Advantages of outsourcing in hospitals
The food service of the hospital Deaconess Clinic in Billings, Montana, was managed by those employees who were hired by another firm. For this case, a partial work force was outsourced by another firm outside the hospital. Though in some cases, outsourced employees don’t have belongingness and loyalty towards their company, but, in this case of Deaconess, the employees have belongingness due to family atmosphere in the Cafeteria.
There are various reasons of outsourcing the operational activities of a hospital which is facing few financial crises.
Few of major advantages are as follows-
- The Quality control: In a hospital, patients use to have different types of foods with various nutritious values. However, few patient use to have some restrictions in the ingredients of the food they use to consume regular basis. Some reasons behind those restrictions can be allergy of patient, or, the medication on which the patient is, or, the disease itself the patient is suffering of. However, the cafeteria of food service of a hospital use to manage these things critically, but in some cases they use to face complicacy (Flynn et al., 2015). These hazards can be easily managed by outsourcing the food services through a specialized food service company. Through this the quality of food can easily be maintain. Apart from that, the outsourcing if done with in the hospital premises, then the supervisions can be easily done by few of responsible staffs (Bates, Sharratt & King 2014).
- Fewer hazards in Management:Along with the previous reason, if a hospital outsources the cafeteria, then it will minimize a part of management hazards. However, the food is a regular need for the patients along with the employees. With the outsourced food service, the responsibility of providing good food to the people in the hospital can be easily managed.
- Employees’ satisfaction: With the good quality of food, the management of the hospital can easily satisfy the employees working in the hospital. In few researches it is seen that, food can be a tactical tool to manage people in an organization (Brown & Fink, 2012). Providing all the employees a quality food a company enhances the health of its workforce, along with that, the employees use to be more loyal toward the company in a psychological manner.
- Patients’ satisfaction: However, the good quality food will enhance the health of the patient. The patients will also be satisfied with complementary quality food service (Tavakol Olofsson et al., 2014). As a result, the overall sales turnover will be increased.
- Cost control:In general hospitals use to face over budget in the food service. With the help of outsourced cafeteria with in the hospital, the cooking resources will be provided by the hospital but all other necessities will be fulfilled by the outsourcer agency (Dressner, 2017). In this way, the whole budget of cooking will be controlled by the hospital.
Rationale behind Outsourcing the food services from different location are –
- In the given case, the Hospital has various financial crises. Therefore, approaching for outsourced foods can be a good strategy to minimize daily operations costs.
- According to a review by US Department of Labour, there are some reasons behind outsourcing food services are mainly cost cutting & profit maximization (Dressner, 2017). Along with that, outsourcing the food services results in lower wages and but a win-win situation for the Hospital as they can earn more profit.
- However, there are few positive causes of outsourcing like- a hospital can avail expert work and there is no need of training. These things also minimise the chance getting low nutritious foods.
- Along with that, hospital can have few competitive advantages if they choose any reputed firm for the food service support. It will ensure the quality of food and also maintain the better standards for the hospital in the industry.
In the given case, the hospital has faced many problems when they outsourced housekeeping employees. The belongingness is a motivational factor for the employees in every organization. Though there is cost effectiveness as a good reason for this outsourcing but, labors issues and overall quality cannot be compromised in a hospital sector. The house keeping employees have such a job profile which makes them isolated from other departments. Along with that, this isolation somehow affects on their mind and influences with their personality type in the performances (Ikediashi & Ekanem, 2015). In case the housekeeping employees get outsourced, the factors like isolation get emphasized and as a result the hospital faces higher attrition rate in workforce.
However, the wage rates of outsourced employees are lower than the direct payroll employees. Wage is always a motivational factor for the employees. Lower wage rate hampers the personal life and their basic needs. Therefore, performing same duties for low wage cannot satisfy workers and ultimately increases the attrition rates (Suweero & Moungnoi, 2016).
To avoid this hazard, it will be good to hire back the old employees on own. The smoothness of the regular operational jobs can be maintained in this way. However, the employees’ turnover issues will not come up anymore. There will be good control over the total workforce.
According to a research conducted by Cali in the year 2015, for the Mahalapye hospital, they have also faced such issues in outsourcing the cleaning services. The cost-benefit analysis in that research shows, it is more costly to outsource employees along with managing such issues, than to rehire old employees on own. Though the study by Cali was in South Africa, but it can relate with hospital industry in subcontinent. There are economic differences which can be considered in this case, but situational consequences can be matched for both the hospitals.
Another research by Siganporia conducted in the year 2016 for the hospitals of British Columbia suggests, the outsourced employees of housekeeping department have face many injuries in the workplace and the management of the hospital didn’t paid any concern about this matter. Such behavior of the management team of the hospital has the background reason as the outsourcing activities and lack in taking responsibility towards workplace hazards of outsourced employees.
Similarly, many studies are done in the healthcare sector all over the world and the findings conclude that, Deaconess Clinic should re-hire their old employees only rather outsource new people.
