How HR outsourcing improves the ASC's bottom line: 5 key areas

Outsourcing human resources management can make a huge impact on the ASC's efficiency and bottom line.

"There is functionality and efficiencies delivered when a company is able to single source a lot of areas that are encompassed within HR capabilities. We are trying to bring a solution that is aligning companies and sharing risk with a company that provides the outsourcing solution. We are trying to utilize companies' efficiencies and the latest in office management technology," said Jay Petrick, who leads MedHQ's business development and sales division.

HR capabilities and responsibilities include:

• Employee benefit insurances
• Payroll services
• Accountant payroll tax
• Recruiting
• Manager/supervisor mentoring
• HRIS software and process automation
• HR compliance
• Workers compensation and liability insurance

"Delivering those services from a larger platform to the client company, we find in smaller companies — ASCs and doctors’ practices — the HR duties are typically shared across several people," said Tom Jacobs, MedHQ CEO. "What we find is that by outsourcing, you can really free up that time from that set of individuals so they can focus their time on more productive activities, like negotiating better payer contracts or supply contracts."

An outsourcing company also brings economies of scale to the ASC like a larger organization. A typical ASC using an outsourcing solution can reduce risk and expense by increasing productivity. A $5 million center that improves 5 percent on the bottom line realizes a $250,000 savings, and the ASC staff can then work within their core competencies.

"In healthcare, we know a well performing RN might become the charge nurse or director of nursing, they might become the administrator. But they don't have formal training in essentials of management," said Mr. Jacobs. "Outsourcing can bring that training to your facility. We have even brought clinical training one-off and bullying training sessions — how to overcome that in the ASC."

Here are five key areas where outsourcing HR functions is helpful:

1. Employee disciplinary issues. The biggest concerns for HR managers are employee disciplinary issues and then employee benefits issues, according to a September 2013 survey of participants in the California Ambulatory Surgery Association annual meeting.

When there is an employee issue, the rest of the team compensates. Management is distracted from more productive activities, there is poor physician and patient satisfaction and unwanted employee turnover drags down productivity. It can make a huge difference for an outsourcing company to handle these issues.

2. Employee compensation. Compensation, benefits and health insurance are other big issues facing ASCs.

"There is a wide gap between ASCs around the country on what they consider is an average range of compensation. A good capable HR partner will be able to advise on compensation strategies and provide fair market value feedback to that organization to help you attract and retain talent," said Mr. Petrick. "That is key when it comes to the management of your facility and how profitable it will be."

The federal government is looking at fair pay; if you document compensation correctly and can gear processes toward maintaining compliance, you can avoid being fined by the department of labor.

3. Health insurance. Many companies are adopting Wellness plans, as part of their benefits strategy. Health insurance claims can go up in the beginning of a well-run plan because employees get treatment for things they have to mitigate bigger risk down the road. But there are also employees who don't know how to use their health plan appropriately; they might get services that aren't needed. Most ASCs are in the small group market, and there isn't transparency about what drives prices.

4. Benefits. An outsourcing company can automate benefits enrollment and management processes and track employee use. Automation can track:

• Deductions for state or federal taxes
• PTO requests
• Paid for tuition reimbursement
• Online complaint filing

5. Hiring and training new staff. The cost of replacing the employee is around 12 weeks' productivity. You have to recruit and train the employee and train them. That can be quantified to impact your bottom line. The HR partner can train staff and organize administering recruiting and administrative offices. An outsourcing company can narrow down the best candidates and facility managers then make the final call. The company also has the infrastructure to allow candidates to apply for open positions online, which makes the process as efficient and seamless as possible.

Click here to view a MedHQ webinar on how outsourcing HR functions can improve your ASC.

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