As healthcare rapidly digitizes, providers must balance patient care with cutting-edge technology. Managing complex IT functions in-house can be costly and inefficient, pushing many organizations to seek expert outsourcing partners.
By using external IT services, healthcare providers can reduce costs, accelerate innovation, and ensure regulatory compliance—all while staying focused on delivering quality care.
So, what makes healthcare IT outsourcing the key to staying competitive in this evolving industry? Let’s dive in.
Healthcare IT outsourcing refers to the process of hiring an external technology partner to fulfill the organization’s IT needs and accelerate project delivery.
This emerging business model has attracted huge interest in recent years from leading health enterprises. The dominating region in the healthcare IT outsourcing market is North America, which will continue to increase its market share in the future because of its well-established healthcare industry and better reimbursement systems.
The USA also holds the majority of the market in North America, due to the higher adoption of digital healthcare and the growing investments made by companies in the country.
Experts note the global healthcare IT outsourcing market continues to grow because of high business needs and changing demands. Hospitals and healthcare workers see cost reduction as a top priority, and outsourcing services deliver a lower cost model. This approach also frees up in-house teams for other tasks.
Healthcare IT outsourcing was growing rapidly before the pandemic, but COVID-19 accelerated its expansion. Today, projections for the industry’s growth reflect this shift. The global healthcare IT outsourcing market is expected to reach $390.7 billion by 2024. While some may view these estimates as inflated, they are grounded in strong reasoning. Healthcare organizations now face higher standards as they adopt advanced technologies that demand new types of services.
The healthcare market is undergoing a technological transformation, but many hospital executives still find basic IT functions—such as service desks, data storage, network management, and security—difficult to grasp. However, as we will explore next, executives do not need to become IT specialists to ensure their organizations receive the right services.
Many hospital executives worry about the risks of outsourcing IT in healthcare, including data breaches and security challenges. However, outsourcing IT security provides access to specialized expertise and cybersecurity solutions tailored to clinical environments.
Because of this discrepancy between skills and requirements, many organizations have determined that the majority of their IT activities should be outsourced to specialists with long-term experience in developing IT solutions for this sector.
Before diving into why your organization should trust an outsourcing IT company, let’s back our statements with more statistics.
The facts about healthcare IT outsourcing
We don’t want to overwhelm you with numbers, but it’s good to know the stats to make an informed decision about your organization’s future. That’s why we gathered some key facts and data on why IT outsourcing will be important for the healthcare industry:
- Outsourcing IT healthcare reduces costs by 30% to 60%.
- More than 90% of the hospitals in the US have outsourced at least one IT service to optimize their processes (Jonathan Clarke, the Assistant Professor of Health Policy and Administration, Penn State University)
- The most common IT outsourcing healthcare services include – healthcare coding and billing, medical transcriptions, insurance claim processing, virtual assistants, and customer support.
- In the second quarter of 2020 outsourcing healthcare IT cloud services increased by 11% due to scalability and remote care enablement. (Deloitte Global Healthcare Outlook 2021.
- The global market for healthcare IT outsourcing is estimated to reach $64 billion by 2027. (iHealthcareAnalyst)
- The key benefits of IT Outsourcing in Healthcare include reducing and controlling operating costs, improving company focus, gaining access to world-class capabilities, freeing up internal resources for other purposes, and utilizing resources that are not available internally. (iHealthcareAnalyst)
Source: ihealthcareanalyst.com
When investing in IT outsourcing in healthcare, many healthcare services also see benefits like revenue cycle management improvements and better patient outcomes. By delegating specific tasks to outsourcing partner teams, organizations can focus on patient data and overall digital transformation.
Advantages of outsourcing healthcare IT
Healthcare executives outsource IT for many reasons, including technology enablement, agility, scalability, and innovation. Ultimately, their goal is to stay competitive, improve patient care, and drive their organizations forward.
Below are the key benefits of working with IT outsourcing partners.
Lower operational costs
If you want to have a fully operational IT team, you must invest in equipment, human resources, and infrastructure management. That’s a huge cost that you need to add to your budget.
Outsourcing IT to third-party vendors significantly reduces costs. These companies provide their own infrastructure and employ highly skilled specialists with up-to-date market knowledge, eliminating the need for in-house investment.
