Support Services: Impacting Cost, Quality and Access,
Aramark Healtchare, (date).
3 American Hospital Association, Fast Facts on US Hospitals, 2012.
4 Billians HealthData, 2012.
5 Essential Link of Non-Clinical Services to Quality Care, Aramark Healthcare
6 International Association of Outsourcing Professionals, State of Industry Survey, May 2010.

2012 MedSpeed LLC. All Rights Reserved.

W H I T E PA P E R

Do more with less.

It has become the mantra of healthcare executives around the country.

Yet while organizations consider how to do more with less, they must
also continue to meet stringent patient safety standards and boost
patient satisfaction and outcomes creating a tall order to fill.
Multiple factors have increased the focus on healthcare quality. Rising
costs have led the government as well as health insurers to look more
closely at the care they pay for. Increased consumer consciousness
has made patients more aware and more likely to demand higher
quality care. And finally, growing social networks can quickly turn
isolated instances of dissatisfaction into networks of disgruntlement.

medspeed.com

This tumultuous environment is requiring healthcare organizations to

be more nimble than ever. A significant way for them to accomplish
this goal while increasing the focus on quality and streamlining is
through the outsourcing of services, particularly services that are not
the core competency of healthcare systems.

To Outsource
or Do it Internally?
Todays Healthcare Conundrum

1 The Outsourcing Institute, Executive Survey: The Outsourcing Institutes Annual Survey of
Outsourcing End Users, Top 10 Reasons Companies Outsource, 1998.
2 Global Strategies for Outsourcing Support Services: Impacting Cost, Quality and Access,
Aramark Healtchare, (date).
3 American Hospital Association, Fast Facts on US Hospitals, 2012.
4 Billians HealthData, 2012.
5 Essential Link of Non-Clinical Services to Quality Care, Aramark Healthcare
6 International Association of Outsourcing Professionals, State of Industry Survey, May 2010.

2012 MedSpeed LLC. All Rights Reserved.

W H I T E PA P E R

Do more with less.

Why outsource certain functions?

According to the Outsourcing Institute, the top reasons
companies outsource1 are:
1. Reduce and control operating costs
2. Improve company focus
3. Gain access to world-class capabilities
4. Free internal resources for other purposes
5. Resources are not available internally
6. Accelerate reengineering benefits
7. Function difficult to manage or out of control
8. Make capital funds available
9. Share risks
10. Cash infusion

How do you know when outsourcing is right for you?

There is a clear difference between a strategic decision
to outsource and outsourcing for the sake of outsourcing.
For some services (particularly those that are core to your
business) outsourcing is not the answer. Before deciding if
outsourcing is right for your organization, consider two things:
1. Make sure that outsourcing fits your goals: Evaluate and
determine if outsourcing a certain function will support and
help meet your organizations business/strategic objectives
and priorities better than performing that function internally.
2. Determine that there are organizations to perform that
function: Ascertain that there are organizations available
to take on that particular function at quality and efficiency
levels equal to or greater than what you can achieve.
The primary argument against outsourcing is the loss of
control over processes and outcomes when you put part of
your organization in the hands of an outsider. To be sure, there
can be risks with outside providers, which is why choosing
a high performing outsourcing partner is so important.
Management teams want reassurance that they are partnering
with an outsourcing specialist that can be trusted and, more
importantly, can adapt to the organizations growing and
changing needs.

Outsourcing has been around for as long as work

specialization has existed. And whatever lingering concerns
there may be regarding loss of control over processes, there
are frequently more reasons in favor of outsourcing. A few
include:
Specialization A third party service provider is an expert
in the specialized service provided.
Quality Because of specialization, the services provided
by a third party reflect their core business competency
and all of their resources will be focused on delivering the
highest quality service.
Staffing Through outsourcing a non-core function,
organizations can avoid the human resource challenges
associated with recruiting, hiring and other personnel
issues.
Cost savings Many costs typically associated with an
in-house solution, such as capital and human resources
expenditures and liability, may be avoided by partnering
with an outside service provider.

