10 things you should ask your outsourcing partner; management companies can still be your friends, and then some, under PPS - 1999 Buyers Guide - prospective payment systems

Nursing Homes, July, 1999 by Constance B. Girard-diCarlo

Management companies can still be your friends, and then some, under PPS

Skilled nursing facilities (SNFs) confronted by the Medicare Prospective Payment System (PPS) are taking a look at their outsourcing. Because PPS puts a premium on cost control, many facilities debate whether they might have better control and flexibility by taking services in-house. The marked decline in the number of contract rehabilitation therapists working in SNFs is a sign of these times.

The fact is, though, that outsourcing can give facilities customized cost control and continuing service quality and expertise in many areas, for example, food service and housekeeping. Success depends on what the outsourcing partner has to offer in helping facilities cope with this new environment. There are characteristics to look for in an outsourcing partner that can provide some assurance about this. I would offer ten:

1. Outcomes focus

Can the company help me to reduce costs and increase resident satisfaction at the same time? Can it guarantee that those goals will be achieved within a specific time frame? In a multifacility organization, can those goals be guaranteed not just at a single site, but across the entire network of facilities? In a multilevel campus, does the company understand the needs of different levels of long-term care, e.g., independent living, assisted living and skilled nursing?

2. Partnership

Do we want to be partners with this company? Does the company share our goals and values? Will performance goals be set collaboratively among staff, residents, the community and the management company?

3. Innovation

What can a management company do that my facility cannot do on its own? What are the benefits? What role does technology play in the company's systems?

4. Flexibility

Can the recommended management services be customized and tailored to my facility and the needs of my residents, both now and for the foreseeable future?

5. Change Management

How does the company manage the change necessary for achieving our performance improvement goals? Does it meet with residents and the community to better understand and meet their needs? How does it prepare my staff for this change?

6. Benchmarking

Does the company provide comparison data to ensure that its customers are receiving the highest quality of service in the field? How does it measure success? How is resident and employee satisfaction measured?

7. Resources

Does the company's management team have a depth and breadth of experience in the long-term market? Does it offer resources specific to this market? What resources will be made available to my department manager?

8. Employee Development

Does the company provide comprehensive and ongoing training and professional development for employees?

9. Continuous Quality Improvement

Once initial goals are achieved, does the management company have the willingness and ability to meet long-term goals? What additional services can it manage over time?

10. References

What other facilities are currently served by the management company? What has their experience been with the company as an outsourcing partner?

You might even want to ask if your outsourcing partner has an interest in innovative business arrangements. As an example, our company's recent alliance with Johnson & Johnson Health Care Systems brought together major providers of key services and products so that they could coordinate for more cost-efficiency and add value to their customer relationships.

In sum, if you can size up your prospective outsourcing partners using the criteria suggested, you can end up with the best of both worlds: cost control and continued high-quality services and products.

Constance B. Girard-diCarlo is president of ARAMARK Healthcare Support Services, which manages a full range of nonclinical support services for long-term care, including food and nutrition, environmental services, plant operations and maintenance, and laundry and linen. For more information, please call 1-800-556-4477.