Healthcare IT Outsourcing: Current Trends and Considerations

healthcare it outsourcing

The healthcare industry revolves around embracing technology as the world becomes increasingly digitized thanks to AI, big data, cloud computing, etc. Properly leveraging healthcare IT outsourcing is the key to successfully inventing and implementing new healthcare software. 

Have you ever wondered why software vendors and healthcare providers are increasingly outsourcing IT? Let’s look at what’s driving this pivotal healthcare management and technology shift.

What Is Healthcare IT Outsourcing?

Healthcare IT outsourcing refers to engaging an external company to handle IT tasks. This decision enables healthcare organizations to delegate specific IT duties, services, or even entire projects to those specializing in these areas, freeing them up to concentrate on their business objectives and patient care provisions. 

What Is Healthcare IT Outsourcing?

This approach can cover a broad spectrum of IT services, from building software and managing data to keeping networks running smoothly, ensuring data security, overseeing IT infrastructure, and beyond. 

By leveraging the expertise of IT outsourcing partners, healthcare operations can be made more efficient, expenses can be cut down, and the latest technology can be adopted and streamlined. Patient care and overall service within the industry are raised to a higher standard. 

Current Demand For Healthcare IT Outsourcing

The 2024 economic landscape in general and the healthcare industry in particular are confronted with rising inflation, escalating costs, labor difficulties, and pressures on revenue growth. During the first quarter of 2023, the tech sector witnessed a global workforce reduction exceeding 166,000 employees, surpassing the total layoffs in 2022. Costs in 2025 are forecast to increase.

Healthcare organizations are urged to navigate profitability instability by creating more value at the same cost. This allows healthcare IT outsourcing to thrive, thanks to an ability to provide high-quality solutions at lower cost

Moreover, the competition for tech skills and talent is fierce. The talent shortage is estimated to reach a whopping 85.2 million developers by 2030. Opting for IT outsourcing services can help fill in these expertise gaps.  

Worldwide healthcare IT outsourcing is anticipated to surge to $78.3 billion by 2031, expanding at an annual growth of 5.9% from 2024 to 2031. This significant growth is attributed to the ready availability and swift uptake of affordable, third-party tech services. 

Reasons Behind the Growing Need for Healthcare IT Outsourcing

The rising demand for IT outsourcing raises the obvious question, “What drives its popularity?” Understanding the core factors of healthcare IT outsourcing and its increasing popularity helps maximize its potential in healthcare software innovation and medical management.

Reasons Behind the Growing Need for Healthcare IT Outsourcing

Here are some driving forces behind the growing demand for healthcare IT outsourcing:  

  • Expertise drives innovation
  • Cost-efficiency empowers operation
  • Well-rounded control mitigates data breach and legal risks
  • Delegation enables strategy priorities and patient outcomes
  • Flexible scalability supports growth and demand shifts

1. Expertise Drives Innovation

Many IT projects require specialized knowledge and skills that may not be available in-house, especially expertise directly related to the healthcare industry. Moreover, businesses are on the trail of digital transformation, with 91% of companies implementing some form of digital initiative. However, only a few companies possess the in-house team and tech stack required for these innovations. The many hurdles in hiring specialists with core competencies in emerging technologies like AI, big data, and cloud computing in healthcare make IT outsourcing a better deal for companies. 

Healthcare IT outsourcing allows companies to tap into a pool of experts with the expertise needed for the project. Whether it’s software development, cybersecurity, or data analysis, outsourcing provides access to an international talent pool with various skills to do the job efficiently. 

External IT partners enable healthcare providers to expand or contract their IT capabilities seamlessly without the constraints and delays associated with hiring or training new staff internally.

2. Cost-Efficiency Empowers Operation

Hiring individual developers in the US is expensive, with hourly rates up to $850 per hour, depending on the experience level. Healthcare outsourcing as a whole team can reduce that by up to 30%. 

