Healthcare IT outsourcing is a popular option for how businesses in this vertical can solve their tech issues and optimize spending. However, due to strict regulations (and high penalties for non-compliance), many hesitate to delegate these functions to a third-party tech vendor.
While these concerns are valid, the companies can still create an effective IT outsourcing strategy for the healthcare industry. This article reviews the key things a business should consider when delegating tech tasks to healthcare software development companies. Let's start with discussing what can be outsourced.
What healthcare IT functions can be outsourced?
Healthcare businesses can outsource various IT tasks-from app development to IT support. However, they should ensure their chosen vendor complies with the regulations of the target market regarding data processing and software requirements. Below is the list of the most popular healthcare IT outsourcing services:
- Software development consulting;
- Software development: customer and employee-facing applications, IoT applications for smart devices,
- Solution development: EMR (electronic medical records), EHR (electronic health records), BPM (business process management), CRM (customer relationship management), LIMS (laboratory information management systems);
- Software support;
- IT infrastructure management;
- Cybersecurity services.
When deciding what tasks to outsource, businesses will have to consider their tech ability, project details, and how outsourcing can benefit them in their digital transformation journey.
They should also analyze the industry's outsourcing trends to ensure their business decisions align with market conditions, customer demand, and tech progress. Let's review the most prominent trends in healthcare IT outsourcing.
Healthcare IT outsourcing trends
Considering IT outsourcing trends in healthcare is crucial for businesses to respond to evolving market demands and outperform competition. These trends also force companies to keep up with innovations that improve care quality, optimize resource allocation, and enhance patient outcomes.
According to iHealthcareAnalyst, Inc., the healthcare IT outsourcing market is predicted to reach $78.3B by 2031. This means that more businesses will outsource their IT functions to optimize their costs, improve service quality, and better prepare to outperform competitors.
There are also worldwide tendencies and visions regarding the future of healthcare.
For example, as Deloitte's "Forces of change: The future of health" suggests, the healthcare businesses "will identify and compete in one or more of the new business archetypes" in three large categories by 2040:
- Data + platforms;
- Well-being +care delivery;
- Care enablement.
The market success of each archetype from this group will be defined by the technologies they choose to enable their operations. Below are the archetypes for each group.
In addition, the whole healthcare sector is on the way to a major transformation, enabled by new technologies and the way the data can be collected, processed, and used. According to Deloitte, the 2030s will be the era of industry reassembly, characterized by a consumer-centric approach towards healthcare.
It's important to analyze which trends your company should follow, considering your business strategy, tech landscape, and unique challenges. Here are six trends shaping the healthcare sector today.
Trend 1: Opting for nearshoring
Most businesses outsourcing IT functions choose nearshoring over offshoring or onshoring, and the healthcare sector is no different. Nearshoring allows them to cut costs while enjoying proximity to the development centers and access to a larger talent pool. In addition, it solves the problem of scheduling joint sessions with the outsourced teams, as both business and tech experts are located in the same or similar time zones.
Trend 2: AI adoption on and off-premises
According to the Future of Jobs Survey 2023 by the World Economic Forum, 80% to 90% of medical and healthcare services providers plan to prioritize skills training in AI and Big Data. It will lead to businesses prioritizing those outsourcing vendors who offer AI services and can implement generative AI in healthcare.
In fact, as the State of Outsourcing Report 2024 by CMSWire and SupportNinja suggests, 38% and 35% of surveyed businesses already consider the tech vendor's AI capability very important and moderately important, respectively.
Trend 3: Integration of remote patient monitoring solutions
With the rapid growth of telemedicine and increasing workforce shortage, the healthcare providers are adopting remote patient monitoring (RPM) tools on a larger scale. According to a Vivalink report cited by PR Newswire, the use of RPM tools has increased by 300% over just two years.
One of the major reasons driving RPM adoption was rehospitalization that cost both clinics and patients significant use of resources. Use of tools that allow continuous monitoring helped decrease in-patient visits, improve patient outcomes, and decrease rehospitalization rate by detecting condition deterioration and treating the patients timely.
The survey also found that 45 % of providers use RPM for acute monitoring, such as hospital-at-home programs. Moreover, 77% of healthcare providers expect a switch from traditional in-patient hospital monitoring to RPM-based care.
