Data Viewpoint

Healthcare delivery models are going through a renaissance

October 29, 2021

  • Healthcare enterprises across the ecosystem have been slow adopters of outsourcing models for various reasons, from regulatory to contractual to cultural. However, that dynamic began to shift for life sciences first, a couple of decades ago, followed by health plans and finally providers. Still, outsourcing was limited to transactional back-office functions, but that began to shift to higher-end functions, including research and development, innovation, and product development, with the adoption of emerging technologies.
  • With increasing cost sensitivity and Medicare and Medicaid restrictions being eased first for domestic outsourcing and then offshore, more healthcare enterprises initially took advantage of nearshore outsourcing and are now expanding to offshore locations. Enterprises have been using various delivery strategies to address commercial contracts, normally through a combination of domestic, nearshore, and offshore models.
  • Consequently, healthcare enterprise partner and vendor ecosystems have invested in developing solutions for legacy challenges and innovating for future opportunities. These investments have enhanced the sophistication of partners’ and vendors’ capabilities.
  • Given the choice and maturity of delivery models combined with the pandemic-driven energy, healthcare enterprises recognize the need to outsource to strengthen their supply chain resiliency and operational redundancy and leverage partner options to address ongoing talent challenges at a pace faster than they are capable of and at a price point that does not include capital investments.
  • Across delivery models, there is a material increase in wanting to outsource irrespective of geography, including working from anywhere (WFA) or remote work.
The Bottom Line: The pandemic has been a Petri dish of experimentation at warp speed to find the best fit for outsourcing, and the results are in for execution.

We expect to see more outsourcing structured with outcomes where partners and vendors need to have skin in the game, not just delivering against a contract but also carrying the risk and glory of failures and successes.

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