Healthcare IT outsourcing empowers businesses to manage various client projects efficiently with reduced costs. Additionally, it allows companies to showcase a wide ranges of expertise in services, fostering client loyalty. 

By partnering with IT firms, they can convert fixed IT costs into variable costs and allocate resources more effectively. IT outsourcing means flexibility and reducing the burden on staff compensation. Moreover, outsourcing to a complete team can ensure a smooth workflow among members. It decreases conflict and nurtures a space for innovation. 

3. Well-rounded Control Mitigates Data Breach and Legal Risks

Healthcare continues to be the costliest industry for data breaches, with costs increasing by 53% since 2020. The report found that the cost of an average healthcare breach reached nearly $11 million in 2023, increasing 8% from last year.

Healthcare IT outsourcing partners are typically well-versed in industry regulations such as HIPAA Compliance in the United States or GDPR in the European Union. They can ensure that data handling and processing practices comply with these regulations, reducing the risk of non-compliance penalties and data breaches. Outsourcing partners can also assist healthcare organizations by conducting regular audits to ensure compliance.

Moreover, outsourcing IT healthcare partners often employ advanced real-time monitoring tools that detect and respond to security incidents. They can provide 24/7 surveillance of healthcare systems and networks, promptly identifying suspicious activities or that may indicate a potential security breach. 

4. Delegation Enables Strategy Priorities and Patient Outcomes

Outsourcing IT functions allows a business to focus on core competencies while leaving specialized tasks to experts. Organizations can allocate resources more efficiently, concentrating on strategic initiatives that drive growth by delegating non-core activities to external vendors.

Choosing the right healthcare IT outsourcing provider lets healthcare workers concentrate on caring for patients without getting bogged down by repetitive tasks and complicated technical duties.

5. Flexible Scalability Supports Growth and Demand Shifts

Expertise-driven outsourcing enables scalability, allowing healthcare providers to adjust resources quickly based on project requirements. From scaling up during periods of high demand or scaling down for slower periods, healthcare IT outsourcing gives businesses the ability to adapt to changing business needs without getting bogged down with the of hiring, training, or downsizing an internal team. 

It also aids in meeting increasingly complex requirements. From the advancement in client tech to data coming from diverse fields, there is a growing need for expertise in IT employees. 

Types of Healthcare Technology Services that Companies Can Outsource

A diverse array of healthcare technology services can accommodate the particular needs of software vendors, including:

  • Telehealth
  • Pharmaceutical
  • Clinical outsourcing
  • Healthcare analytics and management
  • Patient information management
  • Integration and interoperability services
  • Supply chain management
  • Claims processing
Types of Healthcare Technology Services that Companies Can Outsource

1. Telehealth

Telehealth encompasses many remote healthcare services, from telemedicine and remote patient monitoring to training sessions and administrative gatherings. This broad category incorporates telemedicine procedures, physical therapy conducted over digital platforms (Telehealth Physical Therapy), and nursing services accessible remotely (Telehealth Nursing).

By outsourcing components of your telehealth operations, you are better equipped to handle the rising demand from patients keen on leveraging these virtual services. This helps alleviate the pressure and potential burnout your team might face. 

2. Pharmaceutical

Recently, pharma corporations have shifted from keeping their IT operations in-house to outsourcing areas like HR (payroll to general operations), finance operations, distribution, procurement, and data management.

This move toward healthcare IT outsourcing enables them to tap into a pool of specialized know-how and infrastructure at a fraction of the cost. For pharma firms, the push to outsource is driven by the desire for swift adoption of the latest technological advancements and a faster route to implementing universal standards or broadening their global footprint.

3. Clinical Outsourcing

Clinical outsourcing involves pharmaceutical or medical device companies (sponsors) entrusting the tasks of conducting trials and associated operations to contract research organizations (CROs). 

