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Outsourcing in Healthcare

By outsourcing the facility involving complex and costly equipment, the hospital owners are reducing their risk in terms of technology evaluation

Dr Arun Goyal

Outsourcing in healthcare has become a rising trend in the recent years, especially in the fields of radiology and imaging, nuclear medicine, oncology, dental services and ophthalmology, and there are several reasons behind this trend. Firstly, the increasing cost of high technology equipment. In many fields, rapid developments have taken place in technology and the equipment has become very expensive. Therefore, many hospitals are outsourcing to reduce their capital expenditure. Evaluating the technological specifications of the latest equipment and getting competitive pricing is a very complex exercise. By outsourcing the facility involving complex and costly equipment, the hospital owners are reducing their risk in terms of technology evaluation and other factors for e.g. potential returns. Also, rapid technological changes and rapid advances in healthcare mean that the concerned personnel (both doctors and other technical staff) need to be constantly updated about the latest changes. Development of many new hospitals creates a demand for experienced/trained manpower. This leads to a movement of senior people. Also, identification of new trained consultants is a problem area for hospitals. As healthcare is becoming more corporatised, individual doctors feel left out. In this situation, many doctors get together and invest in the equipment. This gives them a feeling of ownership and increased work satisfaction.

The reason for this trend to catch up is rapid development of healthcare in the country. In the phase of rapid expansion, different types of opportunities open up and are exploited. Today many hospitals are following this trend and outsourcing of dental facilities, plastic surgery, urology etc is also visible now. A big chain like Fortis has outsourced their radiodiagnosis facilities. We also have Dr BL Kapoor Hospital that has outsourced their radiodiagnosis facility. Sir Gangaram Hospital has also outsourced the high end radiodiagnosis facilities and similar partial outsourcing of radiodiagnosis can be seen in many other hospitals. However outsourcing of therapeutic departments is a new concept and oncology outsourcing is an important part of this trend which is being done by Pushpanjali Crosslay Hospital and Fortis hospital.

A very successful example is of Galaxy Cancer Institute which is the super-specialty cancer care unit of Pushpanjali Crosslay Hospital, W-3, Sector 1, Vaishali, Ghaziabad. Pushpanjali Crosslay Hospital is a modern multispecialty hospital with a capacity to handle 300 in patients and having more than 35 specialties and superspecialties. It is equipped with state of the art diagnostic and therapeutic facilities. The oncology facility 'Galaxy Cancer Institute' has been established as a result of an outsourcing arrangement. The unit has been established by a team of senior cancer specialists that comprise of all subspecialties of cancer treatment i.e. surgical oncology (Dr Arun Kumar Goel, Dr Umang Mithal), radiation oncology (Dr Sudarsan De, Dr Dinesh Singh, Dr Sandeep Agarwal), Medical Oncology (Dr Malay Nandy), and Gyne Oncology (Dr Kanika Gupta). These seven senior cancer specialists had been practicing in Delhi/NCR region for more than a decade each. They have established the center with most advanced cancer care facilities consisting of comprehensive cancer care, world class radiation oncology (Image guided RT, thirty channel brachytherapy), etc. The center is among the most advanced in cancer care facilities in the country. Patients have the benefit of having cancer treatment by a large team of cancer specialists, most advanced cancer treatment equipment and supported by modern diagnostic and treatment facilities of Pushpanjali Crosslay Hospital.

Dr Arun Goel, Director Oncology & Head, Surgical Oncology, Galaxy Cancer Institute, explained, "Recruitment of doctors and technical persons in a facility such as Galaxy Cancer Institute is not a high volume game. The system runs with a small team of highly skilled professionals supported by receptionists/GDAs/Nurses etc. Technical persons are usually recruited by a system of referral within the network of existing team members. The focus is on identified people with skill/motivation and then focus on giving them work satisfaction, developing their skills and retaining them for the long term."

"Outsourcing in healthcare is not a homogeneous industry and it is not a systematic/organised industry at present, however the long term prospects seem to be good. Some of the early players are now expanding beyond the initial centers. However, healthcare businesses are not very rapidly scalable. One of the reasons is that it is capital intensive, i.e. the cost of equipment in radiotherapy, radio diagnosis etc is very high and the recovery of the cost takes a long time," he added. Thus outsourcing in healthcare though, is an industry which is still in its infancy. In small and medium sized hospitals, the return on investment is not great but in larger hospitals- 500 or more, it is a very attractive proposition. Of course, it is all dictated by the revenue sharing pattern.