Cost-savings are a driver, but a strategic approach is

increasingly important. A shift in the nature of outsourcing
has moved from one more strictly focused on cost savings
(transactional mentality) to one with a more strategic focus
(partnership mentality).
Because of the ever-increasing pressures that healthcare
executives face, many recognize and acknowledge the value
of forming a long-term strategic relationship with a trusted
outsourcing partner. These future context partnerships are
characterized by long-term timeframes, mutual risk, the ability
to tolerate change and experimentation and the involvement of
the senior management of both organizations.5

A shift in the nature of outsourcing has

moved from one more strictly focused on cost
savings to one with a more strategic focus.

Centralization and systemization

A trend in service delivery within the current hospital business
climate in the U.S. is driving the systemization of services.
Hospital systems with many locations are seeking to leverage
outsourcing partnerships across many hospitals to help drive
predictable outcomes and cost efficiencies. The desired state
is more of an integrated organization, with both horizontal and
vertical integration across all hospitals to achieve efficiencies.2
According to the American Hospital Association,3 there
are 5,754 registered hospitals in the U.S. and there are
more than 500 healthcare systems.4 With increased system
consolidation, the number of hospitals and other facilities in
a given healthcare system is increasing. These systems in
turn are trying to centralize more through their supply chain
functions.
Leading healthcare organizations are proactively seeking
outsourced services. Organizations or healthcare systems
that are focused exclusively on short-term, tactical solutions
miss the point. Success is a long-term proposition. The key to
that success is the ability to leverage organizational strengths
while continuing to make incremental improvements for overall
effectiveness and efficiency.

Hospital systems with many locations are seeking to

leverage outsourcing partnerships across many hospitals
to help drive predictable outcomes and cost efficiencies.

Outsourcing is strategic and should involve

senior management
A 2010 survey conducted by the International Association of
Outsourcing Professionals (IAOP),6 across multiple industries,
found that organizations expect to continue to increase the
size and scope of their outsourcing programs. The survey also
found that outsourcing programs are not only expanding, but
more importantly, are becoming more strategic.
The IAOP survey goes on to conclude: this increase in the
strategic importance of outsourcing is reflected in both a shift
in the reasons that companies are outsourcing and in the level
of senior executive involvement. According to the survey, twothirds of respondents indicated that senior executives were
increasingly more involved in outsourcing, compared to only
13 percent who said that senior executives were less involved.

A case example:
There are likely many functions within your system that may
be better served through outsourcing. The authors of this
whitepaper specialize in healthcare transportation so that
is the example given below. Note however, that much of the
information below is relevant for other functional areas within
healthcare as well.

How outsourcing healthcare transportation can

support strategic objectives
Patient and business critical materials, such as patient
specimens, pharmaceuticals, supplies and medical records,
are transported to and from multiple touch points within
healthcare organizations. The transport of these items is
operationally crucial because nearly everything that occurs
within a given health system depends on it.

2. Technology cost avoidance

Elements of technology, notably scanning and tracking,
are progressively becoming the industry norm. An
outsourced transportation companys technology
platform not only ensures that you are using the most
up-to-date technology but, more importantly, it relieves
your organization of that investment burden.

Yet, unfortunately, healthcare organizations often make

department-level transportation decisions. Even with the best
of intentions, the result can be overlapping internal and thirdparty courier services and disconnected networks that can
cause delays, increase loss and affect the chain and quality
of care.

3. Variable pricing
With an internal transportation department, added
stops can mean additional employee(s) and vehicle(s).
Conversely, reduced stops can mean costly down time
or layoffs. A third-party transportation specialist should
be able to provide you with a variable pricing model,
which allows for incremental costs for added work, as
well as cost relief for reduced work.

Minimal management attention is paid to these internally run

or third-party delivery services, limiting quality control and/
or providing insufficient tools for maximum performance, yet
healthcare transportation can drive impactful value.

4. Return on released capital

If capital is not tied up in vehicles and other assets
related to transportation, it is instead available to
be more productively applied in other areas of an
organization.

Direct value
As described in the previous section, department-level
decision making can lead to overlap and disconnection. A
healthcare transportation specialist can offer several points of
direct value that cannot be easily achieved internally:

5. Error reduction
Errors can be costly, both financially and to a systems
image and reputation. A healthcare transportation
operation with updated technology can help reduce
errors and provide associated cost savings.

1. Scheduled cost savings

A healthcare transportation specialist can examine a
health systems needs impartially and design a
scheduled network that meets its needs in the most
affordable manner possible.