Reducing overheads and streamlining processes are the primary drivers prompting healthcare IT outsourcing for pharmaceutical firms. CROs are sought after for their specialized knowledge in specific treatment fields or markets less familiar to the company, particularly concerning regulatory protocols and personnel flexibility amidst surges in demand.

4. Healthcare Analytics and Management

Healthcare IT outsourcing, in terms of analytics and management, refers to contracting external service providers to handle various aspects of data analysis, strategic planning, and administrative functions within the healthcare industry.

In this arrangement, specialized vendors are engaged with tasks like data collection, analysis, and interpretation that derive meaningful insights from healthcare data. Those insights can then be used to optimize resource allocation and promote strategic decision-making within healthcare organizations.

These services help save time and effort and improve overall efficiency when handling incoming patient records from outside sources, like EHR systems.

5. Patient information management

Health Information Management involves collecting, analyzing, storing, and safeguarding patient health data. This data can be paper-based, a mix of paper and digital, or fully electronic in the form of Electronic Health Records (EHR).

HIM professionals rely on advanced technology for their tasks. They require broad knowledge, including understanding HIPAA privacy laws, data analysis, and proficiency in utilizing data-collecting computer systems. The role of an HIM professional ensures a seamless flow, from doctor’s appointments to insurance claims.

6. Integration and Interoperability Services

Interoperability in healthcare entails the seamless and secure access, integration, and utilization of electronic health data to enhance health outcomes for all involved.

Interoperability enables organizations to analyze data trends and past performance, facilitating data-driven enhancements in patient care and other domains.

Data interoperability can also minimize redundant administrative tasks, enhancing satisfaction for employees and the people they serve.

7. Supply Chain Management

Outsourcing offers scalable solutions to changing demand without excess inventory or staffing. Partners manage supply chain risks, including recalls, compliance, and cost reduction. 

Healthcare IT outsourcing partners help lower procurement and operational expenses while keeping healthcare institutions updated with industry best practices and innovations. Outsourcing non-core functions like inventory management enables healthcare organizations to focus more resources on patient care and medical excellence.

8. Claims processing

Claims processing is when an insurance company gets a policyholder’s request for claims. After an investigation to validate the claim, they determine the amount to reimburse the insured individual. 

The claims process starts with filing the claim, which requires the parties’ names, the date, incident details, and the claim amount. Next is a claim investigation, which reviews the details of the incident and collects the necessary documentation to decide on the claim amount. Lastly, the insured party accepts or rejects the settlement amount during closure and payment.

Elements for Choosing the Ideal IT Outsourcing Partner

Choosing a partner for all this is like choosing a best friend who always has your back. Selecting the right IT outsourcing partner is an important decision for businesses aiming to streamline operations and foster growth in an era of paramount technological agility and innovation. 

  • Industry experience and references
  • Skill requirements
  • Productivity and employee retention
  • Innovation and continuous improvement capabilities
  • Interaction and assistance
  • Cost structure and transparency
Elements for Choosing the Ideal IT Outsourcing Partner

1. Industry Experience and References

Find a healthcare IT outsourcing partner who can deploy a dedicated team of developers and engineers proficient in constructing and sustaining highly effective software solutions that exceed market standards in the healthcare industry to yield exceptional outcomes. 

A capable healthcare IT outsourcing provider should have a solid background of successful cooperation, evidenced by positive, measurable outcomes and outstanding products. They can deliver user-centric design, seamless integration of critical technologies, and accelerate product launch to the market. 

2. Skill Requirements

Your outsourcing partner should have technical and managerial teams boasting diverse skill sets. Suppose your healthcare organization suddenly needs an expert to develop a specialized telemedicine platform to meet emerging patient demands. 

Your healthcare IT outsourcing partners must provide access to specialized skills on-demand and accelerate project timelines, ensuring that your healthcare initiatives remain at the forefront of innovation.

Software outsourcing firms employ teams of seasoned experts with diverse, specialized skill sets. This enables immediate acceleration of development projects, eliminating the delays associated with waiting for the ideal candidates to fill positions. 