Outsourcing food service and housekeeping employees in Deaconess Clinic in Billings, Montana
The laundry services of a hospital are also vital part of the operations management. Now, outsourcing the laundry services with another hospital can somehow be beneficial for Deaconess. There are basically two aspects needs to be considered in this case.
Benefits of this strategy:
Cost cutting and its effect on overall budget
Deaconess if tie up with another hospital for the laundry services outsourcing then the laundry service provider will get the order in bulks and it can offer few discounts and the overall laundry cost will be lower (Dressner, 2017). Along with that, issues like rising fuel costs, unstable costs of energy exhaustion and various labor management issues and be controlled thoroughly by the hospital.
Deaconess should choose the strategy to tie up with other hospital since; it will help them to concentrate to their core jobs like treatments and the technological advance in healthcare support in their hospitals (Zhiarfar et al., 2014). Excellence and quality of medical treatments in the hospitals can be maintained with more attention towards every patient. This will enhance the performance of the business in the market.
However, the strategy will help Deaconess to maintain their cleanliness standards. Through this tie up for outsourcing of laundry services both the company can maintain their good image for hygienic and cleanliness in the competitive market. Also the cost saving also helps both the hospitals in managing financial lags as mentioned in the case.
Due to cost effectiveness of this strategy it will increase the working capital and the money can be utilized for the betterment of the core hospital jobs by hiring excellent doctors and other medical staffs. Along with that, advance tools and medical instruments set ups can be included in the hospital’s structure. This will result in more patients and lastly in more profits along with growth in industry.
In many research studies, it is seen that, outsourcing of laundry services results in various labors issues (Zuberi, 2013). Along with that, in previous cases it was seen that, employees turnover has become an issue in outsourcing strategies applied for food services and housekeeping. For the laundry services, it can also be as issue (Litwin, 2014).
It is given that, the company with whom Deaconess is going to tie up, is a rival hospital in US. Thus there can be various issues sue to this rivalry like loss of money.
The labor and rivalry issues can be overcome by following few measures of tie up. The hospitals should go for the laundry services outsourcing as it has many positivity for future. The benefits and the issues if get compared, maximum weightage will go for the benefits. Thus, it will be a good opportunity for both the hospitals to maintain their image and quality standards.
References:
Brown, M. P., & Fink, R. L. (2012). Human Resource Outsourcing in Health Care: Strategic, Cost, and Technical Considerations. Southern Business Review, 37(1), 51.
Bates, J., Sharratt, M., & King, J. (2014, April). Successful outsourcing: Improving quality of life through integrated support services. In Healthcare Management Forum (Vol. 27, No. 1_suppl, pp. S58-S67). Sage CA: Los Angeles, CA: SAGE Publications.
Cali, J., Cogswell, H., Buzwani, M., Ohadi, E., & Avila, C. (2015). Cost-benefit analysis of outsourcing cleaning services at Mahalapye hospital, Botswana. Journal of Hospital Administration, 5(1), p114.
Dressner, M. (2017). Cutting costs, growing problems: hospital issues in the United States and Canada: Monthly Labor Review: U.S. Bureau of Labor Statistics. Bls.gov. Retrieved 10 March 2017, from https://www.bls.gov/opub/mlr/2015/book-review/cutting-costs-growing-problems.htm
Flynn, W. J., Mathis, R. L., Jackson, J. H., & Valentine, S. R. (2015). Healthcare human resource management. Nelson Education.
Ikediashi, D., & Ekanem, A. M. (2015). Outsourcing of facilities management (FM) services in public hospitals: a study on Nigeria’s perspective. Journal of Facilities Management, 13(1), 85-102.
Litwin, A. S. (2014). Cleaning Up: How Hospital Outsourcing Is Hurting Workers and Endangering Patients, by D. Zuberi..
Siganporia, P., Astrakianakis, G., Alamgir, H., Ostry, A., Nicol, A. M., & Koehoorn, M. (2016). Hospital support services and the impacts of outsourcing on occupational health and safety. International journal of occupational and environmental health, 22(4), 274-282.
Suweero, K., & Moungnoi, W. (2016). Outsourcing decision factors of building operation and maintenance services in hospital business. KKU ENGINEERING JOURNAL, 43, 439-442.
Tavakol Olofsson, P., Aspelin, P., Bergstrand, L., & Blomqvist, L. (2014). Patients’ experience of outsourcing and care related to magnetic resonance examinations. Upsala journal of medical sciences, 119(4), 343-349.
Zhiarfar, M., Seyedin, S. H., Tourani, S., Khodayari Zarnaq, R., & Ayoubian, A. (2014). Impact of Outsourcing Healthcare Services Management on the Quality of these Services. International Journal of Hospital Research, 3(3), 145-148.
Zuberi, D. (2013). Cleaning up: how hospital outsourcing is hurting workers and endangering patients. Cornell University Press.
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