Outsourcing of healthcare services in a smart city of Eastern India

Abstract

Purpose Owing to the rising costs and shrinking budgets; inefficiency can be observed in the financing and delivery of health service both in the private and public sectors, which is not only causing organizations to reconsider their management patterns but also to use new strategies to achieve competitive merits in the current world of business. Outsourcing is one of the best alternates. The purpose of this paper is to study: the nature and magnitude of outsourcing of health-care services in a Smart City of Eastern India; the motives behind outsourcing: and the factors affecting outsourcing decisions. Design/methodology/approach The study was conducted in Bhubaneswar, a Smart City of Eastern India and capital of Odisha State. Data relating to the outsourcing of health-care services were collected from 40 hospitals (each having a minimum of 10 beds) through a structured schedule. Descriptive statistics were calculated through Statistical Package for Social Science to substantiate the objectives. Findings Most of the clinical services were outsourced by small hospitals, while a significant portion of non-clinical services were outsourced by large and medium hospitals. Reduction in cost and better management control were the major driving forces of outsourcing. Loss of control over service providers and quality of measurement were considered as the main disadvantages in the decision-making process of not outsourcing the services by hospitals. Originality/value The study is the first-ever survey based on empirical evidence about the state of facilities management services outsourced in public and private hospitals in Odisha, India. The paper concluded that the effect of outsourcing did not synchronize successfully as shown in international literature.