The outsourcing of hospital services has become increasingly commonplace as way to control or reduce costs.
In the US, the need for outsourcing has intensified in recent years, in order to cope with cuts to Medicare after budget sequestration. This has intensified a backlog of pressure dating to the 1990s for healthcare reform and cost-effectiveness, which had already been driving hospitals to outsource.
On its part, Europe too has seen growth in the use of outsourcing over this period as a means to control healthcare spending. However, there are no European parallels to the relatively sweeping and immediate impact of the US budget sequestration.
Support functions typical outsourcing targets
Typically, the most common outsourcing targets for hospitals have consisted of support functions. These range from catering, housekeeping and laundry services to human resource management and IT.
Catering is among the areas where outsourcing is well established, and hospitals have become a key source of revenues. For US chain Au Bon Pain, hospitals account for more than 60 of its 280 outlets in the US. Its outlet at Long Island Jewish Medical Center is