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Advantages of the Knowledge Process Outsourcing for Healthcare

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This election season, the economy was on everyone’s mind. Americans were evaluating the candidates on the likelihood that they will be able to improve the economy and get more jobs. However, this simplistic view of the economy does not penetrate the business world.

Leaders understand that job creation/company growth is an increasingly global proposition, especially, with the growth of outsourcing over the past two decades. Outsourcing began small, focused on finding cheaper manpower for labor-intensive jobs such as telemarketing and data entry at the beginning of the millennium. However, the paradigm is changing. Leading businesses, including those in the healthcare industry, are outsourcing even their “core competencies” to gain a competitive edge with the Knowledge Process Outsourcing Model.

The outsourcing of core processes that require competitive knowledge and higher specialized skills is known as Knowledge Process Outsourcing or KPO.

Business process outsourcing has been a reality for many larger corporations for the past decade and smaller businesses have been gradually engaging as well because of the changing process. Initially, smaller businesses were hesitant because the headache of managing even employees in a central office—the idea of managing overseas was too much. However, outsourcing now is simpler. Instead of worrying about each individual contractor, companies simply work with a business that specializes in outsourcing that particular talent pool, and their provider hires and manages the workers abroad. In the same way, the Knowledge Process Outsourcing Model will free managers from many of the mundane details of having employees and allow them to focus simply on the deliverables.

Talent is vetted and managed from abroad—all businesses have to worry about is the product and payment.
Advantages of the Knowledge Process Outsourcing Model for Healthcare
The transition to the Knowledge Process Outsourcing (KPO) Model  is occurring gradually, as in every other industry.

Examples of KPO currently available include:

  • Financial Research
  • Insurance Research
  • Market Research
  • Data Analytics
  • Content Research Services
  • Medical Content Services
  • Reconciliation Services
  • Billing and Invoicing Services

In healthcare, it began with outsourcing services such as social network analysis and business process outsourcing for health insurance strategic services. As of July 2010, a wide array of services was available to healthcare facilities and all were in various stages of mainstream adoption. According to a study by Gartner, the KPO for the healthcare industry has reached the “plateau of productivity” and will see increasing adoption in the next few years.

Some of the benefits of KPO for healthcare include:

  • Collaboration across and beyond the enterprise. Automatic work routing and notifications across groups, partners, and customers reduces the time, errors and complexity of executing processes.
  • Straight-through processing. Business rules in processes can help automate the routing and processing of tasks — often reducing the amount of human intervention needed by over 80%.
    Real-time visibility and control over processes. Managers can view real-time process performance and proactively manage bottlenecks.
  • Value and life of core systems extension. Leverage existing applications by reading and posting transactions while introducing more efficient Web-based forms and interfaces.
  • Process consistency. Ensure that the process documented is the process executed. Process models that actually run the process provide consistency, adherence and audit trails to ensure compliance with regulations like Sarbanes-Oxley.
  • Faster response to change. Revise processes to respond to organization or regulatory changes — in days, if necessary.

To increase the probability of success, organizations must use a structured approach to managing the KPO opportunity. One such structured approach is depicted in the diagram below.


Source: Ivey Business Journal

  • Potential for cloud. Cloud is the next iteration of outsourcing, adding to the beneficial economics many companies already experience. Unlike traditional Business Process Outsourcing, which often requires the service provider to take over an existing software installation, the process cloud uses a common, one-to-many platform to automate highly standardized processes. It differs from application clouds in that it provides end-to-end process support, covering not just software but also people processes such as contact centers.

In conlclusion, over the next two to five years, the majority of KPO will be established and widely adopted in the healthcare industry. Companies can no longer afford to stay behind this growing trend.

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