From this perspective, the businesses will consider vendors with experience in computer vision in healthcare as it will help them ensure continuous monitoring of patients. Moreover, they will also increase the use of IoT in healthcare devices to effectively collect, process, and act upon sensor data.
Trend 4: Focus on technologies to address workforce shortage and workload reduction
The workforce shortage is among the key challenges in the healthcare industry. According to the data from the US Bureau of Labor Statistics and the Association of American Medical Colleges, the US will need 1.1M new registered nurses and between 54,100 and 139,000 physicians by 2033, respectively.
Since overworking and burnout are the major reasons people leave this field, businesses will focus on adopting tools that help automate routine, repetitive tasks, deal with workload pressure, and make virtual patient observation more accessible.
Trend 5: Prioritizing compliance
Each country has specific standards for maintaining and processing patient data. The US, for example, is governed by HIPAA (Health Insurance Portability and Accountability Act). It regulates data processing and security and holds healthcare businesses accountable for data security breaches. It also defines the penalties for HIPAA violations. Here's how much the HIPAA breaches may cost companies in 2024, according to The HIPAA Journal:
|
2024 HIPAA Penalty Structure |
||||
|
Penalty tier |
Culpability |
Minimum penalty per violation (inflation adjusted) |
Max penalty per violation (inflation adjusted) |
Maximum penalty per year (inflation adjusted) |
|
Tier 1 |
Lack of knowledge |
$137 |
$68,928 |
$2,067,813 |
|
Tier 2 |
Reasonable cause |
$1,379 |
$68,928 |
$2,067,813 |
|
Tier 3 |
Willful neglect |
$13,785 |
$68,928 |
$2,067,813 |
|
Tier 4 |
Willful neglect (not corrected within 30 days) |
$68,928 |
$2,067,813 |
$2,067,813 |
In 2022, fines for HIPAA non-compliance ranged from $127 to $1.9M, depending on the severity. The fines for HIPAA non-compliance and the cost of civil settlements reached $5.74M in the first half of 2024, and the number is expected to grow.
Since the number of breaches in the industry is increasing, companies will partner with GDPR (General Data Protection Regulation) and HIPAA-compliant software development vendors. This will ensure their IT ecosystem is protected and ready to face possible security challenges.
Trend 6: Focus on cybersecurity
According to IBM Data Breach Report, the cost of data breaches cost the healthcare sector a staggering $10.93M in 2023, making it the most affected industry. Since the cost of data breaches across the industries increases, the healthcare businesses will focus on strengthening the resilience of their IT infrastructure to cybersecurity attacks.
These trends will shape how healthcare enterprises plan their outsourcing strategy. Here's why this cooperation model is attractive for many in this vertical.
Explore the topic: 15 top healthcare software development companies
Benefits of healthcare IT outsourcing
IT outsourcing has plenty of benefits that healthcare businesses can achieve. Below is the list of the most common ones:
- Enhanced patient care. Healthcare IT outsourcing enhances patient outcomes by optimizing care delivery, leveraging advanced technologies, improving data management, ensuring compliance, and enabling healthcare providers to concentrate on delivering high-quality, patient-centric care.
- Establishing additional revenue-generating streams. New tech solutions allow medical facilities, practitioners, and pharmaceutical R&D centers to offer more services, expand practice geography, and speed up the medicine development process, creating new revenue streams.
- Reduced operating costs and increased service quality. Businesses outsourcing healthcare IT services save on overhead costs and can respond to business challenges by rolling out development centers faster. It also allows healthcare providers to streamline operations, optimize resource allocation, and focus on medical service provision.
- Access to tech experts with expertise in healthcare IT outsourcing. Partnering with an experienced healthcare IT development company will help you quickly extend your tech team, hire a managed one, or receive a custom product created according to the industry's best practices and regulations.
- Enhanced scalability. Healthcare IT outsourcing allows healthcare providers to flexibly adjust their tech resources based on current needs and demands. It ensures that businesses can maintain operational efficiency, deliver consistent care, and adapt swiftly to market dynamics without the constraints of fixed internal resources.