Cutting-edge resources
Coming from the last thing we said, outsourcing IT companies have the latest market insights. They have a proven track record of working with other healthcare providers, and they know what’s best to meet your technological requirements.
As a result, their toolboxes include the best, latest, and most technologically advanced tools and resources on the market.
System development outsourcing
Building your eHealth solutions is a long and complex process that requires specific IT skills. Instead, you could outsource these operations to a team with expertise and resources that has already built multiple similar solutions for other clients.
From patient CRM, CTMS, Electronic Data Capture Systems, GMP platforms, and mobile apps to their maintenance, quality assurance, and testing—you name it, and the outsourcing IT company can do it for you.
Full-proof security
Due to the high amount of sensitive data healthcare organizations collect in electronic health records, for example, the healthcare industry is prone to cyber-attacks. The role of data security and compliance in healthcare IT outsourcing should not be neglected in the least.
Since HIPAA demands complete data security from such crimes, healthcare organizations are bound to find measures to avoid penalties. That’s another reason the healthcare industry opts to outsource IT services.
Most companies that provide IT outsourcing for the healthcare industry ensure compliance with HIPAA regulations so that their clients do not face legal issues.
Impact on staff
Outsourcing in healthcare can have both positive and negative impacts on staff and operations.
On the positive side, outsourced services allow staff to focus on core activities, access specialized expertise, enhance efficiency and productivity, and optimize resource allocation. However, there can be concerns about job security, communication and collaboration challenges, loss of internal control and expertise, and dependency on external vendors.
To navigate these challenges, healthcare organizations need a solid outsourcing plan. Keeping staff informed and involved makes the process smoother. Strong vendor relationships build trust and ensure reliability. Regular check-ins on performance help keep everything on track.
Potential disadvantages and drawbacks for healthcare institutions
There are a couple of disadvantages that also need to be mentioned here.
Security and privacy risks
Outsourcing IT functions involves sharing sensitive patient data and information with external parties. This introduces potential security and privacy risks, as organizations need to ensure proper safeguards and compliance with data protection regulations.
There is also a risk of data breaches or unauthorized access if security measures are not properly implemented. Tracking healthcare resources is also a fundamental part of how a facility functions, and their standards regarding this aspect have to also be taken into consideration by the IT company.
Loss of control and communication challenges
Outsourcing IT means relying on external vendors for critical services and infrastructure. This can result in a loss of direct control over IT operations, decision-making, and customization.
Communication challenges may arise due to geographical or cultural differences, potentially affecting collaboration and responsiveness.
Dependency on external vendors
Outsourcing healthcare IT can create dependence on external vendors or service providers. If there are issues or disruptions in the vendor’s operations or services, it can impact the organization’s IT capabilities, support, and overall performance. It is crucial to establish robust contracts, service level agreements, and contingency plans to mitigate such risks.
It is wise to weigh the pros and cons of outsourcing healthcare IT carefully. Many hospitals enjoy lower cost structures, better overall efficiency, and access to specialized skills. However, there can be risks associated with outsourcing network IT in healthcare if not handled properly.
Integration with existing systems
Integrating outsourced IT services with existing hospital systems can be complex. Many healthcare facilities use a mix of EHRs, billing software, and diagnostic platforms, all of which must work together without disruptions.
A reliable outsourcing provider should offer innovative solutions that ensure seamless compatibility with current infrastructure. Regular coordination between in-house IT teams and external vendors helps prevent compatibility issues and optimizes system performance.
Using the latest technological advancements, such as AI-driven interoperability tools, can further streamline integration and enhance efficiency.
Hidden costs
Unexpected costs can arise when outsourcing IT services if the project scope, deliverables, or pricing structure is not clearly defined. Expenses related to system modifications, additional training, or unforeseen service needs can quickly add up.
To avoid budget overruns, hospitals should work closely with their outsourcing provider to establish transparent pricing models and comprehensive contracts.
Regular financial reviews and performance assessments ensure that costs remain under control while still benefiting from innovative solutions and the latest technological advancements in healthcare IT.
How to select the right IT outsourcing company for your organization?
At the start of the healthcare industry’s technological shift, finding an IT outsourcing company was simpler due to limited options. As demand for IT services has grown, so has the number of outsourcing providers.
