The Risk-Reward Spectrum in Healthcare IT Outsourcing

Healthcare IT Outsourcing: A Brief Historical Note

Tracing its origins back to the mid-twentieth century, healthcare IT outsourcing is a complex concept that has undergone numerous transformations up to the present day.

The Birth of IT Outsourcing

The 1960s and 1970s were revolutionary decades. As more businesses recognized the urgent need to delegate their non-core activities, particularly those related to technology, IT outsourcing emerged like a breath of fresh air. The economic boom caused by the post-effects of World War II was slowly calming down, so businesses had never had a better moment to streamline their operations by focusing on core competencies. At the same time, this period is associated with significant technological advancements, especially in computing and telecommunications. Hence, the abovementioned factors laid a perfect foundation for IT outsourcing, which emerged as a new concept in 1963. The healthcare industry, on the other hand, stayed away from IT outsourcing during the 60s and 70s because of the critical nature of healthcare data and stringent regulatory compliance.

Explaining the Term "Healthcare IT Outsourcing"

The term "healthcare IT outsourcing" combines the healthcare industry with IT, which stands for information technology, "outside," and "resourcing." Thus, it describes the practice of involving external resources to handle non-core activities that were typically performed in-house. Although, at first, outsourcing was popular mainly in the manufacturing industry, it soon expanded to the information technology domain, inspiring businesses from diversified industry verticals to outsource their production processes to third-party vendors in order to reduce costs and boost productivity. Speaking of the healthcare industry, outsourcing marched in lockstep with the evolution of healthcare IT systems. As healthcare IT systems became more complex and technology advanced, healthcare providers turned to outsourcing data entry, billing, transcription procedures, etc.

Healthcare IT Outsourcing Timeline

During the mid-90s, EHRs, also known as Electronic Health Records, gained momentum, raising the need for external expertise to implement and manage these innovative data storage. In light of such rapidly growing popularity, the beginning of a new century signified a new edge in the world of healthcare IT outsourcing, marked by EHR adoption incentives introduced by the US government in 2004. A few years later, in 2009, EHR adoption and healthcare IT outsourcing were accelerated by the famous HITECH Act. In a nutshell, the HITECH Act aimed to encourage healthcare providers to utilize EHRs to enhance healthcare data protection. Multiple financial incentives for Medicare/Medicaid providers, combined with increased penalties for violating the HIPAA Privacy and Security Rules, significantly improved the EHR adoption rate from 3.2% to 14.2% (source: Grand Valley State University). 2020 is well-known as the year that shook the world with the COVID-19 pandemic. However, there are two sides to every coin: the global coronavirus pandemic contributed to the rapid evolution of telehealth, significantly increasing the demand for healthcare IT outsourcing.

Healthcare IT Outsourcing Benefits

Finally, it is time to discover how healthcare IT outsourcing can benefit your organization. Ready, set... Let us crush the list of healthcare IT outsourcing benefits!

Bring Your Operational Efficiency to a New Level

Healthcare IT outsourcing enables organizations to streamline their operations by focusing on their core competencies related to patient treatment. From data management and system maintenance to technical support and web portal development, healthcare IT outsourcing offers a variety of services that free up valuable resources so that healthcare providers can focus on patient care instead of IT-related tasks they are not proficient in.

Saving More While Investing Less

At first glance, the title of this paragraph may seem too optimistic. Yet, this is what healthcare IT outsourcing offers: you do not have to hire an in-house team of developers and spend money and effort on their training, equipment, and professional growth. Hence, you invest in access to the latest technologies and specialized expertise, resulting in reduced operational expenses, lower capital investments, and more efficient resource utilization.

Top Talents to Serve Your IT Needs

The modern healthcare IT outsourcing market offers a wide selection of companies with diverse specializations, ranging from 3D modeling to custom web development. With such a large pool of skilled developers, healthcare organizations can easily find a perfect match, especially when it comes to areas like cybersecurity, data analytics, and emerging technologies that lack in-house resources.

Better Patient Outcomes

Leveraging the power of innovative technology, healthcare IT outsourcing can boost patient engagement, streamline clinical workflows, and improve overall patient care. With next-gen custom healthcare software solutions like telehealth/telemedicine or EHR management platforms, healthcare organizations can improve patient outcomes while increasing patient satisfaction and contributing to overall population health management.

Scale Up & Down Without Risks

There is no doubt that the healthcare industry is a challenging area affected by multiple external factors like global pandemics and economic crises. Fortunately, healthcare IT outsourcing relieves the stress associated with scaling an in-house team by allowing healthcare organizations to scale their IT infrastructure and services according to their varying needs. In this way, healthcare providers can maintain flexibility by quickly adapting to changes in demand and responding to emerging market trends.

Healthcare IT Outsourcing Challenges

Forewarned is forearmed. An in-depth understanding of challenges associated with healthcare IT outsourcing will help you build an efficient risk mitigation strategy.

Keep an Eye on Sensitive Data

Since healthcare organizations typically handle a large amount of sensitive patient information, ensuring security measures are in place is of paramount importance. In this regard, healthcare IT outsourcing can raise concerns associated with data breaches, unauthorized access, and compliance with regulations such as HIPAA (Health Insurance Portability and Accountability Act).

Pro Tip: To avoid security concerns, ask your development provider about their regulatory compliance and data protection measures before signing an LSA agreement.