6. Management liberation
With internal transportation, managers in each
department of a healthcare organization may spend
time supervising employees; overseeing capital
infrastructure, such as fleet, technology and equipment;
designing routes and tracking down lost or delayed
items. Partnering with an expert lifts this burden
so that these employees can focus on their core
responsibilities.

2. On-demand cost savings

An effectively built transportation operation can satisfy
the majority of a healthcare organizations needs
though scheduled service, reducing the need for
expensive on-demand service, thus removing waste.

Beyond savings: productivity and scalability

3. Supply chain efficiency through integration and

centralization
More than just delivering items from points A to B,
a well designed network can serve as a backbone
for centralization and integration of many functions,
providing ongoing value and savings.

Healthcare transportation has strategic bearing on a health

system and can unify an entire network. By removing the
need to oversee transportation logistics and responsibilities,
healthcare organizations can return to their area of expertise
and focus on providing quality care and improving their
patients experiences.

Indirect value
In addition to the direct value a specialized healthcare
transportation initiative can yield, there are also indirect value
points that many healthcare organizations may overlook. These
can be just as vital, while also contributing to care quality.

A strong, centrally managed transportation function facilitates

the complementary centralization and leveragability of related
departments (lab, mail, supplies, etc.), which can enable
future strategic opportunities and growth. By converting
legacy operations into a centralized and consolidated network,
healthcare organizations can increase efficiency and control,
reduce waste and overlap and create a transportation system
that is far less costly and easier to manage.

1. Liability transfer
Both employees and vehicles on the road carry liability.
If you partner with an outside healthcare transportation
specialist, these areas of exposure are transferred from
your organization to theirs.

To OutSource or Not
How to Tell if a Function
Can/Should Be Outsourced
Many times, healthcare executives
do not know if a function can or
should be outsourced as a way to
make operations more efficient and
streamlined and/or reduce costs
and improve quality. Below is a brief
checklist. If you answer yes to any of
the below questions, outsourcing may
be a good option for you.

Is the function outside of your core

competency?

Is outsourcing aligned with your

business objectives/criteria?

Can a specialist provide better

quality or more efficient service?

Will outsourcing free up my internal

resources without jeopardizing
quality?

Will outsourcing provide me

access to world-class capabilities,
such as technology, without having
to make a capital expenditure?

Why outsource certain functions?

According to the Outsourcing Institute, the top reasons
companies outsource1 are:
1. Reduce and control operating costs
2. Improve company focus
3. Gain access to world-class capabilities
4. Free internal resources for other purposes
5. Resources are not available internally
6. Accelerate reengineering benefits
7. Function difficult to manage or out of control
8. Make capital funds available
9. Share risks
10. Cash infusion

How do you know when outsourcing is right for you?

There is a clear difference between a strategic decision
to outsource and outsourcing for the sake of outsourcing.
For some services (particularly those that are core to your
business) outsourcing is not the answer. Before deciding if
outsourcing is right for your organization, consider two things:
1. Make sure that outsourcing fits your goals: Evaluate and
determine if outsourcing a certain function will support and
help meet your organizations business/strategic objectives
and priorities better than performing that function internally.
2. Determine that there are organizations to perform that
function: Ascertain that there are organizations available
to take on that particular function at quality and efficiency
levels equal to or greater than what you can achieve.
The primary argument against outsourcing is the loss of
control over processes and outcomes when you put part of
your organization in the hands of an outsider. To be sure, there
can be risks with outside providers, which is why choosing
a high performing outsourcing partner is so important.
Management teams want reassurance that they are partnering
with an outsourcing specialist that can be trusted and, more
importantly, can adapt to the organizations growing and
changing needs.

Outsourcing has been around for as long as work

specialization has existed. And whatever lingering concerns
there may be regarding loss of control over processes, there
are frequently more reasons in favor of outsourcing. A few
include:
Specialization A third party service provider is an expert
in the specialized service provided.
Quality Because of specialization, the services provided
by a third party reflect their core business competency
and all of their resources will be focused on delivering the
highest quality service.
Staffing Through outsourcing a non-core function,
organizations can avoid the human resource challenges
associated with recruiting, hiring and other personnel
issues.
Cost savings Many costs typically associated with an
in-house solution, such as capital and human resources
expenditures and liability, may be avoided by partnering
with an outside service provider.

