Managing strategic outsourcing in the healthcare industry

Hospitals and healthcare systems are facing increased financial difficultie s because of the Balanced Budget Act of 1997 and managed care. As a result, healthcare executives face the challenge of reducing costs while maintaini ng quality patient care. One of the strategic tools healthcare executives u se to meet this challenge is outsourcing. Even though outsourcing has many benefits, outsourcing will fail if not man aged successfully. Senior executives must choose outsourcing managers who h ave the necessary leadership capabilities. Managing outsourcing requires an understanding of outsourcing strategy, the benefits and risks of outsourci ng, the evaluation process, and the methods to managing strategically. With appropriate management, strategic outsourcing should provide healthcare ex ecutives with a viable strategy for controlling costs and maintaining quali ty patient care.