Past Meetings

Outsourcing and the Role of the CIOBack

12/14/2001

Outsourcing will be the feature topic on Friday, December 14 at Health Tech Net, and we will also discuss some ideas for our monthly meetings going into the new year.
Several speakers will review outsourcing alternatives, as well as strategies for evaluating them, and will present a high-level survey of major players in the healthcare outsourcing arena. An area hospital CIO will review the hospital's experience with outsourcing, with particular emphasis on operating relationships between the outsourcing vendor and the hospital. Shaw Pittman experts on outsourcing will also present some legal and practical considerations in these arrangements. The program will be led by Jim Oakes, CEO of Criterion Health Strategies.

Summary:

The HealthTechNet meeting of December 14, 2001 featured two speakers, James L. Oakes, Jr., CEO, Criterion Health Strategies, and James H. Wilkins, Jr., a partner in Shaw Pittman LLP’s Outsourcing Group.

Mr. Oakes’ presentation, captioned "Outsourcing : What, Why, When, and Who," covered four topics, including: (1) an overview of prevalent outsourcing models, (2) a discussion of key decision drivers, (3) a discussion of evaluation criteria, and (4) a brief review of major players in the outsourcing industry. Of note, Mr. Oakes discussed reasons not to consider outsourcing, such as the belief that it is expensive, that the best employees will quit, or that the company will lose control of a key asset. Countering these assertions, Mr. Oakes also explained several reasons to consider outsourcing, including: (1) access to key skills, (2) greater control over cost escalation, (3) accountability, and (4) access to capital. Mr. Oakes concluded his presentation with a discussion of "Autopsy Results," also known as outsourcing failures. In particular, Mr. Oakes noted that a critical outsourcing mistake is the failure to allot adequate time for evaluation; he recommended an average of 6 to 9 months to evaluate and choose the best outsourcing vendor. Mr. Oakes' presentation is attached below.

Mr. Wilkins spoke on "Outsourcing in Healthcare: Best Practices in Process." He began his presentation with a definition of outsourcing and a review of several different types of outsourcing arrangements. Mr. Wilkins also outlined suggested steps for an outsourcing arrangement, including: (1) forming a team, (2) developing the right infrastructure, (3) identifying the objectives, (4) avoiding traps, and (5) evaluating potential vendors by using a ‘term sheet.’ In closing, Mr. Wilkins highlighted an important legal issue to consider in the context of drafting an outsourcing contract : identifying the appropriate standard for termination for material breach. Mr. Wilkins' presentation is attached below.