Cost-savings are a driver, but a strategic approach is

increasingly important. A shift in the nature of outsourcing
has moved from one more strictly focused on cost savings
(transactional mentality) to one with a more strategic focus
(partnership mentality).
Because of the ever-increasing pressures that healthcare
executives face, many recognize and acknowledge the value
of forming a long-term strategic relationship with a trusted
outsourcing partner. These future context partnerships are
characterized by long-term timeframes, mutual risk, the ability
to tolerate change and experimentation and the involvement of
the senior management of both organizations.5

A shift in the nature of outsourcing has

moved from one more strictly focused on cost
savings to one with a more strategic focus.

Centralization and systemization

A trend in service delivery within the current hospital business
climate in the U.S. is driving the systemization of services.
Hospital systems with many locations are seeking to leverage
outsourcing partnerships across many hospitals to help drive
predictable outcomes and cost efficiencies. The desired state
is more of an integrated organization, with both horizontal and
vertical integration across all hospitals to achieve efficiencies.2
According to the American Hospital Association,3 there
are 5,754 registered hospitals in the U.S. and there are
more than 500 healthcare systems.4 With increased system
consolidation, the number of hospitals and other facilities in
a given healthcare system is increasing. These systems in
turn are trying to centralize more through their supply chain
functions.
Leading healthcare organizations are proactively seeking
outsourced services. Organizations or healthcare systems
that are focused exclusively on short-term, tactical solutions
miss the point. Success is a long-term proposition. The key to
that success is the ability to leverage organizational strengths
while continuing to make incremental improvements for overall
effectiveness and efficiency.

Hospital systems with many locations are seeking to

leverage outsourcing partnerships across many hospitals
to help drive predictable outcomes and cost efficiencies.

Outsourcing is strategic and should involve

senior management
A 2010 survey conducted by the International Association of
Outsourcing Professionals (IAOP),6 across multiple industries,
found that organizations expect to continue to increase the
size and scope of their outsourcing programs. The survey also
found that outsourcing programs are not only expanding, but
more importantly, are becoming more strategic.
The IAOP survey goes on to conclude: this increase in the
strategic importance of outsourcing is reflected in both a shift
in the reasons that companies are outsourcing and in the level
of senior executive involvement. According to the survey, twothirds of respondents indicated that senior executives were
increasingly more involved in outsourcing, compared to only
13 percent who said that senior executives were less involved.

A case example: How outsourcing healthcare

transportation can support strategic objectives
There are likely many functions within your system that may
be better served through outsourcing. The authors of this
whitepaper specialize in healthcare transportation so that is
the example given. Note however, that much of the information
is relevant for other functional areas within healthcare as well.

Patient and business critical materials, such as patient

specimens, pharmaceuticals, supplies and medical records,
are transported to and from multiple touch points within
healthcare organizations. The transport of these items is
operationally crucial because nearly everything that occurs
within a given health system depends on it.

2. Technology cost avoidance

Elements of technology, notably scanning and tracking,
are progressively becoming the industry norm. An
outsourced transportation companys technology
platform not only ensures that you are using the most
up-to-date technology but, more importantly, it relieves
your organization of that investment burden.

Yet, unfortunately, healthcare organizations often make

department-level transportation decisions. Even with the best
of intentions, the result can be overlapping internal and thirdparty courier services and disconnected networks that can
cause delays, increase loss and affect the chain and quality
of care.

3. Variable pricing
With an internal transportation department, added
stops can mean additional employee(s) and vehicle(s).
Conversely, reduced stops can mean costly down time
or layoffs. A third-party transportation specialist should
be able to provide you with a variable pricing model,
which allows for incremental costs for added work, as
well as cost relief for reduced work.

Minimal management attention is paid to these internally run

or third-party delivery services, limiting quality control and/
or providing insufficient tools for maximum performance, yet
healthcare transportation can drive impactful value.

Direct value
As described in the previous section, department-level
decision making can lead to overlap and disconnection. A
healthcare transportation specialist can offer several points of
direct value that cannot be easily achieved internally:
1. Scheduled cost savings
A healthcare transportation specialist can examine a
health systems needs impartially and design a
scheduled network that meets its needs in the most
affordable manner possible.
2. On-demand cost savings
An effectively built transportation operation can satisfy
the majority of a healthcare organizations needs
though scheduled service, reducing the need for
expensive on-demand service, thus removing waste.
3. Supply chain efficiency through integration and
centralization
More than just delivering items from points A to B,
a well designed network can serve as a backbone
for centralization and integration of many functions,
providing ongoing value and savings.

