outsourcing in healthcare best practices in process presentation to health technet december 14, 2001...
TRANSCRIPT
OUTSOURCING in HEALTHCARE
Best Practices in Process
Presentation to Health TechNet
December 14, 2001
James H. Wilkins, JrShaw Pittman, LLP
Copyright 2001, All rights reserved
2
What is Outsourcing?
Infrastructure
Applications development
ASPs
Back office operations
Networks
Other services
3
Using the Right Process
Objectives of the process
• perform a comprehensive and disciplined evaluation of outsourcing
• maximize the benefits of competition
4
Suggested Steps
Form the team
Develop the right infrastructure
Identify your objectives
Avoid the traps
Evaluate the vendors by using a “term sheet”
5
Form the Team
Senior management team Evaluation team Class of service teams - - to perform detailed reviews and
provide input and assistance to the evaluation team Support teams Due Diligence Negotiation
6
Develop the Right Infrastructure
Understand existing operations
Modeling tools
Performance measures
Measure against objectives
Relationship management capabilities
7
Identify Your Objectives Objectives should be user focused
Write them down what are the drivers? look at all perspectives identify tensions
Gain consensus
Modify as appropriate
Use them! tell the vendors evaluation criteria
8
Avoiding the Traps
Top-down selling by the vendors
Imposing unnecessary secrecy
Failing to follow a disciplined process
Setting unrealistic schedule or goals
9
Avoiding the Traps (cont’d)
Sole source negotiation
Ignoring any aspect of the relationship
– define scope with precision
– do not evaluate and negotiate piecemeal
– do not delay due diligence
Not understanding pricing
10
Term Sheet
What to include:
Scope Quality Pricing Transition
Term and termination Key employees Service level credits
In other words, everything.
11
Selected Issues
Termination for material breach -- the right standard? Service level credits Transition assistance Regulatory compliance Disaster recovery