Outsourcing can hone a practice's focus

While hiring may be the immediate solution that comes to mind when it appears that you need more administrative help around the office, another option is outsourcing.

Parceling out work to outside companies is seen by some practices as a way to boost employee productivity in areas that matter -- such as caring for and serving patients. It's also a strategy that allows group leaders who are inexperienced in human resource issues, such as workers' compensation and benefits administration, to lean on the expertise of an outside firm.

The goal of outsourcing is not necessarily to cut payroll expenses or eliminate positions in the office, consultants said. Chances are, the staff member who handles payroll, for example, probably handles several other duties, and outsourcing one task will allow more time to perform others.

For doctors, a prime measurement for determining the need for outsourcing is opportunity cost. If physicians, nurses and other staff members spend time dealing with administrative issues, that's time spent away from patients and a quantifiable amount of money lost, outsourcing experts said.

"Doctors have the highest opportunity costs of all the industries we serve," said Carl Kleimann, president of Odyssey OneSource, a professional employer organization in Euless, Texas. "They don't always recognize reducing opportunity costs as the biggest advantage."

A 2005 study of legal and medical practices conducted by researchers from Cornell University and Gevity Institute, the research arm of Gevity, a human resource outsourcing provider, showed that a commitment to human resource details had a significant impact on employee performance. Financial performance improved between 15% and 22%, depending on the size of professional practice, and employees in those groups apparently showed greater effort and a better focus on customers.

"Overall, the use of HR services had a significant impact on these things," said David Sikora, director of Gevity Institute. Most small employers try to handle human resource duties themselves, but "the problem with that is they're missing out on implementing the practices that will help them get that impact," Sikora said.

Doctors have the choice to hire a firm to handle specific office duties in an a la carte style, or a practice can enter into a co-employment agreement with a professional employer organization, which handles the group's entire human resources platform.

There are advantages and disadvantages to both, consultants said. For example, most professional employer organizations handle only human resource functions, meaning that a practice would need to find another outsourcing provider to take on billing and coding work. On the other hand, entering into a co-employment agreement makes the outside company a more prominent player in employee issues such as workers' compensation and disciplinary problems.

Regardless of your route, you should be able to tap into the buying power of outsourcing firms, resulting in advantages such as cheaper health insurance premiums. Outsourcing firms also can offer better understanding of federal employment guidelines.

Nathan Mayl, MD, a plastic surgeon in Fort Lauderdale, Fla., says that by outsourcing his human resources duties, he can offer a better benefits package to employees, which lets him compete against hospitals. "In terms of actual cost, the total dollars spent is not much different than trying to do it on your own," he said.

One thing outsourcing does not allow you to do is stop dealing with employees. While an outside company may process payroll checks or help you navigate a tricky discipline issue, you are still the one working with staff daily, and you will be the one they come to when they have a problem.

"It's not a magic pill," said Roberta Chinsky Matuson, president of Human Resource Solution, a human resources consulting firm in Northampton, Mass. "You can have someone take over your HR, but the problems don't automatically go away."