Indirect value
In addition to the direct value a specialized healthcare
transportation initiative can yield, there are also indirect value
points that many healthcare organizations may overlook. These
can be just as vital, while also contributing to care quality.
1. Liability transfer
Both employees and vehicles on the road carry liability.
If you partner with an outside healthcare transportation
specialist, these areas of exposure are transferred from
your organization to theirs.

4. Return on released capital

If capital is not tied up in vehicles and other assets
related to transportation, it is instead available to
be more productively applied in other areas of an
organization.
5. Error reduction
Errors can be costly, both financially and to a systems
image and reputation. A healthcare transportation
operation with updated technology can help reduce
errors and provide associated cost savings.
6. Management liberation
With internal transportation, managers in each
department of a healthcare organization may spend
time supervising employees; overseeing capital
infrastructure, such as fleet, technology and equipment;
designing routes and tracking down lost or delayed
items. Partnering with an expert lifts this burden
so that these employees can focus on their core
responsibilities.

Beyond savings: productivity and scalability

Healthcare transportation has strategic bearing on a health
system and can unify an entire network. By removing the
need to oversee transportation logistics and responsibilities,
healthcare organizations can return to their area of expertise
and focus on providing quality care and improving their
patients experiences.
A strong, centrally managed transportation function facilitates
the complementary centralization and leveragability of related
departments (lab, mail, supplies, etc.), which can enable
future strategic opportunities and growth. By converting
legacy operations into a centralized and consolidated network,
healthcare organizations can increase efficiency and control,
reduce waste and overlap and create a transportation system
that is far less costly and easier to manage.

To OutSource or Not
How to Tell if a Function
Can/Should Be Outsourced
Many times, healthcare executives
do not know if a function can or
should be outsourced as a way to
make operations more efficient and
streamlined and/or reduce costs
and improve quality. Below is a brief
checklist. If you answer yes to any of
the below questions, outsourcing may
be a good option for you.

Is the function outside of your core

competency?

Is outsourcing aligned with your

business objectives/criteria?

Can a specialist provide better

quality or more efficient service?

Will outsourcing free up my internal

resources without jeopardizing
quality?

Will outsourcing provide me

access to world-class capabilities,
such as technology, without having
to make a capital expenditure?

Why outsource certain functions?

According to the Outsourcing Institute, the top reasons
companies outsource1 are:
1. Reduce and control operating costs
2. Improve company focus
3. Gain access to world-class capabilities
4. Free internal resources for other purposes
5. Resources are not available internally
6. Accelerate reengineering benefits
7. Function difficult to manage or out of control
8. Make capital funds available
9. Share risks
10. Cash infusion

How do you know when outsourcing is right for you?

There is a clear difference between a strategic decision
to outsource and outsourcing for the sake of outsourcing.
For some services (particularly those that are core to your
business) outsourcing is not the answer. Before deciding if
outsourcing is right for your organization, consider two things:
1. Make sure that outsourcing fits your goals: Evaluate and
determine if outsourcing a certain function will support and
help meet your organizations business/strategic objectives
and priorities better than performing that function internally.
2. Determine that there are organizations to perform that
function: Ascertain that there are organizations available
to take on that particular function at quality and efficiency
levels equal to or greater than what you can achieve.
The primary argument against outsourcing is the loss of
control over processes and outcomes when you put part of
your organization in the hands of an outsider. To be sure, there
can be risks with outside providers, which is why choosing
a high performing outsourcing partner is so important.
Management teams want reassurance that they are partnering
with an outsourcing specialist that can be trusted and, more
importantly, can adapt to the organizations growing and
changing needs.

Outsourcing has been around for as long as work

specialization has existed. And whatever lingering concerns
there may be regarding loss of control over processes, there
are frequently more reasons in favor of outsourcing. A few
include:
Specialization A third party service provider is an expert
in the specialized service provided.
Quality Because of specialization, the services provided
by a third party reflect their core business competency
and all of their resources will be focused on delivering the
highest quality service.
Staffing Through outsourcing a non-core function,
organizations can avoid the human resource challenges
associated with recruiting, hiring and other personnel
issues.
Cost savings Many costs typically associated with an
in-house solution, such as capital and human resources
expenditures and liability, may be avoided by partnering
with an outside service provider.