- Faster time to market. Outsourcing vendors bring deep industry knowledge and experience, which expedites development cycles, enhances agility in responding to market needs, and facilitates quicker adoption of innovations.
- Effective risk management. By delegating critical IT functions to experienced vendors, healthcare organizations mitigate operational risks associated with technology failures and data breaches. IT outsourcing also allows for proactive monitoring and rapid response to emerging threats, ensuring continuous protection of patient data and maintaining operational continuity.
Alongside the advantages, this service model also has a few things businesses should consider before partnering with external vendors.
Common challenges in healthcare IT outsourcing
The most common IT outsourcing challenges in healthcare revolve around compliance, trust, and data security. Let's review them in more detail.
1. Regulatory compliance
The healthcare industry is regulated by laws such as HIPAA in the US and similar acts globally. These laws mandate strict guidelines for the handling, storing, and transmitting of sensitive patient information to ensure privacy and security.
Failure to meet these regulatory standards can lead to costly penalties, reputational damage, and legal accountability for both healthcare organizations and their outsourcing partners.
N-iX approach: We help our clients ensure compliance by providing services and solutions that meet HIPAA, GDPR, and FDA standards. Our HIPAA-certified experts have built software products, embedded solutions, and clinical software platforms connecting patients and researchers. We understand the regulatory framework for healthcare data processing and plan our development and design processes around the requirements.
Read more: Achieve quality and compliance with a healthcare app development company
2. Vendor reliability
Healthcare organizations rely on the impeccable performance of their IT systems for critical functions like patient care, data management, and compliance with regulatory standards. Failing to maintain safe, secure, and functional IT infrastructure may cause severe damage, so businesses hesitate to delegate these functions to outside vendors.
N-iX approach: We understand that trust and security are also business needs for healthcare organizations, which is why we sort out all the details before our partnership starts. Our team prepares all SLAs and contracts that describe how the project will be handled on our side, what the deliverables are, and other previously discussed issues.
We schedule regular meet-ups with the clients to report on project progress and receive feedback to understand what should be improved to achieve the expected results.
3. Data security and privacy
Since healthcare businesses handle vast amounts of protected health information (PHI) and personally identifiable information (PII), they should handle it according to the regulations such as HIPAA, GDPR, or others.
This is why the outsourcing vendor should be experienced in incorporating data protection and security framework into their development to ensure robust data encryption and access controls and allow for regular security audits. It will help mitigate risks of data breaches or unauthorized access, safeguard patient privacy, and maintain regulatory compliance throughout the outsourcing process.
N-iX approach: We hold necessary certifications proving our compliance with the industry standards regarding data protection and processing. We're GDPR, PCI DSS, and SOC-2 compliant and hold various ISO certifications such as ISO 27001, ISO/IEC 27701:2019, and ISO 9001.
How can N-iX help you achieve your business goals with healthcare IT outsourcing?
If you're looking for a compliant and reliable tech partner to outsource healthcare IT tasks, N-iX is ready to set your project up for success with our 21 years of expertise.
With over 2,200 software experts specialized in cloud, IoT, AI, ML, Data Science, computer vision, automation, and other technologies, we can bring our knowledge to your healthcare project at any stage. Moreover, we have established a strong employer brand in Europe and Latin America, so we can hire top tech talents from 25 countries.
We offer different cooperation models, including Extended Team, Managed Team, and Custom Software Development, so our clients can choose what suits them best.
We are a tech partner for over 160 companies, some of which are on the Fortune 500 list. In the healthcare sector, we have partnered with clinical research, medical device manufacturers, and health tech companies, such as Weinmann Emergency, Think Research, Cure Forward, and Brighter. In addition to healthcare, we also cover the tech needs of companies in the finance, manufacturing, logistics and supply chain, retail, telecom, automotive, energy, and agritech industries.
Contact us, and let's discuss how our extensive expertise can help you ensure growth in the healthcare market!
References:
- The State of Outsourcing: Unveiling the Nexus of Cost, Quality, and AI | CMSWire and SupportNinja
- Cost of a Data Breach Report 2023 | IBM
- Remote Patient Monitoring Adoption Increased over 300 Percent in Two Years | PR Newswire
