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TeamHealth in the News
The following excerpts are from Outsiders moving in by Susanna Moon. The article was published in the September 27, 2004, issue of Modern Healthcare. For the complete article, please visit Modern Healthcare's website.
As specialized knowledge grows increasingly important to the success of healthcare organizations, even hospitals with the buying power of large healthcare systems continue to turn to experts, such as outsourcing companies, for help in tailoring programs and services to meet their consumers' needs.
Still a growing trend
The number of outsourcing contracts for some of the largest and most recognizable names in the business continued to grow last year, according to Modern Healthcare's 26th annual Outsourcing Survey. The 20 largest outsourcing companies reported a combined 9,422 healthcare clients in 2003, up 12% from 8,407 the previous year.
Outsourcing companies with expertise in certain areas of healthcare management, such as food-service, housekeeping, emergency services, information technology or even wound management, can create niche opportunities for themselves while allowing healthcare administrators to focus on their core businesses, respondents say.
Bowing to expertise
In many respects, quality and costs seem to go hand in hand. In the sixth report, How are Hospitals Financing the Future? Where the Industry will go from Here, from a series called Financing the Future, sponsored by the Healthcare Financial Management Association and GE Healthcare Financial Services, industry panelists recommended hospitals buttress their falling bottom lines by focusing on core service lines and improving quality of care while outsourcing noncore services and making better use of resources.
Because outsourcing contracts tend to be highly specialized, the market is fragmented and hard to measure as a whole, but it's estimated that at least three-quarters of hospitals outsource at least one hospital function.
In the U.S., outsourcing firms face other hurdles in addition to political resistance. For example, TeamHealth, a physician-staffing firm based in Knoxville, Tenn., saw its contracts fall 3.5% last year to 328 contracts, from 340 in the previous year. "We exited contracts with hospitals that saw an unusual frequency of malpractice occurrences, primarily in Florida and Texas," says Lynn Massingale, the company's CEO. "No matter how profitable it might be in the short-term, if we thought it might be problematic in the long-term, we would respectfully decline that contract," he says.
Such questionable hospitals included those in financial distress, ones with medical staff who were unresponsive to on-call schedules and those in counties with "runaway juries" for malpractice awards, he says. "No physician wants to go into an area with high malpractice awards."
On the plus side, Massingale says TeamHealth saw more outsourcing interest in radiology, anesthesia and hospitalist departments. Also, using contractors to staff call centers is gaining popularity, he says, because the outsourcing firms tend to be more cost-effective and provide better consistency of service to hospital management.