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November 1999

Outsourcing Your Healthcare Teleservices: Don't Let It Be A Prescription For Disaster


Deciding whether or not to outsource your teleservices is a difficult decision for any company. For healthcare companies today, this decision is particularly complex. Customer demand for improvements in cost, quality and access, combined with the restructuring of relationships between payers, consumers and providers, is driving major change among healthcare companies. Healthcare teleservices centers are attempting to adapt to this change by making available point-of-care and point-of-service information, while dealing with a significant increase in the volume of information processed. To compound the problem, the healthcare industry, more than any other, is struggling to integrate and upgrade diverse and disparate information systems.

Amidst these tumultuous times, many healthcare organizations are handing over their teleservices needs to outsourcers in the hope of reducing cost and improving customer service. While outsourcing can lead to significant benefits, it's important that organizations do in-depth analysis both before and after outsourcing to determine if true benefits were realized.

Budgeting And Benchmarking
The first step in the outsourcing process is identifying your teleservices budget and benchmarking current customer service levels. According to Elizabeth Herrell, senior industry analyst with Giga Information Group, “Customer satisfaction surveys are good indications of customer reactions to current service levels. Comparing results with other healthcare institutions provides data on the quality of customer service delivered. Rating current performance objectives with similar service centers indicates if the organizational results are in the same class as top healthcare call centers.”

A 1999 benchmarking study titled “Best Practices in Call Center Manage-ment, Operations and Technology” by ProSci indicated several useful metrics for healthcare CSR performance objectives, including: talk time per call (average: 205 seconds), service level (average: answer 80 percent of calls in 30 seconds), agent utilization (average: 87 percent), percent completion on first call (average: 90 percent), annual turnover of CSRs (average: 24 percent) and number of agents per supervisor (average: 18). For more information see www.call-center.net.

Application Requirements
In addition to benchmarking, the type and complexity of the teleservices application itself must be considered when deciding whether or not to outsource. Typically, healthcare organizations require very specific applications that vary dramatically across departmental lines. For instance, the needs of a hospital emergency room are different from the needs of its billing and claims or human resource departments. As healthcare teleservices applications grow more complex and diverse, outsourcing becomes an increasingly viable option.

“Delivering best-of-breed solutions involves a complex integration of IVR, messaging, ACD, advanced call routing, paging, mobile phone and PBX systems,” said Terrell Edwards, president of PerfectServe Inc., a service provider specializing in healthcare teleservices applications. “Most end-user companies simply don’t have the resources to design, implement and manage these types of solutions.”

For example, PerfectServe is currently in the design phase of a solution for Horizon Physicians Group, a 34-physician practice in Knoxville, Tennessee. Horizon Physicians has an inbound call volume consisting of about 25 percent appointment scheduling and 40 to 50 percent non-urgent clinical requests (e.g., calls for prescription refills, lab results, referrals and medical questions). The remaining percentage of calls fall into the “all other” category, including those related to billing, insurance or administrative needs.

Horizon Physicians Group required advanced teleservices capabilities for their nurse triage phone room. In order to meet these needs, PerfectServe developed an IVR messaging application that allowed patients to access many services without the assistance of a nurse. While the IVR application proved helpful, the volume of these calls was tremendous and some patients found the IVR application insufficient. To meet the needs of patients, while balancing available staff resources, PerfectServe will now implement ACD services integrated with the IVR messaging application and some advanced call routing. This will provide a managed system for handling patient calls designed to enhance patient service.

“Because the number of our active ACD nurse-agents is unlikely to grow beyond more than 10, and our IVR and call routing services are so complex, it makes sense to continue to outsource our teleservices,” said Jeff Whitton, administrator and CEO of Horizon Physicians Group. “Through outsourcing, we will be able to implement an advanced call center for a fraction of the capital and administrative costs we would have incurred had we tried to do it in-house.”

Integration And Networking Requirements
Another aspect of teleservices applications involves their use across facilities. Many healthcare organizations today are of the distributed variety, and the majority of physicians demand sophisticated paging and cell phone capabilities. Providing teleservices applications capable of routing calls based on time-of-day and day-of-week schedules, along with advanced reporting and customization options, usually proves too complex for an in-house implementation.