Cost-savings are a driver, but a strategic approach is

increasingly important. A shift in the nature of outsourcing
has moved from one more strictly focused on cost savings
(transactional mentality) to one with a more strategic focus
(partnership mentality).
Because of the ever-increasing pressures that healthcare
executives face, many recognize and acknowledge the value
of forming a long-term strategic relationship with a trusted
outsourcing partner. These future context partnerships are
characterized by long-term timeframes, mutual risk, the ability
to tolerate change and experimentation and the involvement of
the senior management of both organizations.5

A shift in the nature of outsourcing has

moved from one more strictly focused on cost
savings to one with a more strategic focus.

Centralization and systemization

A trend in service delivery within the current hospital business
climate in the U.S. is driving the systemization of services.
Hospital systems with many locations are seeking to leverage
outsourcing partnerships across many hospitals to help drive
predictable outcomes and cost efficiencies. The desired state
is more of an integrated organization, with both horizontal and
vertical integration across all hospitals to achieve efficiencies.2
According to the American Hospital Association,3 there
are 5,754 registered hospitals in the U.S. and there are
more than 500 healthcare systems.4 With increased system
consolidation, the number of hospitals and other facilities in
a given healthcare system is increasing. These systems in
turn are trying to centralize more through their supply chain
functions.
Leading healthcare organizations are proactively seeking
outsourced services. Organizations or healthcare systems
that are focused exclusively on short-term, tactical solutions
miss the point. Success is a long-term proposition. The key to
that success is the ability to leverage organizational strengths
while continuing to make incremental improvements for overall
effectiveness and efficiency.

Hospital systems with many locations are seeking to

leverage outsourcing partnerships across many hospitals
to help drive predictable outcomes and cost efficiencies.

Outsourcing is strategic and should involve

senior management
A 2010 survey conducted by the International Association of
Outsourcing Professionals (IAOP),6 across multiple industries,
found that organizations expect to continue to increase the
size and scope of their outsourcing programs. The survey also
found that outsourcing programs are not only expanding, but
more importantly, are becoming more strategic.
The IAOP survey goes on to conclude: this increase in the
strategic importance of outsourcing is reflected in both a shift
in the reasons that companies are outsourcing and in the level
of senior executive involvement. According to the survey, twothirds of respondents indicated that senior executives were
increasingly more involved in outsourcing, compared to only
13 percent who said that senior executives were less involved.

A case example: How outsourcing healthcare

transportation can support strategic objectives
There are likely many functions within your system that may
be better served through outsourcing. The authors of this
whitepaper specialize in healthcare transportation so that is
the example given. Note however, that much of the information
is relevant for other functional areas within healthcare as well.

Patient and business critical materials, such as patient

specimens, pharmaceuticals, supplies and medical records,
are transported to and from multiple touch points within
healthcare organizations. The transport of these items is
operationally crucial because nearly everything that occurs
within a given health system depends on it.

2. Technology cost avoidance

Elements of technology, notably scanning and tracking,
are progressively becoming the industry norm. An
outsourced transportation companys technology
platform not only ensures that you are using the most
up-to-date technology but, more importantly, it relieves
your organization of that investment burden.

Yet, unfortunately, healthcare organizations often make

department-level transportation decisions. Even with the best
of intentions, the result can be overlapping internal and thirdparty courier services and disconnected networks that can
cause delays, increase loss and affect the chain and quality
of care.

3. Variable pricing
With an internal transportation department, added
stops can mean additional employee(s) and vehicle(s).
Conversely, reduced stops can mean costly down time
or layoffs. A third-party transportation specialist should
be able to provide you with a variable pricing model,
which allows for incremental costs for added work, as
well as cost relief for reduced work.

Minimal management attention is paid to these internally run

or third-party delivery services, limiting quality control and/
or providing insufficient tools for maximum performance, yet
healthcare transportation can drive impactful value.

