Healthcare IT Outsourcing – Avoiding the booby traps

The fact that outsourcing, especially off-shoring can provide cost effective solution in a tight economy, has been long realized by CXOs of the early adopters of off-shoring in the financial services industry. Off shoring has started to gain traction with several health plans and product vendors taking the lead; providers are following as well. Though India has been the recognized leader in offshore outsourcing the relative strength from a healthcare perspective has to be evaluated thoroughly before making a buy decision. This article looks at some of the critical questions one should ask while evaluating an offshore healthcare vendor relationship.

1. How long has the vendor been in business?

There are several IT service organizations that have recently sprung up seeing the requirement in the healthcare market. Maintenance and support is necessary for the healthcare organization from a long-term perspective. It is therefore imperative that healthcare organizations choose vendors that have been in business for at least ten years and have the resources to stay afloat in a volatile IT market.

2. Can the vendor provide end-to-end solutions?

The vendor should be able to provide a reasonable range of services in the healthcare spectrum so that the healthcare organization does not have to spend time locating vendors for each separate requirement.

3. Does the vendor understand the healthcare business?

It is essential that the vendor understand the nuances of the healthcare industry. The knowledge accumulated over a period within the organization definitely helps in understanding the client’s requirements better.

4. What is the vendor’s policy on privacy, security and business continuity?

Most mature vendors understand implication of HIPAA and are compliant with the requirements, which may not be the case with lesser-known entities. However it makes sense to be safe than sorry and include a privacy clause in your contract.

5. Is the organization associated with trade bodies in the healthcare space?

Association with the concerned healthcare bodies ensures that the consultant is current on the developments in the healthcare space. (I have met with organizations that believe that HL7 is named after the seven founding fathers of the organization, if there were eight, HL7 would have been named HL8!!)


6. What is the size of the company in market capitalization and employee strength?

Since the days of dotcoms going bust, it makes sense to associate with accompany that has the staying power. Size DOES matter. Go with companies that are at least $200 million in revenue.

7. Does the vendor have the right mix of professionals?

Healthcare IT is an enterprise wide issue, which has regulatory, management, legal, technology and human resources components. A cross-functional team with the right mix of domain, business and technology is essential to address the various concerns raised by the healthcare organization.

8. Does the consultant have reference able clients?

Reference checking is a good practice in vendor evaluation, and will never be a bad idea. Watch out for vendors who have been only involved in staff augmentation.

9. Does the vendor have a structured onsite offshore relationship model?

When the project is on fire, you would want a vendor representative right way in your office to drive the mitigation plan. You would not want this to be just a voice some where in Bangalore or Shanghai. Insist on a having an onsite account manager who would report to you whenever required.

10. Does the organization have a quality certification?

Adherence to Quality processes and Quality Certification ensures that the vendor will provide a minimum necessary quality assurance and control. Look for organizations with SEI -CMM Level 5 certification.

11. How is the vendor organization geared to coping with uncertainty?

The organization should be mature enough to have risk mitigation plans for adverse events such as key professionals leaving the company, or other business concerns that could occur.

12. Does the pricing model provide value for money?

Finally price does matter too. Do not go for a vendor that is priced exorbitantly high or pathetically low.