To increase your chances of selecting a top-tier IT partner, follow the guidelines below.
Feedback from existing customers
There isn’t a better sign of what a company is about than its previous work and clients’ feedback. That’s why the first thing you have to do is look into your candidates’ portfolios, testimonials, and business models.
This paints a complete picture of how the company performs and whether its efforts yield exceptional results.
Check their services and performance
The next step is to determine what the service standards are. Besides that, you should check out the best outsourcing practices for healthcare IT.
For example, a good outsourcer follows PMI project management standards and ITIL standards to ensure smooth development.
Previous healthcare experience is a must
You don’t want to work with a company with zero hands-on experience in developing solutions for the healthcare and pharmaceutical industries. The best-case scenario is selecting a partner with years of experience that industry leaders trust. That’s because companies that outsourced healthcare facilities earlier know the drill.
They have a better understanding of clinical workflows and revenue cycle management. Additionally, they understand how those workflows are interconnected with IT. On top of all that, they meet all HIPAA requirements, which is a must in the healthcare industry.
Overall, an experienced healthcare IT outsourcing firm will provide you with risk and error-free development and save you from breaching protocols.
Remain forthcoming
While it’s important to know what the IT company of your choice can offer, you have to make sure that your needs are well-defined for the partnership to work. You must be open about your challenges rather than focusing on what to say to avoid additional costs.
The main goal is to identify challenges so that your partner can come up with the best strategy to overcome them. Failure to identify and define your needs will reduce the effectiveness of the whole planning and development process undertaken by the outsourcing firm.
Cooperation and trustworthiness
Even if you did complete research, problems might surface once you start working with an outsourcing company. To stay on top of the issues, cooperation is required on both ends.
Communication about current challenges and co-operation in resolving them together can contribute to overcoming those challenges and lead to the development of lasting relationships.
Look for a partner, not a vendor
And last but not least, make sure to work with a partner. The biggest mistake healthcare companies make is choosing several vendors with only specific skills in a tight area. That’s why they are limited to basic services and cannot get the synergy of working with a technology partner, which can be a one-stop-shop.
However, if you opt for a partner, then you can get a wide range of benefits, starting with the creation of the product’s blueprint, which will capture all your requirements and related solutions for ongoing maintenance and support. Hence, invest in a partner that has the right core competencies. Otherwise, you risk ending up with unsatisfactory results.
IT outsourcing for healthtech: services, consultancy, and strategic partnership
As healthtech companies grow, they rely on IT outsourcing for secure data management, software development, and system integration. Choosing the right provider requires assessing expertise in compliance, interoperability, and innovation. Expert consultancy plays a critical role, with senior IT professionals offering guidance based on 15+ years of experience in digital health projects and software development.
To enhance this service, BGO Software provides Project CTO as a Service, where a dedicated technical leader manages project challenges and oversees engineering teams. This approach ensures a strong start, minimizes risks, and enhances strategic reusability. Our industry-experienced technology leaders support decision-making through four engagement packages tailored to different needs.
Healthcare organizations must evaluate IT outsourcing for security, EHR systems, and administrative functions based on their goals. A reliable IT partner applies industry best practices and deep digital transformation knowledge to deliver specialized skills and scalable solutions, reducing costs and improving patient outcomes.
BGO Software exemplifies this role, supporting healthtech leaders worldwide in building global health ecosystems, advancing preventive care, and leveraging technology to transform healthcare.
Healthcare IT outsourcing refers to the process of delegating IT-related services—such as EHR management, software development, cybersecurity, and infrastructure support—to external providers who specialize in the healthcare industry. The main reasons include: Typical services include: Common challenges include: Important criteria include:Frequently Asked Questions (FAQ)
What is Healthcare IT Outsourcing?
Why do healthcare organizations choose to outsource IT services?
What are the most commonly outsourced healthcare IT services?
What are the main risks of Healthcare IT Outsourcing?
How do you choose the right healthcare IT outsourcing partner?
BGO Software is a renowned IT company specializing in healthcare technology solutions. With over 15 years of industry experience, we offer comprehensive technology consulting, software development, and IT infrastructure services. Our focus on healthcare technology enables businesses to mitigate technological risks and accelerate growth, ultimately delivering enhanced value to patients.
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