Direct value
As described in the previous section, department-level
decision making can lead to overlap and disconnection. A
healthcare transportation specialist can offer several points of
direct value that cannot be easily achieved internally:
1. Scheduled cost savings
A healthcare transportation specialist can examine a
health systems needs impartially and design a
scheduled network that meets its needs in the most
affordable manner possible.
2. On-demand cost savings
An effectively built transportation operation can satisfy
the majority of a healthcare organizations needs
though scheduled service, reducing the need for
expensive on-demand service, thus removing waste.
3. Supply chain efficiency through integration and
centralization
More than just delivering items from points A to B,
a well designed network can serve as a backbone
for centralization and integration of many functions,
providing ongoing value and savings.

Indirect value
In addition to the direct value a specialized healthcare
transportation initiative can yield, there are also indirect value
points that many healthcare organizations may overlook. These
can be just as vital, while also contributing to care quality.
1. Liability transfer
Both employees and vehicles on the road carry liability.
If you partner with an outside healthcare transportation
specialist, these areas of exposure are transferred from
your organization to theirs.

4. Return on released capital

If capital is not tied up in vehicles and other assets
related to transportation, it is instead available to
be more productively applied in other areas of an
organization.
5. Error reduction
Errors can be costly, both financially and to a systems
image and reputation. A healthcare transportation
operation with updated technology can help reduce
errors and provide associated cost savings.
6. Management liberation
With internal transportation, managers in each
department of a healthcare organization may spend
time supervising employees; overseeing capital
infrastructure, such as fleet, technology and equipment;
designing routes and tracking down lost or delayed
items. Partnering with an expert lifts this burden
so that these employees can focus on their core
responsibilities.

Beyond savings: productivity and scalability

Healthcare transportation has strategic bearing on a health
system and can unify an entire network. By removing the
need to oversee transportation logistics and responsibilities,
healthcare organizations can return to their area of expertise
and focus on providing quality care and improving their
patients experiences.
A strong, centrally managed transportation function facilitates
the complementary centralization and leveragability of related
departments (lab, mail, supplies, etc.), which can enable
future strategic opportunities and growth. By converting
legacy operations into a centralized and consolidated network,
healthcare organizations can increase efficiency and control,
reduce waste and overlap and create a transportation system
that is far less costly and easier to manage.

To OutSource or Not
How to Tell if a Function
Can/Should Be Outsourced
Many times, healthcare executives
do not know if a function can or
should be outsourced as a way to
make operations more efficient and
streamlined and/or reduce costs
and improve quality. Below is a brief
checklist. If you answer yes to any of
the below questions, outsourcing may
be a good option for you.

Is the function outside of your core

competency?

Is outsourcing aligned with your

business objectives/criteria?

Can a specialist provide better

quality or more efficient service?

Will outsourcing free up my internal

resources without jeopardizing
quality?

Will outsourcing provide me

access to world-class capabilities,
such as technology, without having
to make a capital expenditure?

It has become the mantra of healthcare executives around the country.

Yet while organizations consider how to do more with less, they must
also continue to meet stringent patient safety standards and boost
patient satisfaction and outcomes creating a tall order to fill.
Multiple factors have increased the focus on healthcare quality. Rising
costs have led the government as well as health insurers to look more
closely at the care they pay for. Increased consumer consciousness
has made patients more aware and more likely to demand higher
quality care. And finally, growing social networks can quickly turn
isolated instances of dissatisfaction into networks of disgruntlement.

medspeed.com

This tumultuous environment is requiring healthcare organizations to

be more nimble than ever. A significant way for them to accomplish
this goal while increasing the focus on quality and streamlining is
through the outsourcing of services, particularly services that are not
the core competency of healthcare systems.

To Outsource
or Do it Internally?
Todays Healthcare Conundrum

1 The Outsourcing Institute, Executive Survey: The Outsourcing Institutes Annual Survey of
Outsourcing End Users, Top 10 Reasons Companies Outsource, 1998.
2 Global Strategies for Outsourcing Support Services: Impacting Cost, Quality and Access,
Aramark Healthcare.
3 American Hospital Association, Fast Facts on US Hospitals, 2012.
4 Billians HealthData, 2012.
5 Essential Link of Non-Clinical Services to Quality Care, Aramark Healthcare
6 International Association of Outsourcing Professionals, State of Industry Survey, May 2010.

2012 MedSpeed LLC. All Rights Reserved.

W H I T E PA P E R

Do more with less.