Hospitals and health systems have reported outsourcing IT jobs in a move to reduce operating costs and allow their former employees to retain jobs, but will this be a new norm for healthcare organizations?
Raymond Lowe, senior vice president and chief information officer at AltaMed, told Becker's a common practice in healthcare has been to outsource help desk and end-user support functions to third-party vendors.
Most recently, Providence, R.I.-based Care New England outsourced some of its IT employees to health IT provider Kyndryl. Under the agreement, Care New England's employees joined Kyndryl's team to provide technical services to the health system.
The move, according to the healthcare organization, was to reduce operating costs. This motive is the entire goal of outsourcing as healthcare organizations look to "optimize costs and tap into specialized expertise for non-core tasks," Muhammad Siddiqui, vice president and CIO of Richmond, Ind.-based Reid Health, told Becker's.
This trend of outsourcing at hospitals and health systems will continue, according to Will Landry, CIO of Franciscan Missionaries of Our Lady Health System, based in Baton Rouge, La. But so will insourcing, he said.
"We'll see more insourcing of application and business analysts and more outsourcing of traditional IT services," he told Becker's.
Mr. Lowe attributed the outsourcing to the demands CIOs are facing in trying to do more with less.
"Depending on the organization, IT may be viewed as a 'cost center' rather than an actual value-driven and value-provided department," he said.
Franciscan Alliance, the parent company of Mishawaka, Ind.-based Franciscan Health Indianapolis, moved 61 employees from its information services department to an outside company and ended their employment with Franciscan.
Challenges of outsourcing
Despite the cost savings and specialized skills outsourcing can bring to hospitals and health systems, Mr. Siddiqui said it also presents challenges such as communication barriers and differences in organizational culture.
"As the CIO, my role is to strike a balance between in-house and outsourced IT functions, ensuring our hospital stays at the forefront of technology while maintaining the highest standards of patient care and data protection," he said.
Additionally, if healthcare organizations continue to outsource, Mr. Lowe said it is the CIO who must effectively manage the outsourced relationship.
"CIOs must actively participate with the vendor while also demanding excellence from them," he said.