3. Productivity and Employee Retention

Maintain a consistent team of engineers and project managers throughout the entire lifecycle of your software development. High retention rates among employees indicate a satisfied and effective workforce, reflecting positively on the overall productivity and harmony within the team. 

A stable team, deeply familiar with the project’s nuances and history, can make informed decisions based on a comprehensive understanding of past challenges and successes. Having a stable crew of professionals from healthcare IT outsourcing companies contributes significantly to achieving successful outcomes.

4. Innovation and Continuous Improvement Capabilities

Get a dedicated team to persistently steer a product through its lifecycle, from flowcharting to launch, into maintenance and enhancements. This continuity ensures that the team’s deep knowledge of the product’s architecture and evolutionary history is leveraged for innovative development and swift issue resolution. 

Prioritize a team committed to the product’s success and invest in its ongoing improvement and adaptation to changing customer needs. Organizations can launch innovative products and confidently serve their customers, knowing they have a skilled, experienced team ready to support every phase of the product’s lifecycle. 

5. Interaction and Assistance

Interaction is more than just the exchange of information. You must facilitate clear understanding, aligned expectations, and efficient problem-solving. Regular and open interactions are strongly emphasized to ensure that you and the healthcare IT outsourcing party are on the same wavelength, enabling swift adjustments to project demands and market changes. 

Assistance is necessary for a healthcare IT outsourcing supplier. It reflects the commitment to meet and exceed their client’s needs. It involves proactive support, from offering expert advice to devising innovative solutions that drive project success. Together, interaction and assistance forge a thriving, long-term collaboration

6. Cost Structure and Transparency

A transparent cost structure ensures that all parties clearly understand what services will be provided and at what price. It eliminates surprises or hidden fees that can lead to mistrust or conflict. This clarity allows companies to plan their financial resources more effectively. 

Transparency in operations fosters trust between the healthcare IT outsourcing corporation and the client. This creates an environment that facilitates open communication, and one where transparency is encouraged. Openness centers on building a relationship based on mutual respect and trust — essential for long-term success and collaboration.

7. FAQs

In addition to the reasons for healthcare IT outsourcing development, you may have questions about its condition and efficiency. Some commonly asked questions are:


When Should You Outsource IT Services?

When IT expenditures are too high or can’t keep up with growth, healthcare IT outsourcing can offer a more affordable solution to overcome budget constraints and reduce the high costs of recruiting, training, and retaining IT staff. Also, IT needs can fluctuate over time, and outsourcing provides an ability to scale up or down quickly without hiring new staff or laying off employees.

Does Outsourcing Improve Company Performance and Competitiveness?

The agility of the right healthcare IT outsourcing approach allows businesses to adapt quicker to market changes and technological advancements, keeping them ahead of their competitors. Furthermore, outsourcing can lead to overhead cost savings that can be reinvested into business areas. Thus, outsourcing fosters a more dynamic, competitive, and resilient business model.

Embrace the Benefits of IT Outsourcing with KMS Healthcare

The right healthcare IT outsourcing strategy is vital for organizations striving to succeed in today’s dynamic landscape. Partnering with KMS Healthcare opens doors to various services, such as software development, modernization, and technology consulting.

Embrace the Benefits of IT Outsourcing with KMS Healthcare

KMS Healthcare specializes in healthcare software development and boasts a dedicated team of developers and engineers adept at crafting innovative software platforms that exceed industry expectations. Our platform-certified experts seamlessly integrate with your team to ensure exceptional results.

We prioritize a user-centric approach, agility, MVP development, with the integration of automation and cutting-edge technologies. We aim to swiftly deliver top-notch products, anticipating your needs and surpassing expectations to address healthcare customers’ primary challenges.

Let KMS Healthcare be your trusted partner in shaping a brighter future for healthcare delivery. Contact us today!

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