Integration and Interoperability Issues

The compatibility of outsourced IT solutions can be a massive showstopper. To ensure seamless data exchange, the solution developed by your healthcare IT outsourcing provider should be compatible with the existing healthcare systems.

Pro Tip: Ensure the solution you require to develop is compatible with your existing infrastructure and can be seamlessly integrated into your workflows.

Misunderstandings Do Not Lead to Success

Yes, we are going to talk about cultural and communication challenges. It is not a secret that effective communication and cultural alignment between the healthcare organization and the healthcare IT outsourcing provider are essential for mutual success. Different cultures, communication styles, and time zones can pose challenges in collaboration and decision-making.

Pro Tip: Look for healthcare IT outsourcing providers in your region or a similar time zone. Pay attention to their proficiency in English.

If You Do Not See It, It Does Not Mean It Does Not Exist

Healthcare IT outsourcing is often associated with loss of control. Healthcare providers may struggle to maintain a satisfactory level of visibility and oversight over the outsourced processes, which can raise concerns about service quality and the ability to respond to emergencies in a quick and efficient manner.

Pro Tip: Many healthcare IT outsourcing providers offer several cooperation models to ensure healthcare organizations maintain the preferred level of control.

Vendor Lock-In and Dependency

Reliance on a single outsourcing provider can lead to a vendor lock-in scenario. Consequently, healthcare organizations can find switching providers or bringing certain IT functions back in-house challenging. Such a dependency can affect the organization's flexibility in the long term.

Pro Tip: Start with an MVP project or short-term contract to ensure the potential healthcare IT provider ticks all the boxes.

Real Cases Instead of Boring Phrases

Discover how devabit team handles healthcare IT outsourcing. Below, we have gathered our top healthcare IT outsourcing solutions for various healthcare organizations from all over the world.

Pharmacy Payment Solution

With our next-generation payment software, pharmacies can perform prescription payments in days instead of months. This prescription payment platform brings pharmacies' online experience to an entirely new level, handling the whole payment process from A to Z. From grocery stores to independent pharmacies and everything in between, this universal platform can be utilized by pharmacies of any type and size. Our skilled Ruby on Rails developers enriched this solution with a wide array of features, such as comprehensive integration capabilities, a seamless importing system, an autopay function for patient accounts, and transactions empowered by the virtual terminal. Subsequently, this all-in-one payment solution streamlines pharmacy operations by reducing the number of phone calls and faxed payment forms. It allows patients to pay co-payments online, schedule deliveries or curbside pick-ups, and quickly respond to onboarding questions, ensuring an excellent experience.

Pharmacy Prescription Fulfillment Solution

The devabit team developed a unique web platform that enables pharmacists to easily access, manage, and transfer prescription and patient data. Managing information concerning processing, compounding, packaging, and preparing prescription orders to be shipped or picked up depending on patient preference has never been easier. Equipped with a vast selection of features, this unique platform revolutionizes the complex prescription fulfillment process, turning it into an enjoyable journey. Thanks to the prescription fulfillment platform delivered by devabit, pharmacists not only can compose custom compounded medications, specialty medications, and nutritional supplements but also gain the ability to unleash the power of innovative technology in order to streamline pharmaceutical processes.

Data Entry Solution for a Large Pharmacy Company

Our clients prioritize 100% data accuracy, so we focused on validating and ensuring correct data entry to prevent errors that could impact patient care, billing, and other healthcare processes. Besides, the devabit team has also automated information storage, making the processing of medical documentation faster and more efficient. Our skilled data entry team contributed to the client's growth by fulfilling the following goals. First, our solution resulted in significantly enhancing and maintaining high-quality patient care practices. Second, we managed to streamline pharmaceutical processes through automation, leading to increased operational efficiency. Third, our data entry solution offers a personalized approach to prescription fulfillment procedures. Last but not least, this tailor-made project contributes to a more sustainable pharmacy ecosystem.

Numbers Speak Louder Than Words: Healthcare IT Outsourcing Statistics

Let us explore the concept of healthcare IT outsourcing through the prism of numbers.

Spoiler Alert: Numbers prove that healthcare IT outsourcing is a promising domain worth investing in.

On a Final Note: Revealing the Risk-Reward Spectrum in Healthcare IT Outsourcing

Over the last decade, healthcare IT outsourcing has evolved from a cost-reduction mechanism to a strategic approach for accessing advanced technology and expertise, improving patient outcomes, and ensuring regulatory compliance.

After all, is the reward worth the risks? Hopefully, this article highlighted all the advantages and disadvantages of healthcare IT outsourcing so you can make an informed decision. At devabit, we believe healthcare IT outsourcing is worth your attention in 2025 and beyond. From increased operational efficiency to lower costs, the positive impact of healthcare IT outsourcing is unprecedented.

Custom Healthcare Software Solutions We Develop:

• Telemedicine & Telehealth Platforms
• Pharmacy Payment & Management Systems
• Pharma/Healthcare API Integration
• Appointment Booking/Scheduling Solutions
• Electronic Prescription (ERX) Software Solutions
• Data Entry & Data Management Healthcare Solutions
• Medical Device Integration
• Mobile Healthcare Solutions

Ready to make the first step toward the healthcare technology revolution? Fortunately, you do not have to go through this challenging path alone. With devabit, a trusted healthcare development provider, by your side, you can reach new heights in the blink of an eye. Contact us to schedule a free consultation.