A good example of this is another PerfectServe customer, Blount Memorial Hospital in Maryville, Tennessee. They were operating an in-house answering service for active staff physicians. Due to changes in Medicare compliance, however, and a need to replace an aging answering service phone system, the hospital turned to outsourcing.

PerfectServe was charged with the task of integrating more than 100 physicians located in multiple offices. Using a leading-edge communications server solution to integrate the hospital’s multiple offices, a PBX, paging networks and cellular phones, PerfectServe accomplished the task in three months. Meeting the needs of both the hospital for contacting physicians on-call and the physician’s office for after-hours coverage made this an ideal project for outsourcing.

Staffing is another criterion that must be considered when deciding whether or not to outsource. The design, implementation and administration of complex applications and services require a high level of technical expertise. Requirements for staffing medical call centers are just as stringent. In addition to documenting patient encounters, managing inbound telephone calls and responding to text-based Web chat and e-mail, nurses must also be comfortable providing medical care and advice when they cannot see or touch the patient. Many centers today also require that their nurses be registered.

Outsourcing can help eliminate the difficulty of hiring and training personnel, allowing current staff to focus on core business needs. To ensure full benefits are realized, however, it is critical that staffing budgets are assessed prior to outsourcing and that the staffing option contained in the outsourcing contract is well-defined and flexible.

When Not To Outsource
Of course, there are instances where outsourcing is not the best option. If a healthcare organization’s application needs are very simple and do not require advanced functionality such as those found in many integrated computer-telephony solutions, then it may make sense to use in-house resources. For instance, a healthcare organization with an existing PBX that only needs to add a single ACD group for basic call queuing might be quite happy simply installing an ACD system from the PBX vendor.

In addition, many mid- to large-size healthcare call centers can justify the staffing and technical resources to keep these functions in-house. However, even the largest call centers may find that outsourcing, especially for technical and application design needs, is required to deliver best-of-breed solutions. For the larger centers, it is really a question of resource availability.

For PerfectServe, answering the question of whether or not outsourcing makes sense is always centered around the question of value. “Because of the complex nature of most teleservices and the long-term nature of the provider-client relationship, we always ask whether or not we can add sustainable value to the customer’s business,” said Terrell Edwards. “The point is, if we can’t add value to our customer’s business now and in the future, then maybe it’s better for them to perform the function in-house. This is a question that needs to be asked by both the provider and the end customer.”

Selecting The Right Outsourcer
Once a decision to outsource is made, it is important to select the right company and to continuously manage the relationship through the terms of the contract. Choose an outsourcer that specializes in healthcare teleservices and be sure the company has invested in advanced technology to support needed requirements. Elizabeth Herrell advises organizations to “take time to understand the outsourcer’s underlying culture and patterns.” She adds, “When entering into a contract, set performance objectives and measurement systems. Build in flexibility to permit continuous performance goals. Leading outsourcers view their engagement with an organization as a partnership and will work as a team to improve customer care and satisfaction.”

Communication is, of course, also key. Terrell Edwards believes that expectations of both outsourcer and client must be communicated up-front and throughout implementation and rollout. “Most important,” he stated, “the service provider can never have too much information about how end users work and will interact with the system. In fact, most advanced teleservices applications are really just workflow systems and if they’ve not been designed to really enhance a new or existing workflow process, they will fail.”

Benchmarking, defining your objectives, choosing the right outsourcer and communicating your expectations both at the outset and throughout the outsourcing project can lead to tremendous rewards. Through outsourcing, healthcare organizations gain immediate expertise in application design, implementation and management. These organizations also get access to tested, best-of-breed technology without having to incur the high capital costs required of in-house development. Fixed costs become variable costs, allowing funds to be redirected for other essential demands. The bottom line of teleservices outsourcing is that when done right, it allows healthcare organizations to provide higher levels of service while reducing overhead expenses. For users of healthcare services, this is a sweet pill to swallow.

Christine J. Holley is the market communications specialist for Interactive Intelligence Inc., an Indianapolis-based firm specializing in communications server solutions. She has worked in the IT industry since 1994 and began freelance writing in 1992.

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