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What Is Healthcare BPO?

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  • Written By: Andrew Kirmayer
  • Edited By: Allegra J. Lingo
  • Last Modified Date: 30 October 2014
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Healthcare business process outsourcing (BPO) is a practice in which healthcare organizations outsource business operations to outside vendors. Relying less on staff and equipment onsite to manage computers, employees, customers, and accounting enables a healthcare company to focus primarily on patient care. Off-site vendors can handle information technology (IT) tasks, human resources, employee training, finance and accounting, and also customer relationship management and supply chain management. The concept of healthcare BPO began in the 1980s, and it is now common for healthcare companies to outsource their operations on many different levels.

The first step in healthcare BPO is for the company to find a vendor that is skilled in providing services for the processes it handles. Each vendor must also be skilled at training and keeping a staff that focuses on customer satisfaction, and have a well-established IT staff and support system. Project management and the ability to collaborate with the client company are essential. Important skill sets also include providing financial services and healthcare management.

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An organization does not have to outsource everything all at once. Companies can go with a step-by-step approach, and outsourcing often begins by offloading IT support operations as well as data entry. On this level, a vendor does not need much healthcare experience or technical knowledge. Healthcare BPO can then move on to transaction processing tasks, such as billing, collection, documentation, and coding. Outsourcing can then extend to patient interactions, call center management, and various customer service tasks for which a vendor needs to possess extensive knowledge of the healthcare industry.

A vendor can eventually hire staff previously employed by the client and commit to improving business processes on its own. At the highest level of healthcare BPO, the vendor is responsible for everyone in the company, all processes and technology, and providing pre-determined improvements in performance which are directly tied to the provider’s compensation. A healthcare company can see as much as 50% savings in their total operating costs by outsourcing business processes to an experienced provider.

Other processes that can be outsourced include mailroom operations, converting of paper documents to electronic versions, and invoice and accounts payable. Health insurance claims and billing can also be outsourced, as well as Explanation of Benefit processing that comes with insurance payments. Operations from revenue cycle management to denial management are also included. There are some healthcare BPO vendors that specialize in providing the full range of business processes to clients.

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