Rebadging—rather than laying off staff—offers some added benefits, since health systems and outsourcing companies both see advantages from having skilled employees who are familiar with a health system’s internal processes. It also helps to maintain a sense of continuity after a large outsourcing transition.
Rebadging is most common when the majority of an IT department or revenue cycle function is outsourced, said Parrish Aharam, a director in the IT practice at the Chartis Group, a healthcare advisory firm. For smaller outsourcing arrangements, rebadging isn’t as likely.
But while rebadging saves jobs—at least, when compared with offshoring or more aggressive outsourcing deals—it can be jarring for employees.
“One day, you’re a part of something, and then one day we’re all gone,” Latimer said.
It also meant losing benefits the health system had offered. Latimer said she was just about six months away from being eligible for the health system’s pension plan.
In 2018, the same year Intermountain outsourced its revenue cycle services to R1, the health system also rebadged 98 IT employees to DXC Technology.
Marc Probst, Intermountain’s chief information officer, said the health system “worked to minimize the impact” of the transition to DXC by ensuring rebadged workers would be guaranteed employment at DXC for at least one year and building a 10% pay increase into their contract with the company.
“We recognize the change may have been challenging for some of the transitioning employees, but the results have been positive,” he said in an emailed statement.
That included help desk improvements, like getting the average speed to answer IT requests to less than 20 seconds and nearly 70% of requests resolved with the first call, according to Probst.
Multiple former Intermountain employees who spoke with Modern Healthcare said that before their jobs were outsourced Intermountain had been the “perfect” place to work—leadership focused on training employees and made them feel appreciated, like a family. Former employees jokingly referred to themselves as “stepchildren” after being outsourced.
“It just felt like a major betrayal, of ‘Well, we’re all family, except for you,’ ” said Christopher Deal, a former coder at Intermountain who was rebadged to R1. “It felt like, ‘If you’re clinical, you’re important to us—but if you’re back behind the scenes, you’re not really as important. You’re not really family.’ ”
Deal left R1 less than a year later after a recruiter from another healthcare company reached out to him.
All rebadging agreements will differ, noted Nick Fricano, CEO of Healthfuse, a company that manages hospitals’ vendor relationships. But typically, employees at first will remain in the same location and roles. Over time, as vendors look to cut costs, the vendor may employ fewer people on-site, shifting workers or their responsibilities to a service center that manages multiple accounts.
“It’s not that there’s necessarily aggressive termination,” Fricano said. “What we oftentimes see is they’re not filling positions as people leave through attrition.”
He said it’s common for about 30% of employees to leave within the first year of being rebadged.
Some companies do cut headcount if they need to trim costs or no longer need the institutional knowledge of former hospital workers, among other reasons.
David Jefferson said he felt like that after his employer, BJC HealthCare in St. Louis, opted to outsource some of its IT in 2018. Jefferson, a customer support technician who worked on access management, said many of the others on his team were laid off, but he was one of a handful of workers asked to join the third-party IT company.
A BJC spokesperson said the system didn’t have time for an interview by deadline but provided the following statement on its most recent IT outsourcing transition, which took place in December 2019. BJC said that, under that deal, it shifted responsibility for most of its IT infrastructure to an unnamed managed services provider.
More than 70% of workers affected in the deal were placed into other roles at the health system or joined the third-party provider, according to BJC.
“Using managed service providers for IT services is a standard practice in many industries, including healthcare, and enables internal staff to focus resources on IT strategy and business solutions,” BJC wrote in an emailed statement. “We believe this approach enables BJC to take full advantage of the capabilities and core competencies of organizations that provide high-level IT services as their only mission, which will in turn better position BJC to focus on our core mission of healthcare delivery.”
BJC did not respond to a follow-up question on its 2018 outsourcing and hasn’t confirmed what vendors it has outsourced IT to.
Former BJC employees said the system in 2018 outsourced IT jobs to Tech Mahindra in India. Tech Mahindra did not respond to a request for comment.
Jefferson said that while some of his former BJC coworkers are still on staff at Tech Mahindra, he left after his boss in May 2019 told him he would probably be let go later in the summer.
In total, Jefferson worked at Tech Mahindra for less than a year. “I didn’t want to wait (for that), so I found something else and bolted,” Jefferson said. He said he had a feeling he would be let go in the weeks leading up to that conversation.
“I could tell that they probably wouldn’t keep us,” Jefferson said. “Most outsourcing companies try to get by with the bare minimum.”