Thomas Senker doesn't think outsourcing is a dirty word Even so, Senker, who is vice president of operations at St. Mary's Hospital in Waterbury, Conn., prefers to use another term to describe this particular method of subcontracting: He calls it insourcing. Or, better still: partnership.
No matter which way it's described, Senker says, the model "brings added resources and capabilities to the hospital that we would not have access to otherwise.""To some people, it represents someone else coming in to do the work," he adds. "That's not what we were looking for. We were looking for additional help.
Senker has quickly made his mark at St. Mary's, where he was hired only about seven months ago, setting in motion an ambitious plan to improve customer service and plant operations through a partnership with an outsourcing firm. Since putting these services out for bid, Senker has seamlessly transferred about 25% of all of the hospital's nonclinical functions to Sodexho USA, the nation's biggest outsourcing company for hospitals.
Is it possible to outsource every hospital function aside from clinical services? Unlikely, says Senker, but he may not be finished after beginning the push for improvement by soliciting bids from outsourcing firms several months ago.
Senker, who worked with Sodexho in his previous job at USC University Hospital in Los Angeles, began by assessing the services at St. Mary's and calling upon outside experts for further analysis. After determining that there were "opportunities to improve" in key areas, Senker talked with several outsourcing firms, ultimately deciding to accept bids from two of the nation's biggest-Sodexho and Aramark. The process began in February.
Representatives from both firms spent about a week on-site before returning with proposals. By July, Senker and other hospital officials had made their decision to hire Sodexho for a range of services that includes the transportation department (now described as the "service-response center"); the food and nutrition department, which includes all patient meals and a retail operation that features the new Jazzman's Coffee Bar; facilities management; and environmental services.
While most hospitals don't have this level of outsourcing, more and more are moving in that direction, according to Jay Marvin, who is executive vice president of Sodexho's healthcare group. He estimates that about 20% of nonclinical hospital services are outsourced, with that number approaching about 30% for food service.
Like Senker, he says, hospital executives are calling on companies such as Sodexho, Aramark and other big players to handle these and other services, creating a competition for outsourcing contracts that he says provide a "huge opportunity in controlling cots and expenses" for clients like St. Mary's. Sodexho, firmly entrenched at St. Mary's over the last two months, is performing according to expectations, Senker says.
Under the aegis of Sodexho, he said, support services have attained a significance in this era of patient-centered healthcare that nearly approaches that of clinical care. "They have a much more visible presence in our patient-satisfaction effort," Senker says.
If he has any advice for hospital executives planning to follow his lead, Senker says, "It's important to have a vision for the operation laid out before you even contact these companies. You need to let these companies tell you what they can do to help achieve that vision."
Sodexho's Marvin agrees, saying executives need to "spend a little time thinking about the strategic impact" of outsourcing and what exactly the hospital hopes to achieve in doing so. Hospitals must create a good request for proposals that clearly outlines those goals to the companies that are invited to bid on the business. He also says it is vital to have a "point person" within the organization to deal with the outsourcing company.
"You have to have that person, internally, to communicate with the contractor," he says. Marvin says it takes only about 90 days for a company like Sodexho to begin a new partnership after moving through the bidding process and a transitional period. But it can stretch as long as five or six months. Typically, a hospital will seek bids from two or three of the largest outsourcing companies and perhaps a smaller regional outfit.
Senker says the transition has been seamless to the point where most employees don't even realize that the half-dozen or so individuals absorbed into Sodexho in management roles are no longer officially employed by St. Mary's.
"It's not like we have a Sodexho operation within the hospital," Senker says. "Our success is tied directly to theirs."
Senker said the partnership with Sodexho provides increased revenue as well as improved morale. He says profits were not a make-or-break consideration in the decision to hire Sodexho, adding that he expects the hospital to essentially break even in the first year and achieve some marginal savings over the course of the five-year contract, a time frame that has become the industry standard.
He says he quickly deflected early resistance to the outsourcing plan from many worried employees. "When we first broached the idea and started our research and began talking to the staff, there was a negative sense about it." No more. In fact, he says, every individual who was on staff at the hospital before Sodexho was hired remains employed at St. Mary's.
"We've kept every single employee who was here," he says. "And that is why we like to call it insourcing."