Term Paper: Kemp Health Center Outsourcing Plan

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[. . .] The capability of the microbiology staff needs to be seriously assessed to help determine which tests will remain in-house. With the abundance of inaccurate tests it is important that only tests that the staff can effectively handle remain in-house. Incorrect interpretations result in flawed therapy. Physicians rely heavily on fast, accurate tests for disease prevention, diagnosis and prevention.

Cost and Quality also play a big role in making the decision to outsource. With the prevalence of inaccurate tests at KHC that impact quality and reduced reimbursement rates from insurance companies, outsourcing is an option that could possibly reduce the looming debt. For a community hospital as small as KHC, tests that are too complicated to be performed onsite, and those that are rarely ordered, should be sent to a respected, reliable reference laboratory such as LabCorp or another HCO. On the other hand, standard microbiologic tests, particularly those used for the direct examination of clinical specimens for microorganisms, probably should not be outsourced. For example, if test results could require individuals to be placed in isolation for the protection of health care workers, those tests should be performed in-house.

By correctly identifying and implementing an outsourcing solution, a healthcare organization will realize some benefits. The in house laboratory in most cases is low on the list for budgetary funds, despite the impact on healthcare delivery. Without funding, the lab is unable to remain competitive and provide state-of-the-art testing, which very often is what is required by clinicians. For the lab at KHC to be competitive it would require a large investment which the hospital is unable to provide. A partial laboratory outsource would provide the following benefits:-

Financial saving -- Money will also be saved on equipment, supplies, and personnel. The equipment that would be needed to perform outsourced tests will be provided by the outsourced lab. In-house laboratory functions are characterized by relatively high fixed costs for supplies, high capital investment, and associated benefits and salaries, and yet these assets and manpower are usually under-utilized.

Cost-effective, high-quality testing of patient specimens -- This will save the hospital money and provide more accurate testing of specimens. Each individual test result will be backed by quality processes that have met the accreditation requirements

Increase in Patient satisfaction -- The increase in accurate test results this will result in higher patient satisfaction. The patients will feel more confident about having their tests performed via KHC by a reputable lab like LabCorp or a well-respected "local" lab and prevent them from driving one to three hours to another facility for evaluations and testing.

Increase in Physician satisfaction -- Test results are more accurate and large arrays of tests are offered.

Availability of sophisticated testing -- Outsourcing to a commercial lab, gives patients the convenience of sophisticated testing that ordinarily will not be available because of the high cost of equipment's used and the skilled personnel involved. Specimens can be drawn in the hospital and transported to the lab.

Insurance and Billing -- The commercial lab or the hospital lab that KHC is looking into has enough volume and staff to negotiate higher reimbursement rates from the insurance companies. This allows them to bill the insurance companies directly and provide discounted rates to self-pay patients.

Technology component - The lab services provided by LabCorp and Portneuf Medical Center both have the capability to view lab results online. There is also an interface that will connect directly to an EMR when KHC decides to implement one. This interface will allow patient lab results to be integrated directly to the patient chart and viewed by physicians in the hospital and in their offices.

Improve focus on mission - KHC will be able to pay more attention and devote more time on the organization's mission. Management will no longer have to worry about the laboratory services which provide at least 70% of patient care information. Outsourcing reduces cost and provides KHC with the benefit of much needed quality services (Ume, 2008).

Proposed Solution

The Laboratory Performance Management Team at the Kemp Health Center recommends forming a contract with either Portneuf Medical Center or LabCorp for the outsourcing of most clinical laboratory services other than STAT studies and essential microbiology services; the selection [END OF PREVIEW]

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Kemp Health Center Outsourcing Plan.  (2012, December 17).  Retrieved July 17, 2019, from https://www.essaytown.com/subjects/paper/kemp-health-center-outsourcing-plan/6968829

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